Economists dispute spending growth

Economists dispute spending growth

As the Legislature convenes this evening for a 10-day special session to re-balance the state budget, a central point of debate will be over the size of state government - and whether its growth has outpaced the broader state economy.

As the Legislature convenes this evening for a 10-day special session to re-balance the state budget, a central point of debate will be over the size of state government – and whether its growth has outpaced the broader state economy. Rep. Lance Harris, who has been leading the push for a cuts-only approach to plugging the $304 million mid-year budget shortfall, claims state spending has outpaced inflation dating back to 2004. But The Advocate’s Tyler Bridges digs into the numbers and finds them misleading. Leaning on economist Jim Richardson and former state budget chief Steve Winham, Bridges notes that Harris includes federal dollars in his analysis, including hurricane-recovery dollars that flow through state government and artificially inflate the budget. A more fair way to look at state spending is to measure all the taxes, licenses and fees that the state collects against the overall state economy:

In 2008, 6.81 percent of what the state economy produced was spent by state government, or more than the 5.92 percent in 2016. This means that state spending by last year had declined relative to the state’s economy and population growth, counter to the figures from the longer time frame that Harris is using. In an interview, Harris noted that the state is facing its 15th midyear budget cut over the past nine years. “We’re overspending every year,” he said. “The revenue doesn’t match the spending. When are we going to wake up?”

But as legislators convene on the Capitol for the 6:30 p.m. start of the session, there is only one plan on the table. The Advocate’s Elizabeth Crisp suggests that it’s not clear whether fiscal conservatives will come up with a viable alternative.

Harris, the House GOP leader, said he doesn’t have a precise alternative to the governor to bring to the State Capitol yet. He’s heard of plans circulating. “I’ve talked to some folks about all kinds of different ideas,” Harris said. He said he would prefer that the end be the result of some form of compromise. “Hopefully, when two philosophies start debating, there will be something that bubbles to the surface,” Harris said. “We want to take everybody’s ideas into consideration.”

The AP’s Melinda Deslatte provides a useful run-down of what to expect. Here’s Deslatte’s summary of the governor’s plan to patch the budget hole:

Edwards’ plan recommends cutting about $60 million in state agency spending and using more than $240 million in reserves and other financing to close the hole. He’s not seeking fee increases, though he’s allowed lawmakers to consider them. Rather than rely solely on cuts, the governor wants to take just under $120 million from Louisiana’s “rainy day” fund and tap into another $120 million in patchwork financing, dollars from better-than-expected tax and fee collections and other financing sources to fill gaps. Colleges, prisons, K-12 public schools, the TOPS college tuition program and the state child welfare agency would be protected. Cuts would hit the privatized charity hospital services, medical school training programs, roadwork, outreach services for the homeless, economic development marketing and the Office of Juvenile Justice.


Long road to recovery for renters

The Advocate’s Terry Jones reports that renters displaced by the historic flooding of August 2016 are still having trouble finding housing. It’s been particularly difficult for those who rely on federal housing vouchers.

The East Baton Rouge Parish Housing Authority reports that approximately 42 percent of the 753 families who were flooded out of Section 8-subsidized homes haven’t found a place where they can re-use their voucher. Richard Murray, the head of the parish’s Housing Authority, said 11 percent of the flood victims who used the Section 8 voucher program had to move out of the city to find new housing. Davenport predicted the need for FEMA rental assistance won’t dissipate until the region starts benefiting from the types of federally-funded programs that helped restore the New Orleans housing market post-Katrina. Gov. John Bel Edward’s Office of Community Development has announced that it will direct $100 million of the $1.65 billion in flood-recovery funds Congress has approved for Louisiana to tackle the rental shortage.

Many devastated by the recent tornadoes will also be searching for new housing. A federal disaster declaration was approved for Orleans and Livingston parishes.



ACA should stay

The Advocate’s editorial board writes that Congress should not work to roll back health coverage gains realized through the Affordable Care Act’s Medicaid expansion. Doing so would jeopardize the care of over 394,000 Louisianans.

First of all, as (Gov. John Bel) Edwards has frequently stressed, working people can’t work if dogged by poor health. The governor notes how many people in Louisiana over the last year have received life-saving diagnoses and treatments under the new regime. Secondary to that is the availability of primary care — a newly insured person being able to see a doctor in an office, rather than waiting until sicknesses get treated in the more expensive setting of an emergency room. While the decline in the uninsured population is a good number, a decline in ER visits should also be a goal among those having policies on the ACA exchanges or via Medicaid. Families with traditional insurance policies are hurt as costs of the uninsured go up, and health care providers must charge more to balance the books; the settings of treatment are an important issue.


High-quality early care and education pays off

Investments in early care and education provide a $13 return on every dollar invested. Andres S. Bustamante, Kathy Hirsh-Pasek, Deborah Lowe Vandell, and Roberta Michnick Golinkoff present the evidence for The Brookings Institution in a piece meant for incoming officials at the U.S. Department of Education. Louisiana leaders should pay attention to the findings as well. The state currently is not providing any general-fund dollars for early care and education for children from birth to three years old.

The data, then, offer a clear pattern of results with direct policy implications. First, they tell us that programs that begin in infancy, include parents, and are high quality will yield lasting advantages for young children and will help set them on positive lifelong trajectories. Second, short of access in the first three years, it is imperative that we pay serious attention to the quality of programs as defined by high quality teacher-child interactions and curricula that encourages children’s active engagement. Research tells us these conditions are facilitated by low child to teacher ratios, well-trained and well-paid teachers, and ongoing job-embedded professional development. The research also provides proof of concept that these aims are scalable on a modest budget (e.g., in Tulsa, New Jersey, and Boston).


Number of the Day

3.52 – percent growth in the state’s economy since 2004. State effort- the total taxes, tuition, and fees paid by Louisianans- has only grown 3.3 percent. (Source: The Advocate)