Rep. Fannin discusses 'difficult' money issues

By James Ronald Skains
Journal Correspondent

"It has been a difficult session so far, and it may get more difficult before the 2012 session is over," State Representative Jim Fannin from Jonesboro, and Chairman of the House Appropriations Committee told the Piney Woods Journal.

"One thing that I am pleased about is our legislation to improve rural highways," Fannin explained. "We are taking the license fees from trucks and trailers and using it to bond-out $325 million in road improvements across the state.'

"These are roads that do not qualify for federal monies,' Fannin added. "Some of these roads have not been over-laid since the original asphalt in the 1960's. There are some 6,000 miles of these roads and we will be able to do 1,400 miles in this first round of improvements.'

"Every parish but Orleans will have some rural roads in this project,' Fannin added. "Next year, we hope to be able to continue the rural road program.'

In response to the Journal's question whether there is any legislation pending that would have any effect on the forest or agriculture industries, Fannin replied.

"If there is any legislation introduced this session directly affecting the forest industry, I haven't seen it. The major problem for the forest industry is the budget cuts in the Agriculture and Forestry Departments."

"We don't direct any specific cuts to the Commissioner of Ag & Forestry, but give him a budget to work with which is less than last year," Fannin explained. "From what I'm hearing, there will be cuts in the firefighting force in the forestry Department."

"However, it is simply a matter of dollars and cents in this case," Fannin pointed out. "The state collects eight cents an acre from forestland owners to use for fire protection. It costs the Forestry Department roughly 75 cents an acre to provide fire protection.

So, anyway that you look at it, there is roughly 68 cents an acre that the state is subsidizing for fire protection for forestland owners," Fannin noted. "It has been great over the years that the state has had the money available to provide fire protection for forestland owners, but when the State Budget has a deficit, cuts have to be made."

"I'm old enough to remember the days when the major timber companies had fire crews of their own to supplement the Forestry Department fire crews," Fannin acknowledged. "With all the changes in the forest industry in recent years, we have a system that isn't working very well."

"When the major forestland owners operated their own mills, at least the mills were generating jobs and tax revenue," Fannin explained. "However, when you have Timber Management companies owning large portions of timberland, but not operating mills, the state tax revenue situation gets further out of balance very quickly."

"I'm very pleased as to what is happening in my home district," Fannin acknowledged. "The RockTenn paper mill in Hodge is spending nearly $70 million on upgrades to the mill, so that makes me believe that they are planning on continuing to operate the mill even during a down market."

"Jeld-Wen, the national window and door manufacturer which built the big new mill in Winn Parish a couple of years ago, is still telling us that they will start the mill up in the 4th Quarter of 2012," Fannin pointed out.

"We have worked closely with the Weyerhaeuser mill in Dodson to relocate the highway to give it more room to operate safely, and hopefully, one day expand," Fannin said.

"I know that the PBS Mill in Winnfield is having trouble in this down lumber market," Fannin added. "I do know that the Louisiana Economic Development Department has been trying to help PBS, but sometimes in such down lumber market, there is not a lot that can be done to help."

The Journal's next question pertained to the price of oil and how it affects state tax revenue.

"Yes, the price of oil has been very high for a number of months, however, severance tax from oil and gas only makes up 14% of the state tax revenue stream," Fannin answered. "Sales tax and state income tax makes up the overwhelming tax revenue coming to state."

The Journal's follow up response to Fannin's answer was; "Just a couple years ago, the State Revenue Estimating Committee (REC) had based the budget on $65 per barrel oil, yet we have had much higher oil prices for many months."

"That is true; however, the State Revenue Estimating Committee first raised the budget number to $80 per barrel, and then last December 14, the REC raised the budget estimate to $90 per barrel so the state would have more money to spend," Fannin stated.\par }{\plain "Now, we are having trouble balancing a state budget with $90 per barrel oil," Fannin noted.

"However, there is a positive in the Department of Ag budget in that the money designated for the Boll Weevil Cotton program, I am working to get that money restored to the Ag budget," Fannin explained. "The 'Boll Weevil' Cotton program money that had been paid in by farmers had initially got swept into the General Fund by the Administration."

The Journal then turned the questions to the "hot topic of the day," the closing of the state correction center in Avoyelles Parish.

"We have three corrections facilities in Louisiana that are about the same size in inmate population, Winn Correction Center, Oakdale and Avoyelles," Fannin noted. "The Winn and Oakdale facilities are run by private companies, whereas the Avoyelles facility is a state run prison. It costs the State $7-9 million more per year to operate the Avoyelles facility than for operation of the Winn and Oakdale facilities,'' Fannin pointed out.

"The average income for a Correctional Officer at the Avoyelles prison, according recent to testimony before the House Appropriations Committee is $62,000 a year," Fannin stated. "They receive minimal training when they start at Avoyelles."

Turning to another topic before the legislature this year, Pension Reform, the Journal asked Fannin to outline the problem and what was being proposed to solve the problem.

"The bottom line is that the State Pension System has an $18 billion deficit," Fannin explained. "In the Governor's proposed reforms, nothing changes for the people who are already in the system and close to retirement age. However, the retirement age will go up to 67 for some people and contributions to the Pension system will increase by three percent."

The Journal's final question to Fannin was on the educational reforms proposed by the Jindal Administration.

"The Jindal Education Reforms are not as dramatic as people have been led to believe," Fannin stated. "I'm old enough to remember when Louisiana elected their Superintendent of Education. After each election, the new Superintendent would come up with their Reform package. And to a degree, that is what is happening now," Fannin explained. "These reforms center on the voucher systems which has not been tried before in Louisiana. After I was able to read the proposals by the Jindal Administration, I went to the Superintendents and Educators in my District and asked them what it would take for them to make these proposals work in their schools,'' Fannin elaborated.

"They told me that they did not want any vouchers in any form, but certainly not voucher transfers from C schools, only D and F rated schools," Fannin emphasized. "Actually, there are very few D or F schools in my District and no charter or private schools in the district."

"Secondly, they told me that the principals at schools, both those being transferred to and would have to sign off on the students transfer," Fannin noted. "Also, it was stipulated that no state monies dedicated for specific use in one school could be transferred with the student to their new school."

"So, those items are now part of the Administration's Education Reform package which is at the heart of voucher system," Fannin emphasized.

"We have the same basic problem today with education that we had when I started teaching school 40 years ago, and that is the drop-out rate," Fannin stated. "When I started teaching school in Winn Parish, the school drop-out rate in Louisiana was about 30%. Today, it is above 30%.''

"At least 60% of those dropping out of school will go to prison at some point in time," Fannin explained. "It costs the State $21,000 a year to incarcerate an adult prisoner. It cost the State $82,000 a year to incarcerate a juvenile per year."

"We spend less than $6,000 on the average statewide to educate a student in grades 1-12,'' Fannin pointed out.

"I'm really looking forward to opening of the new Huey P. Long Vocational School campus in Winnfield," Fannin acknowledged. "To solve our educational problems, we must put more emphasis on Vocational Education and work force needs."