Dec. 16: First round of cuts approved

Dec. 16: First round of cuts approved

A joint House-Senate budget committee signed off on an initial round of midyear cuts Thursday after last-minute negotiations between Gov. John Bel Edwards’ administration and legislative leaders.

A joint House-Senate budget committee signed off on an initial round of midyear cuts Thursday after last-minute negotiations between Gov. John Bel Edwards’ administration and legislative leaders. Public colleges and universities took a smaller cut than originally planned – $12 million instead of $18 million as originally proposed. But the AP’s star reporter, Melinda Deslatte, explains that more cuts are coming in early 2017.


But while the college cuts are lessened for now, deeper reductions are likely only a few months away when the governor and lawmakers must deal with another expected midyear shortfall, a point (Commissioner of Administration Jay) Dardenne stressed to the committee. “I have to be honest with you, it’s not getting higher education out of the woods,” he said…Another shortfall, projected to be around $300 million, is expected for the current 2016-17 budget year, because tax collections and other sources of state revenue aren’t coming in as expected. Lawmakers won’t close that gap until January or February. “We’re going to be having very painful, difficult decisions,” Dardenne said.


Jeremy Alford of reports in his weekly subscription newsletter that administration officials believe a special session is now “inevitable.”

Inequality and tax reform

Income inequality over time is preventing people from being able to move ahead. While there are multiple factors for growing inequality since the late 70’s, the state tax code can make things better or worse. Right now, in addition to not raising sufficient funds, Louisiana’s tax structure asks more of those with the least. The Greater Baton Rouge Business Report’s Sam Karlin talked to LBP’s Jan Moller about this critical issue for Louisiana.


Policies Moller is advocating for—which include an expansion of the Earned Income Tax Credit, an incentive for the working poor—are likely to run into resistance at the Republican-dominated Legislature. However, several of the task force’s recommendations line up with what Moller says would level the playing field for low- and middle-income families. The Legislature in recent sessions passed a host of tax increases that end in 2018, setting up a $1.5 billion fiscal cliff for the state. Tax matters can only be taken up in regular sessions in odd-numbered years, so many have pointed to 2017 as the session for a major overhaul of the tax code. Since 1979, the income of the richest 1% of Louisiana households grew by 83%, according to the CBPP report. In the same time period, incomes fell by 3% for the bottom 99% of earners. “State (tax) policies can make matters worse, or they can improve them,” says Elizabeth McNichol, who authored the report.


A fact sheet on inequality in Louisiana can be found here.


TOPS changes discussed

Recipients of the TOPS scholarship may need to register for more classes to be eligible for the program. Higher education officials are considering a proposal that would require TOPS students take 15 credit hours per semester. But this likely wouldn’t save the state much money since students can only receive TOPS awards for eight semesters. Times-Picayune’s Julia O’Donoghue reports that it will be up to the Legislature whether to advance this proposal next year.


As this proposal came to light, students on social media began to gripe. A few complained that engineering students often only take 12 hours of classes per semester because their labs require so much time. Student athletes also sometimes take 12 hours of classes because their sports schedules are so demanding. There is also the matter of whether students are able to get all the classes they need in their major or concentration to graduate. LSU President King Alexander said budget cuts are putting a strain on how many classes his university can offer every semester. This is making it more difficult for students to complete certain degrees in a timely manner because courses they need may not be offered as often.


Paris Woods, Executive Director of College Beyond– a nonprofit focused on connecting low-income students with college- writes for the New Schools for New Orleans blog about the challenges faced by low-income students due to the TOPS cuts this year. She argues that the Legislature should pass a proposal that would provide TOPS awards based on income if the program isn’t fully funded, instead of the across the board pro-rata cut each students faced this year.


Consider that in 2016, the maximum Pell grant is $5,815 while the typical public college cost of attendance, including tuition, fees, room, and board, is nearly $16,000. LSU has the highest graduation rate in Louisiana and costs in-state students $22,000 a year to attend. These costs nearly put college out-of-reach for the 39% of young people in Orleans parish who live below the poverty line…The result of gaps in financing and other college-related supports is that nationally only 9% of youth from families in the bottom income quartile will complete college, compared to 77% of youth from families in the top quartile. The data also tells us that students with identical test scores will complete college at similarly disparate rates based on socioeconomic status. Financial resources matter tremendously and the degree attainment gap is staggering as a result. Yet, the percentage of TOPS scholarships going to families earning $150,000 or more has doubled in the past ten years.


New idea to reduce recidivism

New research shows that citizens returning to society from prison with an “employability certificate” have a much easier time finding a job. The certificates are granted by a judge after evaluating a person’s work readiness. The Brookings Institution’s Jennifer L. Doleac has more:


Why would employability certificates have such big effects? To answer this question, it helps to consider why employers might discriminate against applicants with criminal records in the first place. One reason is that they view a criminal record as correlated with a lack of work-readiness. Another reason is that hiring someone with a criminal record puts them at risk of a negligent hiring lawsuit — if an employee with a record commits another crime on the job, the employer could be accused of hiring someone that he or she knew was likely to commit a crime. Employability certificates could address both of these concerns.


Ignite for Change

A number of legislators have noted that misogynistic jokes are told frequently within the halls of Louisiana’s Capitol. At the same time, Louisiana women have persistently poor health and economic outcomes. In response to both of these issues, Rep. Helena Moreno launched a nonprofit organization that will advocate for policies beneficial to women. Ignite Advocacy Network has support from both Republican and Democratic legislators and will take on issues such as violence prevention, educational opportunities, health, and employment/earnings. The Advocate’s Rebekah Allen has more:


The nonprofit will be focused on advocating for the passage of legislation that benefits women. Moreno said interested people should sign up with the network. Then, when state and local bills that address issues such as wages, education, domestic violence or women’s health are being considered, a call to action will be issued. Those registered will be contacted and encouraged to call their elected officials, to write letters to their newspapers, to testify at a committee hearing and to vote. “A lot of groups are trying to do great work on women’s issues, but there’s no umbrella organization,” Moreno said.


Holiday hiatus

Today will be the last Daily Dime of 2016. All of us at the Louisiana Budget Project wish you and yours a joyful holiday season. See you in the new year!


Number of the Day

49 – Louisiana’s rank among states for equal pay between men and women. (Source: American Association of University Women via Ignite Advocacy Network)