Wednesday, April 23, 2014

Wednesday, April 23, 2014

Payday lending, Medicaid expansion highlight busy legislative day; More bad news about higher education; A cautionary note about privatized K-12 education; and Small business owner makes the case for raising the minimum wage. 15,600 - The number of jobs that would be created over ten years if Louisiana accepted federal dollars to expand health coverage to low-income adults. (Source: LBP analysis)

Payday lending, Medicaid expansion highlight busy legislative day
The ongoing attempts to rein in predatory payday lenders and convince policymakers to expand health coverage for low-income adults are expected to come to a head Wednesday in Senate committees. Senate Bill 96 is a constitutional amendment that would extend health coverage to adults below 138 percent of the poverty line, if voters approve, being heard in the Health and Welfare Committee. Senate Bill 84 would limit borrowers to no more than 10 payday loans per year and set up a new database to track transactions. The bill, which started out with a 36 percent cap on the interest lenders could charge, is being heard by the Senate Finance Committee because the Legislative Fiscal Office determined that the database would come with a small cost to the state Office of Financial Institutions. Both measures are by Sen. Ben Nevers, D-Bogalusa, and face heavy opposition from entrenched interests. On Medicaid expansion the pressure is coming from Gov. Bobby Jindal, who has made a priority of denying coverage to low-income adults. On the payday issue pressure is coming from the industry, which has hired a small army of lobbyists who’ve spent weeks pressuring legislators on the issue.

While the Medicaid bill faces steep odds, evidence continues to mount that it would be an excellent deal for Louisiana, which would see an influx of nearly $16 billion over the next decade and an estimated 15,600 jobs. A series of new fact sheets developed by LBP breaks down how this economic growth would affect every area of the state. And the Center on Budget and Policy Priorities reports on new data that shows the costs to states of expanding Medicaid are even lower than previously thought:

“States will spend only 1.6 percent more on Medicaid and CHIP due to health reform than they would have spent without health reform. That’s about one-third less than CBO projected in February. And the 1.6 percent figure is before counting the state savings that the Medicaid expansion will produce in state expenditures for services such as mental health and substance abuse treatment provided to the uninsured.”

More bad news about higher education
From the Lumina Foundation comes a new report providing fresh evidence that Louisiana policymakers were shortsighted when they cut state support for higher education more than any other state over the past five years. It turns out Louisiana ranks behind only West Virginia in the percentage of adults aged 25-64 with college degrees, with just 29.1 percent having an associate’s or bachelor’s degree. That compares to a national average of 39.4 percent. But Nola.com’s John Pope reports that state officials are putting a positive spin on the numbers, noting that Louisiana’s graduation rate climbed 2.1 percentage points since 2008 and is growing faster than the nation as a whole.

A cautionary note about privatized K-12 education
Gov. Bobby Jindal’s office was so pleased with James Varney’s latest column about school vouchers that they decided to turn it into a press release. Varney’s column pivoted off a new survey by two pro-voucher organizations that found a strong majority of parents are happy with their children’s voucher school and that their children feel welcome in their new private school environment.

While Louisiana’s privatization experiment is in its infancy, Reuters reports on a country — Sweden — that pioneered school vouchers two decades ago, sending vast amounts of public dollars to independent private schools in the name of parental choice. The results should serve as a cautionary tale for Louisiana.

“While it is difficult to say how, or even whether, private involvement and falling standards are linked … there are indications the market-driven reforms have contributed to widen the gaps in school performances. … A quarter of 15-year-old boys cannot understand a basic factual text, said Anna Ekstrom, head of the NAE, while an NAE study last year showed a growing gap between students, with more and more failing to qualify for secondary education.

“Part of the problem stems from introducing choice. As the best students flock to certain schools, standards suffer at the schools they leave behind.”

Small business owner makes the case for raising the minimum wage
Conventional wisdom — at least the kind perpetuated by the powerful business lobby — holds that raising the minimum wage above the federal $7.25 per hour would be especially bad for small businesses. Not so, says a small business owner who writes in the online magazine Slate that companies like his would actually have an advantage.

“Here’s why. A higher minimum wage helps reduce the structural advantages large corporations have over small businesses, and that in turn helps create a context where high-quality independent businesses can thrive by overdelivering compared to our better-capitalized, but mediocre, big competitors.

“When individuals like me start businesses in our communities with the intent of selling quality goods and services, we quickly find that our biggest obstacle is the low prices offered by large corporations. The issue isn’t that those companies are selling the same things we are for less. The issue is that the low-priced commodities sold by superstores, warehouse clubs, and restaurant chains influence our customers’ understanding of what everything costs.”

15,600 - The number of jobs that would be created over ten years if Louisiana accepted federal dollars to expand health coverage to low-income adults. (Source: LBP analysis)