Instead of bowing down to green pressure groups that greatly overstate the environmental risks attached to natural gas production, policymakers in the northeast should look toward Louisiana as a model for economic renewal, industry and government officials recommend.

The vast supply of natural gas that exists within shale deposits are now within human reach thanks to innovative drilling techniques that have the potential to create about 35,000 jobs in Louisiana as energy companies mobilize to make use of these resources, according to the American Chemical Council (ACC).

Unfortunately, well-funded environmental organizations have persuaded elected officials in Pennsylvania, New York and New Jersey to pull back on further development of the Marcellus Shale, Don Briggs, president of the Louisiana Oil and Gas Association (LOGA), laments. The Marcellus Shale cuts across much of New York, Pennsylvania, Ohio and West Virginia.

“These green groups don’t have same kind of influence down here, and this means it’s not quite so easy to scare people about the oil and gas industry and put out misinformation,” Briggs said. “The culture of a state or region matters and you can see where lawmakers can be pressured into pursuing policies that don’t really make sense. Still, there’s great potential for a state like Pennsylvania, which is actually a very old oil province.”

Briggs recommends that policymakers in other states look to Louisiana as a model for energy policies that strike a healthy balance between increased production and environmental protection. He also points out that technological innovations often result in improved safety and cleaner operations.

These new techniques in question that have spurred environmental opposition in some parts of the country include horizontal drilling, which involves turning the drill horizontally after drilling down. This allows for multiple wells to be drilled at one time. The other technique known has hydraulic fracturing or “fracking” uses a mixture of mostly sand and water to create pressure within a well. This process cracks the shale rock and brings natural gas to the surface.

Briggs views hydraulic fracturing as an environmentally responsible method that makes the most of America’s resources. Wells that would have run dry many years ago, or that may not have been drilled at all, are now viable, he said.

Nevertheless, New York and New Jersey have both imposed bans on hydraulic fracturing in an effort to further assess the risks of contamination. Anti-drilling activists have also stepped up efforts in Pa. aimed at shutting down production, according to a report from the Commonwealth Foundation.

“Much attention has been paid to the efforts of gas companies to influence the political debate through campaign contributions and lobbying efforts,” the report says. “But anti-drilling activists—while claiming gas companies use their vast financial resources to weaken regulatory structures and silence poorly funded environmental groups— influence politicians through their own lobbying efforts and by spreading myths about drilling.”

Despite some initial missteps on the part of regulators and industry officials, Robert Bryce, a senior fellow with the Manhattan Institute, does see Pennsylvania moving in a positive direction. Over the past few months, he estimates that the drilling sector is responsible for creating thousands of new jobs for the state. The experience in Pennsylvania proves that the Marcellus Shale can be developed in a responsible and effective way, Bryce suggests

“If you want to talk about comparison, I would compare New York to Pennsylvania,” he said. “New York is moving far too slowly and the debate has been dominated by environmental groups that are using fear mongering to prevent the development of a much needed energy resource.”

The ban New York officials have imposed on new drilling and hydraulic fracturing have cost the state “tens if not hundreds of millions of dollars in tax revenue and tens of thousands of new jobs,” he said. “New York needs the revenue and the employment.”

Bryce also praised Louisiana state officials  for moving in a quick, but also highly responsible manner, to develop the Haynesville Shale. As a result of embracing new technology, “huge quantities of new gas have been introduced into the state’s market.” he observed.

Fracking has become ground zero in the battle between greens and energy producers, says Matt Patterson, senior editor at the Capital Research Center and Warren Brookes Fellow at the Competitive Enterprise Institute.

“The possibility of exploiting large, new reserves of fossil fuels, thanks to advances in technology like hydro fracking, terrifies the environmental movement,” says Patterson, who edits Green Watch for CRC, “because it undercuts the green argument that we are running out of such fuels, or that they are too expensive to exploit.  So they demonize the industry by exaggerating the dangers, hoping to scare the public and intimidate lawmakers.”

The natural gas obtained through shale “provides the opportunity for what will be a renaissance in chemical manufacturing in the United States, and Louisiana is uniquely positioned to capitalize on that,” ACC President and CEO Cal Dooley has said. “The $5.4 billion investment in expanded ethylene production capacity in Louisiana will generate a total of $10.9 billion in additional chemical industry output, bringing the state’s industry revenues to $56.9 billion and maintaining it as the country’s second-largest chemical-producing state.”

A December 2011 report from PricewaterhouseCoopers (PWC) concludes that the robust development of shale deposits could greatly reduce the price of natural gas and spark “a renaissance in U.S. manufacturing.” The report projects that “lower feedstock and energy costs could reduce natural gas expenses by as much $11.6 billion annually through 2025.”  PWC also anticipates that U.S. manufacturing companies could employ roughly one million more workers by 2025 as a result of increased demand for the products used to withdraw the gas.

