A flagship without sails
If LSU System President John Lombardi is to be believed, a worst-case scenario budget cut of 30% or anything close to it would have a devastating effect systemwide, including LSU’s flagship campus in Baton Rouge.
It’s an exasperating situation to be in for a university system that was bled by serial budget-cutting during the 1980s, but rallied to pursue an aggressive flagship agenda two decades later. Now comes a massive budget-cut redux likely to, once again, rip gaping holes in the sails.
LSU’s response to the Division of Administration foretells heavy damage if the maximum cuts are imposed. As many as 650 faculty members and 1,250 support staff could be laid off systemwide, not to mention the hit to academic and athletic programs, student services and activities, maintenance and other elements of university life.
LSU’s main campus could see as much as a $71.9 million cut; the LSU AgCenter $26.5 million; Pennington Biomedical Research Center $4.3 million; and the Paul M. Hebert Law Center $3.1 million.
While the Jindal administration says the worst-case scenario is unlikely, Lombardi isn’t taking any chances. In a letter to the administration accompanying the spreadsheets, he underlined the blood-and-guts ramifications of imposing drastic cuts.
Among the highlights are “massive personnel terminations and layoffs,” fewer class offerings, dramatically larger class sizes and endangered accreditation for some programs.
“The quality of instruction and academic programming built up over years with state and student involvement will decline rapidly,” he argues. “Research productivity will suffer major damage.”
As for LSU being able to compete against the country’s public university systems once it’s hobbled by deep cuts, forget it. LSU will “lose its place” in the queue of U.S. flagship universities, while the system’s campuses and health care enterprises will fall far behind the rest of the South, to say nothing of richer parts of the country, Lombardi says.
“Doing more with less is the way the world works in the current economic crisis, but the reductions contemplated for Louisiana’s entire public, baccalaureate and above, higher education institutions will not allow us to compete within the context of American quality higher education.”
Rep. Steve Carter, chairman of the Capital Region delegation, hopes a worst-case scenario is averted, saying he’s absolutely opposed to massive cuts aimed at higher education. At the same time, he says, the shortfall presents an opportunity to streamline the LSU System and eliminate unnecessary spending—as long as it’s not harmful to higher ed.
As for the vocal way Lombardi is handling the issue, Carter says it’s probably no different than how he himself would react were he in the president’s shoes. “You have to applaud him,” Carter says. “He’s standing up for LSU and higher education. We just have to sit back and see if it works.”
Lombardi is hewing to a pattern of outspokenness, something he’s demonstrated repeatedly through his career—even when it ruffles feathers. He showed this propensity early in his and Jindal’s tenures when he publicly criticized the governor’s highway infrastructure funding plan as potentially detrimental to higher education.
But when it comes to defending his turf, Lombardi is a veteran of the school of thought which says making a public stand over funding issues is more effective than back-channel whining, although there’s no way to tell whether or not this is going on simultaneously. In the end, it’s all about applying political pressure, influencing the process, and the LSU System president looking out for his charge—the LSU System.
Angele Davis, commissioner of administration, said in a prepared statement that while the budget reduction goals aren’t set in stone and likely will change, “it is necessary for agencies to prepare for what could be their worst-case scenarios.”—Steve Clark
A political circus
If all the hustle and bustle surrounding the federal stimulus package didn’t seem like a three-ring circus to you, it’s possible you weren’t paying close enough attention. There were enough moving pieces, extravagant personalities and over-the-top showmanship to keep even the most fickle audiences wondering what would happen next.
On the federal level, President Barack Obama was the ringleader, shouting orders to his Democratic Congress to get the stimulus [upwards of $800 billion] passed in a hurry. In response, lawmakers dumped even more pork into the plan. By the time the stimulus passed the House and hit the Senate, it was like watching an endless parade of clowns exit a small Volkswagen.
While GOP Sen. David Vitter of Metairie vowed to chop away at the plan, Sen. Mary Landrieu, a New Orleans Democrat, got into the act as well. She was the only member from her party to vote against a $25 billion transportation amendment. And Vitter introduced another amendment to cut $35 billion from Obama’s proposal. “The American people have been told that this bill will help stimulate our economy, but unfortunately all we are looking at now is a list of traditional Washington spending projects,” Vitter says.
