Wednesday, October 8, 2014

Wednesday, October 8, 2014

Poor infrastructure could hold back economic expansion; Gazing into the revenue crystal ball; Minimum wage for home-care workers delayed; and More concern over constitutional amendment

Poor infrastructure could hold back economic expansion

With Louisiana having some of the worst roads and bridges in the country, and a $12 billion infrastructure backlog, reports that “A rising chorus of state leaders and industry insiders worry Louisiana’s infrastructure woes could hamper the anticipated industrial boom and believe the state should prioritize infrastructure investment.”


It isn’t just transportation problems that are causing the captains of industry to fret, but also “residential, commercial, entertainment infrastructure” gaps, according to Louisiana Associated General Contractors CEO Ken Naquin: “I know for a fact by talking to some of those plants that some of those projects could be jeopardized by our lack of service infrastructure.”


Louisiana Chemical Association President Dan Borne gave an idea of the magnitude of the problem when he told the Baton Rouge Press Club “I’m not running for governor, but if I was, I would propose the most comprehensive, the most aggressive infrastructure campaign ever proposed in this state.”


But that will have to wait until 2016 at the earliest, since the current governor and administration refuse to raise the revenue necessary to invest in the state’s future. As Borne said: “I think we can get a lot done in a short period of time with a new administration and a new legislature.”


Gazing into the revenue crystal ball

Predicting the future is hard. And when it comes to predicting state tax revenues, most states make similar mistakes, reports theWashington Post. According to anew study from The Rockefeller Institute of Government, the median state forecasting error was 3.5 percentage points over or under actual collections. The study noted that revenue forecasting was especially difficult after recessions, and that corporate income tax forecasts had the most errors. That’s especially true in Louisiana, where the rapid growth in corporate tax exemptions has contributed to wild swings in revenue. The study also found that smaller states and states with less diverse economies had a harder time estimating tax revenue than their larger and more diverse counterparts.


Minimum wage for home-care workers delayed

Home-care workers have long been exempt from federal minimum wage law, thanks to a legal loophole that treats these workers like babysitters instead of valued employees who provide critical services to some of the most vulnerable people in America. Now, a push to bring the nation’s two million home care workers under the minimum wage and overtime law has been delayed,The New York Times reports.


A year ago, the Labor Department announced that the wage protections would take effect nationwide Jan. 1, 2015, but the department said Tuesday that it would not enforce the rule for six months — from Jan. 1 to June 30. For the second six months of the year, the department said, it would “exercise its discretion” in whether to bring enforcement actions against any employers that decline to pay minimum wage or overtime.

Medicaid pays for a large part of the home care provided to patients, and many state officials urged delay over concerns about the fiscal impact of having to ensure fair pay for workers. Complicating matters, cutting home care services would push many patients into nursing homes at much higher cost to taxpayers.


More concern over constitutional amendment

In aletter to the Advocate, AARP volunteer Brenda Hatfield lays out her concerns over Constitutional Amendment 1 and urges a “no” vote:


This amendment will have serious implications on the future of children and adults with disabilities, and seniors who want to remain in their homes as they grow older. In fact, an AARP survey indicated that 89 percent of people in Louisiana say they want to remain in their own homes and communities as they get older…

The proposed amendment is rather deceptive and tells voters nothing about its dire consequences. For example, if passed, it would become very difficult for the state to reduce rates for nursing homes because they would be protected. This would limit budgetary flexibility and options by legislators and policymakers for other needed services such as health care, community and home-based services, and higher education…A “No” vote on Constitutional Amendment No. 1 will go a long way to help protect our citizens, allow them to live independently and have a quality life.



62.7—Labor force participation rate (percentage of the population aged 16 and over that’s in the work force) in September, the lowest since 1978. (Source: CBPP)