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Dec 08, 2006
Governor Blanco's Opening Remaks to the Special Session of the Legislature

Governor Kathleen Babineaux Blanco
December 8, 2006

Mr. President, Mr. Speaker, distinguished members of the legislature and special guests.  Today we have an opportunity to make significant investments in our recovery.  We have the good fortune to bring much needed relief to our families.   Thank you for giving up your holiday season to help our people.  We are here on the people's business. 

Some of you started calling for a Special Session in November to give insurance rate relief by refunding Citizens insurance assessments.  Others of you were asking, why convene now?  Why not postpone this Special Session until after the holidays?  Here's why we must act now. 

By acting now, we can guarantee that insurance relief checks arrive in the hands of our people in weeks, not months. 

By acting now, we can block the next round of insurance rate hikes due to the Citizens insurance assessments set to start in January. 

By acting now, we can give tax breaks to families and businesses for the 2006 tax year.  Why hold up tax cuts until 2008, why not act now?

By acting now, we can give immediate pay raises to our deputies, police and firefighters.  Some are here tonight.  Why don't you welcome them with me? 

We have not raised their pay for almost 10 years.  The world knows they are heroes, and so do we. 
The people of Louisiana know we can count on them.  At this session, can they count on us?

By acting now, we can invest $400 million in road improvements.  Construction costs are on the rise.  By investing now, we can build more roads for our money and save millions in inflationary costs per month. 

By acting now, we can bring teacher pay to the Southern Regional Average at last!  Together, we've set our sights on this goal.  Let's also honor our cafeteria workers, our janitors, our bus drivers, and all the support workers.  We can score an A+ this school year!

By acting now, we can allow public employees, such as our hospital and social service workers, to start a new year with fair pay.  This will be the first general pay raise many workers have seen in 16 to 20 years.  They depend on us.  We should not let them down. 

By acting now, we can prevent our local governments from being hit with more FEMA bills January 1.

I can go on and on listing the reasons we should act.  The truth is that the critics in Louisiana always have a hundred reasons why government should not act. 

Now, I've learned a thing or two about critics in recent months.  They tend to be the most reluctant to act, the most attached to the status quo, and the first to gripe when nothing gets done. 

Why shouldn't we pay deserving public employees decent wages?  And why should we keep this money tied up in a bureaucracy?  This is not our money.  This is the people's money! 

We have a chance to invest this money to build on a time of great optimism and hope.  There has never been a more exciting time to live or work in Louisiana.  Our economy is coming back stronger than ever before.  This is thanks to the hardworking residents fiercely determined to get back on their feet. 

Three years ago, we all took a leap of faith by reducing taxes, and it worked. 

A year ago, I cut nearly $1 billion from our budget to invest in the recovery.  I did this with your support. 
Our conservative fiscal policies have produced an $827 million surplus for this past fiscal year.  We have $1.6 billion in new revenue for the current fiscal year.  This is projected by economists to continue into the coming years.

Our economic outlook is a tremendous testament to our confidence in ourselves.  We are moving forward with our recovery.  We can't let go of the reins.

Louisiana sits in the driver's seat of the largest construction economy this nation has ever known.  We're attracting new industries and new jobs. 

We're diversifying our economy to compete in new markets.   We've taken an aggressive approach to economic development.  Our pre-storm investments are paying off! 

The strategic investments we're making with this surplus and new revenue will continue to fuel our economy.  I want to begin with the $827 million surplus from last fiscal year.  I urge you to invest it in three key priorities within our constitutional mandates. 

First, I propose that we devote a full $400 million - one-half of that surplus - to road improvements. 

Everyone knows that even before the storms, roads across our State were in urgent need of repair.  We'll push forward with priorities determined by you, the Legislature.  Every parish - every parish deserves a portion of this funding for roadwork.
Second, let's generate savings by investing $200 million to pay down the Unfunded Accrued Liability debt on our retirement systems.  This fiscally responsible investment will save an estimated $1 billion of interest payments over time.    

Third, we must help local governments meet their FEMA payments for debris removal.  The federal government refuses to continue its 100 percent reimbursement policy after December 31. 

The local communities have no money to pay the 10 percent share FEMA will charge them.  We estimate they will need $100 million to finish this debris cleanup work.  Trust me, the last thing our local governments want is yet another FEMA bill! 

Our proposal to invest the surplus is fiscally sound and recovery focused.  It sends a strong message to Congress that Louisiana continues to lead the way in our own recovery.  I trust that you will find a way to allow these surplus investments to be made. 

Next I want to talk to you about the new money. $1.6 billion has been recognized for this current fiscal year.  Please remember that $1.3 billion has been recognized for the 07-08 fiscal year as well.  So this is continuation money, not one-time money.

