Aug. 31: Gas tax lags as infrastructure projects wait

Aug. 31: Gas tax lags as infrastructure projects wait

Louisiana’s gas tax has been unchanged since 1990, and has lost much of its purchasing power since then because of inflation.

Louisiana’s gas tax has been unchanged since 1990,  and has lost much of its purchasing power since then because of inflation. The result is a significant backlog of road and bridge repairs. The Advocate’s Will Sentell reports that while the state has one of the oldest gas taxes in the country, changes may be on the way.

Louisiana has the sixth oldest gasoline tax in the nation, according to a survey by the National Conference of State Legislatures. Only Alaska, Oklahoma, Mississippi, South Carolina and Tennessee have had their gasoline assessments on the books longer than Louisiana, which is 26.1 years. The issue is relevant because an 18-member panel named by Gov. John Bel Edwards is studying the gas tax as a key source of dollars in any push to trim the state’s $12.7 billion backlog of road and bridge needs.

Recent reforms in Georgia may provide a roadmap:

Last year Georgia raised its gasoline tax from 7.5 cents per gallon to 26 cents. Louisiana is one of 15 states that has not changed its gas tax in two decades or more…Shawn Wilson, secretary for the state Department of Transportation and Development and co-chair of the review panel, said last week flooding in south Louisiana may have an impact on what the committee recommends. State road and bridge damage is up to $25 million, and thousands of residents lost homes during record rain and flooding that began Aug. 11.


In addition to its gas tax increase, Georgia indexed the tax so it would automatically rise with increases in fuel efficiency and increases in the cost of road and bridge maintenance. The Institute on Taxation and Economic Policy recommends Georgia’s model in tandem with an increase in the state’s Earned Income Tax Credit to offset the disproportionate impact of higher gas taxes on low-income working families.


Criminal fees, fines for youth are counterproductive

What may seem like a modest fine associated with juvenile offenses can actually lead to extreme economic distress for many families. The financial obligations also keep youth entangled with the justice system and prevent them from accessing opportunities for advancement. These are some of the findings of a report from the Juvenile Law Center that looked into the issue. Erik Eckholm of The New York Times has the story:

Fines, fees and restitution mandates are levied on juvenile offenders to varying degrees in every state, a new national survey of these practices has found. The effects are greatest on the poor and racial minorities, creating a two-tiered system of justice, according to the report, published by the Juvenile Law Center, a legal aid and advocacy group in Philadelphia. In juvenile systems intended to help wayward youths go straight, the study found, these costs are often counterproductive, drawing young people, especially poor minorities, ever deeper into the maze of criminal courts and straining already-fragile families.


Union decline hurting all U.S. workers

A new report from the Economic Policy Institute estimates that non-union workers lose a cumulative $133 billion each year due to the decline in unionization. According to EPI, the share of private sector workers in a union declined from 1 in 3 in the 1950’s to 1 in 20 today. The decline has important spillover effects for non-union workers. The findings are featured by USA Today’s Paul Davidson:

The report argues the dwindling influence of unions is a significant but often ignored reason for wage stagnation, along with globalization, technological change and the slowdown in educational achievement gains. The prevalence of unions affects the pay of nonunion workers in various ways, the study says. Nonunion employers often raise their workers’ pay to foster loyalty and head off an organizing drive. Kodak deployed that strategy in highly organized New York State, the study says. The fatter paychecks of union workers also creates a more competitive labor market that forces nonunion companies to lift wages to prevent employees from jumping ship. And unions often establish labor-friendly policies that generally promote fairness in pay, benefits and worker treatment, according to the report.


Household incomes may be rising

Researchers estimate that in 2015 median household incomes went up by almost 3.8 percent. Economists believe that much of this increase could be due to flagging inflation, primarily the persistence of low energy prices throughout 2015. Still, even accounting for low inflation, income growth could be going up by close to 2 percent. The Census Bureau will release official income data next month, but no matter what the numbers look like, issues such as inequality and racial equity will remain as challenges for policy makers. Quoctrung Bui from the New York Times’ Upshot has more:

Of course, even if the Census Bureau’s household income figure does indeed grow by 3.8 percent, there will still be plenty of legitimate economic concerns for the candidates. Inequality remains high, technological change is poised to disrupt millions of jobs, and manufacturing is still on the decline. What is clear is that not even a strong household income number will let the two candidates avoid grappling with a murkier narrative about the American economy.


The Advocate establishes flood resource page

With a dizzying array of information being disseminated about post-flood recovery: insurance, FEMA, DSNAP, housing options, and the like, The Advocate established a landing page where all relevant stories and information can be found. It can be accessed here.


Number of the Day


$187 million – The amount Louisiana borrowed Tuesday to cover state construction project costs. (Source: The Associated Press)