Landrieu, however, didn’t spend much time slashing. She pressed for double the $4.6 billion funding earmarked for the U.S. Army Corps of Engineers. To be sure, it’s a high-wire trapeze act, but Landrieu’s a pro. “Louisianans understand the importance of Corps funding for commerce,” she says.
On the state level, GOP Gov. Bobby Jindal says if he was still in Congress, he would vote against the stimulus. But don’t expect him to turn down the money once it reaches Louisiana. The Board of Elementary and Secondary Education has already held an emergency meeting to discuss the stimulus, which could mean at least $217.5 million for disabled students, $269 million for high-need schools, $383 million for renovations, $18.5 million for technology and $427 million for college loans.
Moreover, Obama’s stimulus could offer a cushion for state government, which is facing a $2 billion shortfall for the next fiscal year that begins in July. Based on various breakdowns, the stimulus could make roughly $945 million available to the state’s general fund over the next two years. For agencies facing major reductions, that news was more thrilling than a monkey riding a bicycle.
Despite what happens, Jindal’s top budget adviser, Commissioner of Administration Angele Davis, says it’s too early to comment on what the final stimulus package could mean for Louisiana. “Just as we did with the mid-year budget cuts for [the current fiscal year], we will seek greater budget flexibility by reviewing all means of state government financing, including the use of statutory dedications,” says Michael DiResto, her spokesperson.
As for the local ring, that part we see most often, Mayor Kip Holden took his case directly to Congress earlier this month, requesting $800 million just for East Baton Rouge Parish. He says he wants money for road construction and to expand the River Center. With it, his administration could reduce the size of the bond issue that will be put before voters this fall.
While it seems every level of government was caught up in the stimulus hype in recent weeks, it’s only a preview of what’s to come. Once the money hits the streets, the real juggling, fire-eating and lion-taming starts.—Jeremy Alford
Rx: physician migration
Add “physician shortage” to the anxious lexicon of early 21st century America—a situation already with us or soon to arrive.
While it’s a big problem in rural parts of Louisiana, Baton Rouge has doctors and surgeons aplenty. A recent market overview of the Capital Region by research firm HealthLeaders-InterStudy went so far as to identify “an oversupply of physicians, particularly specialists.”
The study found 326 doctors per 100,000 residents in the Baton Rouge MSA compared to 276 per 100,000 nationally.
“I don’t know if I’d say there’s a glut, but there’s certainly an adequate number of most of the specialties,” says Dr. Paul Perkowski, a vascular surgeon and president-elect of the Capital Region Medical Society. There are exceptions: pediatric neurologists, endocrinologists and rheumatoidologists.
Dr. J. Michael Burdine, a pain management specialist who’s the current medical society president, concedes there is an abundance of certain specialties, though he’d like to see even more doctors flood the market, not fewer. That’s how rural communities will fix their physician shortages.
“Baton Rouge and Lafayette and Shreveport will be filled first, then we overflow into smaller communities,” Burdine says. “You see it around Baton Rouge. Zachary and Ascension are doing well, but you’re not seeing it migrate to the smaller communities that are distant.”—S.C.
Blame it on Rio
Gov. Bobby Jindal seems to have been spending quite a bit of time in North Carolina lately. Aside from speaking engagements and fundraisers, he and Louisiana Economic Development Secretary Stephen Moret have been jetting to the east coast to woo N.C.-based steelmaker Nucor Corp. Unfortunately, all those airline miles may not pay off. Bloomberg and The Times-Picayune reported earlier this month the corporation’s proposed $3 billion pig-iron plan in St. James Parish might end up being built in Brazil.
Nucor spokespeople claim the shift is a result of a decrease in the market for steel and the possible increased federal emissions regulations. Part of President Barack Obama’s initiatives to step up pressure on industrial manufacturers could include stiffer regulations on carbon dioxide emissions. State Department of Environmental Quality representatives have said that delays are not related to specific concerns about future restrictions, but that Nucor is still working to file the paperwork to receive approval from DEQ and the EPA.
