Louisiana has the fourth-highest rate of income inequality in the United States, as income gains over the past 35 years have accrued mainly to the wealthy while families in the middle and bottom of the income ladder have stagnated or lost ground. A new report by Liz McNichol of the Center on Budget and Policy Priorities lays out the facts, and says state tax policies are partly to blame.
The mechanisms by which state tax systems ask less of the wealthy than of poor and middle-income families have developed over time, often through closed-door negotiations resulting in special tax breaks that benefit a relative few. To reverse these trends, states should avoid actions — such as cutting income taxes or raising sales taxes — that worsen inequality by shifting taxes further to lower-income residents. Instead, they should ensure that high-income earners pay their share and lower-income earners don’t face increased tax responsibility.
The Advocate’s Elizabeth Crisp has more:
The Louisiana Legislature is expected to next year mull tax proposals as it sets out to fix the state budget, which has been caught in a cycle of deficits in recent years. “2017 in Louisiana represents, really, the best chance we’ve had in almost a generation to make some structural changes in our tax code to begin to address some of these things,” said Jan Moller, director of the Louisiana Budget Project, which advocates on behalf of low and moderate income households and joined CBPP for the release of the report.
Higher education financial woes
Cuts to Louisiana universities and the TOPS scholarship program are driving Louisiana students to out-of-state schools. That was the testimony of LSU President F. King Alexander at a House Appropriations hearing on Wednesday. Commissioner of Higher Education Joe Rallo is asking for $188 million more funding than last year to fully fund TOPS, boost funding for need-based Go Grants, and begin to reinvest in schools that have seen their state support dwindle since 2008. Gannett’s Greg Hilburn reports that while some legislators questioned the number of universities in Louisiana, university leaders pushed back on the notion that this would bring significant cost savings.
Alexander said the closure of LSU-Shreveport and LSU-Eunice would only save $9 million, “but it would displace 10,000 students with no place to go.” (Commissioner of Higher Education Joe) Rallo also resisted the notion of campus closures, although he said all merger and consolidation possibilities will be discussed at the regents’ February meeting. “At the end of the day we believe we need to maintain (existing campuses) to maintain access for students,” Rallo said. “Eighty percent of students go to the university closest to home.” Many of those students and their families are having to dig deeper to stay in school this year after the Legislature trimmed the popular TOPS scholarship program by 30 percent.
Repeal threat rattles NOLA health clinics
Efforts by congressional Republicans to repeal the Affordable Care Act without a replacement plan in place is threatening the viability of community health clinics that have sprung up in New Orleans to serve many of the low-income patients who once flocked to Charity Hospital. As NOLA.com/The Times-Picayune’s Kevin Litten reports, the threat of Medicaid expansion going away is giving pause to clinic operators who had waited patiently for the economic certainty they thought had arrived with Medicaid expansion.
When CrescentCare CEO Noel Twilbeck Jr. sat down for an interview with NOLA.com | The Times-Picayune earlier this month, Twilbeck was three days away from a board meeting scheduled to decide whether to pull the trigger on a new location that would consolidate two clinics and provide more space for patients. “I can’t tell you we’re moving forward because I have a board meeting Monday night, but since the results of the election, our plans just came to a screeching halt,” Twilbeck said. “The overarching panic got very real right after the results of the election because we didn’t know what policies were going to be brought forth. We didn’t know what would happen with the Affordable Care Act.” Ultimately, Twilbeck said he was going to recommend moving forward with the clinic, even though doing so was a “leap of faith.” It would be dependent on stable funding for treating the working poor, he said, something Twilbeck said is undoubtedly under threat but that he hopes will ultimately remain in place.
Price’s budget process changes would harm key programs
President-elect Donald Trump’s pick for Secretary of Health and Human Services, Tom Price, recently proposed federal budget process changes as House Budget Committee Chairman. Embedded within the dozens of proposals is an entitlement cap that could mean big cuts for key public programs that millions of working families use to make ends meet. In addition, the plan would make the safety net less responsive to economic downturns. The Center on Budget and Policy Priorities’ Richard Kogan and David Reich have the full report.
The Price plan would establish an outside commission to recommend converting entitlement programs such as Medicare, Medicaid, SNAP, unemployment compensation, and farm programs to annual appropriations. As entitlements, these programs are open-ended and serve everyone who is eligible. If converted to appropriated programs, there would be no guarantee of benefits, even for those eligible. In contrast, Price proposes no such commission to review open-ended tax breaks — the credits, deductions, exemptions, or preferential rates that abound in the tax code — even though they function the same way as open-ended entitlements. Often referred to as “tax expenditures” or “tax entitlements,” they amount to about $1 trillion per year in forgone revenues.
Number of the day
13 – percentage of low-income children under 5 enrolled in Head Start in Louisiana, exceeding the national average of 10 percent (Source: National Institute for Early Education Research)