Treasurer lays out goals for next four years
By: GEOFFREY STOUTE
MORGAN CITY — State Treasurer John Kennedy laid out his five goals for Louisiana for the next four years Thursday during his speech at the Morgan City Rotary Club’s luncheon at the Petroleum Club of Morgan City.
His goals are to finish Interstate 49 North and begin Interstate 49 South, create 250,000 new jobs, reduce state government spending, reform teacher tenure and raise teacher pay, and reduce poverty by reducing out-of-wedlock births.
Regarding I-49, Kennedy said the funding is in place to finish the 37-mile northern portion from Shreveport to the Arkansas border, it just needs to be finished.
To the south, he said the region needs to “get serious” about finishing the project, which he called the most important infrastructure project in the state.
“U.S. 90’s wearing out, folks,” Kennedy told local Rotarians.
While the southern portion of the roadway is projected to cost about $5 billion, it is anticipated to generate more than 100,000 new, permanent jobs and provide a North American Free Trade Agreement trade corridor from the Gulf of Mexico to Canada.
Although Kennedy said he had ideas about securing money for the project without raising taxes, he said he was not ready to discuss those publicly.
However, tools such as a public-private partnership between the state and private investment funds — something used in other states — will be something that will have to be looked at, he said.
Other possible funding sources include Transportation Infrastructure Finance and Innovation Act funds, the Unclaimed Property Leverage fund, a joint venture between the state and sovereign wealth funds and a greater percentage of the state’s capital outlay budget.
“We’re not going to be able to get the money from the federal government,” he said. “Part of me says I hope I’m wrong on that, but part of me says I hope I’m right because the federal government’s broke.”
As for job creation, Kennedy said it can be accomplished by lowering taxes, eliminating unnecessary regulations and by concentrating on existing Louisiana businesses — especially those with 100 or fewer employees.
The 250,000 new jobs proposed, Kennedy said, is only a little more than 10 percent of the current workforce.
These new jobs, which he said may be the most important of the five goals, will keep younger generations here. It’s something that Louisiana hasn’t done a good job of as it lost more than 5 percent of its young people, ages 45 and below.
As for taxes, he said governments on local, state and national levels have gone “way overboard” with taxes, and regulations are “smothering” small businesses here and in other states.
While he said every state wants to find a large company that will bring many jobs, he said that is something that must be worked toward, and the state needs to do a better job of focusing more time and money on helping the businesses already here.
Ninety-five percent of all jobs that will be created in Louisiana, Kennedy said, will be created by businesses already here and most of those will be businesses that employ fewer than 100 people.
Regarding state spending, Kennedy said that since 2005, Louisiana state spending has increased 32 percent, while the state also has too many state employees, adjusted for population, compared to other Southern states.
While the current budget is $25 billion, down from $27 billion last year, he said that in 2005, the budget was $19 billion.
“I don’t know many Louisiana families that have seen their income go up 32 percent in the last five years,” Kennedy said. “I don’t know very many Louisiana businesses that are earning 32 percent more today than they were five years ago, not in this economy. But state government has grown 32 percent, and we’ve made some effort to downsize it, but we’ve got to do more.”
As for state jobs, he said that state jobs could be downsized and save the state $1 billion over three years by not filling a third of the approximately 15,000 vacancies in state government per year.
Additionally, he noted that according to the Louisiana legislative auditor, 22 percent of all managers in state government manage just one person.
The state, Kennedy said, also should eliminate some of its many consulting contracts. Each year, he said the state spends billions on consulting contracts.
According to the state legislative auditor, Louisiana has 19,000 consulting contracts.
“Even he admits he couldn’t find all of them,” Kennedy said of the auditor.
While the budget is balanced, Kennedy said that a balanced budget does not reform state spending to solve the state’s long-term structural fiscal problems.
Money saved by cutting wasteful spending, Kennedy said, could be invested in roads and universities and reduce taxes.
Regarding teachers, Kennedy said teacher quality — and home environment — are the biggest factors in whether a child learns. Kennedy proposes determining in the next four years what teachers can teach and pay them a starting salary of $60,000 annually to attract the best teachers to the state’s classrooms; and find the teachers who can’t teach and educate them how to do a better job or remove them from the classroom.
“Now that’s going to be controversial,” Kennedy said. “I think the vast majority of our teachers are good teachers, but we do have some teachers who shouldn’t be in the classroom, just like we have (in) any other profession.”
While he said the salary would be costly, he said what is being done now is even costlier.
He said the state needs to reform its tenure laws, too.
Kennedy also recommended that the state can reduce poverty by state’s political leaders acknowledging this problem and speaking out against it.
The treasurer noted that last year, this year and probably next year, 49 percent of all Louisiana babies were born out of wedlock, and half of all newborns will never know their father or mother.
“That’s (about) one out of two children who are likely to never know either the firm hand of a father, because they’ll be raised by their mom, or the loving hand of a mother, because they’ll be raised by their father,” Kennedy said. “This isn’t about government in people’s bedrooms. This is about giving kids a chance in life.”
Statistically, he said children brought up in these conditions are more likely to be undereducated, underemployed and less healthy, while they also are more likely to commit more crimes and access more social programs that cost taxpayers more money.
Kennedy said this will impact the future of the state if something is not done to stop it.
During the question and answer session, Dr. Walter Daniels asked Kennedy if he would run for governor during the next election cycle
Kennedy said he couldn’t commit to that.
While the treasurer said he supports Gov. Bobby Jindal, he said he has encouraged him to “be bold” and tackle such issues as I-49 work and eliminating excess state employee positions as well as unnecessary state contracts.