Another round of budget cuts looming?

A gallon of regular unleaded cost $1.63 at Costco this weekend – great news for anyone with a morning commute, but worrying for state budget writers, who could be looking at another downgrade to the state’s revenue forecast as early as next week. State officials already made $170 million in mid-year cuts last month, and are working to plug a $1.4 billion gap between projected revenues and expenses in next year’s budget.

The good news, as Manny Fernandez and Jeremy Alford reported in The New York Times over the holidays, is that Louisiana is far less dependent on oil and gas revenues than it was in the 1980s, when the state economy cratered along with the price of oil. Only 13 percent of the state general fund comes from mineral revenues, compared to 45 percent in the 1980s.  But Louisiana’s economy remains less diversified than some of its neighbors’.

“From a strictly budgetary perspective, Louisiana is more sensitive to all of this,” said James A. Richardson, a Louisiana State University economist who serves on the state’s Revenue Estimating Conference, which estimates how much money will be available for the budget. “It shows up in our house much sooner.” Gifford Briggs, vice president of the Louisiana Oil & Gas Association, said some sections of the industry were beginning to scale back as reality set in and prices dropped. Though production in existing wells is expected to continue apace in the coming months, companies are already shrinking their drilling and exploration activity, he said. “Landmen say they’re laying off everyone they have right now until things pick up,” he added, referring to the independent firms that provide services to exploration and drilling companies.

Payday battles unlikely to repeat in 2015

The efforts to rein in predatory payday lenders – which were a major topic during last year’s legislative session – are unlikely to be repeated this spring, The Advocate’s Marsha Shuler reports.

Louisiana Payday Loan Association lobbyist Danny Ford said he doesn’t expect any state activity on the issue this year, based on conversations he’s had with legislators. If legislation does surface, he said, he does not anticipate debate will be “as harsh as last time.” The upcoming session will focus on state fiscal matters, and the rules limit legislators to introducing only five bills that don’t deal with finances. “I don’t think anybody wants to give up one of their five bills to get into that fight again,” Ford said.

Certainly, Democratic state Rep. Ted James doesn’t. “I don’t know that I want to use one (of the five bills) on something that’s going to go down,” James said. His north Baton Rouge district has a lot of the payday loan shops.

Social programs that work

It doesn’t sound like a novel idea, but it is: Using evidence to improve federal social programs, to make sure dollars are spent on things that actually work. It’s been one of the unsung successes of the Obama years, but as Ron Haskins writes in The New York Times, an effort is underway on Capitol Hill to scrap the effort.

As a policy analyst who helped House Republicans design the 1996 welfare overhaul and who later advised President George W. Bush on social policy, I am committed to the principle that the government should fund only social welfare programs that work. That’s why it’s imperative that the new Congress reject efforts by some Republicans to cut the Obama administration’s evidence-based programs. Especially in a time of austerity, policy makers must know which programs work, and which don’t.

More than 3 million workers start the year with a raise

Low-wage workers in 20 states and the District of Columbia started 2015 with a pay raise, thanks to laws that raise the minimum wage in their state above the federal $7.25 per hour. In some states the raise amounts to a few pennies, but others are raising wages by $1 or more – which can make a big difference for people living on the margins. The New York Times reported on Rita Diaz of Roslindale, Mass., who sometimes walks 3 miles to her job at Popeye’s instead of taking the bus to cut down on expenses.

“I need to make a decision to buy clothes, or pay the rent or pay my cellphone bill,” she said. “Now I’ve got to do that decision, but I’m going to have more money for me, too. A little bit of money for me.”

Across the country, 29 states now have minimum wages above the federal minimum. Louisiana remains one of just five states without a minimum wage law on its books.

Number of the Day

60 – Percent of America’s work force covered by new minimum wage laws that took effect Jan. 1 in 20 states and the District of Columbia. (Source: Economic Policy Institute via New York Times)