Preying on the working poor

It should be an easy campaign promise for the candidates for governor: I will rein in predatory lenders to protect the working poor. So-called payday lenders charge exorbitant interest rates and studies show that most borrowers get stuck in a “debt trap” of repeat borrowing. Sadly, this is not by accident–it is the lender’s business model. But given recent battles in the Legislature, reform isn’t likely without strong support from the fourth floor, writes nola.com’s Bob Mann:

In the 2014 legislative session, a group of state lawmakers tried to do something about the proliferation of businesses designed expressly to reap huge profits from poor people. Their legislation, among other things, would have capped the interest rate on payday loans at 36 percent. The payday lenders and their 40 lobbyists howled in protest. So, the bill’s sponsors offered a compromise: Cap the interest rate at 72 percent. The lenders and their lobbyists refused to budge. The bill, of course, died. We will likely see this struggle again in the 2016 legislative session. Without the new governor’s support, however, it’s obvious who will prevail. The groups that advocate for the working poor are no match for the payday lenders and their dozens of lobbyists. The lenders argue they merely provide a service for poor people who have no other source for loans. That’s why, they say, their interest rates and fees are so high. But their rates aren’t high because lenders are apprehensive about making risky loans (high interest rates is not a bug in their business model; it’s a feature). A responsible, ethical banker does not lend money to people he knows cannot repay the loan. This is not about risk; it’s about abusing and profiting off poor people.

Obamacare and jobs

It is an attack heard ad nauseum: Obamacare is going to kill jobs. Well, it didn’t. Max Ehrenfreund of the Washington Post has a round-up of all the studies that prove it. Of particular interest to the Daily Dime, it seems the idea that Medicaid expansion would discourage work and somehow increase “dependence”–a claim supported by certain Louisiana politicians–is a dud:

The researchers at Urban also examined a separate aspect of the law, the expansion of Medicaid to more beneficiaries. For many people, health insurance is one of the most important reasons to find and hold down a job. Obamacare’s conservative opponents predicted that if Americans could receive insurance through Medicaid instead of through an employer, some of them would leave the workforce. Yet the Urban analysis did not find significant differences between states that expanded Medicaid and those that did not. “There’s been a lot of talk about the ACA reducing the number of jobs, or killing some jobs, and we simply don’t see the evidence of that in the data that we’ve been able to examine up to 2014,” Garrett said.

Kevin Drum of Mother Jones magazine sums it up rather well:

Obamacare isn’t a job killer. Nor is it even a schedule killer. Life goes on normally, except for the fact that millions of people now have health insurance who didn’t before.

Next year’s deficit

The Revenue Estimating Conference–the four-member panel tasked with determining how much revenue that state has to spend–will meet this morning. Some legislators are predicting that even with the revenue bills (many of them temporary) passed this spring, next year’s shortfall between revenues and expenses will be pegged somewhere north of $700 million. Greg Hilburn with the Monroe News-Star reports:

Louisiana House Appropriations Committee Chairman Jim Fannin believes the state will face more than a $700 million budget deficit next year despite passing more than $600 million in new annual tax revenue. The state’s Revenue Estimating Conference will meet in the Capitol this morning to provide official projections for the next five years. “My understanding and expectation is that the projection will mean we will face a budget hole of about $717 million for the 2016-2017 fiscal year,” said Fannin, R-Jonesboro…“Without some help from oil prices or an increase in personal income and sales taxes then we will still have a major issue to deal with next year.” State Sen. Neil Riser, R-Columbia, chairman of the Senate Revenue and Fiscal Affairs Committee, said the projection for a $700 million plus deficit “shows there is a real need for a complete overhaul of the tax code to stabilize the budget…Most of the tax measures we passed this year are sunsetting in three years so they’re going away,” Riser said. “Now we have to look at true permanent reform by examining all of the tax credits, rebates and exclusions that exist.

When I win the lottery

The Louisiana lottery had the second-biggest year since it started selling hopes and dreams in 1991. The lottery took in $454 million last year, reports the Associated Press:

Lottery President Rose Hudson said in a statement that scratch-off tickets were a revenue-driver, with sales growing 13 percent. Under Louisiana law, 35 percent of the money generated by the lottery goes to the state treasury, dedicated to public elementary and secondary education. The lottery says it transferred more than $158 million to K-12 education last year. Other dollars go to retailers that sell tickets, and at least half of the lottery’s revenue pays for prizes for players.

Number of the Day

1,009 – Number of “payday” lending storefronts in Louisiana. By comparison, McDonald’s has 226 fast-food locations in the state (Source: California State University Northridge)