Of special interest to Louisiana is the Haynesville Shale.

Since its development began at the site in 2008, Haynesville has resulted in the injection of over $22 billion into the local and state economy, according to LOGA.

“When the Haynesville Shale boom came to northwest Louisiana, it made an incredible positive economic impact on an area that already had a strong economy,” Department of Natural Resources Secretary Scott Angelle, has said. “Responsible exploration of this new prospect, even if it does not reach the same fever pitch, could mean a welcome strengthening of the northeast Louisiana economy and greater opportunities for businesses and jobs.”

Rep. William Cassidy (R-La.) is also keen on the idea of further developing shale deposits.
“Let’s start moving toward a natural gas economy,” he said. “It is a domestic energy supply with proven reserves available in an area of the world where we have the rule of law. Right now, we have a 40 year supply and the only reason we don’t go out and find more gas is because we have such a backlog. This is a clean fuel, which works well for Louisiana and the nation as a whole.”

Louisiana was placed in the top 10 percent of areas identified as the most attractive for exploration investments, according to a Fraser Institute survey of energy industry executives released last year.

Development of the Haynesville Shale figures prominently into this story.

“Louisiana’s long and distinguished history of providing energy is known throughout the world, Angelle said. “We are seeing the energy industry’s confidence in our ability to coordinate responsible management of our natural resources with economic development that benefits us all.”

Kevin Mooney is the capitol bureau reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org and followed on Twitter.

Medicaid costs continued to rise in 2011, consuming a greater percentage of overall state spending. This was a result of federal stimulus money, heightened health care expenses and increased enrollment, according to the latest edition of the State Expenditure Report released by National Association of State Budget Officers (NASBO) and the National Governors Association (NGA)

However, state policymakers in Louisiana and in other states will have fewer resources available to accommodate Medicaid over the next few years as the funds made available through the American Recovery and Reinvestment Act of 2009 (ARRA) “wind down” and the economy continues to experience a sluggish recovery, the report says.

This is before any of the new health care regulations are scheduled to go into effect beginning on Jan. 1, 2014. State officials who are already under pressure to cut other vital social services in an effort to meet health care demands will be even further constrained under the new federal law formally known as the Patient Protection and Affordable Care Act (PPACA), key congressional figures and policy analysts warn.

“Even without the burdens ObamaCare will place on Medicaid, we see spending estimates rising to unprecedented levels,” Sean Riley, a legislative analyst with the American Legislative Exchange Council’s (ALEC) Health and Human Services Task Force, observes.  “Now, throw the federal health law’s constitutionally questionable Medicaid expansion scheme on top of that and it’s easy to guess what will happen to already strained state budgets.  Real Medicaid reform would include private options for beneficiaries or a variation of capped allotments and block grants to the states.  Instead, Medicaid expansion under the federal health law will only serve to make a big problem even bigger.”

In Fiscal Year 2011, Medicaid spending is estimated to be $398.6 billion, an increase of 10.1 percent over FY 2010, according to NASBO. This is almost three times the rate of higher education spending, which was 3.4 percent, and much higher than the spending on elementary and secondary education, which was 2.1 percent, and public assistance at 1.8 percent, corrections at 1.3 percent and transportation at 3 percent, the report shows.

ObamaCare calls for state Medicaid programs to be expanded to the point where they cover non-pregnant, non-elderly individuals who have an income up to 133 percent of the federal poverty level. Moreover, states are required to utilize a “five percent income disregard,” which means that Medicaid eligibility actually reaches 138 percent of the federal poverty level.

“This is why the public tide against ObamaCare continues to grow,” said Rep. John Fleming (R-La.), who is also a medical doctor. “Reports like this one confirm everything we knew when Democrats were pushing ObamaCare through. It will cost much more than they claimed and give back much less than they promised, all the while undermining the best health care system in the world. We need to repeal ObamaCare altogether.”

The figures reported by NASBO link back to a series of broken promises associated with President Obama’s health care law, Fleming said.

He described them as follows:

“The broken promise that insurance rates would go down. They went up.”

“The Class Act which was designed to help finance ObamaCare has been deemed defunct by the actuary.”

“The student loan program was nationalized to use `profits’ to finance ObamaCare, but now the president wants to begin forgiving some of the loan debt, creating another loss of taxpayer money and inability to finance ObamaCare.”

“The $500 billion that ObamaCare took from Medicare.”

“At least 12 new taxes or tax increases to help pay for ObamaCare.”

Bruce Greenstein, Louisiana’s secretary for the Department of Health and Hospitals (DHH), is concerned that the federal health law could short circuit reform efforts and innovations at the state level, and further exacerbate an already challenging fiscal climate.

“The economics behind Medicaid is counter-intuitive to what really needs to happen,” he said. “If I thought that more spending was the answer to health care that I would be open to these kind of proposals. But despite all the spending, we still get bad results.”

