Friday, July 10, 2015

Friday, July 10, 2015

Child abuse case prompts policy change; Oil prices threaten budget stability; Retired state employees call for veto session and; Film industry won’t sue over subsidy cap

Child abuse case prompts policy change

The state agency charged with investigating child abuse allegations is promising to mend its ways after authorities this week discovered a disabled Baton Rouge teen living in squalid conditions. As The Advocate reports, officials from the Department of Children and Family Services had visited the child’s home numerous times over the years, but failed to take any action beyond making sure he had access to food and water.

Weighing in with public comments for the first time since the child’s living conditions became public Wednesday, Department of Children and Family Services Secretary Suzy Sonnier said her agency has initiated what she promised would be “a thorough investigation on this.” Under a new policy, she said, any child who is nonverbal and has special needs, such as the boy found Wednesday living in a house in the 1700 block of North 46th Street, will be evaluated by a multidisciplinary team, including medical professionals, in the course of any investigation.


Oil prices threaten budget stability
The 2016 fiscal year is only 10 days old, but already there is concern that weak oil prices could force another round of mid-year budget cuts. As Jeremy Alford reports in LaPolitics, the budget is based on a $61 per barrel oil price, yet the price recently dropped below $52 per barrel. Anytime the price of oil drops below the forecast, it means less money in royalty and severance tax collections. But there also is plenty of time left for the price to recover.


Albrecht said Louisiana loses $12 million for every $1 decrease in the annual average price of a barrel of oil. “If this is something that is sustained over several weeks, it could possibly be something to be concerned about,” he said. “I don’t worry about the daily prices at all, but the outlook has been weakening.”  If the decline does continue over the next month or so, the concern created could intersect with the next meeting of the Revenue Estimating Conference, which is likely to be held in mid-August, said Greg Dupuis, a spokesperson for the Division of Administration. If a downward adjustment, which would mean less money for the current budget, is needed — and in no way is that being signaled at this time — it could take place at the August meeting.


Retired state employees call for veto session
The Retired State Employees Association wants legislators to call themselves into session to override Gov. Bobby Jindal’s veto of their cost-of-living increase. The move comes after the governor killed legislation that would have given a $30 per month raise for 130,000 retirees living on state pensions. Marsha Shuler of the Advocate has the story:


Legislators have until midnight Thursday to notify legislative leaders if they think a veto session is necessary. If a majority of either the House or Senate vote against convening for an override, a session would not be held. The retiree COLA bill is one of nine measures Jindal vetoed from the 2015 legislative session. He also line-item vetoed some items in the state budget bill. In his veto message, Jindal said granting the pension check boost “jeopardizes the state’s credit rating by violating previous retirement reform efforts.” Jindal referred to a law passed in 2014, which specified that COLAs could be granted every other year. He said the retirees got a COLA in 2014, so one was not due this year. That law limited both the frequency and amount of future benefit hikes so more money would go toward reducing the $19 billion long-term retirement systems’ debt. Jones said there was no way the COLA would jeopardize the state credit rating and argued that Jindal had not considered the reforms in the bill that would lead to the systems becoming financially stronger sooner.


Film industry won’t sue over subsidy cap

The head of the trade association for Louisiana’s movie industry is backing off an earlier threat to sue the state over a new law that temporarily caps state subsidies for film and TV productions at $180 million per year. As The Advocate’s Gordon Russell reports, the Louisiana Film and Entertainment Association had vowed a legal challenge to the cap, which is expected to save the state $70 million in the current fiscal year. That’s because state officials are interpreting some of the reform provisions in the new law – such as a cap on the subsidies for star actors – in ways that make them virtually meaningless.


In the short run, French said, the Jindal administration has interpreted the new law in industry-friendly terms.For instance, one new provision in the film law says that only the first $3 million worth of salary tied to one person in a particular film — such as a celebrity actor — can be eligible for the state’s 30 percent subsidy. But French said state regulators have agreed to apply the provision only to people who are paid directly and receive a W-2 tax form. Nearly all actors are paid through so-called “loan-out corporations” that they control, and the $3 million cap will not apply to those who use loan-outs, French said.


Number of the Day

$1 billion – the amount of federal assistance now available to the 12 U.S. regions that have just received the Investing in Manufacturing Communities Partnership classification (Source: Baton Rouge Business Report).