Wednesday, March 2, 2016

Wednesday, March 2, 2016

Special session stalemate doesn’t bode well; Numbers don’t lie; Some colleges won’t see TOPS cuts; and Tax incentives: do they help or hurt states?

Special session stalemate doesn’t bode well

With eight days left in the special fiscal session, the House and Senate remain deadlocked over how to resolve Louisiana’s yawning $950 million midyear budget gap. In what Tyler Bridges describes as a ”Mexican standoff”, House members on Tuesday delayed floor votes on dozens of remaining tax measures while the Senate bottled up a budget-cutting measure favored by conservatives in the House.  Although the Senate made some progress by passing the all-important “clean penny” legislation, the clock is ticking and policymakers still need to find the $200 million still needed to balance the budget before June 30. Times-Picayune’s Julia O’Donoghue has the story:


State Rep. Cameron Henry, R-Metairie, said the House wants to cover the current year’s $900 million budget deficit roughly through $300 million in reserve funds, $300 million in tax increases and $300 million in budget cuts. The Edwards administration and Senate has been pushing a different breakdown — that included around $160 million in cuts and over $400 million in tax increases. “I think that they have enough — more than enough — revenue raisers to work with,” said Henry, the House Appropriations Committee chair, of the Senate. Senate President John Alario, R-Westwego, disagreed sharply with Henry about having enough “revenue-raisers” on his plate. … “I’m open to anything, anything that raises additional revenue,” Alario said.


LaPolitics’ Jeremy Alford sees the current stalemate as a possible preview of the next four years:


While it feels like this Legislature has been going at it for months rather than weeks, not enough time has passed yet for the House to fully trust the Senate — and for the House to move beyond the infancy stage of its new leadership. But even when that is settled the stark ideological differences we’ve seen so far will still be around. … The way Gov. Edwards has handled this special session is telling too. The House isn’t going to give up an inch to the Democrat from Amite, so he’ll have to fight to pick up yards. Whether it means a rare televised address or what amounts to scare tactics, it’s clear the governor is ready to rumble on that level.


Numbers don’t lie

Political scientist Dr. Kurt Corbello takes a columnist for The Advocate to task in a new blog post, debunking the claim that the state of Louisiana spends more per capita than most states in the country. After taking a closer look at U.S. census and state budget data, Corbello finds that “Louisiana’s spending problem” is something of a myth among pundits:


Louisiana averaged $4,192 in per capita state general fund spending, placing it 23rd, or $552 per capita below the state averages nationwide! … Whether we look at per capita spending or gross dollar amounts, Louisiana was in the middle of the pack of fifty states, with one exception: We ranked 14th in State Federal Fund Expenditures! … In other words, we are dependent upon everyone else for a huge amount of resources in our state budget.  Why?  Because of our history of poverty, low levels of education, and lack of economic development … Imagine if we in Louisiana really did have to pay for our own spending!


Some colleges won’t see TOPS cuts

Public colleges and universities in Louisiana will be forced to absorb a 20 percent cut to the popular TOPS tuition assistance program before the end of spring semester due to the state’s budget crisis.. But private for-profit colleges won’t be asked to make any cuts at all. Although schools like ITT Tech and the Louisiana Culinary Institute don’t enroll huge numbers of TOPS students, but some higher education leaders believe they should be sharing the burden of cuts. The Advocate’s Rebekah Allen reports:


While there are about 60 for-profit colleges across the state, only about 330 of their students are receiving the popular state-funded tuition scholarship. The total unfunded portion of their TOPS scholarships is less than $40,000 for the year, which will be absorbed by the LOSFA’s administrative offices. … But that still doesn’t sit well with other university leaders like LSU President F. King Alexander, who are counting every public penny being cut from them this year. “First of all, why are they getting TOPS in the first place?” Alexander said. “Why aren’t they cut like us when we get cut and have to swallow TOPS?”


Tax incentives: do they help or hurt states?

Tax credits, exemptions and exclusions for private sector companies, meant to spur economic growth and attract business to state economies, make great talking points for politicians. But do they really work? A recent analysis of tax incentive policy across multiple states shows that, due to lack of transparency and oversight, it’s often almost impossible to tell. Governing’s Liz Farmer has the story:


Back in 2000, Good Jobs First, which follows corporate tax subsidies, released a report that looked at 122 audits of state economic development programs in 44 states. What it found was that auditors were having trouble doing their jobs because “they are hampered by lack of data and objectives.” … In Louisiana — where auditors can access tax returns — a 2012 legislative audit concluded it was “impossible” to determine whether $3 billion in business tax credits were actually a good investment for the state.


Number of the day:

$1.08 – Tax per pack of cigarettes in Louisiana called for in House Bill 14 by Rep. Walt Leger – a measure projected to raise $16 million in revenue this fiscal year but has yet to see a full House vote. (Source: The Advocate)