Tuesday, March 22, 2016

Tuesday, March 22, 2016

In the Dark on Sales Tax Exemptions; Fear of Reduced Funding for Schools; Panel recommends tax changes; Women’s Work is Never Done…or Compensated Equally

In the Dark on Sales Tax Exemptions
The Louisiana Department of Revenue has no idea about the cost of hundreds of sales-tax exemptions that drain an estimated $920 million per year from state coffers. That’s because the agency only collects sales tax data on the largest sales tax exemptions, while lumping hundreds of other tax breaks into a mysterious “other” category. Revenue Secretary Kimberly Robinson says her department is planning to beef up oversight by requiring retailers to fill out a new form that captures more information. Reporting for The Advocate, Tyler Bridges has the details:

 

The Senate Committee on Revenue and Fiscal Affairs is reviewing all tax exemptions in anticipation of tax reform during next year’s fiscal session when state financial matters may be addressed. In an interview afterward, (Committee Chairman J.P.) Morrell, D-New Orleans, said that without knowing the cost of each tax break, legislators cannot know whether it creates enough jobs and tax revenue to offset the money that it costs the state. That is the task that Morrell has given his committee — to try to figure out which of the 400 or so tax exemptions are beneficial and which can be eliminated.

 

Fear of Reduced Funding for Schools
Gov. John Bel Edwards’ administration has not decided how it will propose to plug the $70 million gap that remains in the current-year budget or the $750 million shortfall in the fiscal year that starts July 1. But The Advocate’s Will Sentell reports that education leaders fear some of the burden will fall on K-12 public schools after years of largely being spared from reductions.

 

[Hollis] Milton [president of the Louisiana Association of School Superintendents] said a reduction in dollars for public schools would have a big impact, including plans to revise the Common Core academic standards for the upcoming school year. “That is a new initiative that is going to cost districts a lot of money,” he said. Despite years of budget problems public schools have escaped the kinds of reductions felt by higher education and health care. Some lawmakers contend that, amid continuing financial troubles, it is unrealistic to think schools will remain unscathed. Scott Richard, executive director of the Louisiana School Boards Association, said his members have been urged to budget conservatively because of concerns about funding.

 

Panel recommends tax changes
The Legislature’s 25-day special session on taxes failed to fully plug the shortfalls in Louisiana’s current-year and upcoming budget cycles, and did virtually nothing to address the structural problems in the state’s tax system that have produced annual budget gaps. That means tax reform will once again be front-and-center in next year’s legislative session, or perhaps as early as June, according to panelists who spoke to the Press Club of Acadiana on Monday. Claire Taylor of The Lafayette Advertiser reports,

 

Jan Moller, director of the Louisiana Budget Project, said the legislature had three jobs during the special session: Balance the current fiscal budget, short $950 million; deal with the next fiscal budget; and fix structural problems in the state budget. “They went 0 for 3,” he said. … “We need to get serious,” he said, “about raising revenues in a permanent way to fund government that exists today. We need to look at personal income taxes.”

 

Women’s Work is Never Done…or Compensated Equally
While some of the gap in earnings between men and women can be attributed to women choosing lower-paying occupations such as caregiving and teaching, research clearly demonstrates that gender bias is a contributing factor. Clair Cain Miller from the New York Times reports:

 

A new study from researchers at Cornell University found that the difference between the occupations and industries in which men and women work has recently become the single largest cause of the gender pay gap, accounting for more than half of it. In fact, another study shows, when women enter fields in greater numbers, pay declines — for the very same jobs that more men were doing before. Consider the discrepancies in jobs requiring similar education and responsibility, or similar skills, but divided by gender. The median earnings of information technology managers (mostly men) are 27 percent higher than human resources managers (mostly women), according to Bureau of Labor Statistics data. At the other end of the wage spectrum, janitors (usually men) earn 22 percent more than maids and housecleaners (usually women).

 

Number: $1 billion – The amount of sales tax exemptions provided in Louisiana for which the state does not collect detailed information.