Budget cuts impact would be widespread

Posted on June 13, 2018

The budget bill passed by the Legislature in the waning minutes of the last special session includes across-the-board cuts to agencies and programs throughout state government that would wreak havoc on essential services. Lawmakers have an opportunity to reverse those cuts in the third special session that’s set to begin on Monday, but it’s unclear whether they will be able to pick and choose which programs and services to restore first if they fail to raise the $507 million that’s needed to fill the gaps.  The American Press’ editorial board runs through the cuts and the stipulations for applying new revenue:

Without additional funds, TOPS scholarships would be funded at only 70 percent, a nearly $30 million reduction. A $97 million reduction for higher education budgets is a separate item. The state Department of Corrections would see its funding reduced by $38 million. Local sheriffs who house some state prisoners would receive $43 million less from the state. Both reductions would lead to the early release of 10,000 prisoners over the next year. The reduction to the Supplemental Nutrition Assistance Program (food stamps) that serves 19 percent of the state population could end the program. Local district attorneys would lose $25 million in state support and private and parochial schools $14 million for lunchroom personnel and testing costs. A 24 percent reduction to the state Department of Education would cause the first-ever reduction to early childhood education. Legislators have been able in the past to make other reductions protect areas like TOPS and higher education. However, the budget that was approved requires that any additional revenue be distributed on a pro-rata basis.


Affordable housing a struggle for many
Despite a strong economy, many low-income families struggle to find affordable housing, as rising rents outpace the stagnant wages faced by many low-income workers. A new report from the National Low Income Housing Coalition examines the (un)affordability of housing in the U.S. by calculating the number of hours per week a minimum wage earner would have to work to afford a two-bedroom rental. The Baton Rouge Business Report:

At $7.25 an hour, the average American worker would need to work nearly three full-time jobs—a total of 117 hours per week—just to afford the average two-bedroom rental. In East Baton Rouge Parish, someone earning minimum wage would have to work 91 hours a week to afford a two-bedroom rental. “Out of Reach 2017 shows why millions of low income renters are struggling to afford their homes,” NLIHC President and CEO Diane Yentel says in a news release. NLIHC says the problem does not appear to be going away anytime soon. The highest-growing sectors in the U.S. are dominated by service-industry jobs, and six of the seven occupations expected to add the most jobs in the next seven years do not provide a high enough wages to afford housing.

Housing and Urban Development Secretary Ben Carson has proposed raising rent for families receiving federal housing subsidies.


Child care waiting list shrinks
Lack of affordable child care keeps many parents from re-entering the workforce and earning money to support their families. That problem has been on the rise in Louisiana as federal funding for the state’s Child Care Assistance Program has decreased over the past decade. A new infusion of federal funds this year, however, will help to significantly reduce the state’s waiting list for child care assistance that’s built up in the last year. Will Sentell of The Advocate has more:

Melanie Bronfin, executive director of the Louisiana Policy Institute for Children, said it is the first time in nine years that the federal allocation has gone up.”We know that parents need this support,” Bronfin said.”Having every child off that waiting list means a child in higher quality care, and a parent with reliable, quality care able to get to work,” she said. “And that is a blessing.”About 15,000 children are enrolled in the program today, down from about 39,000 in 2008. Backers say the aid offers an invaluable service to families, and helps better prepare children for kindergarten in a state where roughly half arrive at school poorly prepared.

While the increased federal funding will go a long way toward reducing the waiting list, the problem is hardly solved. The federal funding bump may not be renewed after this year and the state has yet to make any investment in the child care assistance program:

Most of those waiting for slots have been on the list for about one year. They have not yet been notified. The state is getting just under $40 million from the federal government. However, rules limit how the dollars can be spent. Bronfin said the larger question is what kind of state dollars the program can expect and when.”We are still a state not investing in it,” she said of the child care program.


Restaurants struggle to maintain workers
Restaurants in New Orleans and around the country are struggling to hire and maintain a full staff.  The low wages and lack of benefits and healthcare in the industry are driving many potential-restaurant staff to other employment opportunities.  Todd Price of Picayune reports:

“It’s global. It’s a world thing,” said J. Bruce Tracey, a professor of management at Cornell’s School of Hotel Administration. What is causing the labor shortage? The population is getting older. Restaurants pay low wages. Younger workers have new opportunities in the “gig economy,” for example driving for Uber or Lyft. And there are more restaurants, from fast food outlets to fine dining destinations, all competing for staff. “The supply is not there, and demand has increased,” Tracey said.

Larger restaurants do have one other option for filling gaps in staffing – hiring foreign employees on a work visa.

Larger restaurants, like Brennan’s or Commander’s Palace, can take advantage of the State Department’s J-1 Visa program to hire foreign workers for a year. The restaurants must show the foreign employees are not taking a job from a local worker. Brennan’s currently has 22 foreign workers from the Philippines, Colombia, India, Romania and South Africa. Without those workers, Brennan’s would have to cut back the hours that it’s open.

Here’s another suggestion for the woe-is-me restaurant owners, whose trade association lobbies annually in Baton Rouge against increases in the minimum wage: Pay your workers more and give them benefits.


Number of the Day
$16.16 – The hourly rate a Louisiana worker needs to afford a two-bedroom rental without spending more than 30 percent of their income on housing. (Source: National Low Income Housing Coalition)


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