Business Report: Legislature faces tough choices

Tyler Bridges, writing in the Baton Rouge Business Report, previews the upcoming legislative session where all the focus will be on the state budget and Louisiana’s $1.6 billion shortfall.

Long-time observers say the state’s financial situation hasn’t been in such bad shape since the oil bust of the late 1980s, although they are quick to note the situation then was even worse because Louisiana’s budget was more dependent on oil and gas revenue. The projected $1.6 billion deficit—about 20% of the state’s general fund—leaves legislators facing tough choices on spending and cutting. The easy options for a fix were used up in preceding years. Making matters politically worse across party lines, the budget-balancing effort takes place in a year when many of the 105 House members and 39 senators are running for re-election or another elected office. Voters who’ve had to deal with their own budget crises after the Great Recession will be closely watching what legislators do with their tax dollars.

Emergency services shut down in EBR

Six minutes after the only emergency room in the heart of Baton Rouge closed its doors for good on Tuesday morning, the need for such services became crystal clear to the reporters who had gathered for the occasion. As Andrea Gallo and Ben Wallace report in The Advocate, an ambulance rolled up to the ER doors at 7:06 a.m., carrying a patient in cardiac arrest.

Before the ambulance came in, the hospital was dark and quiet in the early hours of Tuesday morning while the Emergency Room was still operating. But minutes after the clock struck 7, signs on the door were already being changed. Workers used double-sided tape and glue to add blue signs on the brick walls of the former emergency room entrance. The blue signs are a warning for the public that say, “No ER services on this campus.”

While the cardiac patient was admitted, future patients won’t be as lucky. If they live anywhere near the heart of Baton Rouge, they’ll have several miles farther to travel in case of a medical emergency. The Baton Rouge General says it had no choice but to close its ER, since many of its patients had no insurance coverage and had to be treated for free.

If only there was some kind of federal law that allows states to extend health coverage to low-income uninsured adults at little or no cost. Because then things like this might not have to happen.

The ‘false hope of limited government built on tax breaks’

Louisiana isn’t the only place where a debate over tax breaks is long overdue. As Eduardo Porter reports in The New York Times, tax code spending at the federal level disguises the true extent of the federal safety net, and the ways that government spending often benefits the wealthy at the expense of the poor and middle class.

Such spending through the tax code not only offered the false promise of smaller government. Its most insidious effect was to hide what the government does and, notably, to shield from political debate which people it benefits most. That is clearly not those of middle and low income, who don’t earn enough to qualify for many tax deductions and often don’t even claim them. Built in the shadows, protected from democratic accountability, the government developed into a Rube Goldberg contraption that has only a weak claim to a defensible social purpose. It might not be the smallest government in the advanced world, but it can lay claim to being among the least efficient and the most unfair.

A ‘hydrocarbon solution’ to budget crisis? *

Under increasing pressure to come up with a workable solution to Louisiana’s $1.6 billion budget shortfall, Gov. Bobby Jindal threw his support behind a proposed constitutional amendment to enact a new oil and gas processing tax proposed by Sen. Ben Nevers. The 4 percent levy proposed in Nevers’ Senate Bill 15 would raise an estimated $1 billion per year, which would be used to avert damaging cuts to higher education and health care services.

“I’ve been opposed to an oil and gas processing tax since I entered politics,” Jindal said at a Wednesday morning news conference at the Governor’s Mansion. “But my experience with Common Core taught me that consistency is vastly overrated in politics.”

Jindal chief of staff Kyle Plotkin said the administration has been assured by Americans for Tax Reform that support for the hydrocarbon fee does not violate the infamous anti-tax pledge that Jindal signed in 2003.  “Mr. (Grover) Norquist says hydrocarbons are not people, and thus not subject to the pledge,” Plotkin said.

*=check your calendar

Number of the Day

3,000 – Drop in number of state inmates since 2012 (Source: Department of Correction via Associated Press)