EITC boost clears first hurdle
We start today with some excellent news: The House Ways & Means Committee voted 8-6 on Tuesday in a bipartisan fashion to give low-income Louisiana workers a boost in their take-home pay. House Bill 70 by Rep. Walt Leger III of New Orleans would double the state’s Earned Income Tax Credit from 3.5 percent of the federal credit to 7 percent. This important credit helps families that work hard but struggle to make ends meet because their jobs simply don’t pay enough. It helps reduce poverty and puts money into every community in Louisiana. The EITC is especially important for families with children, as the extra money helps pay for necessities like books, school uniforms and groceries.
The bill still has a long way to go and a short time to get there. First, a vote on the House floor. If successful there it still must go through the Senate and get signed by Gov. Bobby Jindal. Sue Lincoln of WRKF and WWNO was there, and notes that the $47 million a year cost of expanding the credit could be used to offset some of the tax increases legislators are considering and satisfy the governor’s pledge to not have a “net” tax increase.
“Offsets” ended up being the key argument. This bill could help offset the House-approved tax increases, thus assisting with keeping the budget within the governor’s “no net tax increase” guidelines.“If we’re going to ultimately balance the budget – without vetoes – we need to just be cognizant that, at this point in the session, providing the Senate with some options on offsets is, I think, a valuable tool,” Leger explained.
Film credit bills on the move
Seven separate bills about the state generous film tax credit program, designed to reduce fraud and eliminate abuses, were approved by the House Way and Means committee on Tuesday. Sen. J.P Morrell of New Orleans sponsored all seven of the bills which passed without objection. The Advocate’s Tyler Bridges reports:
“We’re trying to eliminate fraud, improve the predictability of the credits and improve the return on investment to the state,” Morrell said in an interview afterward. “As long as the return on investment is as bad as it is, the program is in jeopardy.” Numerous lawmakers have called on scaling back the program, which is steadily costing taxpayers more and more money at a time when they are scrambling to find enough money for the state’s public hospitals and colleges and universities. Some have even sought to end the program, which has also suffered from several high-profile incidents of fraud. Lawmakers seem willing to keep the film tax credit program, but with the proviso that it not cost the state more than $200 million per year, under a separate measure, House Bill 829. That measure has passed the House and is now before the Senate Finance Committee.
State retirees might get a raise
Retired state workers, teachers, school employees and state troopers would get a 1.5 percent cost-of-living increase next year under legislation that passed the House and is on its way to the Senate. Marsha Shuler of The Advocate reports:
Rep. Sam Jones said the pension plans have the money in special accounts set up for retiree cost-of-living adjustments, or COLAs. “It has a zero impact on the state general fund,” he said. Jones said retirees are suffering now because of increased state health insurance program costs, with some premiums going up $58 a month and copays added. Retirees need the help now, instead of next year when they are scheduled to receive one.
Full House to consider bill to limit oil price estimates
Although not the main factor in the $1.6 billion budget shortfall the state faces, the unexpected drop in oil prices did affect state revenues. In an effort to mitigate the impact on the state budget, a bill was approved by committee Tuesday that would allow the state to use only 90 percent of the previous year’s oil price to calculate predicted revenues and create the state budget. The Advocate reports:
As royalties, severance taxes and other mineral revenues are based on the price of oil, much of the decision on how much state government can spend is calculated from the price per barrel set each year — and that money often is spent before the actual dollars come in. Rep. Kenny Havard, R-Jackson, says overestimating the price of oil is part of the reason state government had to make mid-year corrections in the budget when revenues don’t come in as predicted. “This is the state’s way of printing money,” Havard told the House Appropriations Committee, which was debating the legislation. “This is to stop the overestimating.”
Number of the Day
$326 Million – The gap between the cost of projects stuffed into the state construction budget ($696 million) and the money available to pay for them ($370 million) next year (Source: The Advocate)