Louisiana has an insurance crisis.  We all know this.  Our recovery requires us to deliver short-term relief and a long-term solution. 

Insurers are over-reacting to the one-time experience of the storms.  It will take a while for them to settle down.  This problem is much bigger than just Louisiana.  The insurability of the entire coastline of the United States is at risk. 

I'm calling for us to enact a Louisiana Catastrophic Insurance Fund similar to Florida's plan.  Today we can begin long-term reform by setting aside $100 million as the first installment into our state catastrophic fund. 

Many of you called for a Special Session last month to refund the extra 15 percent assessments charged to all insurance policyholders.   

It will cost $236 million to refund these insurance rate hikes and offset pending rate increases.  Our people need rate relief, and this legislature can deliver!

To some of you, this insurance rebate may seem insignificant.  But to a struggling parent, it can make a big difference.  I've been there.  I raised six children on an educator's salary.  I know that individual and family tax cuts help, too.

I'm asking you to support a $300 million package of tax cuts for families and businesses. 

Young families with children are struggling.  I know they will benefit from a child income tax credit. 

If we are responsible, we can cut taxes on itemized deductions for mortgage interest, charitable contributions, casualty losses, and medical and dental expenses. 

If we act now, we can apply these tax cuts to the 2006 tax year.  Our families have weathered the toughest year in our State's history.  They deserve every nickel of these tax breaks and they deserve them now! 

We're going to give tax cuts to businesses too.  As you know, the legislature removed utility sales taxes for homeowners a few years ago.  Businesses still pay them.  At the urging of business and industry, I'm proposing a cut in sales taxes on utilities for businesses.  Reducing the business utility tax will benefit all companies, large and small.
I've been working with small businesses.  Yesterday, I proposed a $100 million dollar recovery grant program.  I know that for small businesses, every dollar counts.  These tax savings will help us to retain businesses of all sizes and spur economic growth.

My team is out there pushing, pitching and recruiting new investors.  We have a strong package of State and federal incentives to sell. 

Over the past three years, our investments and incentives have produced new jobs and growth throughout the State. 

Just think about Roy O. Martin in central Louisiana, Union Tank Car in Alexandria, Steelscape in the Shreveport-Bossier area, Shintech near Plaquemines, Synfuel in South-Central Louisiana, Jeld-Wen in Winn Parish, NuComm in Lafayette, and the list goes on. 

Now we are chasing down more than 70 active leads on new projects.  Tonight we have an opportunity to give one of the biggest leads our best shot.  

I asked you to meet in December because we're actively pursuing a big economic development deal.  I'm asking the legislature to set aside $300 million to show our commitment to securing a major durable goods manufacturer.
We are in stiff competition with two other states to secure the largest project of this type on the national horizon.  This project has the potential of creating 3,000 permanent jobs and 40,000 construction jobs.  It's that big! 

Right now - this month - they are looking for a strong signal that Louisiana is serious about wanting their investment.  If we don't fight for this, then we send a message to the nation that we are out of the economic development game.  We have the confidence to land a big manufacturer that offers our workforce good paying jobs with great benefits.  Stand with me and show the nation that we are major contenders.

In addition to economic development, the new revenue allows us to set aside a $200 million investment in health care reform.  And we're going to invest $20 million to strengthen the interoperability of our emergency communications system. 

Let me close with an honest discussion about fair pay.  We have an opportunity to fulfill many promises that have been made over the years.  Each time fair pay comes up, we say:  "We wish we could do it, we'd like to do it, we should do it."  Now, ladies and gentlemen, we can do it.

We've made promises to our teachers, to our firefighters and police officers, to our sheriff's deputies, to our support workers and state employees.  Every one of you is going to tell the first responders and groups here today that you are for their raise.  You will.  But there is only one way to get all this work done and be for their raises. 

I am asking you to vote to raise the spending limits for this one year - and one year alone. 
In order to refund Citizens' assessments, you have to vote YES to allow us to spend over the limits.  You have to vote YES to create a catastrophic insurance fund.  You have to vote YES to invest in roads.  You have to vote YES to secure the biggest economic development opportunity of all times.  You have to vote YES to invest in modest pay raises.  You have to vote YES to save 1 Billion dollars worth of interest in retirement savings.  Let's not use this as an excuse to stop our progress.

We're picking ourselves up and moving forward.  We have an opportunity to build on this momentum and fulfill many of the core goals and values that we all share.

Insurance rate relief and reform, investing in our people, tax cuts for our families, succeeding in our recovery, and economic development.

The people of Louisiana support these goals.  We are moving forward with firm footing.  Let's build on this progress. 

Thank you, and God bless the people of Louisiana in this holy Christmas season.