Louisiana faces a $1.2 billion “fiscal cliff” in July of 2018 when a number of temporary taxes – most notably a 1 cent sales tax – expire. Gov. John Bel Edwards’ administration and legislators failed to come to an agreement during the legislative session this year and will have to gather for another special session to fix the cliff. However, the governor insists he won’t call the special session without an agreement in place. To gather input on as he develops plans, Edwards is talking with business and community leaders throughout the state. Nola.com/The Times-Picayune’s Julia O’Donoghue has the story:

Gov. John Bel Edwards met behind closed doors with 21 Louisiana business leaders at the Capitol on Tuesday (Aug. 8) to discuss the state government’s looming $1 billion-plus budget gap. The governor is expected to hold several more meetings with business interests and legislators over the next few months to figure out how to will handle such a shortfall without closing public hospitals and colleges .

The Advocate’s Elizabeth Crisp reports that Edwards will also get feedback from community organizations such as Together Louisiana and the Council for a Better Louisiana.

“Their input is critically important as these business leaders are on the front lines – creating jobs and working to build a strong economy,” Edwards said in a statement. “It’s their ideas, combined with the input from legislators and other community leaders that will, hopefully, guide us as we look for consensus to avoid the fiscal cliff.”

Tax breaks get scrutiny at local level

Last year, Gov. John Bel Edwards signed an executive order that required businesses seeking local property tax exemptions to meet job creation metrics and also receive the blessing of local authorities before getting an exemption. Now, community organizations – led by the faith-based group Together Louisiana – are working to make sure local governments make decisions in the best interest of their people. The Advocate’s Andrea Gallo has the story from East Baton Rouge Parish:

The city-parish’s finance department is expected Wednesday to brief the East Baton Rouge Metro Council on the effect that the industrial tax exemptions have had on the city-parish budget. Together Baton Rouge estimates that just this year, city-parish government lost out on $9.4 million from the exemptions and that the East Baton Rouge School System lost out on $28 million.

Investing in people

With higher education emerging from the most recent budget battle without the deep cuts seen in recent years, leaders at LSU and Southern University are investing in their workforce. These gains could be short-lived if policymakers don’t come up with a sustainable revenue solution to the fiscal cliff. The Advocate’s Will Sentell has more:

“Our students and citizens are not well served by a revolving door of faculty and staff at Louisiana’s flagship university,” he (LSU president F. King Alexander) said. “To retain our most important asset — you — LSU must become competitive with the other great American universities, which makes this small step forward imperative,” according to the letter. Alexander in December said about 500 faculty members have left in the past nine years, including 27 assistant professors in 2015. LSU and other colleges and universities in Louisiana have suffered major budget problems for the past decade or so amid state budget problems.

Sabotage watch (cont’d)

Health insurers continue to live in limbo while awaiting word from the Trump administration about the cost sharing reduction (CSR) payments they’re owed, which help people afford deductibles and other out-of-pocket costs. Even if the administration stops the payments, enrollees are still entitled to them as long as a marketplace plan is available where they live. But insurers wouldn’t be compensated for providing CSRs. To cover the upfront cost, marketplace insurers would likely raise premiums. The New York Times’ Robert Pear has more:

“Most of us are hoping and praying that this gets resolved,” said David Shea, a health actuary at the Virginia Bureau of Insurance. “But that’s not the case right now.” Without the federal subsidies, insurers would need to get the money — estimated at $7 billion to $10 billion next year — from another source. And that means higher premiums, state officials said.

The Center on Budget and Policy Priorities is tracking all efforts by the administration to sabotage the Affordable Care Act. The “Sabotage Watch” is available here.

Number of the Day

99.999 – Percentile in the income distribution seeing the largest income gains. In the 1980’s the largest income gains went to low and moderate-income households. (Source: The New York Times)