Tuesday, June 3, 2014

Tuesday, June 3, 2014

Session 2014: That’s a wrap; State consultants recommend reforms to costly tax breaks; Last-minute maneuver will enrich law enforcement and hurt the poor; and Here’s more evidence that budget cuts really matter. $388 million – Difference between the cost of projects in the state’s annual construction bill and the bonding capacity available to pay for them. (Source: The Advocate) 

Session 2014: That’s a wrap
The Legislature finished the final regular session of the Bobby Jindal era on Monday by approving the final pieces of the state budget plan – including a “bloated” construction budget that contains far more spending than the state can afford. With the governor carrying a light agenda into the session, lawmakers had plenty of opportunity to craft their own plans. But The Advocate reports that the three-month lawmaking period will likely be remembered more for the bills that failed to pass than for those that did.

“Legislators didn’t toss out the controversial Common Core standards. They didn’t stop efforts to create a city of St. George in East Baton Rouge Parish. They didn’t ensure that medical marijuana can be dispensed by pharmacists. They didn’t resolve problems with the death penalty. They didn’t curtail the spiraling costs of TOPS. They didn’t increase minimum wage for the working poor.”

The Times-Picayune notes that the budget fights that often dominate discussion at the Capitol were more muted this year, in part because there were very few dollars to fight over.

“One strange aspect of the Legislature’s budget discussions was the lack of focus or open dialogue after how the federal government’s rejection of Jindal’s plan to privatize state-run hospitals for the poor could eventually affect state coffers.

The Jindal administration has submitted a revised plan to federal officials regarding the hospitals’ privatization, which affects health care statewide. But if the U.S. Centers for Medicare and Medicaid Services doesn’t accept the adjustments, Louisiana could be forced to pay back the federal government hundreds of millions of dollars in a couple of years.”

LBP will have more to say about the session in a forthcoming report.

State consultants recommend reforms to costly tax breaks
Just as the Legislature was set to adjourn for the year, a team of consultants that was paid more than $4 million to come up with government streamlining proposals laid out its findings in a thick 425-page report.  While the hullaballoo of the session’s final hours prevented LBP from taking a detailed look at the recommendations, it did notice that the Alvarez & Marsal team found a “high potential for abuse” of the film tax-credit program, which has cost state taxpayers more than $1 billion to date and whose costs have been growing out of control in recent years. The report also found fault with the state’s Enterprise Zone program, in which the state doles out millions of dollars each year to subsidize low-wage jobs in big-box retail stores, regardless of whether they’re located in actual enterprise zones.

None of this information was new to anyone who has followed the debate over these subsidy programs over the past few years.

Last-minute maneuver will enrich law enforcement and hurt the poor
The final hours of a legislative session is when backroom deals are often struck, and this year was no exception. Jeremy Alford of LaPolitics reports on a heretofore little-noticed bill by Rep. Barry Ivey of Central that will raise up to $50 million a year for sheriffs, district attorneys and the Louisiana State Police – often known as “the courthouse crowd” – by dramatically increasing the penalties for people who let their vehicle insurance lapse.

 Lobbyists who tracked the bill Monday said they were most concerned with a provision that increases the reinstatement fee for vehicle insurance from $25 to $100 for the first 31 days. If there’s no coverage obtained for between 32 and 90 days, the reinstatement fee jumps from $100 to $250, and then from $200 to $500 for a period in excess of 90 days. “These are people who can’t afford insurance in the first place,” said a lobbyist.

Here’s more evidence that budget cuts really matter
Louisiana taxpayers and donors have spent $8 million to build the Cecil J. Picard Center for Child Development and Lifelong Learning on the campus of the University of Louisiana – Lafayette. The center was named in honor of the state’s beloved education superintendent, who believed that early childhood education was the key to lifting the state’s long-term economic prospects. As recently as 2008 the center had a budget of $3 million per year, and as recently as 2 ½ years ago it had upwards of 40 workers on the payroll. But as the Lafayette Advertiser reports, the budget and staff have dwindled in recent years due to budget cuts, and only 17 employees remain.

Research done at the Picard Center shows that every dollar spent on high-quality early childhood education saves more than $12 in social services in the future. “The fact that we know so much about the importance of early childhood education speaks to the importance of the Picard Center. There’s nobody else in the state who’s doing it,” Cooper said. “My hope — and it’s a desperate hope — is that Dr. Savoie and UL won’t let it go by the wayside because we don’t have another avenue to make the progress we’ve made in the last 20 years.”

$388 million – Difference between the cost of projects in the state’s annual construction bill and the bonding capacity available to pay for them. (Source: The Advocate)