While he was not opposed to some of the health care expenditures connected with President Obama’s stimulus, Greenstein would prefer to have more freedom and flexibility at the local level for experimentation.

“In fairness, I would say some of the investments I saw with the stimulus money went into areas that were worthwhile,” he said. “But instead of leaning on taxpayers we should let the market decide how to best allocate our dollars.”

Assuming the U.S. Supreme Court does not overturn the individual mandate included as part of the PPACA, there is good cause to be concerned about the impact the law will have on the state, Greenstein added.

Louisiana officials estimate that implementation will cost Louisiana in excess of $7 billion over a 10-year period. Moreover, between now and 2014, Louisiana health officials also expect Medicaid enrollment to grow by more than 50 percent.

Although Medicaid was set up as a federal-state partnership with an eye toward splitting the cost of the program, this arrangement exists on unequal footing, Christopher Jaarda, president of the American Healthcare Education Coalition (AHEC), said. The federal government now largely sets the rules leaving the states with very little latitude, he notes.

“States have to beg the feds for flexibility in how they run Medicaid,” he said. “With the current economy, states need even more flexibility but, with ObamaCare, the feds have expanded the states financial burden under Medicaid, making it harder for states to balance their budgets.”

Moreover, the Medicaid expansion will could force “dramatic cuts” in other areas of state budgets such as primary, secondary and higher education, he added. States face a $175 billion shortfall over the next two years, according to current projections.

“Supporters of ObamaCare call it reform but it is not,” Jaarda said. “What would reform look like? Making every American better consumers of health care dollars, giving each of us skin in the game to make smart decisions and to shop for better, more affordable care. Market forces can help reduce costs, reduced costs will make insurance less expensive, which in turn will mean more people can afford coverage. ObamaCare is not reform because the law does nothing to curb costs, it makes the system less transparent, masking the cost of health care through the expansion of existing entitlements and the creation of new entitlements which simply shift the costs from one group of Americans to another.”

Kevin Mooney is the Capitol Bureau Reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org and followed on Twitter.

For a comprehensive description of the proposed amendment, we direct you to a report from the Public Affairs Research Council of Louisiana (PAR). PAR does not take a position, but their report describes the amendment, places the issue in context and summarizes the arguments for and against. It is well worth a few minutes of your time.

The central issue is whether it makes sense to amend the constitution to prohibit the state and local governments from accessing revenue from real estate transfer taxes.

Real estate industry groups are actively supporting the amendment. They argue that adding taxes or fees to the purchase and sale of land will act as a deterrent to these transactions. Government-imposed costs would discourage an important type of economic activity at a time when the real estate market is already in the doldrums. This is a compelling argument and it goes largely unchallenged by opponents of the amendment.

Instead, opponents claim that it would be a mistake to deny access to potential revenue streams at a time when the state and local governments are struggling with budget shortfalls. The Louisiana Budget Project opposes the amendment on these grounds. Similarly, the Council for a Better Louisiana opposes the amendment, though it focuses more on the advisability of amending the state constitution.

We believe that voters should support this amendment and vote Yes on Saturday. While there is no doubt that policymakers have been challenged by recent budget shortfalls, most taxpayers face challenges of their own. These taxpayers must live within their means and we believe that policymakers should do the same.

One underappreciated fact about budget deficits is that they force policymakers to address problems that are otherwise avoided. In times of surplus, it is easy to throw money at problems, avoid the tough choices and kick the can down the road. Policymakers are human and most humans are understandably inclined to prefer the easy way out.

But the tendency to avoid making tough decisions, left unchecked, leads to disaster. The requirement that our state balance its budget each year puts a check on this tendency, and balancing the budget when revenues are down is a healthy exercise that taxpayers should welcome even if policymakers do not. The substantive reforms that are needed in so many areas simply will not take place if policymakers know that there is always a new source of revenue around the corner.

Opponents of the amendment claim that governments need flexibility to deal with the challenges facing our state. We agree. But governments can demonstrate flexibility by finding creative ways to deliver better services at a lower cost, rather than finding new ways to separate taxpayers from their money. We encourage you to vote Yes on Constitutional Amendment 1 on Saturday. It will protect taxpayers, encourage economic activity and increase the likelihood of the meaningful reform in our state.

Big spenders in Congress who continue to inflate the national debt at the expense of future generations could be brought to heel if a Louisiana resolution in favor of a proposed constitutional amendment continues to catch on in other states.

With the national debt now approaching $15 trillion, recent polls show that a broad cross-section of Americans stand united on the need to curtail spending in Washington D.C. and alleviate the flow of red ink. A new Reuters poll, for example, shows 71 percent of Americans oppose increasing the national debt.

Even so, recent history shows that Congress is not likely to constrain itself and must instead be forced into accepting public opinion, North Dakota State Sen. Curtis Olafson a Republican from Edinburg, has warned.

