Let nothing in this world evade Jindal’s plan to steer business to his cronies

Federal grant writers, and those who review the applications, rely on obscure language when applications are written and when terminated.  The current rescinding of an $80 million grant to Louisiana is a case in point.

The original grant approval was based upon Louisiana’s agreement to bring high-speed Broadband to universities, K-12 schools, hospitals, libraries and other hubs in unserved and underserved areas of Louisiana.  The National Oceanographic and Atmospheric Agency awarded a grant for a project that proposed to construct 900 miles of new fiber-optic  infrastructure.  The new network would have connected with the Louisiana Optical Network Initiative, a more than 1,600 mile network connecting Louisiana and Mississippi to a national network.

A year after the state began the project NOAA, with $5.3 million of the initial $15 million in state funds and $431,747 in federal funds already spent, the State took control and changed the entire plan to rent rights-of-use from commercial providers.  Problem is that there are no commercial providers to provide the services required, no 900 miles of fiber-optic and few commercial providers willing to invest $90 million to do so.  Shades of the Tennessee Valley Authority in the 1930s when most farm and rural town families could get no electricity from existing electrical generating stations whose management believed it would take too long to recover the investment cost.

The federal rescission document includes in its reasoning  the “…response outlines a solutions-based procurement approach that leaves key determinants to be provided by entities responding to its IRU (Indefeasible rights of use) RFP (Request for Proposals) and therefore does not provide the details required.”  The withdrawal of grant letter also notes that the state “does not include information related to the methodology used for revenue projections related to fiber leases…”

If this sounds familiar one might remember how the administration unlocked the door to immeasurable riches by uncapping the number of charter schools allowable, or by granting charters to for-profit virtual schools that will make at least $1,500 profit on every student taken from traditional or other bricks-and-mortar charter schools.

The underlying assumption is that private interests will ALWAYS perform better than any government effort.

One might be caused to wonder how Lafayette Academy, in New Orleans, was forced to recover half of the $750,000 paid to for-profit education manager Mosaica by going to court to prove the company failed to perform.  Or how Baton Rouge’s 100 Black Men were forced to fire for-profit Edison Learning when that company said it needed another $1 million to meet teacher payroll before the school year ended, and the end result was the schools they ran performed worse on state tests than did the prior school board.

Anything that lets private business interests into reap a harvest of state or federal tax collected funds is allowable.  The Governor’s Office of Risk Management was working just fine and costing the state budget but $1.4 million a year.  All of government was self-insured and the program operating efficiently.  But, privatization brought a company that was to be paid up to $68 million over five years.  That, after six months, was judged not to be sufficient so the price tag was raised to $75 million.  At that point a company in Ohio (that was not the low bidder) bought the Louisiana-based company.  We don’t know what the sales price was, but adding that $7 million in contract had to help justify the cost.  Then the Ohio company realized it could come out even better financially if it sold itself to a company across the Pacific in India.

Then of course there is the much fought over move by the Jindal administration to sell out four prisons.  The legislature raised sufficient havoc with that proposal that the Governor postponed action.  The fact that the federal government is charged more, by one of Jindal’s chosen buyers, to operate its Oakdale prison than it costs to operate any of the four state-run prisons is apparently not relevant.

The same kind of initiative was tried in the effort to sell the Office of Group Benefits which successfully runs, on less than 3% of premiums, the health insurance coverage for state and local employees and state retirees.  The low cost, plus the build-up of $500 million in reserve that is dedicated by the State Constitution for the purpose of insuring employee coverage are testimony to the soundness of the agency.  Yet, the administration still harbors the intent of selling it out.

Perhaps it is interesting to note that the Jindal administration could not get its act together to take the offered $60 million in pre-K grants, but when the recently passed TOPA constitutional amendment freed up $80 of the general fund appropriation no thought was given to using the additional cash for the 56,000 eligible LA4 children.  Instead Gov. Jindal urges that it be put into the kitty to lay fallow until some company comes along and needs to be lured to set up shop in Louisiana.

This is a guest blog by:

Don Whitinghill

Consultant