November 4, 2014 LA Constitutional Amendments (Part 1 of 2)

The November 4, 2014 ballot in Louisiana will include 14 constitutional amendments. The text of the amendments can be found here. The Public Affairs Research Council provides a helpful, non-partisan guide to the amendments. I, however, will provide my own thoughts on the amendments below. This post will cover the first 7 proposed amendments.

1.) Using the Constitution to create inflexible budgeting could be a good thing. However, an inflexible budget presumes that the constitutionally set rate is the correct one. I oppose this amendment because it would require the approval of 2/3 of the legislature (or of the budget committee if the legislature is not in session) to lower the rate. What if the rate deserves to be lowered, but 2/3 of the legislature does not want to be labelled during their next campaign as having taken money away from the poor, elderly, or disabled? In that case, the state Treasurer will be required to pay inflated rates to medical providers.

2.) The proposed amendment is unhelpfully lacking in relevant details. Creating a new system of fees, but not detailing how exactly the fees will be structured or assessed is not something I am prepared to support. A complex system of fees, lacking in specificity, combined with added budget inflexibility (see #1 above), is not an appropriate provision to enshrine in the state Constitution. I oppose.

3.) Government-employed tax collectors are bad enough. I oppose allowing local governments to contract with additional, private tax collectors who are not accountable to the voters.

4.) The legislature was unable to pass legislation that would create the Louisiana Transportation Infrastructure Bank. Even if it had, I would oppose the very existence of the bank because I believe there are better ways to fund transportation projects. As a result, I certainly oppose amending the Constitution to allow for transferring funds to this bank in the event that legislature succeeds in creating it in the future.

5.) I support removing the arbitrary retirement age for state judges. Who knows whether 70 is the right age for every judge to retire? No one could possibly know that. In fact, 4 United States Supreme Court Justices are well over the age of 70, and the only one speculated to be considering retirement, Ruth Bader Ginsburg, is 81 (nevermind the fact that most who call for her retirement are doing it for political concerns). There are existing mechanisms in place to remove judges who become unable to do their jobs, yet refuse to voluntarily step down. That mechanism is the appropriate means of accomplishing what an arbitrary age limit attempts to accomplish: having judges without diminished capacity.

6.) Precisely what New Orleans residents need right now is to not require the city to eliminate unnecessary and wasteful spending. Instead, to increase funding for police and fire protection, the city should be allowed to DOUBLE taxes that pay for police and fire protection. That is what this amendment would allow, and obviously I oppose it.

7.) This one is kind of a toss-up for me. Normally, I oppose special tax exemptions for small, specific groups. But, I also normally support tax cuts. In the case of this amendment, since the increased homestead exemption for disabled military veterans would apply to veterans who are determined to be 100% unemployable, the group singled out is certainly sympathetic. For me, the kicker is that the localities losing the revenue are not allowed to makeup the difference by charging everyone else more. As a result, I support it.

Louisiana Means Licensing

Received this email from the Institute for Justice yesterday. This shouldn’t come as a surprise to regular readers.

Louisiana Means Licensing

Friends,

Louisiana is ground zero for one of the greatest threats to economic liberty in America: occupational licensing. An occupational license is just what it sounds like—a government permission slip to work in a particular field.

Licensing Fail: Map of states which license florists
In our groundbreaking study of the nationwide licensing of 102 low-to-moderate income jobs, License to Work, we found that Louisiana licenses more occupations than any other state in the country: 71! For example, Louisiana is the only state in the country to license florists. Many of these laws have nothing to do with protecting the public’s health and safety, and instead provide protection to industry insiders.

We’re looking for entrepreneurs struggling to escape unconstitutional licensure. If you or a loved one are fighting for your right to earn an honest living, let us know today by visiting ij.org/action/report. 

Airbnb or Not2b?

Renting out space in your home to travelers provides an easy means to make ends meet, and offers greater options to visitors to your city. But the Big Easy does not want to make this easy. The New Orleans City Council has voted to outlaw residential rentals for periods of less than 30 days. This effectively bans the use of popular websites like Airbnb. Show your support for property rights, economic liberty and southern hospitality by visiting this petition to legalize short-term rentals in New Orleans. Read more…

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Potential Uber Vote Coming

Tomorrow, August 14, could see a vote from the New Orleans City Council on the pending ordinance updates to the luxury, for-hire vehicle (sedans and limos) code. Of course, Uber’s luxury sedan service, Uber Black will be impacted by the result of the Council’s decision.

I have previously written at length about the issues at play here and here. To briefly sum up the main points:

1) Removing the 3 hour reservation requirement is good.

2) Leaving in place the requirement that luxury vehicle companies own at least 2 vehicles serves as a barrier to entry for entrepreneurs who can only afford to break into the market with one vehicle. This requirement should be repealed.

3) In spite of Council President Head and advisor to the Mayor, Ryan Berni’s fun with words, adjusting the minimum fare formula is still price fixing. Creating an arbitrary, artificial difference, by law, between fares that taxis and luxury vehicles can charge only accomplishes economic protectionism. The existing vehicle companies, especially taxis, are using the government to force people to pay more than they otherwise might.

In short, it is not the job of the government to protect an entrenched, traditional industry from competition. Whether taxi owners like it or not, technology will eventually force them to truly compete with newcomers like Uber and Lyft, or go out of business fighting it.

Rather than trying to use the government to prolong the status quo, they should instead focus their energy on lobbying for fewer government mandated restrictions on their operations. Services like Uber show that the public can still be protected without the current burdensome regulations imposed on for-hire vehicles.