“Some people say we need to change the people in Congress, but we have done that and we have also changed the party in control,” he said. “Yet our debt continues to grow and this tells us that the problem is more systemic and that the ground rules must be changed.”

Olafson was the chief sponsor of the resolution in his home state that calls for a National Debt Relief Amendment (NDRA). He also testified on behalf of the Louisiana resolution, which passed in June. The Louisiana vote was 73-0 in the House and 24-7 in the Senate.

Under Article 5 of the U.S. Constitution, Congress is required to set a time and place for delegates from all 50 states to convene once 34 states have petitioned for an “amendments convention” on the same subject. The NDRA was drafted by RestoringFreedom.Org, a Texas-based non-profit group, and endorsed by the Goldwater Institute, an Arizona-based free-market think tank. The American Legislative Exchange Council (ALEC) also adopted the resolution providing for the NDRA as model legislation in January.

The NDRA’s proposed amendment language reads as follows: “An increase in the federal debt requires approval from a majority of the legislatures of the separate states.”

In just the past few weeks, state legislators in Montana, Ohio, Texas and Wisconsin have committed to introducing NDRA resolutions. The other states where the NDRA is pending introduction or passage are: Arkansas, Arizona, Michigan, Minnesota, Missouri, Nebraska, Pennsylvania and Utah.  “Serious discussions” are now underway in 12 other states, Olafson said, which means the NDRA is in play in 24 states.

“Anyone who thinks Congress is suddenly going to have an epiphany and reform itself will be sorely disappointed,” Olafson said. “But if we get just a few more states on board with the resolution we are off to the races.”

He added:

“What happened in Louisiana and in my home state definitely had an impact because it demonstrates to other state officials that this can be done and that there is support in other parts of the country.”

While Olafson is also open to the idea of a Balanced Budget Amendment (BBA), he does not expect that it would ever pass, and even if it did, it would be far too easy in his view for Congress to circumvent its key provisions.

“There is a get out of jail free card with the Balanced Budget Amendment,” he noted. “With a two-thirds vote it can be waived. I prefer the National Debt Relief Amendment because it is much simpler and it does not dictate any set of policies. It also stands a much better chance of getting to the finish line and exerting pressure on Washington D.C.”

It would be more difficult for Congress to sidestep the NDRA if it went into effect because the financial markets would discount the value of bonds that would be marketed to finance an increase in debt that has not been approved by the states, Olafson added.

Some critics of NDRA have expressed concern that it could open the way to a runaway convention where radical amendments are proposed.

“Nothing is worth opening up our Constitution to uncontrolled action comparable to Democrats and Republicans holding their conventions in the same place at the same time,” Elaine Donnelly, president of the Center for Military Readiness, has written. “A Constitutional Convention  once convened, would make its own rules, in the same way that the original convention did, no matter what the authorizing resolutions said.  Do you see among today’s cast of characters leaders comparable to the Founding Fathers?  I don’t, but I do see many people who would like very much to pose as ‘Founding Fathers’ in imposing more ‘hope and change’ on our Constitution.”

Rob Natelson, a retired law professor, has addressed these objections in a series of reports for the Goldwater Institute.

He argues that the status quo in Washington D.C. is far more dangerous to American interests than the convention process.

“The Founders included the state application-and-convention process because they recognized that Congress might become irresponsible or corrupt and refuse to propose needed changes — particularly if those changes might restrain the power of Congress,” Natelson wrote. “In the state application-and-convention process, the states play much the same role in curbing abuses at the federal level as citizens do when curbing abuses through citizen initiatives at the state level. Increasingly, Americans are recognizing the current situation in our country is precisely the kind for which the convention method was designed.”

Opponents of the NDRA overlook some key historical facts, Olafson points out. For starters, Article 5 does not provide for a full blown Constitutional Convention but only authorizes a Convention for the purpose of proposing specific amendments. Moreover, when language was introduced that would allow for a full Convention it was rejected multiple times.

“The fear over an Article 5 amendments convention, while it’s pervasive and widespread it is not rational,” Olafson said. “If you do some basic research on the Article 5 process and the history of how and why it was formulated by the founding fathers you come to realize there is no good reason to fear the process.”

There is also the added hurdle of needing 38 states to ratify the NDRA or any other amendment.
“I ask our critics to produce for us their official list of 38 states that they fear would ratify a dangerous, extremist or radical amendment,” he said. “I have challenged many people who preach fear mongering to produce a list and so far no one has because it doesn’t exist.”

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org and followed on Twitter.

Ten oil rigs have left the Gulf of Mexico since the Obama Administration imposed a moratorium on deepwater oil and gas drilling in May 2010, according to documentation obtained from Sen. David Vitter’s (R-La.) office.

