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A responsible approach to Louisiana’s budget

The $31.8 billion proposed budget Gov. John Bel Edwards released Feb. 22 comes amid a period of financial stability in state government after a decade marked by fiscal turmoil. Steady economic growth, combined with the Legislature’s decision to partially renew a sales tax that was due to expire last year, means the state can expect enough revenue in 2019-20 to fund key health care and education programs without any damaging cuts to services.Read more...

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Understanding Medicaid in Louisiana

Louisiana Budget Project has created two new resources aimed at helping lawmakers, the media and the public better understand the state’s Medicaid program.

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Louisiana has an opportunity to boost health outcomes for children

Louisiana has made great strides in providing health coverage for children in recent years. But the state still lags behind the rest of the country on some key quality measures, which could be improved with strategic policy changes.

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The Daily Dime

Louisiana’s Medicaid expansion, which extended the program’s eligibility to adults earning below 138 percent of the federal poverty line, has been a resounding success: Nearly 500,000 people are newly covered by health insurance, and federal funds have generated at least $1.85 billion in direct economic impact for the state.Read more...

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Our Two Cents Blog

Louisiana is one of 23 other states where funding for K-12 public education remains below what it was before the Great Recession. Combined state-local funding for Louisiana schools was 3 percent below 2008 levels in 2016, after adjusting for inflation.That’s according to a new report by the Center on Budget and Policy Priorities. This comes at a time when Louisiana is seeing significant economic growth and low unemployment.

State funding is particularly important, because it helps ensure that dollars flow to where they’re needed most – in schools located in low-income areas where the local tax base may not support sufficient funding for education. The CBPP report, citing a recent study, explains that increased investments in schools can pay long-term, positive dividends:

State funding increases can improve educational outcomes for students, benefiting the economy as a whole in the long run. One study found that low-income children whose schools received a 10 percent increase in per-pupil spending before they began their 12 years of public school had 10 percent higher earnings — and 17 percent higher family income — in adulthood, were likelier to complete high school and less likely as adults to be poor.

So why is Louisiana struggling to fully fund its schools?

It comes down to the stagnant school funding formula. Like most states, Louisiana distributes state dollars to local school districts through a funding formula that sets a “base” amount that the state requires to be spent per student. For many years Louisiana’s funding formula, the Minimum Foundation Program (MFP), increased annually by 2.75 percent to keep up with the rising cost of living. But massive tax cuts, combined with the 2008 economic downturn, prompted state officials to eliminate this annual increase – ultimately leaving Louisiana with near-stagnant state funding for K-12 schools for over a decade (Chart 1).

The MFP was created to ensure all school districts, regardless of wealth, are able to secure the funds necessary to meet the needs of all students. When state spending remains stagnant, the burden of raising adequate revenue falls to the local school districts which creates an equity problem. Districts with higher property and sales tax collections are able to compensate for stagnant state funding, while districts with low property values and little industry have a hard time keeping up.

In 2015, Louisiana was 28th in state-local spending out of the 50 states at $9,462 per student, and spent more than any Southern state besides South Carolina. It may feel frustrating to spend more than our peer states and still fall short in student outcomes, but the reality is that Louisiana is much closer to the lowest spending states than the top. New York spends $18,719 per student, which is double Louisiana. Meanwhile, Idaho is at the bottom, spending only $3,185 less than Louisiana at $6,277 per student.

The fact is, Louisiana still is not spending enough. Louisiana has the highest child poverty rate in the nation, and has the largest gap between the incomes of families sending their children to public versus nonpublic school. This means that our public schools are serving children in poverty at much higher levels than other states. In our “wealthiest” school districts, low-income students still comprise over 46 percent of the student population, and our poorest districts, Bogalusa and Madison Parish, are 100 percent low-income.

It simply costs more to provide an equitable education when schools are serving large percentages of students in poverty. Lower student/teacher ratios, social workers, school nurses, and after school programming should exist to ensure low-income students can have access to the same resources that are readily available to children from middle-income and wealthy families.

A 1.375 percent increase to the MFP is being proposed for the 2020 school year, and would be only the second increase in over a decade (Chart 1). This increase is long overdue, but is not enough to fully re-invest in public schools. It is time for Louisiana to follow the lead of the other 26 states who have fully reinvested in their public schools.

-Neva Butkus

 

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