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Story Archives: Can anyone say scapegoating?
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Can anyone say scapegoating?
 It should not have come as a surprise earlier this week when the House Appropriations Committee peeled off some $82 million from the state's so-called economic development megafund to offset proposed cuts to other state agencies.
Let's recall the Legislature is in the midst of the regular session, hammering out a spending plan for the state's 2011-2012 fiscal year, which begins July 1. Lawmakers are dealing with about $1.6 billion in less revenue for the new fiscal year compared to the 2010-2011 fiscal year, or the current fiscal year. That means the Legislature is looking high and low for every penny it can find to approve a budget that's balanced, which the state constitution requires.
It also shouldn't have come as a surprise when the state's point man on economic development, Stephen Moret, as well as officials in Ouachita Parish howled to the heavens that the Appropriations Committee's move to pick off that $82 million all but killed efforts to put Next Autoworks in business in the former Guide plant in eastern Ouachita. Can anyone say scapegoating?
Before we delve any further, does anyone remember Next Autoworks?
That's the company we used to call V-Vehicle. At least it was V-Vehicle until the powers that be at V-Vehicle decided to start calling the company Next Autoworks. I've never quite understood why the company changed its name, but that's why the folks at V-Vehicle make the big bucks and I opine for a living.
Be that as it may, V-Vehicle – I mean New Autoworks – announced a couple of years ago it had plans to set up shop in the former Guide plant where 1,400 people would be hired to build fuel-efficient automobiles. We were told the venture would create another 1,800 indirect jobs and hundreds of construction jobs would surface to refit the former Guide plant to make it suitable for the start-up company.
To convince V-Vehicle to locate in the former Guide plant, local officials leaned on voters in Ouachita to approve a 1.8-mill property tax to help finance a $15 million incentives package for V. The tax was collected for a year, or until the Ouachita Parish Police Jury exhibited some common sense and put the brakes on collecting the tax until V-Vehicle learned the fate of a more than $320 million loan from the federal government. The loan from the Department of Energy represents the bulk of the financing V-Vehicle needs to launch an automobile manufacturing operation in Ouachita.
Of course, a $15 million incentives package is peanuts in the wild world of luring big business, and the jobs that accompany it, to a community. That's where the state of Louisiana and its economic development megafund come into play.
The state offered V-Vehicle an incentives package that totaled some $140 million. The incentives package was made possible with monies from the megafund. The megafund monies have been earmarked, so to speak, since 2009. That's when lawmakers signed off on putting up the money to finance the state's efforts to attract V-Vehicle to Louisiana.
According to Rep. Jim Fannin, chairman of the Appropriations Committee, it's been tough convincing lawmakers to be patient with V-Vehicle while it lines up the rest of its financing, or waits on the Department of Energy to decide whether it will approve V-Vehicle's loan. Fannin's job got tougher this year as lawmakers grapple with a huge budget shortfall heading into the new fiscal year. To make matters worse, V-Vehicle and the Department of Energy aren't saying whether V-Vehicle will land the much-needed financing from the feds. We're left to wonder whether the feds believe V-Vehicle is a viable venture.
That brings us back to Moret and Ouachita Parish officials, who had a conniption fit Tuesday when the Appropriations Committee seized $82 million from the megafund to offset cuts elsewhere in the state budget. Moret and company claim the committee's decision put the kibosh on the V-Vehicle project because the Department of Energy would view the committee's handiwork as a signal that the state was no longer committed to V-Vehicle.
That might sound good to someone who lives in a cocoon, but to me, it sounds a lot like scapegoating.
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