The ten rigs named in the document are: Marinas, Discover Americas, Ocean Endeavor, Ocean Confidence, Stena Forth, Clyde Bourdeaux, Ensco 8503, Deep Ocean Clarion, Discover Spirit, and Amirante. The rigs have left the Gulf for locations in Egypt, Congo, French Guiana, Liberia, Nigeria and Brazil.

“This highlights the problem we have with losing domestic energy production as a result of the drilling moratorium and the slow permitting,” David Kreutzer, a research fellow in Energy Economics and Climate Change at the Heritage Foundation, said. “We must also keep in mind that the impacts are not instantaneous, the rigs may be idle for a while, but once they move it’s going to be difficult to move them back once they are drilling in say Nigeria or Brazil.  The oil companies must have confidence they can move forward with their drilling plans and to know these plans won’t be revoked. Only certainty will bring them back.”

Although federal officials announced they were lifting the restrictions last October, a “de-facto moratorium” remains in effect that stifles energy production and undermines large and small businesses in the Gulf region, industry officials have argued.

“I don’t think the people in Washington D.C. who implement these policies have an understanding of how much this has impacted our economy, especially in Louisiana,” Renee Baker, the state director for the National Federation of Independent Business (NFIB), said. “We can’t just look at the large businesses to understand what’s happening, there are small businesses that do a lot of services for the rigs and they have been set back. We just want to see people get back to work.”

Unfortunately, the “political uncertainty” surrounding the Gulf region has discouraged companies from making investments that could help spur economic growth, Don Briggs, president of the Louisiana Oil and Gas Association (LOGA), laments. Even before the 10 rigs cited in the document from Vitter’s office pulled out, eight other rigs that were planned for the Gulf were detoured away, Briggs said.

“When you have companies that would be spending hundreds of millions of dollars, or some cases, billions of dollars, they need certainty,” Briggs explained. “We don’t have that now and I don’t expect that we will anytime soon. We will be in a deteriorating position until this changes.”

Briggs also questions the necessity of the moratorium that was imposed in response to the explosion of British Petroleum’s (BP) Macondo oil well on April 20 of last year. The accident resulted in the death of 11 workers and caused an estimated five million barrels of crude oil to spill into the Gulf.

Despite whatever missteps were involved with BP’s oil drilling operations, the industry as a whole has a “great safety record” in the Gulf, but this has not been taken into account, Briggs noted.

“We would have implemented new rules and guidelines without any federal action. This could have been done without a moratorium. There is no getting around how severe the regulatory fallout has been for us,” Briggs said.

Meanwhile, Sen. David Vitter has called out top Obama administration officials for issuing what he views as conflicting and misleading statements on the correct number offshore drilling permits. A U.S. Justice Department motion filed in March stated there are 270 shallow water permit applications pending and 52 deepwater permit applications pending.

But in testimony before the Senate Energy and Natural Resources Committee this past March, Interior Secretary Ken Salazar said the Interior Department had received only 47 shallow water permit applications over the previous nine months and that only seven deepwater permit applications were pending. Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation, and Enforcement, told Vitter personally that only six deepwater permits were pending, and he publicly stated that deepwater permits would be limited because “only a handful of completed applications have been received.”

Over the past three months, deepwater permits are down 71 percent from their historical monthly average of 5.8 permits per month, Robert Bluey, a blogger and journalist with the Heritage Foundation, has reported on The Scribe. Shallow-water permitting have also fallen in past few weeks by 34 percent from the historical monthly average of 7.1 permits, Bluey reported.

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org. Follow him on Twitter.

Over at The Lens, contributor Nathan C. Martin recently criticized the Louisiana legislature for cutting statewide funding for the arts. While Martin rightly celebrates Louisiana’s culture, his argument for increased government subsidies falls short. He claims that the budget cuts undermine the valuable asset that is our culture, but how can the legislature undermine something it has never been responsible for in the first place?

There are many reasons why Louisiana has “generations-old traditions like jazz, second lines, Mardi Gras Indians, zydeco and parade floats.” Our state’s unique history, geography and demographic diversity have all played a hand. If there is evidence that government support has been integral to any of these great traditions, Martin does not offer it.

If government funding were so vital to the existence of a rich local culture, wouldn’t other states have figured this out by now? According to this logic, Minnesota and Kansas need only spend a few more millions of dollars on the arts and they would become destinations for the educated young newcomers now heading to New Orleans.

Of course this is absurd. Just as New Orleans has its own culture, Minneapolis and Wichita have theirs. Each of these cultures has developed over many years and each appeals to some people but not others. State spending on the arts has never been a key factor in this process.

Some recognize that cultural traditions are created independently of government, but claim the state plays an important role in keeping these traditions alive. This, however, places too much faith in the government bureaucracies that deliver poor outcomes in so many other endeavors. To assume that taxpayer dollars are being used wisely just because they are dedicated to the arts is to ignore the rampant corruption and incompetence found in every other government realm. If the vitality of Louisiana culture depended on government support, we would all be in trouble.

