The state board that oversees billions of dollars in property tax breaks for manufacturers approved new rules Friday that are designed to implement a pair of executive orders from Gov. John Bel Edwards. Under the new rules, local authorities will have a say in how their taxes are given away and companies will have to start paying some property taxes after five years, instead of the previous 10-year exemption. Mark Ballard of The Advocate was there.
“If it’s done right, it’ll be a sea change. This was an important day,” said Jan Moller, a member of the board and director of the Louisiana Budget Project. “The purpose of the rules is to give business more certainty about the process. Businesses don’t like to pay taxes but what they don’t like more is not knowing what’s expected. These rules say that if I do a, b, and c, then I get d.” Under the new system some of the projects that qualified in the past – such as administrative tasks, routine maintenance and required environmental upgrades – now would be disallowed. An applicant would have to sign a contract, called a cooperative endeavor agreement, which would spell out specifically the number of jobs and payroll created and retained. Conditions would be put in writing for an exemption of up to 100 percent of the taxes for up to five years. The contract also would detail what would be necessary for renewing the tax break, after the first five years, but limit property tax exclusion to 80 percent of the taxes owed for no more than three years.
Another budget showdown looms
The Legislature’s budget committees were officially notified Friday that state government finished last fiscal year with a $313 million deficit. And administration officials say the current-year budget may get worse, as tax collections are coming in slower than expected. Nola.com/The Times-Picayune’s Julie O’Donoghue reminds us that Gov. John Bel Edwards predicted this would happen, while his critics in the Legislature were saying the opposite.
On Friday, Republicans indicated that they will be looking for places to cut at the Louisiana Department of Health and the private operators who run hospitals for the poor and insured around the state. Legislators voted to give those private hospital operators $135 million more on Friday, but complained about doing so. The $135 million isn’t money that could be diverted to another purpose — a lot of it is federal funding — so it couldn’t help mitigate cuts. But several Republicans are concerned about the size of the health agency’s budget — and the amount of state funding that goes toward the private hospital operators. If there is a silver lining to the budget crisis, it’s that the August flooding in Louisiana won’t cause immediate financial stress. The Edwards administration says a $42 million payment the state owes Federal Emergency Management Agency for emergency services doesn’t have to be paid back until after July 1. Even then, it can be returned in installments over five years.
Football and academics at LSU
Private donors to Louisiana State University are more likely to give to the school’s athletic programs than to support academics – making LSU the only Southeastern Conference school where that’s the case. The Advocate’s Rebekah Allen also reports that only 6 percent of LSU alumni donate to academic programs at their alma mater, the lowest rate among SEC schools. Together, these facts help explain why the university’s sports teams are among the best in the country while its academic reputation is middling.
LSU is still trying to fix the leaks that flood the basement of Middleton Library during routine rainstorms. But it provides top-shelf maintenance to the world-class, $3 million live tiger habitat that it built on campus for the school mascot. The university trimmed at least a half-dozen programs and lost a raft of star faculty members in recent years as the state cut support to its flagship school by more than half. And yet LSU is spending almost $10 million to buy out the contract and fire one of the most successful head football coaches in school history, a man who won 77 percent of his games.
Growing up poor in America
New York Times columnist Nick Kristof traveled to Pine Bluff, Ark., where he met 13-year-old Emanuel Laster. He lives in a house that’s “filthy and chaotic, with a broken front door” that has three flat-screen TVs but no food. He is among the 20 percent of American children being raised in a particularly American form of poverty – a calamity that neither of the presidential candidates is talking about on the stump.
What many Americans don’t understand about poverty is that it’s perhaps less about a lack of money than about not seeing any path out. More than 80 percent of American households living below the poverty line have air-conditioning, so in material terms they’re incomparably better off than poor families in India or Congo. In other ways their lives can be worse. Too many American kids are set up for failure when they are born into what might be called the “broken class,” where violence, mental illness, drugs and sexual abuse infuse childhood. Yes, such young people sometimes do stupid things, but as a society, we fail them long before they fail us. There are no silver bullets to eradicate these challenges, but there is “silver buckshot” — an array of policies that make a difference. Early childhood initiatives have a particularly good record, as do efforts to promote work, like the earned-income tax credit. Financial literacy programs help families manage money — and avoid buying large-screen TVs on credit.
Number of the Day
20.1 – Percentage of American children living in households that earn half the median income or less. That’s a higher rate than Greece (17.3), Hungary (16.8), Russia (15.8), Poland (14) and the Czech Republic (10.6) among many others (Source: The New York Times)