Thursday, March 12, 2015

Thursday, March 12, 2015

Kennedy opposes tobacco settlement sale; How to boost graduation rates at 2-year colleges; More details emerge on cigarette tax proposal and; LANO “mini institute” focuses on advocacy

Kennedy opposes tobacco settlement sale

A proposal to offset state budget cuts by selling a portion of Louisiana’s tobacco settlement to investors drew a high-profile critic in state Treasurer John Kennedy, who likened the plan to “a junkie selling his TV or smartphone to buy another fix.” Although not technically part of Gov. Bobby Jindal’s budget proposal, the administration suggested the sale on a list of “revenue-raising options” for the Legislature to consider. Louisiana currently gets $55 million a year from tobacco companies under the 1998 legal settlement, but the administration estimates that it could get $750 million upfront if that financing stream was sold to investors. The money, in turn, would be used to offset the cost of TOPS scholarships. But as The Advocate’s Marsha Shuler reports, Kennedy doesn’t trust that the money would be spent wisely:

 

“My fear is that all $750 million of this money will be spent. Everyone will want a piece of the pie,” Kennedy said. “That will only add to our structural deficit, and, besides, what will we do next once the money is gone? Kennedy noted the administration’s chronic use of one-time cash to plug budget holes, including state property sales, depleting the Medicaid Trust Fund for the Elderly, “taking money out of the state employee health insurance claims fund” and embarking on numerous tax amnesty programs.

 

How to boost graduation rates at 2-year colleges

As the industrial expansion in South Louisiana creates more demand for people with two-year and technical college degrees, a key question for state policymakers is how to to raise graduation rates at schools where most students never complete their training. While more than 78,000 students are enrolled at Louisiana’s two-year and technical colleges, the graduation rate has dipped below 14 percent. But as The New York Times’ Upshot blog reports, a pilot program at City University of New York has managed to nearly double the percentage of students who graduate within three years, from 22 percent to 40 percent. So what’s the formula?

 

(The Accelerated Study in Associates Program, or ASAP) was a multipronged intervention. Students had to attend full-time, which tends to speed students toward a degree. To support students carrying this full-time load, ASAP provided a wraparound set of services, including intensive advising and tutoring; priority in registering for oversubscribed courses; a free MetroCard; free textbooks; and a waiver that covered any shortfall between schooling costs and financial aid.

 

All that tutoring and advising didn’t come cheap. The average per-student cost rose by 60 percent. But if the goal of a college is to provide the world with trained graduates, it was a bargain. But because graduation rates nearly doubled, the amount CUNY spent for each college degree actually dropped by more than 10 percent.

 

More details emerge on cigarette tax proposal

Gov. Bobby Jindal’s plan to raise money for the state budget by raising tobacco taxes will not be limited to cigarettes, one of his financial advisers told Nola.com. Revenue Secretary Tim Barfield said the plan would also affect cigars, smokeless tobacco, electronic cigarettes and other vaping commodities.

 

But fissures could erupt between the administration and the Legislature over how such a tax should be configured. Jindal has said he will only support new or higher taxes if they are offset, dollar-for-dollar, by a corresponding tax credit. That way, he can keep an anti-revenue pledged he signed at the behest of Washington lobbyist Grover Norquist.

 

Federal spending is not out of control

Did you hear the one about the federal government being too big and spending being “out of control”? If you watch cable news or listen to talk radio, chances are that you have. But the reality is somewhat different, as Robert Greenstein, Joel Friedman and Isaac Shapiro of the Center on Budget and Policy Priorities point out in a new report. It shows that spending on programs – federal spending that doesn’t include interest on the debt, Medicare and Social Security – is now below historical norms and projected to fall even farther in the coming years.

 

When Americans hear talk of the government growing in size and reach, they usually don’t think this means that more people will receive Social Security and Medicare because the population is growing older, or that Medicare will cost more because of factors like the aging of the baby boomers and improvements in medical technology.  Yet outside of demographic and health cost factors, the portrait of a rapidly growing federal government is at odds with reality.  Indeed, the rest of government — reflecting nearly three-fifths of program spending today, including health reform’s coverage expansions — is projected to shrink relative to the size of the economy under current policies.

 

LANO “mini institute” focuses on advocacy

David Thompson, vice president of public policy for the National Council of Nonprofits, will lead a 90-minute seminar this afternoon from 3-4:30 pm on how nonprofit leaders can become better advocates for their mission. The event is hosted by the Louisiana Association of Nonprofit Organizations (LANO) and details are here.

 

Number of the Day

11.2 percent – Federal spending as a percentage of Gross Domestic Product (GDP) after excluding interest on the debt, Medicare and Social Security. (Source: CBPP)