Tuesday, December 8, 2015

Tuesday, December 8, 2015

Senators ask for Medicaid plan; Tax credits for working families; Faucheaux: Budget changes can’t wait and; Dardenne and Robinson will lead budget policy

Senators ask for Medicaid plan

With Gov. Bobby Jindal packing up for departure, members of the Senate Finance Committee have suddenly taken an interest in expanding Medicaid coverage for low-income adults. The committee wants the Department of Health and Hospitals to submit plans to expand Medicaid that include cost estimates and examples of models used in other states. Legislators consistently rejected numerous proposals to expand Medicaid during the Jindal administration, but budget shortfalls and a supportive Gov.-elect John Bel Edwards has made expansion more appealing. Melinda Deslatte of the AP reports:


“I’d like to see how much it costs. I don’t think we’ve ever had a really good estimate of what it costs,” Finance Committee Chairman Jack Donahue, R-Mandeville, said after the hearing. “It could be a benefit to Louisiana.”


While expansion could provide financial benefits to the state, it will not fix the problem of $530 million Medicaid budget deficit this fiscal year.


Without a fix, the health department estimates it would run out of money to pay doctors, hospitals and other Medicaid providers in May. “Once the money runs out, the payments to the providers stop. That’s just the stark reality,” said Jeff Reynolds, undersecretary for the department. To close the immediate Medicaid gap before the fiscal year ends June 30 would cost an estimated $191 million in state financing, to draw down the remaining portion in federal matching dollars. Jindal and lawmakers didn’t put enough money into this year’s Medicaid budget to cover increases in enrollment and in costs of items, like prescription drugs. An internal source of financing planned to fill the Medicaid gap was instead used by Jindal to cover another state budget deficit.


The upside is that Medicaid expansion will save the state tens of millions of dollars once it is implemented and provide a boost to the state economy, as the experience of other states has proven again and again.


Tax credits for working families

Two sets of tax policies will expire at the end of the year if they are not extended by Congress. One set benefits big business, the other low-income families. Congress is currently considering making the tax cuts that benefit business permanent. Jared Bernstein of the Center on Budget and Policy Priorities writes in The Washington Post that Democrats should insist that permanent improvements to working family credits scheduled to expire in 2017 be part of any deal struck:


Back in 2009, improvements were made to the Earned Income Tax Credit and the Child Tax Credit that now benefit more than 50 million people in low- and modest-income working families with incomes up to about $50,000. Together, these additional refundable credits lift 16 million people — including 8 million children — either out of poverty or closer to the poverty line each year. If they expire, a single mother with two children who works full time at the federal minimum wage of $7.25 an hour and makes $14,500 will lose $1,725 — her entire child credit.  If you’re still on the fence re whether this is a deal worth signing on to, here’s the clincher. Rarely before, in the time-worn, annual process of extending the business tax cuts, has Congress done anything for the working poor. This unique alignment of the budget stars is driven by the fact that the family credits have the same non-permanent status as the business breaks, so Democrats have some rare leverage to hitch anti-poverty policies to the business tax breaks. When you consider that the business tax cuts would have been extended either way, this part of the deal looks like a rare, real win for low-income, working families.


Faucheaux: Budget changes can’t wait

Former state Rep. Ron Faucheux says Gov.-elect John Bel Edwards’ success will depend on his ability to quickly clean up the budget mess left by Gov. Bobby Jindal.

Edwards’ success as governor depends upon his ability to do something that will be very difficult: get the state on a solid fiscal footing. But when he jumps into those roiling waters to make it happen, he needs to remember one critical lesson: Get out as quickly as possible. The budget swamp is no place for a new governor to linger. Edwards faces tricky challenges. He’s raised expectations that he will push new spending initiatives and restore funding for big-budget items slashed by outgoing Gov. Bobby Jindal, such as higher education. But at the same time, he has to pay off a $117 million deficit from last year –– in effect, a stack of unpaid bills left under the mattress –– and a $22 million shortfall in the TOPS scholarship program. He also has to deal with $500 million of red ink engulfing Medicaid. To make matters worse…The Revenue Estimating Conference last month reduced expected state revenue forecasts by $370 million for this fiscal year and $322 million for the next one. If Louisiana is going to confront serious issues — education, economic development, infrastructure, coastal restoration, public safety — and do it seriously, it won’t happen if state leaders endlessly lurch from one budget crisis to another, fixated on small-bore trade-offs and partisan squabbling.


Dardenne and Robinson will lead budget policy
Lt. Governor Jay Dardenne will be the state’s chief administrative officer and attorney Kimberly Robinson, a former staffer for Gov. Kathleen Blanco, will head up the Department of Revenue in the new Edwards administration. Kevin Litten of Nola.com has more:


We’ve got critical issues facing the state, so I’m happy to come back and lend a hand,” Robinson said. While Robinson acknowledged there were some tough times serving under Blanco — Hurricane Katrina and Hurricane Rita occurred during her tenure — they pale in comparison to the fiscal situation the state now faces. “The current fiscal condition of the state is really daunting,” Robinson said. “I think it’s going to require some really — beyond rolling up your sleeves — thinking through, meeting with, talking to, evaluating and looking at what everyone’s doing.” Edwards said that during the transition, his team hasn’t found many surprises when examining the state’s fiscal situation. But he said in some areas, the problems are more “acute” than originally thought. Robinson said that after she joined Edwards’ transition team, Edwards pulled her aside and said, “There’s something else I’d like you to consider.” During the news conference, Edwards said Dardenne and Robinson’s respective appointments, which are subject to confirmation by the state Senate, reflect his commitment to a cabinet that looks like Louisiana.


Number of the Day

$1,725 – The amount of money a single mother of  two making $14,500 a year (full time at federal minimum wage) will lose if Congress does not extend the child tax credit (Source: The Washington Post)