Oct. 26: LBP on the amendments

Oct. 26: LBP on the amendments

In today's Daily Dime, LBP weighs in on four of the six constitutional amendments on the Nov. 8 statewide ballot, look at the upcoming report from a blue-ribbon task force studying tax policy, and showcase a policy brief that shows why high quality early learning environments are critical to a child's future success.

The financial crisis confronting Louisiana’s colleges and universities is well known: Faced with chronic revenue shortfalls fueled by irresponsible tax cuts, Louisiana policymakers have responded by making deep cuts to state support for public colleges and universities, and having students make up the difference through tuition hikes.

Unfortunately, the solution that’s being proposed to voters in a Nov. 8 ballot measure – giving tuition-setting authority to university governing boards instead of the Legislature – is the wrong answer, as it has the potential to make higher education even less affordable for low-income students in Louisiana.  While public colleges and universities are in dire need of more funding to reach their full potential, the best way to do that is to reverse the cuts that have been made in recent years, not by putting more of the burden on college students.

In today’s modern economy, some form of advanced education or training is not a luxury, it’s a requirement. While state support for higher education helps all students, it is especially critical for students from modest backgrounds, who must rely on loans to make up for any loss of state support. Starting in the Spring semester, students on TOPS scholarships will receive less than half the full award due to budget cuts, and the program faces an uncertain future.

Low-income students who don’t qualify for TOPS, yet still want to attend college, have faced an even tougher road in recent years. As tuition has steadily risen, funding for the need-based Go Grant scholarship program has been stuck at $26.4 million, which is about $37 million short of what’s needed to provide all eligible students with a grant. Low-income students who qualify for TOPS also lose out when Go Grants are underfunded. Low-income students who receive TOPS and Go Grants are 41 percent more likely to graduate than those who only receive TOPS. Read LBP’s policy brief on Amendment 2 here.

Amendment 3 would eliminate the corporate income tax deduction for federal income taxes paid, while triggering a 6.5 percent single corporate tax rate. This is sound tax policy that takes away a loophole and is projected to yield a modest amount of additional revenue for the state.

Amendment 5 would put excess revenue from corporate and mineral taxes into a new rainy day fund. This is good budget policy that would bring more budget stability over the course of boom and bust economic cycles, especially in the oil industry.

Finally, Amendment 6 is not good budget policy. It allows fund sweeps and diversions from protected budget accounts. This is the type of irresponsibility that led to the state’s ongoing fiscal challenges. A better way would be for the legislature to raise adequate revenue to make the necessary investments for shared prosperity in Louisiana.


Task force nears end
A blue ribbon task force looking at state tax and budget issues is in the final days of its deliberations. Members of the task force have been guided by the economic mantra of “broadening the base and lowering the rates.” What that means: trying to do away with the loopholes and exemptions that choke off revenue from the state. It remains to be seen whether the Legislature will accept recommendations that put the state on a sustainable revenue path or whether it will continue to limp along from year to year. The Advocate’s Tyler Bridges has the story:

During the Jindal years, legislators repeatedly approved budgets that were out of balance, and they papered over the deficits by allowing the governor to draw down the state’s various reserve accounts. Gov. John Bel Edwards inherited a $2 billion deficit when he took office in January. Saying that the day of reckoning had arrived, he vowed to put the state’s budget on sound footing. Lawmakers, however, approved only a raft of temporary tax measures, most notably, a one-cent increase in the sales tax. That gave Louisiana the highest combined state and local sales tax in the country at nearly 11 percent. Most of the tax increases approved by the Legislature expire in 2018, setting up the choice of reauthorizing those taxes, approving other taxes or cutting even more money from the state’s colleges and universities and the public health care system.


Quality early care and education
Quality early care and education is important for parents and kids. Working parents need quality centers to ensure they’re able to work and kids need an environment that promotes social-emotional growth, development, and learning. Currently, Louisiana is not investing a dime in early care and education for kids from birth to age 3. In a recent policy brief, Leila Schochet of the Center for American Progress lays out useful information about early learning, along with some pervasive myths.

Research shows that high-quality learning environments enhance child development, and that a skilled and well-educated workforce is integral to program quality. Sensitive and responsive caregiving from a provider who engages in nurturing interactions with children and creates developmentally appropriate learning opportunities in the classroom requires a great deal of knowledge and experience.

The brief also emphasizes the importance of a well-compensated early childhood workforce:

There is growing awareness that access to high-quality child care is a necessity for working families and for the economy. However, many individuals do not realize that supporting access to high-quality child care means investing in the early childhood workforce. Despite the significance of their work, most child care workers receive dismally low wages and few have benefits—such as health insurance, which is common in other sectors. On average, child care workers earn less than animal caretakers, receiving a median hourly wage of only $9.77, and almost half of all child care workers are enrolled in at least one public assistance program. Paying child care workers near-poverty wages undermines their ability to provide high-quality care and devalues the important role that they play in fostering healthy child development and supporting the economy. Child care workers are skilled professionals, and it is time to give them credit where credit is due.


Conscious Capitalism
Capitalism and concern for social justice are often pitted against one another. An upcoming “Big Think” event hosted by the Baton Rouge Area Chamber of Commerce (BRAC) hopes to challenge this thinking. Ideally, capitalism provides a framework for economic growth and entrepreneurship while public policy makes sure that the benefits of growth are broadly shared, and that a safety net exists for those who take risks and fail. Policy decisions notwithstanding, BRAC’s keynote speaker emphasizes the importance of business attention to economic justice for the sake of the community. Here’s more from BRAC on the event:

Keynote speaker Jeff Cherry of Conscious Venture Lab believes social and economic justice are not only inextricably connected but that connection or lack thereof is a major contributor to many societal ills in America. Conscious Venture Lab operates on the premise that a more inclusive form of capitalism – focused on societal purpose and the manner in which we elevate the humanity of all of our citizens – can have a transformational impact and help to create a more just, joyful and prosperous society for all. More information on BRAC’s Big Think can be found at bracbigthink.com. BRAC’s Big Think is part of Baton Rouge Entrepreneurship Week, which takes place November 11 – 18.


Talking child poverty
As Department of Children and Family Services Secretary Marketa Walters continues a series of conversations about poverty and child welfare across the state, faith-based organizations are also stepping out to get people talking about the challenges Louisiana families face to make ends meet. “Bread or Stones,” an initiative of the Louisiana Interchurch Conference’s Public Policy Task Force is hosting a number of “Listening Posts” across the state. The next event is slated for Nov. 15 in Baton Rouge. You can register online at this link.


Voting resources
As election day – Nov. 8 – approaches, early voting began yesterday and runs through Nov. 1. For resources on voting including sample ballots and poll locatiions, check out www.geauxvote.com or www.vote.org.


Number of the Day
$134,571,561 –
Dollar amount needed to provide all eligible students the maximum $3000 need-based Go Grant financial award for college (Source: Louisiana Office of Student Financial Assistance)