The good news is that in a free society people voluntarily lend their support to the arts. This occurs in countless ways and has a track record of success that no government bureaucracy can match.

Preservation Hall, for example, was founded by individuals whose passion for traditional jazz spurred them to create a venue for the great musicians of New Orleans that had been fading into obscurity. Over the course of the past half-century it has grown into one of the most popular jazz venues in the world. Its owners have succeeded in preserving one of America’s great artistic achievements while turning a profit.

Another example is Frenchmen Street in New Orleans. This once-moribund area has become a world-renowned destination for visitors and locals seeking a range of music that cannot be found on Bourbon Street. Once again, individuals in the private sector found a way to make money while showcasing Louisiana artistry.

Undoubtedly there are worthy artistic projects that have benefited from state funding. But ultimately, the development of “new and innovative forms of expression” that Martin praises does not hinge upon government funding. The human instinct to create and consume art is too powerful to be extinguished by lack of state support.

When it comes to supporting the arts, government just needs to get the basics right: Keeping streets safe so artistic pioneers can revive blighted neighborhoods, removing unnecessary regulatory obstacles that might hinder enterprising investors in the arts, and ensuring that our children have access to a quality education so that they, too, will someday become participants and protectors of Louisiana’s rich cultural heritage.

NEW ORLEANS, La. – A sophisticated analysis of freedom across state lines, released today, finds Louisiana the least free of the former confederate states and in the bottom third of the nation. The one bright spot of the ranking is that Louisiana has risen four places, from 39th to 35th since 2007.

Update: Jeff Crouere, a television host with WLAE and radio host with WGSO, interviewed Fergus Hodgson, author of this article and former Pelican Institute reporter, on the results. Watch the full clip below (eight minutes).

The Mercatus Center at George Mason University has published “Freedom in the 50 States: An Index of Personal and Economic Freedom” – an updated and revised version of their first ranking of 2007 data – which measures three primary state freedom variables: fiscal, regulatory, and personal. The authors, William Ruger and Jason Sorens, political science professors from Texas State University and the University at Buffalo, assess these variables from the perspective that “individuals should be allowed to dispose of their lives, liberties, and properties as they see fit, as long as they do not infringe on the rights of others.” (Click below to hear the authors discuss the findings – 34 minutes.)

New Hampshire comes in first, just edging out South Dakota – and Indiana, Idaho, and Missouri round out the top five. On the other end of the scale, no state comes close to New York for overbearing government, but the other cellar dwellers are New Jersey, California, Hawaii, and Massachusetts.*

All of the bottom five states are DemocraticPartystrongholds, and that applies to the personal freedom ranking as well, despite perceived Democratic sympathies for civil liberties. However, those ranked highest tend to be swing states, rather than Republican Party strongholds. Both New Hampshire and Indiana, for example, have switched their presidential majorities in recent elections.

In total, there are five rankings, so two in addition to the primary categories. The authors combine fiscal and regulatory variables for an economic freedom ranking. Finally, economic freedom goes with personal freedom to complete the overall freedom ranking.

The authors compared each of the rankings with domestic migration between the states, which will be of particular interest to Louisianians. (While southern states increased their populations by an average of 15 percent over the past decade, Louisiana’s population barelycracked 1 percentgrowth, and on net 7.1 percent of its domestic residents left.) With greater than 99 percent statistical confidence, the data indicated that American residents have been migrating to freer states.

“An increase of 0.5 points on the freedom scale, for instance from Connecticut [38th] to Iowa [13th], increases net migration by a whopping 5.9 percentage points of 2000 population.”

Applied to Louisiana, that suggests if the state were to increase its freedom ranking into the top 20 – comparable to Alabama, which is 19th – that would halve the net domestic out-migration. A shift into the top five states, holding the same logic, would eliminate the out-migration.

“The positive effect of personal freedom is actually more than twice as large as that of economic freedom,” write the authors. They suggest that “Americans in general are indeed attracted to freedom for its own sake, not just for the economic benefits.”

The report has a profile for each state, including three policy prescriptions for how to quickly rise in the rankings. To explain Louisiana’s poor placing, the state’s profile notes high sales taxes, increased government spending (through 2009), high government employment, excessive drug sentencing, a prohibition on Internet gambling, heavy regulation of private schools, and a liability system among the worst in the country.

Not all is bad, though. Homeschoolers enjoy relative freedom, and the authors complement the state’s reformofeminentdomain laws (although recenteventsinNewOrleans place doubt on how prudent local municipalities are with applying these.)

The policy prescriptions include a hiring freeze on government workers, a lower sales tax, and the elimination of all private school regulations. They also cite the partisanship of judicial elections as counterproductive to the liability system.

