Tuesday, November 24, 2015

Tuesday, November 24, 2015

Medicaid expansion momentum; Edwards and education; Another fee, another fine; and Online doesn’t mean tax free


Medicaid expansion momentum
Governor-elect John Bel Edwards has long been a proponent of expanding health coverage to low-wage workers, but supporters of Medicaid expansion aren’t resting on their laurels just because he was elected. Together Louisiana, a statewide group of churches, held a meeting and press conference on Monday to renew the push for health care. Marsha Shuler with the Advocate has details:


Governors of Tennessee, Utah, Wyoming, Florida, Missouri and Virginia have backed Medicaid expansion only to have their Legislatures veto the idea, the Rev. Lee T. Wesley said. “We are committed to meeting with legislators in the Capitol, in their districts and make our voices heard and make our concerns known and push for expansion of Medicaid in our state,” said Wesley, the pastor of Baton Rouge’s Community Bible Baptist Church.


Jan Moller, director of the Louisiana Budget Project, said Louisiana has one of the highest rates of uninsured in the nation and spends $1 billion a year on charity hospital care for those uninsured. More people would have insurance coverage with the expansion and the dollars would follow the patient to the health care provider of their choice, Moller said. And, he added, “it would save tens of millions of dollars” by lowering state costs related to uninsured care.“How do we know it saves money? Other states are saving money right now: Arkansas, Colorado, Kentucky, New Mexico,” Moller said.


Edwards and education
Governor-elect John Bel Edwards has long been a critic of Gov. Bobby Jindal’s education reforms, voting against the school voucher bill that was later declared unconstitutional by the state Supreme Court and pushing for more local control over charter school growth. That history is making some nervous, reports the Associated Press:


During his campaign against Republican U.S. Sen. David Vitter, however, Edwards said he wouldn’t seek to shutter Louisiana’s voucher program or its widespread use of charter schools to educate students. But he said the voucher program should be for only students in failing public schools. He also wants to prohibit the Board of Elementary and Secondary Education from starting new charter schools in higher-performing public school systems that have denied the charter application.


Those positions have put him at odds with the Louisiana Association of Business and Industry, which endorsed Vitter, and other “school choice” groups that have sought to broaden options available to students from families who can’t afford private schools…Regardless of Edwards’ relationship with the unions, the new governor likely would have difficulty unraveling past education policy decisions if he decided to try. Edwards will be working a majority-GOP Legislature that has favored the voucher program, charter schools and other initiatives opposed by conventional public school groups.


Another fee, another fine
Across the country, the reluctance to look at raising sustainable revenue through the tax code has led to a proliferation of fees to fund government. One particularly troubling trend is the reliance on new fines and fees to fund the criminal justice system. Michael Mitchell with the Center on Budget and Policy Priorities says poor revenue decisions can lead to poor policing:


State and local governments increasingly charge criminal defendants for services ranging from a public defender to room and board in a prison or jail, as a Brennan Center for Justice report explains.  This growing dependence on fees, along with burdensome criminal fines, encourages poor policing practices — such as those a U.S. Justice Department investigation uncovered in Ferguson, Missouri — and disproportionately harms low-income residents and communities of color. States and localities rely more on criminal justice user fees largely because they need to raise new revenue since they’ve made other fiscal policy decisions that have squeezed their budgets.


Online doesn’t mean tax free
Many online retailers, including Amazon, don’t collect sales tax in Louisiana. Consumers are supposed to self-report and pay a “use tax,” but compliance is low. With Congress gridlocked, the likelihood of a federal Marketplace Fairness Act setting up a framework for online sales tax collection is low. But according to the Institute for Taxation and Economic Policy, the expansion of Amazon’s physical business is allowing more states to collect sales tax from the Internet giant:


For years, making purchases online was an easy way to avoid paying sales tax since most e-retailers refuse to collect the taxes owed by out-of-state customers.  When that happens, shoppers are supposed to pay sales taxes directly to the states in which they live, but such requirements are unenforceable and few shoppers actually pay the tax.  The result is a massive hole in state sales tax bases that has made raising state revenue for education, infrastructure, and countless other public services more difficult. Recently, however, tax-free online shopping has become slightly less universal as the nation’s largest online seller—Amazon.com—has expanded its physical distribution network in a way that has brought it within reach of a growing number of state tax authorities.


In fact, this holiday season will be the first in which Amazon will be collecting sales tax in a majority of states.  As recently as 2011, Amazon collected sales tax from its customers in just five states: Kansas, Kentucky, New York, North Dakota, and its home state of Washington.  With the Oct.1 addition of Michigan to its tax collection list, that number now stands at twenty six states—home to 81 percent of the country’s population. Amazon’s (often grudging) expansion in the scope of its sales tax collection represents a modest step toward a more rational sales tax.  Taxing items that are purchased at traditional retail outlets while effectively exempting those bought over the Internet is unfair and unsustainable, especially as more and more consumers shift their purchases from brick and mortar retailers to online.


Number of the Day
$998 million – Amount Louisiana is projected to spend on charity care for the uninsured this year (Source: DHH)