Tax subsidies made deficit worse

Households and businesses cashed in more tax credits and rebates than expected last fiscal year, which made Louisiana’s budget deficit worse than expected. As the AP’s Melinda Deslatte reports, many taxpayers may have rushed to cashing in state subsidies before the Legislature put new limits on such tax giveaways. This was particularly true of film subsidies:

“The largest issue that we’re working to finalize is just the general accounting of everything and how the tax refunds play into that number,” (Commissioner of Administration Kristy Nichols) said. Lawmakers enacted a new cap on the film tax credits in the current budget year to help close a massive shortfall and protect public colleges and health care services from steep cuts. A maximum of $180 million in film tax credits can be cashed in annually. The cap kicked in July 1 and expires after three years. Nichols said it’s likely people filed for film credits earlier than usual to ensure they could use them, rather than risk running into problems with the cap.

The shift in movie payments shouldn’t come as a surprise. Instead of controlling costs by capping the amount of credits that could be issued in a given year, the Legislature at the last minute changed the cap to affect the amount of credits that could be cashed in each year. What is left to be seen is whether the Jindal administration will take steps to deal with the deficit or wait and leave the problem for his successor to deal with when he takes office in January.

The high cost of daycare

A year of daycare can cost more than a year of college, and as costs have gone up at the same time wages have stagnated, families are feeling the squeeze. As Della Hasselle writes in the New Orleans Advocate, a lack of access to affordable child care can be a big barrier to work, and often forces families to turn to lower-quality providers to save money. Research proves that the first few years of life are the most crucial for brain development. But this fact has not been reflected in the state’s budget priorities, which have short-changed child-care assistance programs and made things worse:

Young families across New Orleans and the rest of the state are experiencing the same sticker shock. The average weekly rate for a seat in a licensed day care center in Louisiana was $130 a week in 2014, up 12 percent since 2010 and more than 44 percent higher than in 2005, according to the most recent Louisiana Child Care Market Rate Survey…The pinch has forced parents to make sacrifices so they know their children are well cared for. Some have gone into debt, while others have passed up job or educational opportunities in order to stay home…Budget cuts have forced the state to tighten eligibility requirements for low-income families seeking assistance. The number of children enrolled in Louisiana’s Child Care Assistance Program dropped from 40,000 in 2008 to 15,000 in 2014.

United Way Voter Guide

The United Way of Southeast Louisiana and its Women’s Leadership Council have identified poverty as a core issue facing Louisiana and asked the four major candidates for governor where they stand on key issues affecting working families and children. Here are some of the highlights:

• Earned Income Tax Credit (EITC). Scott Angelle, Jay Dardenne and John Bel Edwards all support doubling this pro-work tax credit from 3.5 percent to 7 percent of the federal credit. David Vitter refused to answer
• Minimum wage. Angelle and Dardenne do not support raising the wage. Edwards does. Vitter refused to answer
• Medicaid expansion. Angelle does not support expansion. Dardenne supports the concept and would set up a task force to craft a waiver. Edwards supports expansion. Vitter did not answer
• Predatory lending. Angelle and Dardenne do not support banning predatory lending practice (for example, by implementing a rate cap on so-called “payday loans”), while Edwards does and Vitter did not answer
• Early childhood education. Angelle, Dardenne and Edwards all support legislation to fund the Act 3 early childhood education law, estimated to cost $80 million. Vitter did not answer

You can see the full Voter Guide and read candidates’ detailed answers here.

The politics of incarceration

Louisiana has the highest incarceration rate in the country – and the world. But running on a platform to reduce incarceration isn’t likely to garner many votes, writes Alexandria Burris of the Shreveport Times. Nevertheless, given the high cost–both in terms of dollars ($709 million this year) and lives impacted (37,000 Louisianans are incarcerated)–Gannett Louisiana decided to ask the four major candidates for governor where they stood. Here are some excerpts:

• Scott Angelle: “I agree with the state legislature’s recent decision to reduced sentences for first-time, non-violent offenders … We should focus on policies that ensure those individuals do not become habitual offenders.”
• Jay Dardenne: “Louisiana has recently passed laws allowing non-violent drug offenders to gain early release if they participate in rehabilitation programs. I support these efforts and we need to see their effect on the prison population as we move forward.”

• John Bel Edwards: “As governor, I will reexamine mandatory minimum sentencing laws for non-violent offenders and steer non-violent offenders away from prison. This means they can be taxpayers not tax consumers, leaving fewer children in poverty.”
• David Vitter: “… my number one priority is protecting our family… That means swift justice and strong sentences for violent offenders. And it means reforming criminal justice so we don’t warehouse young, non-violent offenders with hardened criminals so that the only skills they learn are those they’ll use against us.”

Number of the Day

$130 – Average weekly rate for child care in Louisiana, up 44 percent compared to a decade ago. (Source: The Advocate)