Budget clears Legislature with time to spare

The ‘first draft’ of next year’s state budget cleared the Legislature on Sunday, with nearly a full day to spare before the regular session adjourns. The $26 billion spending bill includes deep cuts for TOPS scholarships, safety-net hospitals, K-12 education, prison services and child welfare services that lawmakers will try to address in the special session that starts this evening. The AP’s Melinda Deslatte, as always, was there:

The spending plan looks largely similar to the budget drafted by the Senate, with minor adjustments to pay for a few specific items sought by the House, including programs to combat truancy, aid organ donations and help people with disabilities gain access to specialized technology. The TOPS college tuition program would be funded at 48 percent of what is needed to fully cover eligible students. Safety-net hospitals that care for the poor and uninsured would be short. College campuses, the LSU medical schools and K-12 education would take hits, along with public safety and child welfare programs, state parks and museums. But Medicaid “waiver” programs that provide home- and community-based services to the elderly and disabled would be shielded from slashing.

 

The final version of the budget did not include $74 million that House Speaker Taylor Barras proposed taking from various dedicated funds to help fund general obligations. That move cleared the House on Friday but ran into problems with Gov. John Bel Edwards and the Senate. That means legislators still need to come up with roughly $600 million to keep state government operating at current levels.

Editorial pages back more revenues

The state’s editorial writers aren’t thrilled by the prospect of paying additional taxes to support state government. And they rightly note that the revenue proposals being floated for the special session will not solve Louisiana’s long-term structural budget gaps. But the new revenue is needed to fix the massive budget gaps left behind after eight years of irresponsible management under former Gov. Bobby Jindal. The Nola.com/The Times-Picayune editorial board says tax changes are better than the cuts that are currently in the budget.

He mainly is focusing on income tax revisions and the elimination of some tax breaks for businesses and individuals. That makes sense. Those can produce a significant amount of money, and the state’s sales tax is already too high. Gov. Edwards’ income tax proposals would move Louisiana back toward the Stelly Plan, which raised income tax brackets in exchange for a reduction in sales taxes. Stelly, named after the House member who championed it, was good policy. Lawmakers and Gov. Jindal undid the income tax reforms after Hurricane Katrina when recovery money falsely inflated state revenues. Louisiana has been having budget troubles ever since. To avoid raising taxes, the Jindal administration drained trust funds dry and routinely overestimated income. Gov. Edwards’ approach to the budget is much more responsible. He doesn’t want to raise taxes, either, but he is trying to build a realistic budget with enough revenue to make it work.

 

The Advocate:

Everyone who can operate a calculator knows that our taxes have to go up, because Jindal left the budget in a catastrophic situation. Services have been cut, often severely, in areas from mental health beds to college classrooms. For what it is worth, the governor said that the income tax increases are consistent with the broad plan for tax reform that has been pushed by LSU and Tulane economists working on the reform proposals. So those are a down payment on permanent tax reform, in the governor’s words. We promise we won’t be thrilled with paying up next May 15, the state’s tax day. But prolonging this agony is not good for state institutions, nor good for businesses trying to plan ahead.

 

Public schools face cuts for first time in decades

Even as the state budget cratered in recent years, one funding stream traditionally stayed protected: Money for K-12 public schools, which flows through the constitutionally protected Minimum Foundation Program. But as The Advocate’s Will Sentell reports, public schools will lose a collective $44 million next year because money they received this year – outside the MFP – is not being renewed.

Hollis Milton, president of the Louisiana Association of School Superintendents, said the reduction would trigger layoffs in numerous school districts statewide. “At a time when public schools have instituted much positive change, we should receive the level of funding that we have received in the past,” said Milton, who is superintendent of the highly rated West Feliciana Parish school district. Even in the midst of a state financial crisis — state services face a $600 million shortfall starting July 1 — it was not supposed to be this way.

 

Helping former inmates thrive

Former U.S. Treasury Secretary Robert Rubin was recently invited to give a talk at the San Quentin state prison in California, and came away convinced that states aren’t doing nearly enough to help inmates get prepared for their eventual freedom. That means more investments in education programs, housing for ex-offenders and lowering barriers to employment, among other things. He detailed his findings in The New York Times:

Criminal justice reform is not just about being fair to the individuals who will be most directly affected, but it’s also about doing what’s right for our nation’s well-being. A 2009 study estimated that the official poverty rate would have declined by 10 percent for the years 1980 until 2004 had it not been for our incarceration policies. And while there hasn’t been a large-scale study of the economic effects of criminal-justice reform, most experts in the field agree that preparing people for life after prison is a critically important public investment that would alleviate poverty and increase worker productivity.

 

Footnote: Although Louisiana has made strides in recent years to prepare state inmates for their eventual release, the budget that was sent to Gov. John Bel Edwards on Sunday would close all 11 “re-entry centers” around the state. Which is one more reason it’s critical for the state to raise revenues in the upcoming special session.

Number of the Day

200 – Number of Louisiana children who “age out” of foster care each year. Without additional support, such children are much less likely to finish high school and more likely to end up homeless. (Source: Orleans Parish Juvenile Court Judge Ernestine Gray and CASA New Orleans Director Joy M. Bruce)