Gov. John Bel Edwards’ proposal to spackle the $304 million hole in the state budget by the end of this month was released Monday. The governor proposes to spare state colleges and universities, prisons, direct K-12 school funding, child protective services, programs for people with disabilities, and foster care. The AP’s Melinda Deslatte reports that, even while tapping the rainy-day fund, the Louisiana Department of Health would be cut substantially.
Beyond the rainy day fund, much of Edwards’ plan rests on cutting state financing in the Department of Health by $128 million, though $73 million of that would be offset by using other available fund balances and the tobacco tax money. Health Department spokesman Bob Johannessen said the remaining $55 million would involve spending cuts. A payment to Medicaid providers for dental care would be delayed one month, to shift nearly $5 million in costs to next year. Private managers of the LSU charity hospitals, clinics and services for the poor would be cut 1 percent. Contracts would be cut, along with overtime, supply purchases and travel spending.
NOLA.com’s Julia O’Donogue has more detail on the direct effect of these cuts, if the Edwards plan is approved by legislators.
Nine hospitals that serve the poor and uninsured would be cut by $3.7 million in state funds — or a total of $13 million overall when lost federal funding is included. This would mean a $3.6 million cut in state and federal funds to University Medical Center in New Orleans alone.
See the full proposal here.
Suing for the right to counsel
Louisiana’s chronic refusal to provide adequate legal counsel to poor people accused of crimes has resulted in a class-action suit from a team of civil rights attorneys. Gov. John Bel Edwards and the Louisiana Public Defenders Board were named in the filing, on behalf of a group of 13 prisoners who allege that they have been denied their constitutional right to adequate counsel because of an underfunded state public defense system. The indigent plaintiffs are represented by powerhouse civil rights law firms, bringing even more attention to the Pelican State’s criminal justice system. Ken Daley has the story at NOLA.com
The suit is the latest legal effort aimed at prodding state government to find more money for Louisiana’s public defense system. (State Public Defender Jay) Dixon has testified in New Orleans each of the past three years regarding what he called the chronic underfunding of indigent defense. He said the funding crisis last year forced 33 of the state’s 42 public defenders offices — including the branch in Orleans Parish — to stop accepting new cases or to place many clients, including some who were jailed, on waiting lists. The suit names Edwards, Chief Public Defender Jay Dixon, and all members of the Louisiana Public Defender Board, the agency responsible for the oversight of statewide legal services for the poor in criminal cases.
Edwards pushes back on rainy-day fund
U.S. Sen. John Kennedy just can’t refrain from commenting on state fiscal issues even though his new job involves representing the state’s interests in Washington. This time, he’s urging state lawmakers not to dip into the state’s rainy-day fund, arguing that there is enough room to cut in the Louisiana Department of Health budget. This brought immediate pushback from the governor. Greg Hilburn reports for Gannett via The Monroe News Star.
“Your assertion that the state should not tap the Rainy Day Fund is irresponsible and uninformed,” Edwards wrote to Kennedy. Edwards has said cuts will be “deep and painful” using the Rainy Day Fund, but “catastrophic” without it. Tapping the Rainy Day Fund requires a two-thirds vote of both Legislative chambers. While Senate passage is a given, House Republicans led by delegation Chairman Lance Harris, R-Alexandria, have been resistant to making a withdrawal from the Rainy Day Fund.
Mortgage interest deduction reform
Diane Yentel of the National Low-Income Housing Coalition and Mark Calabria of the Cato Institute agree: the federal mortgage interest deduction is ripe for reform. With a price tag of about $70 billion annually, the deduction costs more than the entire budget of the Department of Housing and Urban Development. Their proposal to cap the amount of mortgage eligible for deduction at $500,000 would bring in $241 billion in revenue over 10 years: money that could be used for rental housing solutions, reducing income inequality, wealth inequality and racial inequality in neighborhoods. In their op/ed for The Hill, Yentel and Calabria say that reform would also, “put more money back in the hands of…red-state constituents.”
Fully 75 percent of federal dollars–including tax expenditures–used to subsidize housing goes to high-income households through the mortgage interest deduction and other homeownership tax benefits. Seven million households with incomes of $200,000 or more receive a larger share of these resources than the 55 million households with incomes of $50,000 or less, even though lower-income families are far more likely to struggle to afford housing. Half of all homeowners receive no tax benefit from the mortgage interest deduction, and almost all of the tax break goes to households with incomes above $100,000. At the same time, only one in four of the poorest households that are eligible for housing assistance get the help they need because of chronic underfunding.
Number of the Day
870,369– Louisiana children and families covered by Medicaid (Source: State Medicaid Forecast, FY2016-17)