Monday, February 8, 2016

Monday, February 8, 2016

Revenue session starts Sunday; Budget hawks or chicken hawks?; Our biggest public policy mistake; Debt recovery office is bureaucratic nightmare

Revenue session starts Sunday

It’s been talked about for months, and on Friday afternoon Gov. John Bel Edwards made it official: The Legislature will meet for a special session starting on Sunday to consider a broad array of potential revenue measures that are needed to cope with an estimated $750 million mid-year deficit and a $1.9 billion gap next year. The official “call” includes 36 subject matters that legislators can consider, nearly all of them dealing with revenue issues. But as The AP’s Melinda Deslatte notes, many legislators – especially in the House – are resisting the idea of raising revenues.


“We want to reduce government’s size first, before we just start arbitrarily raising revenues,” said House Appropriations Committee Chairman Cameron Henry, R-Metairie, who leads the committee where budget negotiations will begin. Asked for details of where to shrink spending, however, and Henry’s list is short. He said $54 million earmarked to agencies for vacant jobs could be eliminated, and he said legislative staff is working to find other places where dollars can be trimmed.


But the Public Affairs Research Council has also been looking for places to cut and has a few more suggestions.


Among the ideas from the watchdog organization are: changing the process for state worker pay raises; paying down retirement debt; cutting the legislative and judicial budgets; reforming criminal sentencing laws to shrink state prison costs; and controlling the costs of the TOPS free college tuition program. In its report, PAR also suggests slashing $200 million across state agencies and working with colleges to consolidate academic programs in regions where duplications exist. It recommends limiting dollars sent to local governments and unlocking some protections that keep money earmarked to specific programs largely shielded from cuts.


Budget hawks or chicken hawks?
Robert Mann is not impressed by the newfound commitment to fiscal prudence among House conservatives, who were mostly were silent during the past eight years while the seeds of Louisiana’s current predicament were being sown. Writing in Times-Picayune, Mann says some legislators are simply misinformed about the full extent of the state’s financial problems.


If Republicans propose to eliminate next year’s $2 billion shortfall with budget cuts alone, they will have little choice but to slash deeply funding for health care and education (and likely trigger enormous tuition and fee increases). Maybe that inconvenient fact explains why no Republican legislator has specified how he or she would achieve $750 million in budget cuts this fiscal year and almost $2 billion next fiscal year. For years, some Republicans like Henry called themselves “fiscal hawks,” indulging the conceit that they earnestly desire to solve Louisiana’s budget mess. Well, it’s time they proved it with $2 billion in specific cuts that voters will support. Even if they do produce such a plan, it seems clear these “fiscal hawks” have the courage to demand fiscal sanity only when the governor has a “D” behind his name.


Our biggest public policy mistake
As the gap between rich and poor continues to widen in America,  economist Jared Bernstein writes that there is one potential solution that keeps getting overlooked by policymakers: greater investments in early childhood education. It’s an idea that’s backed by a solid (and growing) body of research, but which no one seems willing to pay for.


It is widely agreed that while we do not seek equal outcomes in America, we do aspire to equal opportunity, at least in theory. We have, however, never come close to that ideal, particularly as regards minorities and those with few resources. A great way to correct that is to invest more national resources in early childhood education. Moreover, given rising economic inequality, the rationale for this idea is more pressing than ever. Other advanced economies, as you will see, are way ahead of us on this point. As inequality has risen, the barriers to opportunity to the least advantaged have risen as well. Much data supports this case, both statistical and anecdotal. Robert Putnam’s recent book has both. Economist Raj Chetty’s highly touted research shows strong, negative correlations between kids growing up in poor neighborhoods and their outcomes as adults.


Debt recovery office is bureaucratic nightmare
An effort by former Gov. Bobby Jindal’s administration to collect long-overdue fines associated with insurance lapses has ensnared thousands of current and former Louisiana residents in bureaucratic red tape, with some facing massive fines for minor violations. As The Advocate’s Maya Lau reports, the new Office of Debt Recovery recently took over more than 555,000 files from the state Office of Motor Vehicles and has the power to garnish bank accounts, intercept tax refunds and recommend suspensions of a state-issued professional license.


Melanie Cade, a 34-year-old Metairie resident who teaches first- and second-grade special education classes, said she paid her insurance three days late on one vehicle, and let insurance lapse on another automobile that sat in her driveway, unused, after it was damaged in a wreck. Cade said she didn’t know she was supposed to turn in the license plate on the wrecked vehicle that wasn’t being driven. Her failure to do so caused the state to assume she was operating it without insurance. The violations mushroomed into a $2,650 fine she’s paying with the help of a 10 percent interest loan that won’t be paid off until 2022, she said.

“It just seems like a giant money grab,” Cade said. She unsuccessfully petitioned OMV supervisors to cancel the debt and asked to be put on a payment plan, but the agency refused, she said. Cade said hearing the $2,650 figure made her cry at an OMV office. “I have so many student loans to pay. I’m a special ed teacher for Jefferson Parish. I’m a public servant,” she said.


Number of the Day

555,628 – Number of Office of Motor Vehicle files turned over to the new Office of Debt Recovery, which was given vast powers to extract money from Louisiana residents who let their car insurance lapse. (Source: The Advocate)