An anti-poverty agenda

Gov.-elect John Bel Edwards has laid out several proposals aimed at reducing poverty in Louisiana, including a higher minimum wage and extending Medicaid coverage to low-income working-age adults. Kevin Litten of Nola.com/The Times-Picayune looks at another proposed policy change – doubling the size of the state’s Earned Income Tax Credit – that could boost the incomes of more than half-a-million working families in Louisiana.

At 3.5 percent of the federal earned income tax credit, Louisiana has the smallest credit of all 26 states that have enacted what’s commonly known as the EITC, according to the nonprofit Tax Credits for Working Families. Boosting it to 7 percent would put Louisiana ahead of Oklahoma; Oregon; Michigan and Maine. Connecticut has the highest EITC, at 27.5 percent. But even that small increase could make a big difference in the lives of working families, said Jan Moller, the director of the Louisiana Budget Project. Moller has been pushing for an expansion of the EITC for years, and said in an interview that it’s one of the easiest tax credits to administer and one that will help working families catch up on bills, fix a broken-down car or pay for kids’ school clothes. “The theory behind it is it’s always been a credit that encouraged work,” Moller said. It comes once a year, meaning that for most poor people “it is the biggest lump sum they get in a year. It’s a lot of money in the pocket who might be working really hard for $12,000, $15,000, $18,000 a year.”

Transitioning to the state budget

Public Service Commissioner Foster Campbell has been tapped as chairman of the transition team that will review the state budget and tax structure and make recommendations to Gov.-elect John Bel Edwards. Campbell, a former state senator from Elm Grove, will lead a group that includes leaders from the business community, organized labor, former legislators, academia, law and the director of the Louisiana Budget Project. As Greg Hilburn of the Monroe News-Star reports, Edwards also named Richard Carbo, an Alexandria native who has worked for former Gov. Kathleen Blanco and U.S. Sen. Mary Landrieu, as his communications director.

Edwards said he wants the committee to focus identifying ways to eliminate the budget deficit, fund primary, secondary and higher education and improve access to health care in the state. “Louisiana faces severe budget challenges, and until we address them head on, we cannot begin the work of rebuilding our state,” Edwards said in a press release. “Since Election Day, Louisianans from all walks of life have expressed interest in helping to move our state forward. I’m grateful for these committee members willingness to work with me to address our state’s challenges from the moment we take office (Jan. 11).”

Big budget cuts looming

With the new administration facing a budget shortfall of at least $1 billion and counting, The Advocate’s editorial board takes note of a recent report by the Louisiana Association of Business and Industry that says painful spending cuts must be part of the solution.

“The approach of the new Legislature and administration to closing the deficit must be comprehensive and recognize that cost containment, a review of sacred cows, transparency and structural budget reform must be on the table, along with any discussion regarding revenue increases,” declared Stephen Waguespack, head of the influential Louisiana Association of Business and Industry.  He’s right, if only because any new revenue — meaning tax increases — is politically easier when accompanied by spending reforms.

ACA enrollment is lagging

Fewer than 44,000 Louisiana residents had signed up for subsidized health coverage through the Affordable Care Act by the end of last week – representing less than one-fourth of the current enrollees. Experts said many consumers may still be shopping around or dragging their feet to avoid rate increases, but expect the total number of sign-ups to remain steady. As The Advocate’s Ted Griggs reports,

Part of the problem is that when insurers sent out renewal notices, the letters showed the increase in premiums but didn’t include changes in the level of federal assistance, he said. Sometimes the renewal notices were for different plans because the insurers had stopped offering the coverage consumers purchased a year ago. A renewal notice may show the consumer’s premiums increase by $150 a month, but that number is based on the subsidies for 2015, Burton said. So the consumer may actually be responsible for $50.

Number of the Day

186,277 – Number of Louisianans enrolled in health coverage through the federal insurance exchange established by the Affordable Care Act (Source: The Advocate)