Wednesday, February 24, 2016

Wednesday, February 24, 2016

Time to invest in infrastructure; Tax measures advance; Credit downgrades loom for universities; and Education cuts clear House panel

Time to invest in infrastructure

One of the things conspicuously missing from Gov. John Bel Edwards’ special session agenda is a call for raising the gasoline tax, which would provide sorely-needed dollars for rebuilding roads and other infrastructure investments. In a new report for the Center on Budget and Policy Priorities, Elizabeth McNichol suggests the time is right for new public infrastructure investments by state and localities, as they are currently at a 30-year low.


The condition of roads, bridges, schools, water treatment plants, and other physical assets greatly affects the economy’s ability to function and grow.  Commerce requires well-maintained roads, railroads, airports, and ports so that manufacturers can obtain raw materials and parts, and deliver finished products to consumers.  Improving many types of public infrastructure boosts the productivity of businesses by reducing their costs.  Growing communities rely on well-functioning water and sewer systems.  State-of-the art schools free from crowding and safety hazards improve educational opportunities for future workers.  Better roads and public transit make it feasible (or more efficient) for workers to get from their home communities to more of the places where the jobs are.  Carefully targeted initiatives to maintain and improve public infrastructure boosts a state’s long-term productivity, resulting in more economic growth and higher-wage jobs.  In the short-term, under the right conditions – including the current ones – public infrastructure investments also can create needed jobs.


Tax measures advance

The House Ways and Means Committee sent more than three dozen revenue raising bills to the full House for debate that will likely occur Thursday. The committee took no recorded votes, but instead passed them on with favorable, unfavorable or no recommendation. Melinda Deslatte of the Associated Press reports:.


(Gov. John Bel) Edwards is proposing a state sales tax hike, increased taxes on businesses, changes to individual income taxes and boosted taxes on cigarettes and alcohol to help balance Louisiana’s budget. The changes would be extensive, and the implications widespread on taxpayers. One of the biggest-ticket items heading to the House floor is a 1-cent sales tax increase that Edwards calls the “cornerstone” of any budget rebalancing plan because it could raise a substantial amount of money quickly. The sales tax hike would kick in April 1. But lawmakers on the Ways and Means Committee said people shouldn’t read too heavily into their decisions to release so many tax bills for further debate. They said they wanted to give their colleagues a chance to consider ideas as they look for ways to balance the budget.


Credit downgrades loom for universities

Louisiana’s budget crisis has prompted the credit rating firm Moody’s to place eight Louisiana universities on a watchlist for credit downgrades. The move comes after years of budget cuts and tuition hikes at Louisiana’s public colleges and universities and could make it harder for the institutions to borrow money in the future. As Gannett’s Greg Hilburn reports:


Gov. John Bel Edwards used the warning to urge lawmakers to pass new taxes being considered now in the legislative special session. “Over the last eight years, Louisiana’s higher education institutions have faced the largest disinvestment in the country,” Edwards said in a statement. “Now, faced with the largest budget deficit in our state’s history, further cuts will be necessary if the Legislature will not work with me to bring in additional revenue. “… This announcement should serve as a wakeup call for anyone who thinks we can simply cut our way out of this crisis, and I am hopeful this will bring folks to the table to work with me to avoid making these cuts that will have a negative long-term impact on higher education in this state.”


Meanwhile, Rebekah Allen of The Advocate reports that the threat of another round of higher education cuts – particularly the possibility of drastic changes to the TOPS college scholarship program – has many high school students and future doctors reconsidering whether they want to continue their education in Louisiana.


It’s a warning directed toward lawmakers who will ultimately decide what level of cuts higher education will take this year and next. But it’s also a daunting message that’s reverberating through the hallways of high schools and colleges, where students are in the process of making important decisions about where they want to be next year.  In fact, this week, Louisiana medical students are submitting their choices for where they want to do their residency. This is also right about the time that high school students will make firm decisions about where they will go to college and its just enough time that current students who are enrolled can make plans to transfer.


Education cuts clear House panel
House Republicans unveiled their plans for additional budget cuts on Wednesday – $87 million in the current fiscal year, with more than half coming from K-12 public schools – and quickly passed the measure out of the House Appropriations Committee. As’s Julie O’Donoghue reports, House Bill 122 also cuts money from private schools, the Superdome Commission and private prisons.


Henry said the $44 million cut to education is not a personal attack on Edwards. He said the funding was targeted mostly because it was one of the only large chunks of money left in the state budget that isn’t off limits to reductions. “It is absolutely not personal,” Henry said in an interview.



Number of the Day

47 – the percent decline in operating appropriations for Louisiana’s four-year universities between 2010 and 2014, compared to a national average of 9 percent. (Source: Moody’s via Gannett)