Rejecting Medicaid expansion means federal tax hike for businesses
Millions of dollars in tax penalties for some Louisiana businesses could be coming in 2015 due to Gov. Bobby Jindal’s decision to reject Medicaid expansion. As LBP explains in a new blog, a new report from tax preparer Jackson Hewitt found that businesses in Louisiana could be exposed to anywhere between $41 million and $62 million annually in tax penalties that would otherwise be avoided if the state expanded Medicaid coverage. Without Medicaid expansion, workers with incomes between 100 percent and 138 percent of the poverty line will have to use tax credits to buy coverage through the health insurance marketplace. But if they happen to work for a company with more than 50 employees that doesn’t offer quality health coverage, those companies must pay tax penalties that they wouldn’t need to pay had Louisiana simply agreed to expand its Medicaid program.
Here is The Advocate’s take on the report. Meanwhile, any state legislator who signs a pledge refusing to expand health coverage – which is being circulated by a pair of out-of-state billionaires – should know that they are really asking businesses to pay more taxes as they stick it to the working poor.
New report questions Louisiana’s generous corporate tax breaks
One of the first places state lawmakers try to reduce spending when Louisiana faces a budget crunch is payments into the state’s public retirement systems. However, a new report by Good Jobs First shows the Pelican State spends $5 on corporate tax breaks and subsidies for every $1 spent on retirement benefits for teachers and state employees. Louisiana spent more than $1.8 billion last year due to corporate subsidies, official tax breaks and unofficial tax dodging, while spending less than $350 million on public pensions. The study parallels a 2013 LBP report which concluded that the amount of money Louisiana gives away in tax breaks grew 167 percent between 2001 and 2011. These corporate tax breaks rarely pay for themselves and sometimes result in the state giving away more in tax breaks than it receives in reinvestment.
Another LSU professor fails to do basic research before opining in the Advocate
For the second time in a week, a distinguished academician has taken to the pages of Baton Rouge’s daily newspaper to spout outright falsehoods about the minimum wage. This time it’s letter writer Greg Smith, an LSU law professor, who thinks the minimum wage should stay low because it flows mainly to teens. “Who are the workers who make the minimum wage?” Smith asks. “It looks like a lot of them are teenagers who come from middle-class families. To the extent that an increase in the minimum wage is supposed to reduce welfare burdens on the public, it would seem to be something of a blunt instrument, because it would increase the pay of many people from middle-class families.” Had Mr. Smith bothered to check his facts, he would know that fewer than 9 percent of those earning minimum wage (or slightly above) are teens (compared to 12 percent who are over 55) and almost 70 percent live in households with incomes below $40,000. At least Smith has good company, as his remarks echo a sentiment voiced by retired LSU economist Loren Scott in the same pages last week.
Another disappointing jobs report
The U.S. economy added 113,000 jobs in January, and the nation’s unemployment rate dropped slightly to 6.6. percent, according to the Labor Department’s monthly jobs report. That fell short of economists’ projections of 181,000 new jobs — partly due to poor weather and the expiration of unemployment benefits in December. Some economists also believe the expiration of emergency jobless benefits could skew the labor force participation rate, since people must be actively searching for work to be eligible for the benefits. The labor rate participation rate in January was 63 percent, up slightly from 62.8 percent in December.
Milk prices set to drop 30 cents after Farm Bill is signed
Residents across Louisiana will see the price of milk drop by approximately 30 cents a gallon once President Barak Obama signs the new farm bill that cleared Congress this week. Prices for milk in Louisiana have remained at record highs for about a year, primarily due to instability in the market. That problem was fixed when lawmakers replaced federal cash payments to farmers with an expanded crop insurance programs that compensates farmers if they face financial ruin because of unpredictable weather and market conditions.
154 state workers not notified of job termination
Employees from the recently closed JetsonCenter for Youth held a community meeting Thursday to express their concerns that they were wrongfully terminated. According to the attendees, state officials neither notified all workers that the center would be closed nor had a layoff plan approved by the state Civil Service Board before layoff intentions were announced — a violation of state civil service laws. The state Office of Juvenile Services did offer some employees jobs in Monroe, but those jobs would require up to eight-hour-long round trip commutes between worker’s jobs and their homes in Baton Rouge. State officials appeared unapologetic for the way they closed the facility, only stating that the center was unsafe and costly to operate.