If Jindal and Moret fail to the land the deal, an estimated 2,000 construction jobs and 500 permanent positions could be lost. Nucor officials are expected to announce their decision for the location of the mill sometime in March.
If any circumstances result in the Nucor plant being built in Brazil, Jindal and Moret might have to go back to the drawing board for creating new jobs in Louisiana. Maybe on their next flight to North Carolina, they could stop by the Research Triangle Park and woo one of the green or digital technology companies they’ve been so eager to discuss for the last year. Only time, and flight schedules, will tell.—Olivia Watkins
Executive Spotlight: Leonard Kleinpeter
President/owner, Southern Hydroseeders; Lake
Hometown: Baton Rouge
Life didn’t turn out as planned for Leonard Kleinpeter. Instead of his current business attire of work shoes, jeans and short-sleeved shirts, he would have worn the silver and black uniform of the Oakland Raiders. As fate would have it, Kleinpeter never reached agreement on a contract after being drafted by the Raiders as a wide receiver out of Southwestern Louisiana in 1967—a twist that’s led him down many roads. He went from small business owner, to state government and to the materials on which he would have spent his days in pro football. Kleinpeter, owner of Southern Hydroseeders, a landscape and grass planting system, and the government consulting firm Lake, still gets to do what he loves. “It is an ideal business for me as it keeps me outdoors and working with people,” he says. Not quite pro football, but a career with plenty of turf.
Want to find out more about Kleinpeter? Read the rest of his profile Q&A here.
Saving Green: Taskmaster
A Baton Rouge firm has begun marketing software that can improve the way businesses manage the construction process, saving time, money and a tree or two in the process.
ArchitTrek provides Web-based access to construction logs, documents and other job information to architects, interior designers, contractors and related businesses working on a project. Everyone has access to the information in real time. Team members post responses and receive notification of when collaborators have reviewed the information, making the process transparent and improving accountability.
“It’s a tremendous task keeping everyone on the same page,” says Greg Kleinpeter, manager of ArchitTrek. “Nobody wants to be out in the dark.”
The paperless system fits the growing sustainability trend in the architecture community, Kleinpeter says. He says the improved efficiency more than makes up for the expense, and owners are happy to include the software cost in the project fees.
Grace & Hebert Architects have used different versions of the program for more than five years, including on the new Alex Box Stadium at LSU (pictured). It wasn’t until recently that Kleinpeter began marketing the software to outside companies. While the concept came from architect Jerry Hebert, and Hebert is a partner in the software venture, ArchitTrek is a separate entity from Hebert’s firm and Grace & Hebert Architects don’t get access to other companies’ project information.
“We have put it through the paces with extensive use and made extensive updates that provide huge benefits and time saving on projects,” Hebert says.—David Jacobs
BREC sought out the path of least resistance for its first linear park, but a few obstacles remain. In the Sept. 25, 2007 issue of Business Report, “Happy Trails” chronicled the start of Baton Rouge’s pedestrian-friendly movement.
Pathways, or linear parks, are trails that can be used for recreation or transportation, such as the Tammany Trace in St. Tammany Parish. BREC would like to have a network of trails connecting its parks, but they’re starting with only about four miles’ worth along Ward’s and Dawson creeks. A second phase, dubbed the Medical Mile, would connect the Baton Rouge General and Our Lady of the Lake Regional Medical Center campuses.
Once the first trail is built and everyone sees how great it is, Ted Jack, BREC director of planning and engineering, hopes opposition will dissipate. But while the landowners needed for the current project favor the trail concept, legal agreements for the land donations still need to be worked out. Jack says Swaggart Ministries, which owns some of the land BREC would like to use, has not expressed opposition but also hasn’t given its approval.
“We’re trying to re-contact them and find out what’s going on,” he says. By contrast, Richard Carmouche, owner of The Grove, has been easy to work with, Jack says.
BREC wants to build a pedestrian bridge across Ward’s Creek and is negotiating to split the cost with Carmouche and the city-parish, Jack says. With Carmouche and the mall on board, a solid first phase could be constructed.—D.J.
