Thursday, April 21, 2016

Thursday, April 21, 2016

Tax cuts fail to create jobs, expand business; Tuition bills moving; Medicaid expansion lowers medical debt and; Ban the Box

Tax cuts fail to create jobs, expand business
Louisiana isn’t the only state where massive tax cuts have helped crater the budget. In Kansas, Gov. Sam Brownback is feeling the effects of his failed attempt to create jobs and spur business expansion through slashing taxes. The result of his 29 percent cut to the top personal income tax rate and exemption of 330,000 farmers and business owners from income taxes has been drastically declining state revenues with only a 0.1 percent growth in jobs. As John Hanna of the Associated Press reports, leaders in both parties are calling for a rollback of the tax cuts to protect vital services.


If Brownback won’t reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue. “Let him own it,” Republican Rep. Mark Hutton said. “It’s his policy that put us there.” Tax collections missed projections in 11 months of the last year. A growing number of Brownback’s conservative allies want to scale back the tax cuts to ease the budget crunch…Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years… Democrats have long described Brownback’s tax cuts as reckless. Republican critics want to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year…The state’s personal income tax collections dropped 24 percent during its 2014 budget year, down $713 million. They’ve increased since, but the official projection for the 2017 fiscal year is less than $2.5 billion — still 15 percent off the 2013 peak.


Tuition bills moving
Both the House and Senate advanced bills Wednesday that would allow university boards to set their own tuition and fees. Currently that power resides with the Legislature. The Senate version, by Dan “Blade” Morrish of Jennings, is a constitutional amendment that would simply hand over the power. The two House measures that moved out of committee have more restrictions. Julia O’Donoghue of /The Times-Picayune has more.


House Bill 586 would allow Louisiana’s colleges and universities to hike tuition and fees after 2019 if the increases are still less than tuition and fees at peer institutions in the South. The higher education institutions would also have to have higher graduation rates than their peer institutions in the South. House Bill 439 would also allow Louisiana’s colleges and universities to hike tuition up to 10 percent in one year and up to 20 percent over four years, so long as tuition wasn’t increased for students receiving the TOPS college scholarship.Higher education leaders have been asking for a number of years to have control over setting their tuition rates. Given the budget cuts Louisiana’s higher education institutions have suffered, leaders said they need more control over their schools’ finances. Authority over tuition is one way to have some funding oversight.


A key reason why legislators have been reluctant to allow the change in previous years is the growing cost of the TOPS program. When tuition and fees go up at universities, the cost of the popular scholarship program does as well because awards are linked to tuition. That could change this year.


But this year’s tuition hikes legislation assume — for the most part — that TOPS will no longer automatically cover all tuition costs moving forward. It is assumed lawmakers and Gov. John Bel Edwards will approve Senate 174, which will disconnect tuition and TOPS, such that the scholarship wouldn’t necessarily cover tuition hikes in the future.


Medicaid expansion lowers medical debt

The National Bureau of Economic Research has a new study showing that  low-income people who have health insurance thanks to Medicaid expansion have reduced their medical debt between $600 and $1,000 per year. Margot Sanger-Katz of the New York Times has the story.


The new study homed in on the impacts for the lowest-income Americans. The researchers examined credit reports on a sample of Americans across the country. They compared debt incurred by people in two very different sets of states: those that expanded Medicaid to provide free insurance to all individuals earning under about $16,000 and those that either chose not to cover that population or had expanded their programs earlier…Over two years, they didn’t find major changes in every measure of financial distress. But Medicaid expansion did move the needle on the number of bills sent to collections and the amount of debt sent to collections. That’s important because that’s the pattern of debt-stressed people after an expensive health crisis, Mr. Kaestner said. The researchers’ estimate of $600 to $1,000 involved some back-of-the-envelope math, but the money is substantial in the context of a population earning less than $16,000 a year…The authors pointed out that the lower debt burden for the newly insured indirectly helps other people. The credit reports also track debt and unpaid bills outside of health care. The insurance coverage means more bills are paid to doctors and hospitals — but also to banks, utility companies and landlords.


Ban the Box

A nationwide effort to give ex-offenders  a better chance at getting a job after serving their time is making headway in Louisiana. House Bill 266 by  Reps. C. Denise Marcelle and Patricia Smith, both of Baton Rouge, would “ban the box” – a check box on job applications that asks if a person has been convicted of a crime. The law would apply only to unclassified employees seeking a state job, with the exception of law enforcement. It is headed to the House floor. Rebekah Allen of the Advocate has the story.


The motivation behind the bill, Marcelle and Smith said, is that many ex-convicts who have served their time have difficulty getting a foot in the door with a new employer if their application has a check mark next to the box that indicates a criminal record. An employer can still ask about criminal history during an interview and conduct criminal background checks. “The idea is to have a face-to-face conversation to discuss criminal backgrounds,” Smith told the House Committee on House and Governmental Affairs…To date, 23 states have adopted similar policies for governmental jobs, and seven of those states have extended the legislation to apply to private employers. Just last year, East Baton Rouge Parish implemented the policy, a measure led by Marcelle when she sat on the Metro Council. The City of New Orleans put the policy in place in 2013.


Number of the Day
20 – The number of weeks per year (or January through May) a minimum wage worker in Louisiana would need to work full time just to pay for child care for one infant (Source: Economic Policy Institute).