Man in the middle – Gov. Bobby Jindal is nearing the halfway mark of his term and has reason to brag. But with two years of unprecedented budget shortfalls still to come, the most difficult challenges may lie ahead.

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If there’s a transitional locale along the political spectrum that’s nestled snuggly between unfulfilled promise and tangible greatness, a kind of professional purgatory, then that’s where you’ll find Gov. Bobby Jindal these days.

It has been nearly two years since Jindal sat upon the steps of the State Capitol for his inauguration and was serenaded by Deacon John and a children’s choir, honored by a 19-gun salute and flyover from four F-15’s, and promised more than 3,000 people in attendance that a new day had dawned. “We will come to this Capitol to make a clean break with the past,” Jindal said after being sworn in by former Chief Justice Pascal Calogero.

Since then, Jindal, a Republican, has turned Louisiana politics and the national conservative scene on their proverbial ears. While ethics reform has been the governor’s war cry, he’s also made economic development a priority, as evidenced by one of his first special sessions and a statewide jobs-promoting tour that’s just beginning to wrap up.

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Meanwhile, his education and health care proposals have stirred up controversy and jarred old-line thinkers, but his policy teams have yet to make substantial gains. Although his endorsements of other candidates don’t always play out like he wants, Jindal’s personal politics are sophisticated and robust—he’s raised more money than any governor before him, has already survived legislative rows [like supporting then opposing a pay hike for lawmakers] that would have sunk weaker chief executives and is still considered a future presidential contender.

But Jindal still has two years of governing to go until his term as governor expires, and along the way he’ll face some extraordinary challenges. Most notably, Louisiana’s five-year budget outlook forecasts a $1 billion shortfall in fiscal year 2011, which begins next July, and a $2 billion shortfall in fiscal year 2012.

While the sagging economy and other culprits share the blame, Jindal says the “most significant factor” is the cut in federal health care funding for those using Medicaid. Over the next two years, Medicaid’s formulaic change will cost the state more than $700 million.

“There’s no doubt that this will be the real test for Gov. Jindal,” says Joshua Stockley, former president of the Louisiana Political Science Association. “Other state governments have already made drastic reductions and the governor now has to guide his state through the same process.”

On the immediate horizon, Jindal is being pushed to repair a few glitches that resulted from his landmark ethics reform session in 2008—a task that could require the administration to swallow its pride and possibly backtrack on certain initiatives it once heralded.

Two more hurricane seasons remain in Jindal’s term, and former Gov. Kathleen Blanco’s dealings with Katrina prove that Mother Nature can be as devastating to a political career as angry voters—and Jindal will have to face both seasons as he continues to oversee the state’s recovery from four hurricanes that have made landfall in Louisiana in as many years.

It’s an altogether exciting and treacherous place for Jindal to be in, but he readily admits that such dire times require bold action —anything else would be unacceptable, he recently told his newly-created Commission on Streamlining Government, and would also run counterintuitive to the promise he made voters his first day on the job.

“Now is the time to drive the reforms needed to create a strong and sustainable state government that is accountable and effective,” Jindal says, adding the time is short for both the challenges at hand and his term as governor.

As far as Jindal’s success in the area of ethics reform, there’s no simpler litmus test than asking the following question: Does Louisiana have better ethics laws today than it did before Jindal took office?

The answer, of course, isn’t that easy to come by and varies depending on how you ask. For starters, there are the rankings. The Center for Public Integrity now ranks Louisiana as No. 1 in its legislative financial disclosure rankings. Previously, the state was ranked 44th. The Better Government Association’s Integrity Index also bounced the Bayou State from 46th in the country in 2002 to fifth overall today. Jindal says such rankings send a “clear message to the country that ‘who you know’ is no longer more important than ‘what you know’ when it comes to doing business in Louisiana.”

But when it comes to transparency in Jindal’s own office, Louisiana continues to rank near the bottom. The governor has been criticized by lawmakers, editorial writers and good-government groups for dismissing legislation that would have required him to disclose campaign donors he appoints to important positions and opposing other bills that would have granted the public more access to his office.