Nonprofit Spotlight: Burden Foundation
Total assets: $10,003,803
Revenue and support: $976,358
Year founded: 1963
Key projects: Provides oversight of the Steele Burden, Ione Burden and Jeanette Burden donation to LSU, which resulted in the creation and maintenance of the LSU Rural Life Museum, Windrush Gardens lone Burden Conference Center, the Steele Burden Memorial Orangerie and the All-America Rose Display Garden.
Number of staff: 0
Highest-paid executive: None
Source: 2007 Form 990, Guidestar.org
Fortnight February 11 – February 24
11 – On this day in 1998 – Former Gov. Mike Foster announced he was considering “sin taxes” to raise revenue for public school teachers. At the time, the average Louisiana teacher made almost $4,000 less than the average salary of teachers throughout the southeast.
11 – On this day in 1998 – The National Association of Realtors announced that the median home sale price in the Baton Rouge area rose by 7.8% to $97,000 from 1996 to 1997. Running on the confidence of high employment figures, there were 4.7 million single-family dwellings in 1997.
12 – The American Heart Association is raising awareness about heart disease with its Captial Area Go Red for Women Luncheon at 11:30 a.m. at the Crowne Plaza Hotel. Free screenings also will be given from 9:30 to 11:30 a.m.. Tickets to the luncheon can be purchased by calling 248-7700.
18 – Though the economic crisis might not be in full swing in the Baton Rouge region, it never hurts to prepare. The Career Center, a service from the East Baton Rouge Parish Library, is hosting a Job Survival and Success Scale seminar focused on improving soft skills and workplace successes from 11:30 a.m. to 1 p.m. More information about the event, which features certified job and career development coach Anne Nowack, can be requested by calling 381-8434.
19 – Whoever said business belonged to stuffy suits? The Baton Rouge Area Chamber is hosting its annual review of the region with comedian Jamie Wax from 6:30 to 9:30 p.m. at the Manship Theatre. More information about the newscast-style event and ticket reservations can be found at brac.org.
21 – On this day in 1995 – David Duke told the media he was planning to run for governor again after failed attempts to make it big in either radio or insurance. Duke said he “relished” the idea of being able to run against a black congressman; two were considering a bid for the office.
Business of Politics
Pinching pennies After plugging a $341 million shortfall in the current state budget, the Legislature and administration of Gov. Bobby Jindal have turned their sights to fixing an unparalleled $2 billion deficit projected for the next fiscal year. To put it into perspective, the reduction in state spending for the fiscal year that begins July 1 will be akin to losing every dollar ever contributed to the state’s general fund by the Louisiana Lottery Corporation since it started selling games of chance in 1991.
The process of trimming the $2 billion in question began weeks ago, and the reality of the situation is beginning to sink in with state agencies. Commissioner of Administration Angele Davis is meeting with each individually, and every agency is being asked to submit a “Strategic Priority Plan” and an “Activity Performance Review” in an effort to prioritize cuts. While agencies have complained that process leaves its divisions and employees feeling vulnerable, Davis says it’s the best way to separate underperforming items from those that are most beneficial to taxpayers. “I’m not interested in just thinning the soup,” Davis says. “We’ve challenged [agency heads] to come up with strong performance indicators that are meaningful or risk being excluded from the executive budget,” Davis said.
Tell Tara Freshman Metro Councilwoman Tara Wicker, a Democrat who represents District 10, will be hosting quarterly “Tell Tara” town meetings this year. They’re scheduled for March 10, June 9, Sept. 8 and Dec. 8. “My goal is to connect residents, business owners and clergy of District 10 by working together to build a better community,” she says.
Wicker says she is also forming something called the “District 10 Leadership Council,” which will serve as a “vehicle for organizing, planning and implementation of change.” The leadership council will be comprised of citizens from various civic and neighborhood associations, community residents, business owners, religious leaders and youth representing district schools. Those meetings will be held on the second Tuesday of each month at 6 p.m. in the Metro Council chambers.—Jeremy Alford
Dow Chemical Co. says it lost $1.55 billion in the fourth quarter, due in large part to restructuring costs including its decision to slash 11% of its work force and a 23% drop in sales amid a global slump. The loss was larger than expected, and revenue came in below Wall Street expectations. Dow Chemical shares fell 45 cents, or 4.1%, to $10.50 in pre-market trading.
