Tuesday, March 8, 2016

Tuesday, March 8, 2016

Budget standoff as session nears end; Scrubbing pennies; Higher ed avoids doomsday, for now; and America’s eviction epidemic

Budget standoff as session nears end  

As Louisiana’s historic budget crisis garners national attention, legislators remain deadlocked over how to fill a remaining $120 million hole by the end of the current fiscal year on June 30. Lawmakers met late Monday night in Gov. John Bel Edwards’ fourth floor office in a search for common ground, but the talks broke off as Republicans refused to sign on to Edwards’ demand that any additional increase in the state sales tax be offset by an expansion of the Earned Income Tax Credit that helps the working poor.  The Advocate’s Tyler Bridges has the story:

 

“Reasonable people can come together to make it work,” said (Senate President John) Alario, R-Westwego. Edwards is asking that Republicans raise more money by ending tax breaks given for sales taxes and ending a tax break that benefits upper income taxpayers, and he also wants them to expand a tax break for the poor to offset other taxes that they would have to pay, said state Rep. Lance Harris of Alexandria, the Republican delegation leader. … (House Speaker Taylor) Barras said the Republicans have countered with a temporary 0.25 or 0.35 percent increase in the state sales tax, beyond the 1 percent that both chambers have already approved. … Up to now, Democrats in the House, who voted in virtual lockstep to pass the 1-cent sales tax, have resisted the extra sales tax increase. … Even if Democrats agree to support the extra sales tax hike – which seemed very doubtful Monday night — anti-tax Republicans could sink the plan.

 

A series of bills sponsored by Rep Ted James of Baton Rouge that seeks to rein in tax exemptions and credits for businesses did not receive the 70 votes needed to pass the House, frustrating some members and Edwards. But some members’ belief that new revenues aren’t needed continue to stymie attempts at compromise. The AP’s Melinda Deslatte reports:

 

On Monday, the House spurned a bill that would reduce a tax break for businesses that pay property taxes on their inventory, amid a fierce lobbying effort from the oil and gas industry, car dealers and other businesses. Rep. Ted James, D-Baton Rouge, sought to rally support for his proposal by reminding lawmakers that businesses in Louisiana receive more in tax breaks than they pay in taxes.”We can ill-afford to continue these irresponsible practices,” James said. “We’re giving to the people that need it the least.” … House Appropriations Chairman Cameron Henry, R-Metairie, said the tax bills already passed by the House “should cover us,” though he acknowledged that involved the Senate crafting changes to boost their impact.

 

Scrubbing pennies

One of the few measures that did advance Monday was Rep. Jay Morris’ HB 61, which removes existing exemptions from one penny of the existing 4-cent state sales tax. The bill could raise $20 million  toward closing the state’s mid-year gap, which still would leave a deficit of over $100 million, and would put healthcare and higher ed providers at risk of furloughs, exigency, and even closures before the end of the year. Greg Hilburn of the News Star has more:

 

Rep. Jay Morris’ House Bill 61, which failed on its first attempt Sunday night, sailed through Monday with an 87-15 vote after it was amended to expire in three years. … Morris’ bill, which would generate about $20 million this year and about $115 million in a full year, could be amended in the Senate or in a conference committee to clean another penny to increase the revenue it would generate, which Morris admitted is likely. Morris’ bill became the key instrument after Democrats, some Republicans and Gov. John Bel Edwards said they would oppose adding a second new penny to House Bill 62 by Rep. Katrina Jackson, D-Monroe, which adds a new penny to the sales tax. Some Republicans like Rep. John Schroder of Covington said he wouldn’t have supported Morris’ bill without the three-year sunset amendment.

 

Higher ed avoids doomsday, for now

University presidents and other higher education advocates were at the Capitol in full force on Monday, urging legislators to find the revenue to keep college and university doors open for the remainder of the the academic year. The Advocate’s Rebekah Allen reports that their persistence paid off – as work by the Legislature during the special session will keep the doomsday scenarios from happening. But higher education’s worries are far from over. A letter from Higher Education Commissioner Joe Rallo makes clear that colleges and universities will still face drastic cuts.

 

The cut to higher education has been estimated for the past three weeks to land anywhere from $70 million to more than $200 million, depending on how much of the $900 million state budget shortfall the Legislature would be able to close. Now with only a couple days left before the special session ends, the Legislature has closed much of that gap, meaning higher education leaders are preparing for an $86 million share of the cut. … LSU President F. King Alexander on Monday confirmed that the universities in his system would be able to stay open through the end of the year but that the cuts still could be severe. “It’s not the drastic scenario, but it’s still really, really going to hurt,” Alexander said. “It’s going to be layoffs, all kinds of layoffs, and we might have to close an AgCenter station or two.” Most critically, the LSU Health Sciences Center Shreveport reported it wouldn’t make payroll in June under the budget scenario, according to the LSU budget.

 

America’s eviction epidemic

Harvard sociologist and author Matthew Desmond shines a light on a frequently overlooked aspect of poverty in his recent New York Times op-ed. While researching his newest book, Evicted: Poverty and Profit in the American City, Desmond noticed how exploitation of low-income renters and lack of federal housing assistance have fueled the country’s recent uptick in evictions. Emphasizing the long-term damage eviction can bring to the economic and emotional stability of a family, Desmond argues that better funding to housing assistance programs is a worthy investment that’s long overdue:

 

Poor families are stuck. Because they are already at the bottom of the market, they can’t get cheaper housing unless they uproot their lives, quit their jobs and leave the city. Those with eviction records are pushed into substandard private housing in high-crime neighborhoods because many landlords and public housing authorities turn them away. … Expanding our current housing voucher program to cover all low-income families would rebalance landlords’ desire to make a living and tenants’ desire to have a home. Eligible families would dedicate 30 percent of their income to rent, allowing them to pursue education, start a savings account and buy enough food. … Evictions would plummet, and so would the other social problems they cause, like family and community instability, homelessness, job loss and depression.

 

Number of the Day

75 – Percentage of qualifying low-income families in the U.S. who do not receive housing assistance from the federal government (Source: The New York Times)