State Rep. Neil Abramson, D-New Orleans, worked on the former, but said he never quite got the governor to sit at the negotiating table. “The whole point to me is to make sure the public can see the information in an accessible way, as opposed to a scavenger hunt for the public to track down these documents and try to cobble together the information,” Abramson says.

Among the only Jindal-backed ethics reforms that isn’t cloaked in controversy and second-guessing is the $50 limit lobbyists can spend wining and dining lawmakers. The state Ethics Board is in a strange limbo right now, having lost many of its members when new disclosure laws took place and its director quit last year after the process for reviewing violations was transferred to administrative judges. Several cases are close to being thrown out, thanks to a new one-year statute of limitations and state courts are now involved.

In response, the Public Affairs Research Council, a Baton Rouge-based nonprofit watchdog, has joined members of the state Ethics Board in asking for revisions to the ethics laws passed during Jindal’s 2008 special session. Specifically, PAR wants the Louisiana State Law Institute, a group of legal experts that works with the Legislature and state, to study the changes and recommend changes.

PAR President Jim Brandt says it should be done before the end of the year, just in time for the 2010 regular session. “The process of deciding the guilt or innocence of those accused of ethics violations is too important to be altered without thorough legal study and thoughtful consideration,” Brandt says. “Taking such initiative now would boost citizen confidence that the board’s role and authority are based on reliable research instead of political whims.”

In a prepared statement, Kyle Plotkin, Jindal’s spokesperson, says the governor will remain committed to his promise of a “Gold Standard” for ethics in Louisiana and that includes taking action in future legislative sessions. “We’ve made incredible progress through the comprehensive and aggressive ethics reforms put into law last year,” Plotkin says. “Ethics will absolutely remain a cornerstone issue of our administration as it’s indelibly linked with our economic development priorities.”

When it comes to business, Jindal came out swinging last year by accelerating the elimination of the tax on business investment [Louisiana was one of only three states in the country taxing manufacturing machinery and equipment]; speeding up the removal of the tax on capital investment [this kind of taxable debt will be completely cut by next July]; and stripping business utility taxes. The underlying goal, the governor said, was all about jobs, jobs and jobs—the same mantra he’s still preaching today.

“Investing in greater job creation is another vital part of not only making our state more competitive, but making it more attractive to investment and increasing opportunities for Louisianans,” Jindal says.

While accelerating these phase-out schedules was a tremendous step forward, according to Dan Juneau, president of the Louisiana Association of Business and Industry, among the state’s most influential lobbies, there’s still more work to be done in the area of business taxes and that should be a priority for the governor moving forward.

“Louisiana ranks 15th in the category of the total amount of state and local business taxes paid,” Juneau says. “That isn’t good, but it gets worse. When the amount of state and local business taxes as a percentage of all taxes collected is measured, Louisiana comes out 5th highest in the nation. The fact that 60.8% of all state and local taxes collected in Louisiana comes from business is not a favorable factor for our state.”

Corporate handouts have also become the norm during Jindal’s half-term. The governor personally lit a fire under legislation this year to help move along the sale of a shuttered poultry processing plant in north Louisiana formerly operated by Pilgrim’s Pride.

Jindal had the legislature rewrite state incentive laws to lure Foster Farms of California into the deal, which is being supported by $50 million in state funds. It was a top priority for the governor during this most recent session, as was a new deal for the New Orleans Saints.

While the moves have been cheered in economic development circles, Jindal’s own supporters wonder why the governor couldn’t be as proactive for smaller mom-and-pop businesses, like commercial fishermen and smaller outfits.  “[The governor] is running around the state talking about professional football teams and chicken plants and all the money we gave them, and that’s great, but we can’t turn our back on an industry that has been here for generations,” says state Rep. Ernest Wooten, R-Belle Chasse.

In many ways, however, Jindal is bringing his message directly to the people. He has spent the last several months visiting every corner of the state on his “Louisiana Working Tour,” which highlights his administration’s “number one priority”—job creation. The governor says that is his real economic development focus moving forward.