Tomorrow at 4pm EST, the Cato Institute will host a policy forum on this research, including both authors. You can watch it live online.

*If a state is 1 standard deviation freer than the national average on every single policy, then its score will be 1. If a state is 1 standard deviation less free than the national average on every single policy, then its score will be -1. A score of 0 means average all-around.

Fergus Hodgson is the capitol bureau reporter with the Pelican Institute for Public Policy and editor of The Pelican Post. He can be contacted at fhodgson@pelicaninstitute.org, and one can follow him on twitter.
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BATON ROUGE, La. – The National Debt Relief Amendment – a state-initiated tactic against federal debt – has passed favourably out of committee without any objection. It is scheduled for a vote in the House today.

North Dakota Senator Curtis Olafson (R – Edinburg), who flew in to testify as the NDRA’s national spokesman, was met with as many welcomes and jokes as he was with questions. He was the prime sponsor of the same resolution in North Dakota, the first state to pass it.

Here is his testimony, introduced by Noble Ellington (R – Winnsboro), along with the discussion with Louisiana’s House Committee on Governmental Affairs (14 minutes).

The proposed amendment, HCR 87, reads:

“An increase in the federal debt requires approval from a majority of the legislatures of the separate States.”

Olafson (pictured left) promoted the NDRA as nonpartisan, highly researched, and model legislation of the American Legislative Exchange Council. He also emphasized its necessity – that federal debt requires urgent restraint, with both major parties responsible for the problem.

The chief concern of opponents has been the potential for a runaway convention – one that would radically change the U.S. Constitution. Olafson says that the states are “the ultimate protection” and that opponents need to name 38 states that would adopt a dangerous or extremist amendment.

“Unless and until 38 states ratify a proposed amendment, the Constitution is untouched, and nothing changes.”

Both Olafson and Ellington were pleased with the committee’s response and are highly confident of passage through the legislature. At this stage, there does not appear to be strong opposition within Louisiana, and no opponents testified at the hearing.

Passage in Louisiana would bring more national attention for the NDRA and greater likelihood of passage in other states. Olafson is moving on to testify in Pennsylvania and Michigan, and he is pursuing further prime sponsors in other states.

For those interested in learning more, the Pelican Institute for Public Policy has released three articles to explain the logistics, history, and justification behind a state-led amendment such as the NDRA.

The Pelican Post also ran a commentary from Robert J. Thorpe in favor of state-led amendments, particularly for fiscal restraint from the federal government.

Fergus Hodgson is the capitol bureau reporter with the Pelican Institute for Public Policy and editor of The Pelican Post. He can be contacted at fhodgson@pelicaninstitute.org, and one can follow him on twitter.
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Frustration over Washington’s restrictive policies towards the Gulf oil and gas industry has resulted in new legislation to extend Louisiana’s coastline. SB 145, authored by Sen. Dan Claitor (R-Baton Rouge) would extend jurisdiction from three miles to nine miles, ideally allowing the state to collect hundreds of millions in royalties and taxes from additional oil and gas revenues.

SB 145 passed unopposed through the Senate Natural Resources Committee and was passed by the Senate by a vote of 34-0 this past Wednesday. It has now been referred to the House for consideration. Claitor argues that Louisiana is suffering from “intrinsically unfair” federal laws which grant Texas and Florida nine-mile coast lines, yet in contrast afford Louisiana only three miles of coastal jurisdiction. Other notable proponents include Sen. Norby Chabert (R-Houma) and Gov. Bobby Jindal.

According to the Department of Natural Resources, an extended coastline could net the state an extra $342-480 million dollars annually – money currently being expropriated by the federal government.

Louisiana technically does not have legal authority to extend its own coastline. The current jurisdiction was determined by the Supreme Court in United States of America v. States of Louisiana, Texas, Mississippi, Alabama, & Florida, 363 U.S. 1 (1960), which delineated Louisiana’s three-mile long coast while granting Florida and Texas nine miles each.

According to Claitor, the intent of the legislation is to pique the attention of Washington towards this subject. Washington’s response will ultimately entail action by either Congress or in the judicial system. Either way, the government will be forced to make a ruling.

Claitor believes, however, that any potential costs of litigation will be trumped by revenue from an extended coastline.

If SB 145’s committee hearing was an indication, the bill will not encounter sizeable opposition in the state legislature. However, Claitor and others anticipate controversy with the federal government, particularly because of its potential precedent for states’ rights and the tactic of preemption.

Jamison Beuerman is a contributing writer and policy analyst at the Pelican Institute for Public Policy. He can be contact via email at jbeuerman@pelicaninstitute.org or on Twitter @jbeuerman.

BATON ROUGE, La. – While hiring illegal immigrants is already illegal, Sen. Neil Riser (R-Columbia) wants all firms that contract with the state of Louisiana to verify residency status of their employees. SB 66 would mandate participation in the federal E-Verify program, following similar legislation passed in Colorado, Georgia, and South Carolina.

