Gov. John Bel Edwards released his tax plan on Wednesday, which is aimed at replacing $1.4 billion in revenue that falls off the books in 2018 while making Louisiana’s revenue structure more fair and predictable. It didn’t take long for business and political leaders to start gnashing their teeth. As Tyler Bridges with The Baton Rouge Advocate reports, legislative leaders and business lobbyists are pushing back against the proposed Commercial Activity Tax:

“I’m getting some pushback from members of the Senate that low-margin companies would get drastically hurt,” said state Senate President John Alario, R-Westwego. But, he added, “A lot of us are waiting for  more of the details, especially on the commercial activities tax.” House Speaker Taylor Barras, R-New Iberia, said he is asking his staff to get more information. But he added that the new business tax is generating complaints. … Stephen Waguespack, president of the powerful Louisiana Association of Business and Industry, had little good to say about it. “We’re hearing a tremendous amount of concern from a wide variety of members,” Waguespack said.

Bridges solicited advice from the former governor of Ohio, Robert Taft, a Republican who pushed a similar tax proposal in the Buckeye State in 2005.

Robert Taft, who was governor of Ohio then, said a key to winning passage was the support of the state’s manufacturing association while members of the Ohio Chamber of Commerce were divided over the plan. Taft, a Republican, passed it through the state’s Republican Legislature with overwhelming Republican support. Taft said he spent months traveling Ohio to promote the plan…“You need to have some supporters in your corner to pass it,” Taft said in an interview.

Criminal justice agenda takes shape

In an effort to reduce prison population while also reinvesting in citizens, Gov. John Bel Edwards released his legislative agenda for criminal justice reform. As Rebekah Allen with The Advocate reports, the recommendations are based on recommendations from a justice reinvestment task force and aim to reduce Louisiana’s prison population by at least 13 percent, while saving taxpayers $150 million over the next decade.

Not all of the 12 bills had been pre-filed by Thursday for the legislative session, which begins April 10, but the outline of proposed legislation provided by Edwards closely matches the 26 recommendations produced by a criminal justice task force that met over the past year…The measures will focus on simplifying the state’s felony classification system, increasing opportunities for parole and probation, providing more opportunities for alternative treatment, and programs to reduce recidivism. Some of the proposals seek to reduce financial burdens on prisoners, so they can better transition back into their communities upon their release.

Two of the key bills in the package are sponsored by Senate President John Alario – which Capitol observers took as a sign of how important this issue is to the governor. Julia O’Donoghue with Nola.com/The Times-Picayune has the story:

Alario, a 40-year legislator, doesn’t sponsor many bills and doesn’t typically get involved in criminal justice matters. That he is carrying two pieces of the governor’s package is seen as a statement about how seriously Edwards takes these issues.. “The governor asked me if I would do them,” said Alario, joking that he was adding his “brand” to the issue. “I think it is time for us to address the issue.”

Louisiana not alone in its fiscal woes

The Pelican State is far from alone in facing budget shortfalls. The National Association of State Budget Officers reports that half the states are currently have budget shortfalls, and more states are expecting mid-year gaps than in any year since 2010. As Elizabeth McNichol and Samantha Waxman with the Center on Budget and Policy Priorities report, the continuation of budget shortfalls seems likely, but they do offer potential remedies.

More than half the states lack the revenue needed to maintain services at existing levels in 2018.  All told, two-thirds of the states are facing or have addressed revenue shortfalls this year, next year, or both… While states cannot control all of the factors contributing to their budget uncertainty — for example, potential cuts to federal grants that comprise nearly a third of their budgets — they can take a number of steps now to strengthen their tax systems and reserves that will protect revenues in the coming years.

Among other things, the report recommends that states “avoid ineffective tax cuts,” reject artificial spending limits and work on structural budget reforms.   

Ruth Kennedy

For state government to effectively serve the public, it needs effective public servants – the people who toil beneath the political turmoil to make sure programs work for those who need them. In the area of health care, no one has done more to ensure that low-income Louisianans have access to health coverage than Ruth Kennedy, who retires today after 37 years of state service. Kennedy has been charged with implementing three epochal reforms to Louisiana’s Medicaid program – the Louisiana Children’s Health Insurance Program (LaCHIP) in 1998, the transition to managed care in the early part of this decade, and (most recently) the expansion of Medicaid coverage to working-age adults that has resulted in more than 415,000 Louisianans gaining coverage since July 1. Kennedy’s efforts are a big reason why Louisiana has gone from having nearly one-third of its kids lacking health insurance to fewer than 5 percent – and why the state’s uninsured rate is now at an historic low. Her retirement is exceedingly well-deserved, but she will be sorely missed.

Number of the Day

46 – Percentage of Louisiana residents who think the state is heading in the right direction, compared to 40 percent who think we’re headed the wrong way. Louisianans are more optimistic than at any time since 2012 (Source: Louisiana Survey)