“You cannot pick up the paper or turn on the TV in these last few months without hearing about more national economic bad news,” Jindal says. “What should we do about these national economic challenges? Unfortunately, Washington has given us the same old solutions: Spend more money, print more money, borrow more money from China, and get more money out of the American taxpayer. We don’t subscribe to this Washington philosophy here in Louisiana. Since we took office last year—our driving mission has been an economic strategy geared at one top priority—job creation.”

On the horizon, Jindal must still deliver on his promise to reform Louisiana’s system of education. So far, that’s been easier to vow than to deliver.

For instance, Superintendent Paul Pastorek attempted to push reforms on the school board level this year, but was met with parochial resistance. A vocal opposition has also been mounted against Jindal’s reliance on charter schools and other alternative offerings. The setbacks in some regards have put state leaders back at square one.

“Superintendent Pastorek has created conflict rather than education reform, and has assaulted public schools rather than working to improve public education,” says Joyce Haynes, president of the Louisiana Association of Educators. “Superintendent Pastorek’s undying love of charter and takeover-schools has produced little to no evidence to support Louisiana’s fiscal contribution to his untested system.”

Then again, Jindal’s leadership has led to the National Governors Association’s Center for Best Practices to select Louisiana as one of six states to be awarded special grants to create new models of teacher compensation. The new system is intended to enhance teacher effectiveness. This is important to Jindal’s goals for coming years and the governor often points to an abundance of research that confirms that teachers are the most important factor in improving student learning.

“It is critical that we attract the best and the brightest to the teaching profession in Louisiana and retain teachers who are having a positive impact upon student learning in our schools,” Jindal says. “This will be a unique opportunity for our state to continue to lead the nation in efforts to improve teacher quality.”

As for recovery, Jindal was cheered for his handling of Hurricane Gustav last year, but his real test may very well be the continued rebuilding from the 2005 storm season.

In recent media interviews, Jindal has said that the bureaucracy built in Louisiana following hurricanes Katrina and Rita—like the Louisiana Recovery Authority, for instance—must not become a fixture and will eventually have to be eliminated. But that doesn’t mean the recovery process will end anytime soon, he adds, because citizens will have to take it upon themselves to pick up where government leaves off, which is a trend that is already strong in south Louisiana.

“This sort of spirit and attitude is embodied in many parts of our state as we have continued to recover from four storms in three years,” Jindal says, “but there is no doubt that we need to see more of this teamwork at all levels of government as we continue to rebuild and recover from the effects of four hurricanes.”

The most trying test for Jindal, however, is the economic famine the state is currently facing, which amounts to a collective budget shortfall of at least $3 billion over the next three years.

In an effort to find ways to make less money do more, Jindal is working with two different groups: the Postsecondary Education Review Commission and the Commission on Streamlining Government. Hammond attorney C.B. Forgotston, a political columnist and blogger, says Jindal is making a mistake by putting so much faith in the group, when he should be leading on his own.

“Bobby should simply submit a budget to the lege that is $1 billion less than the current one per his constitutionally-mandated job,” Forgotston says. “He has a huge capable staff whose sole job is to develop the state budget. They buried the bodies. Who best know where to dig them up? Instead Bobby created a cumbersome process for finding places to reduce the budget.”

Jindal, though, has been very involved with process, drawing praise even from critics who serve on the panels.

At the same time, his national aspirations continue to be a player and the governor is being included in national polls on the 2012 presidential race.

It’s not that far of cry from where Jindal was politically two years ago as he was sworn into office on the steps of the State Capitol, back when there was a buzz in the air about him being selected as a vice-presidential contender on the GOP ticket.

But the times are indeed different, and Jindal still has even more time, another two years, ahead of him.

His supporters and onlooker inside and outside the state are watching to see what becomes of him, and to find out if he delivers on that great inaugural promise.

“We have the opportunity to affect not just our own children’s lives, but the lives of Louisiana children yet to be born,” Jindal said on that opening day, in a tone that could easily fit into today’s political environment. “We have the opportunity—born of tragedy but embraced still the same—to make right decades of failure in government.”

It’s a bold and airy promise and, for Jindal, time is growing short to deliver.

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