From January 1, 2012, those found still employing illegal immigrants would be subject to cancellation of their contract and could be ineligible for further government contracts.

The bill asserts that employment of illegal immigrants obstructs the enforcement of federal immigration law and undermines the security of U.S. borders. The verification system, it continues, will assure “taxpayers that their dollars are not spent in support of such illegal aliens.”

The state government has almost 12,000 such contracts, each worth an average of $1.1 million. That comes to $12.3 billion and around 6 percent of the economy, so this policy, if enforced, could have a noticeable impact on Louisiana taxpayers.

Contractors hire illegal immigrants because they are willing to work below the wages of legal citizens, so without these workers the cost to taxpayers for public projects would tend to rise. Additionally, pushing illegal immigrants out of the labor force would lower the tax base. The Reason Foundation has reported that two thirds of illegal immigrants pay Medicare, Social Security, and personal income taxes, and they cannot avoid sales taxes.

Sen. Riser, however, believes taxpayers are his strongest ally.

“I would say 80 percent of [Louisiana residents] agree with me that Louisiana tax dollars should not be spent… on someone that does not have legal status in the U.S.” He also cites the American Federation of Labor and Congress of Industrial Organizations, with 55 national and international labor unions as members, as a key proponent.

Regardless, evidence from other states suggests widespread non-compliance from employers, a calculated acceptance of the associated risks.

For example, Arizona, along with Mississippi and Utah, has mandated E-verify participation for all employers, not only those contracting with government. Even two years after enactment, Arizona’s largest newspaper, The Arizona Republic, reported that only a third of employers had even signed up, let alone vetted all employees.

In the case of Mississippi, however, Sen. Riser believes the results have been positive, and he has been in contact with the legislation’s sponsor.

“Last year when I spoke with Senator Michael Watson [R-Pascagoula], who sponsored the legislation over there in 2009, he said the only aspect of all he would change is that he would rather it would have taken effect sooner.”

Antony Davies, an economics professor at Duquesne University, Pennsylvania, remains skeptical.

“Requiring that employers verify the legal status of their employees is like requiring that drug dealers verify the number of sales they make each month. To paraphrase from one of my favorite movies, one does not get a permit to do an illegal thing,” he says.

Davies also disputes the notion that immigrants, legal or illegal, are a problem worthy of resistance.

“Workers bring skills and labor. The more skills and labor we have, the more stuff we can produce. As we produce more stuff, the price of that stuff falls, and everyone who buys that stuff is better off.” (Click here for his complete response, and one of his presentations on immigration is below – three minutes.)

Darlene Kattan, executive director of Louisiana’s Hispanic Chamber of Commerce, notes that immigration is under the jurisdiction of the federal government, not the state. Sen. Riser agrees in principle, but “in the face of federal inaction… the states, in my opinion, have the responsibility to ensure jobs… and I feel like those jobs should go to people that have a legal status in the United States of America.”

Kattan also has concern with the accuracy of the E-Verify program. In fact, a report commissioned by U.S. Customs and Immigration (USCIS) found that 54 percent of unauthorized workers still received E-Verify approval for employment.

Oportunidades Nola is an adult education center that assists Hispanics, regardless of their documentation, to integrate into the greater New Orleans area. Its director, Jamie McDaniel says she seeks “to build bridges between the native and immigrant communities,” and she hopes “all residents of Louisiana, who work hard… would be able to work here without being harassed by [USCIS].”

“This country needs an immigration reform… The immigration system, as it stands today, is not serving the best interests of potential immigrants or citizens of the United States… Asking employers to do the work of the federal government with regard to enforcement of immigration laws is very unfair to those employers and is going to promote racial profiling of Hispanic employees, whether or not they have documentation.”

Jacob Hornberger, of the Future of Freedom Foundation, holds immigration and other economic liberties as equal to freedom of speech, religious liberty, and political liberty. Louisiana officials and everyone else, he says, should advocate open borders “as the only solution to the immigration woes that afflict our nation.” (Read Hornberger’s full response here.)

On the other hand, the Eagle Forum – a paleoconservative, traditionalist organization – describes the E-Verify program as a shovel-ready solution to the “immigration crisis.” Its founder, Phyllis Schlafly, has expressed concern about the “loss of U.S. jobs to illegal aliens,” particularly jobs associated with federal “stimulus” funds.

Sen. Riser remains confident of the bill’s passage. After lacking a quorum last week, the Senate Labor and Industrial Relations Committee is scheduled to review SB 66 tomorrow, May 12.

Fergus Hodgson is the capitol bureau reporter with the Pelican Institute for Public Policy and editor of The Pelican Post. He can be contacted at fhodgson@pelicaninstitute.org, and one can follow him on twitter.
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