Friday, August 15, 2014

Friday, August 15, 2014

Another year, another massive budget shortfall; Will tax exemptions take center stage in 2015?; Paying kids to go to school; Anything but the 9-to-5; Number of the Day

Another year, another massive budget shortfall
After six straight years of gaping budget gaps, it’s hardly surprising these days when state budget forecasters announce that the state is facing yet another large shortfall between revenues and expenses in the upcoming budget cycle. Next year’s gap, announced Thursday to the Joint Legislative Committee on the Budget, is $1.2 billion, which means Gov. Bobby Jindal and the Legislature will have to find that much in savings or new revenue by the time the budget is presented in February.

Though the latest news comes as no surprise – we’ve known for months that the current-year budget was patched together with $991 million in one-time dollars that won’t be available next year – that doesn’t mean we shouldn’t be concerned. It’s one thing for the state to have budget shortfalls in the middle of a great recession, as Louisiana and the rest of the country experienced in 2008-10. It’s quite another to keep running deficits when the state economy is allegedly humming along with 4.2 percent unemployment and a construction boom that spans the southern half of the state.

The governor’s policy advisors assured legislators that they’re already working on ways to plug the gap, including $216 million in potential “savings” identified by a state consultant and $240 million in “private donations” to support the private nursing home industry. But it’s also likely to involve more cuts, large and small, to the basic services that citizens depend on. And those cuts have real-world consequences, as Sen. Edwin Murray discovered recently when he was forced to wait for three hours in line at the Office of Motor Vehicles.

 

Will tax exemptions take center stage in 2015?
While the budget debate is likely to be dominant in the 2015 legislative session – Gov. Bobby Jindal’s last as governor – it’s also a “fiscal” year when lawmakers can debate tax policy. At this early stage it’s entirely unclear what agenda the governor will propose, if any. But Jeremy Alford of LaPolitics Weekly reports that some legislators want to take another stab at controlling the myriad tax exemptions that are draining precious state resources.

“Lawmakers say there’s a real appetite growing for cutting tax exemptions in order to create revenue, despite Jindal’s long-held stance that such policy maneuvers equate to tax increases. “None of us want to run for re-election next year on cutting higher ed and health care to the bone,” said a lawmaker. “A lot of things will be on the table in 2015: the e-fairness tax, the film tax credits, the cigarette tax. We’ll see if they actually move. The game of chicken I see playing out is Jindal preserving his anti-tax pledge and the Legislature overriding him.”

 

Paying kids to go to school
Politico Magazine takes a long look at a pilot antipoverty program in Memphis where low-income parents and children get cash incentives to do the types of mundane things most people do without government support – go to work, attend school and show up for regular medical check-ups. The Memphis Family Rewards Program only includes 600 people, but is being closely watched to see if it can help break chronic, long-term cycles of poverty and despair.

“The rewards system, modeled on similar programs in Mexico, Brazil and Indonesia principally aimed at the rural poor, is one of the few genuinely novel anti-poverty experiments to sprout up in the innovation desert that is post-1996 welfare reform in America. Enthusiasm for the programs, known as “conditional cash transfers” (CCTs), remains high internationally, and has been enthusiastically embraced by the Davos set. In a 2009 report, the World Bank hailed the success of CCTs in Mexico as “powerful proof that well-designed public programs can have significant effects on critical social indicators.”   

“But paying poor people to perform quotidian tasks is a much harder sell in the up-from-the-bootstraps culture of the United States, and the cash transfers have been ridiculed or, at the very least, greeted with skepticism everywhere they’ve been tried in America.”

 

Anything but the 9-to-5
The New York Times takes an insightful look at one more problem confronting low-wage workers in the retail sector: modern scheduling software that companies like Starbucks use to “choreograph workers in precise, intricate ballets, using sales patterns and other data to determine which of its 130,000 baristas are needed in its thousands of locations and exactly when.”

While such software has proven quite profitable for the corporations that use them, it can often wreak havoc on workers. The advances “are injecting turbulence into parents’ routines and personal relationships, undermining efforts to expand preschool access, driving some mothers out of the work force and redistributing some of the uncertainty of doing business from corporations to families, say parents, child care providers and policy experts.

Number of the Day

79 – Percentage of Louisiana residents who were born in the state, making Louisiana one of America’s least diverse states when it comes to domestic migration. (Source: New York Times)