Monday, October 26, 2015

Monday, October 26, 2015

OMV extortion scheme draws fire; Closing the door on affordable housing; Fighting debtors’ prisons - one court at a time and; “Onshoring” and falling wages

OMV extortion scheme draws fire

The Jindal administration’s attempt to extract $444 million from Louisiana motorists through a series of ill-timed demand letters aimed at drivers who may have let their insurance lapse drew fire over the weekend from editorial writers. The Advocate notes that the 1.2 million letters sent out by the state Office of Motor Vehicles – some of them threatening fines for decades-old infractions – tarnishes the work done by that agency to make it easier to do business with the state.

 

That’s now overshadowed by thousands, perhaps hundreds of thousands, of angry folks. Many of them, as OMV records indicate, probably did allow their insurance to lapse and continued driving; that’s what the fines were originally intended to prevent. But many of these people sold or gave away cars, allowing the insurance to lapse, and have — or had — the paperwork to prove they don’t owe a fine. Insurance Commissioner Jim Donelon tells it like it is: “For years, the state has failed to collect fines. Now, years later, the average citizen likely does not have the documents to prove that they had insurance one way or the other. No one keeps proof of insurance from a decade ago.”

 

Nola.com/The Times-Picayune is also displeased by the heavy-handed attempt at collecting money, which sprung from the state’s chronic inability to balance its revenues and expenses.

 

Not even the Internal Revenue Service expects people to keep records that long. The federal agency generally recommends that taxpayers keep records for three to seven years, depending on what type of record and the specific tax purpose. Yet OMV officials expected people to have records on something that happened 20 years ago? Maybe the truth is they were counting on the fact that most people wouldn’t and that some would just give up and pay the fine. Whoever came up with this misguided idea had to have been dazzled by the thought of all those millions of dollars rolling in.

 

Closing the door on affordable housing

A budget standoff on Capitol Hill could have ripple effects in Louisiana, as plans working their way through the U.S. Senate would dramatically reduce federal aid for affordable housing that is desperately needed in New Orleans and elsewhere. One plan would cut the HOME investments partnerships program by 93 percent, while another  would preserve the HOME program at the expense of the National Low-Income Housing Trust Fund. As Nola.com’s Robert McClendon explains,

 

The loss of $1.85 million from a New Orleans general fund budget of $593 million wouldn’t seem like a fatal blow, but Ellen Lee, Mayor Mitch Landrieu’s housing czar, said the results would be catastrophic for the city’s ability to produce and retain housing for low-income residents. That’s because the city has lately used its HOME grant money to leverage other funding, particularly Low-Income Housing Tax Credits, Lee said. Using a reserve of HOME money built up after Hurricane Katrina, the city last year awarded developers $6.2 million in HOME funds for rental construction. Those developers then brought in another $110 million more in outside money. Some of that money may have come from private grants or, in the case of for-profit developers, from equity they put up themselves. But the lion’s share came from private investment, much of it induced through the Low-Income Housing Tax Credit program.

 

Fighting debtors’ prisons – one court at a time

In Louisiana and elsewhere, people who get arrested and charged with minor crimes often have very different experiences depending on their financial resources. Those who can afford bail generally spend very little time behind bars. But for the poor, such minor infractions can mean spending several days locked up while waiting to see a judge. As The New York Times reports, small groups of civil rights lawyers are working to change such practices around the country, from rural Alabama to Ascension Parish.

 

So courthouse by courthouse, groups as small as Equal Justice Under Law, founded by Mr. Karakatsanis and a fellow Harvard Law School graduate, Phil Telfeyan, and as large as the American Civil Liberties Union are waging a guerrilla campaign to reverse what they consider unconstitutional but widespread practices that penalize the poor. These include jail time for failure to pay fines, cash and property seizure in the absence of criminal charges, and the failure to provide competent lawyers. More often than not, they are winning — and even pebble-size victories can have a large ripple effect. After a handful of lawsuits in Alabama accused a private probation company of using the threat of jail to collect high fees, the company announced last week that it would leave the state.

 

“Onshoring” and falling wages

Manufacturing is making a comeback in America. More than 700,000 jobs have been added since 2010 – reversing a decades-long trend that saw millions of middle-class jobs move offshore and decimated the towns and cities that were anchored by factories. But as Alana Semuels notes in The Atlantic, many of the new jobs pay less, on an inflation-adjusted basis, than they did 30 years ago.

 

But these are not your father’s manufacturing jobs. Many of the companies are locating their new plants in right-to-work states where it’s less likely their workers will join a union, and the prevailing wages are far lower. In fact, nationally, the average wages of production and non-supervisory employees in manufacturing are lower than they were in 1985, when adjusted for inflation. In September, those employees made an average $8.63 an hour, in 1982 to 1984 dollars, while they made an average of $8.80 an hour in 1985, according to the Bureau of Labor Statistics.

 

Number of the Day

14 – Percentage drop in wages for workers at non-union automobile manufacturing plants, 2003-13, on an inflation-adjusted basis. (Source: National Employment Law Project)