Looking for leverage in the ongoing debate over Louisiana’s budget shortfall and the impending fiscal cliff, a bloc of Louisiana’s Democrats struck down a construction financing bill, which requires a two-thirds vote in order to pass. Democrats signaled that they were stalling House Bill 3 in an attempt to negotiate on the stand-still budget that the House passed that leaves $206 million on the table for the fiscal year beginning on July 1, as well as urging them to raise revenue in order to avoid the fiscal cliff that will occur when temporary taxes expire in 2018. The AP’s Melinda Deslatte has the story.
New Orleans Rep. Walt Leger, the top-ranking Democrat in the House, said the decision to bottle up the financing bill was born out of frustration that Republicans have refused to have “a meaningful conversation about how to repair our state” and end continued cycles of financial problems. “We feel like we’ve shown up here for the last two years and offered solutions to our budget situation, and every option has been rejected,” Leger said.
Republican leaders cried foul, accusing the minority Democrats of using “Washington-style” tactics to gain advantage. But it was 10 years ago this week that the House Republicans – then in the minority – used the same tactic.
Tax bills advance
Two bills that would eliminate the largest tax exemption in Louisiana’s personal income tax code, but transition the state to a “flat” personal income tax system advanced out of the House on Wednesday. House Bill 353 and House Bill 501, both sponsored by Rep. Julie Stokes, would allow voters to decide whether to accept a lower tax rate in exchange for no longer being able to deduct their federal income taxes from their state returns. Stokes would like Louisiana to shake the dubious distinction of being one of only three states to allow such a deduction. But the flat-tax component means the bill would do nothing to solve the $1.3 billion revenue shortfall that looms next year when a slew of temporary taxes expire. The Advocate’s Tyler Bridges reports:
The bills would place a proposed constitutional amendment on the October ballot asking voters to replace the current graduated individual income tax rate with a flat 3.95 percent rate. To get that rate, taxpayers would no longer be allowed to deduct their federal tax payments on their state tax returns. State Rep. Julie Stokes, R-Kenner, the sponsor of both bills, said swapping the tax break for a lower tax rate would be revenue neutral.
AHCA would ravage healthcare in America
The Congressional Budget Office released its updated estimate on the American Health Care Act, confirming what we already knew: the bill guts Medicaid, doesn’t maintain protections for people with pre-existing conditions and increases out-of-pocket health costs for many Americans. According to the report, 23 million Americans will lose their health insurance over the next decade. The plan would cut Medicaid funding by $834 billion over 10 years, resulting in the loss of health insurance for 14 million people. The Center on Budget and Policy Priorities outlines how these cuts will affect Louisiana.
Louisiana would have to raise taxes or cut other parts of its budget by $10 billion over 10 years to maintain Louisiana Medicaid, including the Medicaid expansion to low-income adults…The House Plan (the American Health Care Act) would require Louisiana to spend as much as 3.8 times more than under current law to continue its Medicaid expansion starting in 2020, which would effectively end the expansion.
Trump budget shifts costs to states
President Donald Trump’s proposed executive budget would cut more than $1 trillion to critical social programs in exchange for an increase in defense spending and tax cuts for the rich. However, as Michael Leachman of the Center on Budget and Policy Priorities explains, what is alarming is the massive cost shift to states as a result of these devastating cuts.
President Trump’s budget would shift massive new costs to states by cutting federal funding for health care, food assistance, and many other areas. States can’t afford to assume these costs without raising taxes significantly so, instead, they’d very likely cut many key investments and public services. States are in no position to assume the massive additional costs that the Trump budget would impose.
Unfortunately for Louisiana, the Trump budget wouldn’t just shift costs to us, it also proposes taking up to $140 million a year by repealing offshore oil revenue sharing by Gulf states.
Today, LBP will release Pensions in the Parishes 2017, an update of its 2014 report that highlights the importance of state pensions for working families and local economies. A press conference will be held in the Capitol Press Room at 11:30am. All the details, including the full report, will be posted on LBP’s website at noon.
Number of the Day
23 million – Number of people who would lose health insurance coverage if the House-passed AHCA becomes law. (Source: Congressional Budget Office)