The work of tax reform begins

The work of tax reform begins

After the completion of a nine-day special legislative session and the release of Gov. John Bel Edwards’ executive budget that left some $440 million of state priorities unfunded, attention now turns to structural tax reform.

After the completion of a nine-day special legislative session and the release of Gov. John Bel Edwards’ executive budget that left some $440 million of state priorities unfunded, attention now turns to structural tax reform. The regular session that begins April 10 will be the best chance policymakers have to put the state on a long-term sustainable revenue path. The Advocate’s Tyler Bridges lays out the next steps.

Now the hard work begins. Edwards and lawmakers are preparing for the start of the regular session in six weeks, when they must craft next year’s budget amidst a cross-current of conflicting and contradictory demands that could result in a grand solution that ends the state’s chronic budget deficits, another patchwork fix to muddle through the year or the type of budget standoff between the governor and lawmakers that has plagued Illinois, Kansas and several other states recently. After nearly a decade of cuts in spending on state government, professors are leaving Louisiana’s colleges and public universities to take more attractive jobs elsewhere, some of the state’s technical and community college campuses are facing possible closure and the state’s roads are crumbling while traffic jams are worsening.

The Advocate’s Lanny Keller writes that a new report by the Louisiana Budget Project offers a blueprint for fiscal reform.

As with all hangovers, though, the temptation for another hair of the dog is going to be there, and it is hardly clear if the medicine is going to be an attractive alternative. Given the recurring nature of the state’s financial crises since former Gov. Bobby Jindal’s ill-advised tax cuts of 2008- not the only problem, but as the new Budget Project report makes obvious, the main problem- conservative and liberal economists and others in between have found similar prescriptions needed. But the Lenten report by Budget Project analyst Nick Albares lays out the issues with a clarity that ought to move even scaredy-cat legislators off the neutral ground.

 

Per capita cap to Medicaid would mean cost shift to state

House Republican leaders have announced that they plan to include either a Medicaid “per capita cap” or a Medicaid block grant as part of the legislation to repeal the Affordable Care Act (ACA). As the Center on Budget and Policy Priorities’ Edwin Park explains, this would shift significant costs to states and endanger health coverage for millions of Americans.

A Medicaid per capita cap would shift large and growing costs, as well as substantial risks, to states. That would put increasingly severe pressure on state budgets and likely lead to significant Medicaid cuts affecting low-income beneficiaries and the health care providers and health plans that serve them. While federal funding under a per capita cap would rise if Medicaid enrollment grew (unlike with the funding formula under a block grant), the federal funding cuts a per capita cap imposes would result in states making considerably fewer people eligible or otherwise limiting enrollment. Moreover, like a block grant, a per capita cap would not respond to greater-than-expected medical cost growth and the impact of the aging of the population.

 

Louisiana could lose federal transportation dollars

While conversations continue about the future of federal infrastructure investment, Louisiana could lose out on current levels of federal funding if the state doesn’t provide the necessary matching dollars. That’s according to Secretary of Transportation Shawn Wilson in a report from The Advocate’s Will Sentell:

That could happen as early as next year and could cost the state up to $150 million in the first year and $300 million in the second, he said. The state typically gets between $650 million and $700 million per year in federal transportation aid. “The exponential impact is significant,” Wilson said. House Transportation Committee Chairman Kenny Havard, R-St. Francisville, differs with Wilson on some transportation issues but agrees that the potential for a loss of federal aid is real. “I don’t think it is a scare tactic,” Havard said. “I think it truly is a reality.” 

Meanwhile, New Orleans Mayor Mitch Landrieu will join a delegation of mayors in DC this week to push federal lawmakers for increased infrastructure investment.

 

Dillard president speaks out on Pell Grants

In a post on Medium, Dillard University President Walter M. Kimbrough discusses what he had hoped to communicate at a recent White House meeting.

Fifty years ago a philosophy emerged suggesting education was no longer a public good, but a private one. Since then we’ve seen Federal and State divestment in education, making the idea of education as the path to the American dream more of a hallucination for the poor and disenfranchised…Therefore we must: Raise the maximum Pell Grant, which has hit a 40-year low in purchasing power relative to college costs and index it permanently to account for inflation; Restore year-round Pell Grants that enable students to finish college faster and with less debt; And remove time limits to benefit growing numbers of part time students who may require more than 12 semesters to graduate.

Among the unfunded priorities in Gov. Edwards’ recent executive budget proposal are the need-based Go Grant program for Pell-eligible students and the TOPS merit-based scholarship.

 

Number of the Day

$54 billion – cut proposed by President Donald Trump to non-defense discretionary (NDD) spending–  which funds key priorities like education and job training, clean water, scientific and medical research, veterans’ medical care, and homeland security (Source: Center on Budget and Policy Priorities)