Monday, September 21, 2015

Monday, September 21, 2015

Candidates short on budget details; Incomes are down and rents are up; Back to the Future; Medicaid expansion makes economic sense; and Building a proactive EITC campaign

 

Candidates short on budget details
The primary election is just a month away. But while the major candidates for governor agree that  budget and tax reform are a top priority, they are offering few specifics on how they would fix the problem. Tyler Bridges of the Advocate reports:

 

“I’d like to believe they have plans,” (former state budget director Steve) Winham said. “But we have no way of knowing whether they do. They’re not even coming close to becoming specific about what they would do. “We have only two options. One is to cut the budget, which is problematic on a number of levels. If it’s so easy, (Gov.) Bobby Jindal would have done it already. The other budget option is to raise revenue, which is unpopular.”

 

The next governor is going to need to tackle multiple budget issues right out of the gate. It won’t be easy:

 

The new governor is likely to inherit three separate but interrelated budget problems from Jindal and the outgoing Legislature, said Jan Moller, director of the Louisiana Budget Project. One will be the immediate need to eliminate the deficit in the $25 billion budget for the current fiscal year, which began July 1.  … Once the current-year budget deficit is eliminated, the Legislature will meet in a regular session beginning on March 14 to pass the budget that will take effect on July 1. To balance that budget, the governor and Legislature will have to eliminate a projected deficit of $700 million to $1 billion. Finally, the governor and Legislature will have to make structural changes to the budget to eliminate projected deficits of more than $1 billion in the succeeding years. The effort to do that could require its own special session, meaning the Legislature might hold at least two special sessions next year. “All of this will be a heavy lift,” Moller said. “We’ve run out of easy answers.”

 

Incomes are down and rents are up
New U.S. Census data released last week showed that household incomes in most states, including Louisiana, are stagnant and remain far below their pre-recession peak. But as families know, the money coming in is only one side of the equation. And when it comes to many families’ biggest expense–housing–the story isn’t any better. As Alicia Mazzara with the Center on Budget and Policy Priorities writes, the problem is particularly troubling for renters:

 

In every state except North Dakota, median rents have grown faster than median household incomes since before the Recession…Even relatively small rent increases can seriously strain household budgets when incomes are falling…The growing gap between rents and incomes particularly squeezes low-income families, who typically rent rather than own their homes.  Most of these families work but don’t earn enough to keep up with rising housing costs…One in four renters live in poverty.  Paying too much for housing puts these families at risk for homelessness, housing instability, and overcrowding.  As we wrote recently, federal rental assistance makes a big difference, lifting 2.8 million people out of poverty last year.  But it only reaches about one in four eligible families, and few states offer additional help.

 

Back to the Future
The Louisiana Film and Entertainment Association has a new president–Robert Vosbein–and already he is talking about altering or removing the $180 million cap on credits passed by the Legislature last year, reports WWL:

 

Vosbein says he’s very concerned, because the state of Georgia has a similar film tax credit program and is getting a lot of Louisiana’s business because our state has a cap on the number of credits redeemed. “People that have come here from all parts of the country to work in our industry are now seeing that we don’t have the jobs, we don’t have the production, so they’re switching over to Georgia. We’ve got to stop that.” Vosbein says raising the cap would be a step in the right direction, but doesn’t really think we need to have it at all. “It’s really not the expense that should be the analysis, it’s not costing the state very much at all and it’s a very suitable investment just like the investment they make in oil and gas.”

 

Reasonable minds can disagree over how the state should spend its taxpayer dollars–on schools, roads or subsidies for industries like Hollywood movies–but Vosbein is wrong that movie subsidies are “not costing the state very much.” As LBP noted earlier this year, Louisiana taxpayers have spent more than $1.5 billion on movie subsidies in the last decade, which is why we argued for a reasonable cap that would protect taxpayers and force the industry to live on a budget, just like other state programs.

 

Medicaid expansion makes economic sense
The Advocate’s editorial board approves of the Baton Rouge Area Chamber’s newfound support for Medicaid expansion, noting that the business case has been obvious for years, even as Gov. Bobby Jindal and others played politics with the issue:

 

There is a powerful moral case to be made for expanding Medicaid insurance coverage for the working poor in Louisiana. Too often overlooked is the business case for expansion. Hospitals and doctors’ offices are businesses, although they have substantial moral and legal obligations to help patients who can’t afford to pay, or pay much. Expanding Medicaid coverage under the U.S. Affordable Care Act would provide real benefits to medical providers’ bottom lines. The chamber’s statement noted that health care insurance is “a major economic issue.” “By bringing billions of dollars of federal investment to the state, expanding Medicaid eligibility will bring thousands of jobs and provide coverage for thousands of workers in the capital region,” BRAC said.We’re delighted that BRAC can make simple calculations that have been obvious for several years but ignored at the State Capitol.

 

Building a proactive EITC campaign
The Hatcher Group will be hosting a webinar tomorrow about state Earned Income Tax Credit campaigns. LBP’s director of outreach, Ashley Herad, will be one of the presenters:

 

This has been a landmark year for Earned Income Tax Credit (EITC) action in the states. But enacting new state EITCs, or expanding or protecting existing ones doesn’t happen overnight. Hear from advocates in three states: Louisiana, Montana and Rhode Island, on how they waged proactive campaigns to build support for the EITC among both Republican and Democratic legislatures. Learn new tactics for influencing policymakers and engaging voters around the EITC in your state, and explore best practices for keeping the credit relevant pre- and post-legislative session. Each state’s presentation will be followed by a brief Q&A session.

 

Click here for more information and to register.

 

Number of the Day

 
53 percent – Share of renters in Louisiana who spend more than 30 percent of their income on rent (Source: American Community Survey)