Plans develop to avoid 2018 fiscal cliff

Plans develop to avoid 2018 fiscal cliff

Gov. John Bel Edwards is still finalizing his proposals for how Louisiana can avoid the $1.2 billion fiscal cliff in 2018, when a slew of temporary revenue measures are due to expire.

Gov. John Bel Edwards is still finalizing his proposals for how Louisiana can avoid the $1.2 billion fiscal cliff in  2018, when a slew of temporary revenue measures are due to expire. Edwards said his revenue plan will be guided by the recommendations of the Task for on Structural Changes in Budget & Tax Policy. But as Gannett’s Greg Hilburn reports, House GOP leaders remain focused on cuts to state programs instead of overhauling the state’s broken tax code.  

Lawmakers enter the session facing a projected $400 million shortfall next year, but on the horizon more than $1 billion temporary taxes are set to expire on July 1, 2018. Lawmakers raised the temporary taxes — the bulk coming from an extra penny in sales tax — last year when the state faced a $2 billion deficit. “We’re making progress, but if we look forward we know on July 1, 2018 over $1 billion in revenue will fall off the books,” Edwards said. “We must take advantage of this opportunity … before we fall off of that cliff.”…”There is some interest and discussion about broadening the base (of the permanent 4-cent state sales tax) as long as we reduce the (temporary) new penny or reduce taxes somewhere else,” said (House GOP Leader Lance) Harris, referring to the possible addition of some services to the permanent 4 cents of sales tax. “There are a lot of ideas on the table, but we have to look at controlling spending.”

LBP’s recommendations for tax reform can be found at www.investlouisiana.org.

 

AHCA would disrupt delicate market balance

There is growing concern among members of Congress, advocates, and experts across the political spectrum that the American Health Care Act simply won’t work. Some project that it will unravel the individual insurance market, while others estimate that the reduced tax credits and phasing out of Medicaid expansion will leave millions of low-income Americans uninsured. While the bill retains some popular pieces of the Affordable Care Act, experts predict the replacement of the individual mandate with a “continuous coverage” requirement will result in fewer healthy people buying coverage, which in turn would drive up costs for older, sicker enrollees. Benji Sarlin of NBC News explains the prediction in detail, including the volatility of changing individual markets and risk pools.

[T]here’s serious concern about the House GOP plan to replace Obamacare’s penalty for not purchasing insurance with a one-year 30% markup on premiums for people whose coverage lapses. Some experts are worried that’s too weak to attract younger people with low premiums, and will drive up premiums as a result. “It’s not enough of a penalty for healthy people and sick people will have no choice but to pay it,” Aaron Carroll, a professor at Indiana University School of Medicine, told NBC News. “It will create adverse selection.”

 

Louisiana delegation stalls on AHCA

Most members of Louisiana’s congressional delegation have been slow to support the House plan to repeal and replace elements of the Affordable Care Act and radically restructure the Medicaid program. Several say they say are waiting on analysis of the legislation from the nonpartisan Congressional Budget Office, to learn how the bill would affect health insurance coverage for their constituents and the projected impact on state Medicaid funding. The Greater Baton Rouge Business Report’s staff has more:

Only Rep. Steve Scalise, the third-ranking House Republican and a member of the leadership team pushing the replacement plan, has given a full-throated endorsement to the legislation. On Wednesday, he described as a plan to “put patients back in charge of their health care decisions.” Louisiana’s lone Democrat in the congressional delegation, U.S. Rep. Cedric Richmond of New Orleans, along with other members of his party, supports Obama’s health overhaul and doesn’t want it uprooted. Rep. Ralph Abraham, a Republican doctor who represents northeast and central Louisiana, says Congress is “on the right road,” but he stopped short of backing the legislation, citing lingering questions.

 

Gas tax boost gaining momentum

State investments in transportation infrastructure have languished for years amid budget shortfalls and competing priorities. But House Speaker Taylor Barras says lawmakers are coming around to the idea of raising the state’s gas tax to finance new projects. Ken Stickney for The Advertiser has more:

The task force asked for a balanced approach to meeting infrastructure needs, including addressing the backlog, relieving traffic congestion, enabling economic development, improving the quality of life, addressing multi-modal means of transportation, serving both urban and rural citizens and using sustainable funding. The Edwards administration has suggested the state should generate about $700 million a year to advance those projects, which would require an additional 23 cents per gallon of gasoline.

 

Upcoming event:

Saturday, March 18: Second Line to Protect Our Care, New Orleans City Hall, 1-3pm.

More details here and here.

 

Number of the Day

207 – Percent increase in net premiums Louisiana marketplace consumers would face in 2020 under the proposed American Health Care Act. (Source: Center on Budget and Policy Priorities)