Gov. John Bel Edwards’ bid to raise new revenue from the wealthiest Louisiana taxpayers to finance critical health, education and public safety services fell one vote short of clearing the tax-writing House Ways & Means Committee on Wednesday. House Bill 11, by Rep. Rob Shadoin of Ruston, proposed to limit the the state income tax deductions allowed for federal excess itemized deductions. But, The Advocate’s Tyler Bridges reports, committee chairman Neil Abramson of New Orleans wasn’t willing to go along with a plan backed by Rep. Julie Stokes of Kenner that would have tied the measure into a larger tax reform plan. In the end, his tie-breaking vote kept the bipartisan effort from advancing:
The measure would raise $116 million of the $600 million that Edwards says is needed to prevent devastating cuts to the Taylor Opportunity Program for Students scholarships, safety net hospitals, prisons, K-12 schools and the state’s colleges and universities. HB11 would limit an income tax break that mostly benefits people who earn at least $100,000 per year. In an interview afterward, Abramson said he voted against the measure because he couldn’t be sure whether HB11 would raise taxes on low- and middle-income taxpayers because the version before the committee had been amended. “The measure was not the governor’s proposal,” Abramson said, a statement that technically was correct. “It had nothing to do with the governor’s tax plan.” The Democratic governor didn’t see it that way because Wednesday’s vote dealt a sharp setback to his goal to raise the $600 million during the special session that began Monday night and that will last up to 18 days.
Even though the committee ended up passing three other income tax changes to the full House floor favorably on Wednesday, none of them will raise any money to help solve the state’s current problem.
Medicaid expansion’s first week
When Gov. John Bel Edwards signed an executive order in January to extend Medicaid coverage to low-income adults, his administration predicted that about 300,000 newly eligible adults would become covered. But after just one week of enrollment, nearly 200,000 Louisianans have already signed up. The state’s one-of-a-kind plan to integrate the Medicaid enrollment process with the SNAP food stamps system boosted the policy’s early success. The Daily Advertiser has the story:
Louisiana is the first state to use existing food stamp eligibility information to determine whether people are also now eligible for Medicaid because the two programs have similar income requirements. Adults who make below 138 percent of federal poverty level — about $33,500 a year for a family of four or $16,200 for a single adult — are among the newly-eligible population. … The goal is to get 375,000 new adults — mostly the working poor — onto the state’s Medicaid rolls in the coming year. Leaders have said that they hoped to have at least half that many already on the books by July 1, when coverage starts. With the new figures released Wednesday, they’ve officially surpassed the half-way mark, and leaders are eyeing opportunities to make even larger gains. The state last week sent 105,000 notifications to Supplemental Nutrition Assistance Program recipients who are likely to now qualify for Medicaid under the new requirements. More than 1,100 people have already responded to the letters and enrolled in Medicaid coverage, according to LDH.
New payday lending rules don’t go far enough
Long-awaited regulations for the predatory pay-day lending industry were released this month by the federal Consumer Financial Protection Bureau. But a closer look at the proposed rules shows that a lack of specificity leaves lenders the freedom to continue charging their customers exorbitant interest rates – even up to 400 percent annually. Pew Charitable Trusts writes that without change, the rules will fail to protect customers who are vulnerable to the cycles of debt small-dollar lenders perpetuate:
As proposed, the CFPB’s approach would lead to major changes in the market for payday and similar loans, notably by accelerating the general shift toward installment loans that consumers pay off over a period of months instead of weeks. However, the prospect of harmful loans would persist because the proposed rule would leave lenders free to charge any rate and set almost any term as long as they make a “reasonable determination” that the borrower can repay the loan. Under this vague directive, payday lenders are in the driver’s seat, because the rule would allow them direct access to borrowers’ checking accounts or, in the case of auto title lenders, grant them the power to repossess vehicles. As drafted, the CFPB rule would allow lenders to continue to make high-cost loans, such as a line of credit with a 15 percent transaction fee and 299 percent interest rate, or a $1,250 loan on which the borrower would repay a total of $3,700 in fees, interest, and principal. These and many other high-cost payday installment loans are already on the market in most states, and they will thrive if the regulation takes effect without changes.
‘Ban the Box’ bill signed by governor
A brief moment of successful bipartisanship lifted hopes at the Capitol Wednesday, when Gov. Edwards signed into law a new bill that will make it easier for convicted felons to re-enter the workforce and society. Originally authored by freshman Baton Rouge Rep. Denise Marcelle, the “Ban the Box” legislation (now Act 398) will keep government employers from asking about an applicant’s past criminal history before they come in for a job interview. The effort brought together an unlikely alliance among state legislators in both chambers and parties, but still drew ire from some business lobbyists. The Advocate’s Rebekah Allen has more:
Advocates of the program say the measure, which is being implemented in cities and states across the nation, is merely an attempt to get a foot in the door, so ex-convicts can explain the circumstances of their previous arrest in person while being judged initially on their qualifications. “They can get integrated back into society with a better opportunity to get a job and become productive members of society,” Edwards said before signing the bill into law. “They’ll be tax payers, if you will, rather than tax consumers because we know that people who cannot be employed typically remain dependent on state services.” … While the bill’s chief sponsor was Democratic Baton Rouge Rep. C. Denise Marcelle, and many Democrats backed the measure, it also had key support from the Louisiana Family Forum, a Baton Rouge-based group that pushes conservative Christian values. The backers made for “strange political bedfellows,” said Holly Harris, an advocate of the measure who heads the U.S. Justice Action Network, a nonprofit social welfare group formed in Ohio to coordinate lobbying between conservatives and liberals on issues such as reducing prison populations.
Number of the Day:
25 – Percentage of Louisiana’s highest-earning taxpayers that would have been affected by a proposal to reduce excess itemized income tax deductions that died in the House Ways and Means Committee Wednesday. (Source: Nola.com/The Times-Picayune)