April 5, 2016

April 5, 2016

Momentum on minimum wage, State parks on the chopping block, COLA bill moves forward, Bill could shift costs to states, incite Medicaid expansion opposition So why do state chambers, which are usually the largest and most powerful business organizations represented in state capitols, seem so far apart from the broader business community when it comes to the minimum wage? Crosby argued that modest minimum wage hikes don’t impact the majority of chamber members, and so they actually tend to leave the issue to trade groups for retailers, hotels and restaurants, which employ most low-wage workers. “In chambers, historically, it’s more successful businesses that are in manufacturing and other higher wage industries,” Crosby says. “They tend to see themselves as the voice of business, but there are other groups that are focused on sectors that are focused on different wage mandates." While New York and California are raising their minimum wage to $15 per hour, The Advocate’s Stephanie Grace says Louisiana legislators should give strong consideration to the much more modest wage hike being pushed by Gov. John Bel Edwards. The governor’s not embracing mass giveaways, and in fact, he recently surprised even some of his supporters by saying he’d consider workforce training requirements for able-bodied food stamp recipients. But he is looking at the plight of his poorer constituents with compassion rather than condemnation, and that makes a big difference. Whether it will make enough of a difference is an open question. In the Legislature, employers who bristle at paying an extra $50 a week for each 40-hour employee have lobbyists to push their case. Those who work full-time for $15,000 a year, far below the poverty line for a family of four, certainly don’t. And guess which side is more likely to write a check come campaign time? State parks on the chopping block

Momentum on minimum wage

An overwhelming majority of business leaders support raising their state’s minimum wage, according to a recent survey by a Republican pollster that was leaked to a watchdog group. As Lydia DePillis of the Washington Post reports, 80 percent of respondents support higher wages, while only 8 percent are opposed. The findings suggest that state business groups, which generally oppose higher wages, may be out of step with their memberships.

So why do state chambers, which are usually the largest and most powerful business organizations represented in state capitols, seem so far apart from the broader business community when it comes to the minimum wage? Crosby argued that modest minimum wage hikes don’t impact the majority of chamber members, and so they actually tend to leave the issue to trade groups for retailers, hotels and restaurants, which employ most low-wage workers. “In chambers, historically, it’s more successful businesses that are in manufacturing and other higher wage industries,” Crosby says. “They tend to see themselves as the voice of business, but there are other groups that are focused on sectors that are focused on different wage mandates.”

While New York and California are raising their minimum wage to $15 per hour, The Advocate’s Stephanie Grace says Louisiana legislators should give strong consideration to the much more modest wage hike being pushed by Gov. John Bel Edwards.

The governor’s not embracing mass giveaways, and in fact, he recently surprised even some of his supporters by saying he’d consider workforce training requirements for able-bodied food stamp recipients. But he is looking at the plight of his poorer constituents with compassion rather than condemnation, and that makes a big difference. Whether it will make enough of a difference is an open question. In the Legislature, employers who bristle at paying an extra $50 a week for each 40-hour employee have lobbyists to push their case. Those who work full-time for $15,000 a year, far below the poverty line for a family of four, certainly don’t. And guess which side is more likely to write a check come campaign time?

 

State parks on the chopping block
A worst-case scenario budget cut of 30 percent to the Department of Culture, Recreation and Tourism could mean the closure of a dozen state parks and numerous museums, historic sites and other venues meant to lure visitors. That was the word from Lt. Gov. Billy Nungesser, who took his turn before the House Appropriations Committee on Monday. LaPoliticsNow’s Jeremy Alford has more on how Lt. Gov. Billy Nungesser plans to address the at least $26 million reduction

By far the biggest loser would be state parks, which would have to absorb a $12 million reduction—the largest cut out of the entire CRT department. State libraries, museums, cultural development and the office of the secretary all face additional reductions of roughly $2 million each, with the tourism budget slated for $5.6 million in red ink…A dozen state parks are set for potential closure, including Bogue Chitto, Chemin-A-Haut, Cypremort Point, Fairview-Riverside, Grand Isle, Hodges Gardens, Lake Bistineau, Lake Bruin, Lake Claiborne, North Toledo Bend, St. Bernard and Tickfaw. This list is based on a matrix of revenue and expenses for each park, with the assumption that the department’s overall 30% cut is implemented and no new money is discovered or generated by lawmakers.

Years of tight budgets have already left our state treasures without necessary resources. For example, last weekend’s minor fire at the 200-year-old Presbytere on Jackson Square could have been much worse, since the facility doesn’t have a sprinkler system.

 

COLA bill moves forward
The Senate Retirement Committee approved cost-of-living adjustments (COLAs) for state retirees after tying the measure to three other bills designed to shore up the state’s retirement systems. If all pass, nearly 125,000 retirees could see a 1.5 to 2.0 percent increase in monthly checks. The money is slated to come from excess investment earnings. Despite this, some question the legality of increasing pension payments due to a law passed two years ago requiring increases be based on inflation within the previous 12 months calculated by the Consumer Price Index for All Urban Consumers, or CPI-U. Mark Ballard of The Advocate has more

Frank L. Jobert Jr., the legislative and governmental affairs director for the Retired State Employees Association of Louisiana, argued that the CPI-U was misleading and shouldn’t be included in the law that allows for cost-of-living increases for retirees. Health care costs, for instance, have gone up considerably and this is a cost important to the elderly. “I’m not sure the CPI-U is a true measure,” he said. Steven Procopio, policy director at the Public Affairs Research Council of Louisiana, said he understood the needs for COLAs and the reason for granting them this year. But, the law, which specified inflation for the previous 12 months, was put in place two years ago  to provide some order and fiscal responsibility in granting the increases. Circumventing the criteria was not prudent, he said. “It basically undoes what the law does,” Procopio testified.

 

Bill could shift costs to states, incite Medicaid expansion opposition

The U.S. House Energy and Commerce Committee approved legislation that would cut Medicaid coverage for certain prisoners, shifting $2 billion in costs to states over the next decade. This provides fodder for Medicaid expansion critics as it exemplifies the argument most cited by opponents–that the federal government will not uphold promises to cover the vast majority of Medicaid costs. While those living in public institutions are not eligible for Medicaid, hospital care for Medicaid-eligible inmates who receive at least 24 hours of care outside of institutions is covered. With expansion, more adults are eligible, thus more hospital-stay costs for prisoners would also be covered. Judith Solomon with the Center on Budget and Policy Priorities provides the details

 

Like any other service under Medicaid, hospital care for prisoners is financed at the applicable federal matching rate (FMAP) — the federal share of federal-state financing in each state.  That means that under health reform, the federal government pays 100 percent of the costs of hospital services for adults who are newly eligible for Medicaid under the expansion through 2016, phasing down starting in 2017 to a permanent 90 percent by 2020. The legislation would undo that element of health reform for this group by cutting the federal funds that states receive for care for these newly eligible adults to the state’s regular federal matching rate — which ranges from 50 to 75 percent depending on the state.  That would shift more of the costs of inpatient care for prisoners back to states, which would have to boost their own spending or, more likely, cut Medicaid or other state programs to make up the difference.  

Number of the Day:

80 – The percentage of respondents to a survey of 1,000 business executives from across the country who support raising their state’s minimum wage. (Source: The Washington Post)