Safety-net programs reduce poverty in Louisiana

Today marks the international day for the eradication of poverty – “poverty day” for short – and it should have special resonance in Louisiana, where one in every five residents lives below the federal poverty line. It’s also a good day to note that the poverty rate would be much higher were it not for federal anti-poverty programs such as rent subsidies, food stamps and the Earned Income Tax Credit (EITC). A new analysis by the Center on Budget and Policy Priorities finds that federal safety net programs cut the poverty rate nearly in half last year.

Accounting for government assistance programs and taxes cuts the poverty rate for 2013 from 28.1 percent to 15.5 percent, we found (see chart).  These figures are based on Census’ Supplemental Poverty Measure (SPM), which — unlike the official poverty measure — accounts for taxes and non-cash benefits as well as cash income.

Here in Louisiana, the poverty rate drops to 18.3 percent using the Supplemental Poverty Measure. According to a new blog by LBP’s David Gray, Louisiana is one of 26 states where the supplemental poverty measure is lower than the official federal poverty rate.

Without supports like Social Security, refundable tax credits (like the EITC) and food stamps, many more people would live in poverty. There are important steps that legislators and other policymakers in Louisiana can take to boost the success of these anti-poverty programs. Those steps include boosting the state’s EITC, investing more dollars in early childhood education and making college education more affordable for students from low-income families.

Surplus vs. deficit Part XIV

The Associated Press looks at the ongoing debate over the $319 million that Gov. Bobby Jindal’s administration recently discovered in the state’s bank accounts. The administration is counting the money to back up its claim that Louisiana finished the last fiscal year with a budget surplus. But the administration’s critics, led by Treasurer John Kennedy, has described it as a secret “slush fund” that shouldn’t be used to solve the latest budget imbalance.

Melinda Deslatte writes that the dispute likely will linger until at least January. That’s when Legislative Auditor Daryl Purpera  presents his annual financial audit of the state’s books.

Meanwhile, before the dollars could be spent, the state’s income forecasting panel – called the Revenue Estimating Conference – must agree that a surplus exists. The conference won’t look at the issue until January, after the auditors finish their review.

Stephanie Grace on political odd couples

Eyebrows were raised recently when arch-conservative columnist Quin Hillyer teamed up with author John Barry to call for a new tax on oil and gas producers to help pay for Louisiana’s coastal restoration efforts. But that’s not the only case of political role-reversal, Stephanie Grace writes in The Advocate.

… former state Department of Health and Hospitals Secretary David Hood openly endorsed one of Gov. Bobby Jindal’s favorite rhetorical targets, President Barack Obama’s Affordable Care Act. The law has become an all-purpose scapegoat for rising premium rates, Hood wrote, but rates had risen annually, often by double-digit percentages, before the ACA took effect. The ACA now regulates increases and mandates that 80 percent of premium dollars be spent on health care, not overhead, he pointed out.

Hood worked for Jindal when the governor ran the Department of Health and Hospitals during the administration of Republican governor Mike Foster.

Department of self-promotion

LBP Director Jan Moller was a guest this morning on the Jim Engster show, guest hosted by Bob Mann. He discussed the debate over the $179 million surplus, the controversy surrounding the state employee health plan and a pair of constitutional amendments that would make it harder to balance the state budget in future years. A full podcast is available here.

Number of the Day
822,000 – Number of Louisianans in poverty, using the Supplemental Poverty Measure. (Source: LBP)