Sept. 16: Louisiana needs a loan

Sept. 16: Louisiana needs a loan

State government is experiencing a cash crunch, which means Louisiana will be borrowing up to $400 million in short term loans in order to keep agencies operational.

Louisiana needs a loan
State government is experiencing a cash crunch, which means Louisiana will be borrowing up to $400 million in short term loans in order to keep agencies operational. Treasurer John Kennedy says this is the first time in 30 years the state has taken such action. In years past the state relied on reserve funds to pay expenses while waiting for tax receipts to arrive, but the Jindal administration depleted those reserves. Star reporter Melinda Deslatte of the Associated Press:


Tax collections, fees and other payments to state coffers tend to be back-loaded, with most of them arriving in the second half of the state’s budget year. Until those payments roll into the treasury, the state usually borrows from its own savings accounts. But former Gov. Bobby Jindal and lawmakers drained many of those accounts to patch together prior budgets, and that left the state with about $3 billion less in treasury reserves for short-term borrowing. For example, Senate Finance Chairman Eric LaFleur, D-Ville Platte, noted the state used to have about $300 million in unspent cash that rolled over from year to year. Former Gov. Bobby Jindal’s administration identified that cash cushion as a surplus and, with the Legislature’s approval, used it to plug holes in the budget. “That is why we are here today for the most part,” LaFleur said. “We blew it all, and we all voted for it.” House Appropriations Chairman Cameron Henry, R-Metairie, said he expects Louisiana might need to take out a similar cash-flow loan in the next budget year as well. Meanwhile, the Edwards administration is looking for ways to shrink some upfront state expenses.


Too many of our children are poor
Analysis of Census data released yesterday shows 17.3 percent of children under 6 were poor in 2015. Chuck Marr of the Center on Budget and Policy Priorities says the fact that America’s poorest citizens are babies, toddlers, and kindergarteners shouldn’t be acceptable. He explains that policymakers can help by boosting the Child Tax Credit (CTC) for very young poor children, many of whom receive little or nothing from the credit now.


Beyond the short-term benefits of reducing child poverty, boosting the CTC for the poorest young children may reduce various poverty-related risks that can limit young children’s brain development, with long-term consequences.  As a report from Harvard’s Center on the Developing Child explains, the early years of life are a “period of both great opportunity and great vulnerability.”  Research suggests that raising families’ incomes can result in healthier, better educated children with greater earning power as adults…Under current rules, families with incomes up to $3,000 are ineligible for the CTC, and the credit phases in slowly for families with incomes above that threshold.  Families with two children don’t receive the full credit of $1,000 per child until their earnings reach $16,333.  As a result, children in the poorest working families get no CTC and many other children in deep poverty, with incomes below half of the poverty line, get only a partial tax credit. By making the full CTC available to all low-income children — in tax parlance, making the credit “fully refundable” — policymakers could boost young children’s potential to succeed in life.

Teacher shortage
The United States is facing a teacher shortage as schools add back classes that were cut from the curriculum during the recession and teacher attrition remains a big problem. An analysis by the Learning Institute found a shortage of 60,000 teachers last year and expects the number to rise to 100,00 by 2018. Joe Heim of the Washington Post has the story.


Regardless of the state, students in high-poverty and high-minority schools are typically hit hardest when there are teacher shortages. In 2014, on average, less than one percent of teachers were uncertified in low-minority schools, while four times as many were uncertified in high-minority schools, the study showed. Teacher attrition — the number of teachers leaving the profession for a variety of reasons — remains high and is the single-biggest contributor to the shortage, according to the report. Nearly two-thirds of the teachers who leave the profession do so before retirement age and cite dissatisfaction with their job as the reason. Addressing the job-dissatisfaction issues could help avert a teacher crisis. “In times of shortage, policymakers often focus attention on how to get more teachers into the profession, but it’s equally important to focus on how to keep the teachers we do have,” Sutcher said. “Reducing attrition in half, from eight percent to four percent, would virtually eliminate overall shortages.”Linda Darling-Hammond, president of the Learning Policy Institute and one of the study’s co-authors, pointed out that teachers make about 20 percent less than other college graduates and that teacher salaries have lost ground since the 1990s. That despite increased teaching hours and less time for classroom preparation. “In more than 30 states, a mid-career teacher heading a family of four is eligible for government assistance,” she said.


Louisiana in Trans-Pacific Partnership talks
Gov. John Bel Edwards is meeting with President Barack Obama today to discuss the controversial Trans-Pacific Partnership – the largest regional trade deal in history. Critics of the deal say it will send jobs overseas. Proponents, such as Edwards, say it’s good for business. Elizabeth Crisp of the Advocate has more.


“We have built a thriving international commerce and trade economy and have one of the largest port complexes in the world,” Edwards said in a statement earlier this year announcing his support for the president’s plan. “The TPP will directly impact Louisiana businesses and open the pathway for improved commerce and trade between the United States and our Pacific Rim partners.” The trade pact would slash tariffs and eliminate other trade barriers among the 12 Pacific Rim countries involved. Louisiana is one of the country’s top 10 exporting states. According to the U.S. International Trade Administration, $17.5 billion in Louisiana products were exported to TPP countries in 2014 — more than a quarter of the state’s exported goods. Edwards has argued that the TPP also would be good for the Port of New Orleans, which would be expected to capture more trade traffic from countries covered in the agreement.


Number of the Day
17.3 percent – The percentage of children under age 6 in the United States that were poor last year. (Source: U.S. Census data via the Center on Budget and Policy Priorities)