January, 2009

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Pilot Program for Dropout Prevention

Tuesday, January 27th, 2009

At the Louisiana Association of Business and Industry (LABI) meeting held last week, Governor Jindal announced a pilot program for dropout prevention.  The Education Mission to Prepare Louisiana’s Youth (EMPLoY) will launch in Spring 2009 and will target 14 school districts and 550 students throughout the state.  The program will offer GED support and Work-Ready Certificates for those who do not finish traditional high school.

The goal of the program is to improve the education system and decrease the number of dropouts in our state.   The program will also help to identify necessary policy changes and determine the capacity of the business community’s involvement in the program.  Jindal urged business and industry leaders to assist in the program’s development by providing paid internships, apprenticeships, and other work-study programs.

The program will be funded with existing Department of Education and federal TANF dollars.

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Study Findings Show Potential for Scholarship Program

Tuesday, January 27th, 2009

This morning the Department of Social Services hosted a briefing by MDRC, formerly Manpower Demonstration Research Corporation, to discuss their findings on a study, Rewarding Persistance:
Effects of a Performance-Based Scholarship Program for Low-Income Parents, conducted at two community colleges in New Orleans.  The study presents strong evidence that low-income parents who received performance-based scholarships, along with counseling, were more likely to stay in school and earn more credits than those who did not.  In a follow-up survey, the students also reported higher self-esteem and more confidence in their ability to reach their goals.

Students in the program received $1,000 for each of 2 semesters ($2,000 total).  They were paid in three increments throughout the semester as long as they remained enrolled at least half-time and maintained at least a 2.0 grade point average.  The payments were made directly to the student and therefore offered flexibility in where it was spent.  Students reported using the money to buy books and supplies, while some also applied it towards bills, transportation, or child care costs.

The scholarships were paid with surplus funding from the state’s TANF program.

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Stelly Plan In Action

Tuesday, January 27th, 2009

The first of 2009 initiates is the Stelly tax repeal. The Stelly Plan eliminates sales tax on food, drugs and household utilities, and replaces them with income tax. The Stelly Plan was approved by voters in 2002. During the 2008 legislative session the Stelly Plan was repealled, which reduced the two highest income brackets to the level they were prior to the implementation of Stelly.

This new tax cut begins the first of 2009; however, the state revenue department will not alter the withholdings on individual income tax tables until July 1, 2009. Essentially, individuals will not receive more in their paychecks until July 1, 2009; unless individuals have their employers adjust the withholdings prior to July.Due to the repealling of the Stelly Plan the state is expected to lose $358 million dollars in taxes for the next budget year, with continued losses in following years.

Posted in News/Updates, Revenue and Taxes | 2 Responses »
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$341 million Budget Cut

Tuesday, January 27th, 2009

On December 30, Gov. Jindal discussed his proposed plan to cut the state budget by $341 million for the fiscal year ending June 30, 2009.  Through an executive order he was able to cut $163 million, but the Joint Legislative Committee on the Budget will meet later this week to approve the remaining $178 million.  These cuts are necessary as the state anticipates lower revenue from fallen oil prices and tax collections.

 More than half of the $341 million will be cut from healthcare and higher education.  The cuts to higher education are divided among three of the state’s universities (LSU, SU and UL) and the Board of Regents.  Each college campus will decide how best to cut costs.  The effects to the healthcare system will be magnified by the loss of federal funding the state receives.  The federal government rewards states for healthcare spending by matching it with federal dollars. 

The Govenor’s press release.

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Unemployment Benefits Raised and Unemployment Insurance Taxes Lowered

Tuesday, January 27th, 2009

Thanks to a stable unemployment trust fund balance and the passage of Act 169 in Louisiana’s 2008 regular legislative session, as of January 1, 2009, Louisiana unemployment weekly benefits have risen and its unemployment insurance taxes have been lowered.

Act 169 provided that when the unemployment insurance trust fund balance exceeded $1.4 billion, the weekly unemployment benefits would increase from a maximum of $258 to $284 and employers paying taxes on the first $7,000 of a worker’s income would get a 10% tax cut.  These provisions of the legislation went into effect because the current balance of the unemployment trust fund is $1.45 billion.

According to this same legislation, when the fund dips below $1.4 billion, the benefits and the taxes will return to their original levels.

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