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The EITC is money well spent

Posted on June 12, 2018

The Legislature’s decision to expand the state’s Earned Income Tax Credit in Louisiana will help lower-income, working households receive a larger tax refund at the end of the year. Wallis Watkins of WRKF hosted the Louisiana Budget Project’s Jan Moller on Morning Edition to explain how the credit will impact families and communities.

The tax break was key to members of the Legislative Black Caucus, who say relying on sales tax to fix the budget shortfall puts a bigger burden on low-income families.”Low-income families tend to spend everything that comes in their paycheck, and so they spend a higher percentage of their income on sales taxes than a family that makes a couple of hundred thousand dollars a year,” says Moller.

When asked about the pushback on expanding the EITC due to its $21 million annual cost, Moller responded by pointing out that all of this money will be reinvested back into local communities and the Louisiana economy.

“This is gonna pay for groceries, school supplies, car repairs, things that people need to live their day-to-day life,” he says.

 

Legislature is fully funded, despite shortfall
Higher education, social services (including the Supplemental Nutrition Assistance Program) and public safety are still facing potential deep cuts if the Legislature fails to raise additional revenue before July 1. But other areas of state government – notably the Legislature itself – are fully funded heading into the 2018-19 fiscal year. The AP’s Melinda Deslatte reports:

In addition, audits show that on top of the annual financing they’re slated to receive, the House, Senate and other legislative agencies have tens of millions in unspent fund balances — and even more cash in the bank beyond that. One legislative agency alone, according to a recent financial report, showed more than $42 million in the bank, with more than $40 million deemed an “unassigned fund balance” when the last budget year ended in June 2017.

Senate President John Alario has said the Legislature should not start the next fiscal year fully funded if other agencies are burdened with cuts.

“I think we ought to share in whatever cuts are across the board,” he said. “If the overall problem gets solved, then the legislative budget gets solved. If the overall problem doesn’t get solved, that’ll have to be thrown in the mix.”

 

TOPS uncertainty is taking a toll
High-performing high school students in Louisiana are seeing out-of-state universities as viable options amid the ongoing uncertainty over full funding for TOPS scholarships. These out-of-state schools are offering scholarships and well-funded programs, two things that Louisiana universities will struggle to compete with if higher education and TOPS are not fully funded. Natalie Anderson of The Advocate has more:

Higher education leaders have pleaded with the legislature to stabilize funding for TOPS and higher education earlier in the year. Come late June, most students already have decided where they’re going to college and, particularly with high-achieving students, they are weighing lucrative offers from other states against a program that may or may not get fully funded each year.

Fully funding our universities and TOPS, which the Legislature was able to do last year, resulted in many positive benchmarks for the state’s flagship university, according to LSU President F. King Alexander.

Alexander also said the year of stability resulted in LSU’s largest faculty retention since he became president in 2013, the second-largest graduating class in May 2018 and the largest incoming freshman class for fall 2018.

 

SNAP strengthened in Senate
A bipartisan effort in the U.S. Senate Agriculture Committee has resulted in a farm bill that would strengthen the Supplemental Nutrition Assistance Program (SNAP) and invest more resources in the elderly, people with disabilities and tribal communities – populations that are often overlooked when assessing food insecurity. The Senate bill would also streamline work requirements and job training, making it easier for states to implement and easier for recipients to comply. A new report from the Center on Budget and Policy Priorities has more:

This approach reaffirms SNAP’s importance for struggling households that can’t afford a basic diet without its help.  It stands in stark contrast to the House farm bill’s SNAP provisions, which would end or cut benefits for more than 2 million individuals in more than 1 million households. In addition, Senate provisions improving program oversight and integrity and streamlining program operations would yield a stronger program for the 1 in 8 Americans who use SNAP benefits to afford food.

The full report by the CBPP is worth a read and breaks down the many ways that SNAP is strengthened through the Senate Farm bill.

 

Number of the Day
$2,138 – Total cost of “summer learning programs” for the average Louisiana family – which amounts to 15 percent of median summer income. (Source: Center for American Progress)

 

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