While it is a welcome sight that the city is taking a fresh look at the current laws, a more basic overhaul is what is truly needed for the New Orleans transportation industry to truly thrive and become something we can be proud of in a city that prides itself on creativity and innovation.

The City Council meeting is scheduled for 10AM at City Hall.

*UPDATE* According to multiple reports on Twitter, the Council voted to table a vote on this issue until the September 4th meeting.

A Man’s Home Is His Licensed, Regulated, and Taxed Castle

If you have ever rented out a room in your home for the weekend to earn a little extra cash and make a new friend, you may be a criminal.  If you have taken the effort to fix up an investment home and believe you can make a higher profit renting it to people on a short-term basis instead of in traditional, six month or year-long leases, you may be a criminal.

If you have ever left town for Mardi Gras or Jazz Fest to avoid the crowds and rented your house to someone for the festivities, you are a criminal.

While 84% of Americans disagree, that is the attitude of some hotel and bed and breakfast (B&B) owners and a few disgruntled neighbors of short-term rental properties in New Orleans.

On July 10, 2014, the New Orleans City Council voted to clarify the law making all residential rentals of less than 30 days (60 days in the French Quarter) illegal. This certainly isn’t the first time the City Council has found itself in the middle of a debate between supporters of newer, disruptive businesses and technologies that shake up the status quo, and those who argue that the newcomers are scofflaws who unfairly threaten the bottom line of existing businesses. In 2013 it was food trucks, earlier this summer Uber entered the conversation, and now it is short-term rentals like those found on websites Airbnb and VRBO.

This time around, prohibitionists are displeased that owners of these “illegal” short-term rentals are able to avoid inspections by the city and are not paying occupancy taxes on their rentals. Some neighbors complain that weekend renters make too much noise, litter, take up parking, and ruin the character of their neighborhoods.

This story should come as no surprise to regular readers of the Liberty in Action blog. San Francisco, “the city with the highest median rent rate” in the country, has banned short-term rentals despite having a problematic housing shortage. Issues have also come up in Grand Rapids, Michigan and New York City.

Nonetheless, in New Orleans, an outright ban is counterproductive and unnecessary to address the chief complaints because there are pre-existing legal mechanisms in place to handle problems perceived to arise from short-term rentals.

First, for those concerned with the safety of a property that isn’t subject to the same inspections as licensed hotels and B&Bs, the New Orleans Department of Code Enforcement is authorized to enforce code compliance on all buildings in the city. Second, neighbors worried about loud renters or litter can already use nuisance laws to address these issues through the District Attorney’s office.

Third, those worried about bed and breakfasts suffering from unfair competition because “illegal” property owners don’t pay taxes should remember that only larger businesses with three or more units pay occupancy taxes, not all licensed B&Bs. In any event, these properties are still subject to regular property taxes. Fourth, street parking on public streets is just that, public. Therefore, a permanent resident of the neighborhood has no more of a claim to a spot than anyone else does.

Finally, attempting to define the character of a neighborhood and debating whether short-term rentals negatively impact it are certainly not immune to significant subjectivity. What to some are transient outsiders, are to others an opportunity to make new friends and leave a good impression about the city to encourage future visits and spending in the community.

Nevertheless, the City Council seems to be open to future legalization and regulation measures. To that end, a group of property owners who rent property on a short-term basis have organized to draft an ordinance and have commissioned a study by the University of New Orleans to analyze the economic impact of short-term rentals. This is a better approach.

Leaving arguments aside as to what additional regulations, if any, are necessary, legalization of short-term rentals is the best decision for three reasons. Short-term rentals help fill properties that may otherwise sit empty, providing an additional incentive for property owners to renovate their property and return it to the housing stock, and lessening opportunities for crime carried out against or within vacant homes. Entrepreneurs are able to create an additional stream of income whenever they need it by renting out rooms in their home. And an additional option is made available for visitors to New Orleans who prefer arrangements that aren’t provided by hotels and traditional B&Bs.

As shown above, the law already provides solutions to safety issues and unruly renters. Instead of a blanket ban to appease a vocal minority, New Orleans should legalize short-term rentals and allow residents and visitors alike to reap the many benefits while focusing enforcement efforts on the few bad apples by using already existing nuisance laws.

By taking this approach, instead of uniformly branding entrepreneurs as criminals, negatively impacted neighbors can have potential problems addressed while still allowing entrepreneurial New Orleanians the ability to create a more robust housing market. Who wouldn’t enjoy more housing options, fewer vacant and blighted properties, and an additional income stream whenever you need it?

You can show your support for legalization by visiting this petition.

*This post originally appeared at the Institute for Justice, Liberty in Action blog.

Council President Head Reminds Us of Signage Woes

New Orleans City Council President Stacy Head sent out an email this afternoon reminding the community that all it takes is a simple phone call to 311 to report missing or damaged street signs. The text of the email is below.

New Orleans, LA…. Councilmember Head frequently hears from residents that street name and traffic signs are missing in neighborhoods throughout the city. Fortunately, the City’s Sign Shop (Department of Public Works) is hard at work replacing missing traffic and street name signs and in many cases, can replace a reported missing sign within days.

Residents are encouraged to report missing and/or damaged street signs by calling 311 with the exact location and type of sign needed.

 

Upon receiving this email, I remembered that I dug into the operations of the New Orleans Sign Shop back in 2012. A brief summary of my thoughts is that the city should privatize the shop. While privatization certainly wouldn’t generate a huge windfall for the city budget, it would certainly create an easy source of savings for the future. Hopefully one day this common sense idea can gain some traction in a City Hall serious about cutting costs.