It’s unfortunate that a piece of common knowledge in Louisiana includes the state’s massive disinvestment in higher education over the past decade. A new national report confirmed the importance of higher education for social mobility, highlighting “working class” schools such as Southern, Xavier, and the University of New Orleans as pathways to the middle class. But with TOPS funding cut this past year and more mid-year cuts about to fall, reinvestment is needed for the state’s colleges to continue as engines of social mobility. The Advocate’s Mark Ballard has the story:
“Every time you face a state budget reduction, you have to resort to tuition and fee increases to offset what the state doesn’t give you. That has a detrimental impact on the social mobility of our students,” (LSU President F. King) Alexander said. “They’re forcing more public institutions to become more private in how they function.” That means some of the leading public universities around the country are relying on out-of-state students, who pay higher tuitions, rather than high school graduates from their own state, he said. “Horatio Alger still exists in this country,” Alexander said, referring to the 19th century novelist who wrote rags-to-riches stories. “The difference now is Horatio Alger has to go to college. That’s our message to the Legislature. Without the higher education institutions, like LSU, you put a serious halt to and a tremendous detrimental impact on the social mobility of this country.”
A scalpel needed on state budget
Nola.com/The Times-Picayune columnist Bob Mann writes that Rep. Lance Harris’ approach to solving the mid-year budget deficit – across-the-board cuts to a host of state agencies – is the wrong solution. And it’s not the kind of thing a smart business owner would do when facing a deficit.
An effective business owner wouldn’t look only for spending cuts, but also smart ways to increase revenue. You might double down on advertising or hire additional sales staff to increase profits. Some businesses also might adjust their prices to account for inflation or lagging demand. And if the company had cash reserves — analogous to the state’s Rainy Day Fund — you might dip into it to get through hard times. That’s the savvy budgeting and management practices we expect from our political leaders and that is lacking from Harris and his Republican caucus.
Gov. John Bel Edwards is outlining the state’s plans for addressing the $304 million shortfall this morning. Nola.com’s Julie O’Donoghue has a preview here.
Religious community weighs in on immigration
Catholic Charities of the Diocese of Baton Rouge spoke out strongly against President Trump’s harsh policies towards immigrants and refugees. Catholic Charities’ Executive Director David Aguillard put the issue in both moral and economic terms. The Business Report has the story.
“These measures are based on fear without a solid factual justification and burden our nation with a disproportionate costly response to an ill-defined issue,” David Aguillard, executive director of Catholic Charities of the Diocese of Baton Rouge, says in the prepared statement. “Whenever we respond to imaginary fears rather than our hopes, when we act based on weakness rather than confidence, we harm our self-interest and empower our enemies…A path to citizenship would increase our Gross State Product (GSP) by $3 billion and increase tax revenue by $15 million. Deportations would reduce our state’s revenue by $75 million,” the Catholic Charities statement reads. “If all the unauthorized immigrants were removed from Louisiana, the state would lose $500 million in economic activity, $400 million in GSP, and over 6,500 jobs.”
SNAP and soda
The Supplemental Nutrition Assistance Program is a time-tested policy that improves economic opportunity, childhood development, and health outcomes. It lifted 4.7 million people out of poverty in 2014. One of the potential reform measures being floated is to impose a “soda ban” on SNAP recipients as a dual means of creating positive health behavior change. Diane Whitmore Schanzenbach at the Brookings Institution points out that a soda ban for SNAP isn’t the best way to promote health. She suggests a “soda tax” could be a better way that would also generate revenue for state and local government.
…[I]t is not at all evident that banning soda purchases with SNAP benefits would actually be successful in decreasing soda purchases. SNAP benefits are modest—approximately $4.50 per person per day—and as a result nearly all families supplement their SNAP purchases with groceries purchased from their cash income. The USDA study indicates that households spend only about $14 per month on soda, or $24 if all sugar-sweetened beverages are included. These numbers are well below the amount of out-of-pocket spending on groceries done by SNAP families. What is the likely impact of banning soda purchase with SNAP dollars, then? Consumers would change the payment method used for buying soda, but likely will not change the amount of soda they buy. It would be a lot of regulatory red tape—defining what counts as a sugar-sweetened beverage, and programming grocery scanners nationwide to exclude those UPC codes—for no actual behavioral change.
Studies also show that one effective way to promote healthy behavior among SNAP recipients is to boost benefits. Recipients of SNAP often face barriers to accessing healthy food, which can be mitigated with higher benefit levels.
Number of the Day
6.5 million– Number of Americans lifted out of poverty by the Earned Income Tax Credit in 2015. (Source: Center on Budget and Policy Priorities)