Wednesday, September 14, 2005

The Last Barrier Falls

I attended the public service commission meeting this morning and the good news couldn't be better: Lafayette's plan got the go ahead 5-0. This was the last major, official hurdle and with that out of the way there is no further barrier to selling the bonds and beginning to build. Lafayette will have her new utility.

There were two relatively minor amendments, one procedural--LUS agreed to an audit schedule that might come as often as yearly, and one more substantial--LUS will definitely pay "imputed taxes" each year. While this is a good bit less onerous than being required to pay a full measure of the traditional In Lieu of Taxes, it does reduce flexibility and it does increase real costs but apparently not enough to seriously perturb LUS.

The real story of the morning was the strange behavior of the legislative auditor Steve Theriot. The legislative auditor's office, which fell into disrepute—at least among legislators—for what was regarded as an overweening arrogance of Dan Kyle, appears to have spawned another of the same ilk in Theriot. The state auditor is involved because it is charged by the (un)Fair Competition Act with enforcing regulations in Lafayette concerning internet and cable because the PSC does have authority to regulate those functions--in fact the state, except for Lafayette's LUS, does not regulate these functions at all. The legislatures auditor's insistence on an equal playing field sounds odd coming out of his mouth since he is not charging in to insist that "legislative intent" as to an equal playing field would require him to equally regulate BellSouth and Cox. Instead he believes that "legislative intent" compels him to insist the PSC impose new taxes on LUS. His level playing field only tilts in the direction of the incumbent corporations.

Theriot wanted to make sure that the imputed taxes that LUS had already agreed to pay and that the commission staff insisted that they had the power to compel should be written into law by explicit regulations. The problem with his position is, as was repeatedly pointed out by the commission and its staff, that the law passed by the legislature does not authorize a tax and the commission does not have the power to impose one. Theriot, who occupied the witness table long after it became clear that the commission wanted to get on with the vote, (he continued to repeat his position for at least fifteen minutes after commissioner Fields called for a vote) alternately threatened and complained that his opinions had not been sufficiently taken into account by the commission's staff. He blustered that if the commission did not regulate as he wanted he would be forced to write "procedures" of his own to take care of it.

Eventually an exasperated commissioner told him that the commission's staff did not feel they were ignoring his suggestions. Instead they believed he was simply "overreaching" his authority by attempting to make the law say something it very clearly avoids saying: that imputed taxes were meant to do anything other than raise the cost charged customers. (Which, I must say, is obnoxious enough a law for the state to have passed.) At no point does the law suggest that those taxes "shall be" collected by the local government, only that they "may be." They finally told him to go to the legislature and suggest that they "tighten up" the law. Theriot didn't appear eager to do so for a reason that is obvious on reflection and probably is the reason why the incumbents did not press for such a law in the first place: it would require a 2/3 vote of the legislature and require that the state intervene to impose a tax on a governmental body that it would impose on no other entity and then to force the local city government to receive it whether or not they wanted it. That is too crazy even for the Louisiana legislature and such a provision would surely have killed the initial law had it been included.

In an index of just how surreal the conversation became one commissioner suggested imposing fines equal to the Theriot's tax and wanted to know if the fines could be directed to the Lafayette Consolidated Government (LCG). --The answer: No, of course not. At another moment the audience, crowded with Lafayette supporters started calling out that the law didn't say what Theriot said it did (accurately, and to Theriot's obvious irritation). But the oddest moment came when Theriot suggested to a room full of Louisianaians in the aftermath of Katrina that he thought maybe the Feds should get some of the imputed taxes and that not all of it should go to the LCG. He swallowed that one pretty quickly but nothing could be better evidence of just how out of touch Theriot is...if he wants to make law he should run for the legislature.

The confusions this law evokes are a direct result of the fact that the law is bad law, written to serve corporate interests and awkwardly inserts the state apparatus in areas of governance where the state has no logical role. The wisdom of earlier legislatures in making the judgment that state should take its hands off the actions local governments pursue to fulfill local needs has been confirmed by the distateful mess in which this law has resulted. The hands off model worked well in the provision of local electric utilities and that should be the model followed with this new municipal utility.

What motivated Theriot to court the ire of the commission and the people is very unclear. Certianly nobody but the incumbent monopolies benefit. But clearly those that are concerned to support Lafayette should add Theriot to the list of state officials that bear watching. It is evident that some part of the first round of confusing and contradictory rules was due to Theriot's insistence and not to confusion on the part of the commission's staff.

Regardless, the road is open. We should all celebrate.

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