Employees say job cuts at its Plaquemine and Hahnville facilities could be the first of more to come. Dow is terminating about 270 workers at plants in Plaquemine and Hahnville as part of recession-driven, worldwide work force reduction.
The Plaquemine job cuts alone could represent a $10 million loss in annual income in the region. Dow’s layoffs stem partly from the economic downturn but more from a company transformation into additional specialty chemicals, more profitable niche markets and less reliance on the commodity chemicals produced at the Louisiana operations.
Andrew N. Liveris, Dow’s chairman and chief executive, says while the economic recovery could be rapid this year, “We are planning for a global recession throughout 2009 and will continue to take actions on managing our cash and controlling our costs with the same intensity that we demonstrated in the fourth quarter.”—Timothy Boone and Anna Thibodeaux
Regions Bank and Phelps Dunbar will start moving this month into the II City Plaza office building, and the building should soon be half occupied. Mike Wampold, who is developing the 260,000-square-foot building, says he’s working on a few more leases. If those deals go through, II City Plaza will be about 80% occupied. “We fully believe in 2009, we’ll have all of City Plaza and II City Plaza leased,” he says.
Plans are in the works to put an “urban coffee house” in the first floor of the new building. Once work is finished and tenants to move in, Wampold says potential tenants will have a good idea of what the new office building will be like.
Meanwhile, Wampold says he’s still going ahead with plans to turn the Jimmy Swaggart Ministries dorm into a Marriott Renaissance hotel, but that $70 million project has been stymied by the credit crunch. “It’s difficult to get financing because hotels are out of favor with lenders,” he says. “It’s kind of like how condos were in the late 1980s and early 1990s.”—T.B.
On the Beat
We got it! Louisiana was ranked as the second-best job market in the country during 2008 by a Gallup poll. The state had a net new hiring index of 35, which was based on the percentage of people who say their companies are hiring, minus the percentage who say their companies are letting people go.
Congrats, Cane’s: Raising Cane’s ranked second in a survey of regional casual dining chains, according to the Wall Street Journal. Of those who responded to the Sandleman & Associates survey, 59% gave Cane’s an “excellent” rating for overall customer service.
Beating the odds: Louisiana added 3,700 nonfarm jobs from November to December, and the state Workforce Commission says it is the only state to see an increase during the month. The state had 1.95 million nonfarm jobs in December, compared with 1.94 in December 2007. In metro Baton Rouge, the number of nonfarm jobs increased by 4,000 from December 2007, reaching 379,500.
Hard to breathe: Baton Rouge ranked 43rd in a survey of how difficult it is for asthma-sufferers to live in the 100 largest U.S. metro areas. The report, conducted by the Asthma and Allergy Foundation of America, says Baton Rouge is helped by anti-smoking laws and a low number of residents who have asthma. But the poor air quality and large number of poor people without insurance hurts the city’s ranking.
Luck of the Irish: City-parish officials have delayed structural repairs to the Perkins Road overpass until after the annual Wearin’ of the Green St. Patrick’s Day Parade. Jim Ferguson, the city-parish drainage and bridge engineer, says the delay was put in at the request of parade organizers who didn’t want to change the route and nearby restaurant and bar owners who were concerned about losing business on one of their busiest days of the year.
On the market: The number of people looking online for information about houses in Baton Rouge increased by 29.5% in December compared with the year before. Realtor.com, the official Web site of the National Association of Realtors, says that put Baton Rouge in the middle of the pack for increases by cities.
Hot housing: Housing Predictor ranks Baton Rouge in its top 10 markets for homebuyers. The city ranked No. 9 on the annual list of places where buyers are most likely to see an investment from buying a house. Housing Predictor looks at factors such as prospects for growth and strong employment.
What national bid? Gov. Bobby Jindal will be the headlining speaker at the National Republican Congressional Committee’s March fundraising dinner. He’s following in some big footsteps—for the past eight years former President George W. Bush was the main speaker at the event, which raises money for GOP Congressional candidates.