The Medicaid program turned 52 years old this week. That’s how long it’s been since President Lyndon B. Johnson signed into law the unique federal-state partnership that finances health coverage that nearly 1.6 million Louisianans now depend on. Medicaid covers the majority of births in Louisiana, as well as most nursing home stays. It covers 714,000 children in Louisiana – and, thanks to a long-overdue policy change, more than 433,000 adults struggling to make ends meet now have coverage as well. LBP senior policy analyst Jeanie Donovan celebrates this important program by highlighting 5 Louisiana Medicaid facts in a new blog:

Medicaid expansion – which provides coverage for more than 433,000 Louisianans – is actually saving our state money. The state’s cost share will increase from 5 percent to 10 percent by 2020, and the projected state cost share for Louisiana under current law will be just over $474 million by 2026. When fees from insurers (which will cover $290.8 million of the state’s expansion costs in 2026), and savings from reduced uncompensated care are taken into account, Louisiana’s Medicaid expansion is not only sustainable, it will be a source of continued savings in the state budget. Without Medicaid expansion, the state projects it would spend $317 million in uncompensated care for the uninsured in 2026, compared to the net $183 million the state expects to pay for Medicaid expansion.

Misguided job creation strategies

Recent research has shown where economic development should focus: policy should center on encouraging entrepreneurship, helping new businesses to survive and enabling businesses with the potential to become high-growth firms to fulfill that potential. However, state economic development efforts remain focused on trying to lure out-of-state businesses. Sam Karlin of the Greater Baton Rouge Business Report tells the story of one recent failure in the capital region.

The state was offering Stixis $115 million—more than three times what the state spent on veterans services that year—in subsidies over a decade; all the India-based firm had to do was meet the job numbers it was promising. That meant Stixis had to create 265 new jobs by this year, and more than 900 by 2019. Today, Stixis has four full-time employees. … So why did Stixis fail to create all the jobs that were promised? Why did it fail to create practically any jobs? A unanimous answer is hard to come by—the state, other tech companies, Stixis, and education leaders all point in somewhat different directions. Stixis blames the state’s lack of resources in finding talent through a workforce recruitment program. LED blames Stixis’ unreasonable demands. Higher education leaders say K-12 could do a better job training students in the basics of coding, and tech leaders simply say the pool of workers is too small.

While Stixis never received the millions in tax credits (they were tied to the job creation metrics), this is yet another reminder that economic development strategies should recognize that the vast majority of jobs are created by businesses that start up or are already present in a state – not by the relocation or branching into a state by out-of-state firms.

Immigrants and the economy

This week, U.S. Sens. David Perdue (GA) and Tom Cotton (AR) released the RAISE Act, which would drastically reduce legal immigration to the United States. Backed by President Donald Trump’s administration, the proposal would cap refugee admissions, cut total immigration in half by eliminating diversity visas and cutting family-based visas and create a new visa system that awards points to potential immigrants based on characteristics such as speaking English and having higher education levels. The Brookings Institution’s William H. Frey explains that in many places, international immigration is offsetting losses from “domestic migrants” – people moving from one part of the U.S. to another.

In endorsing a newly proposed bill, President Trump claims that legal immigration levels should be cut in half and that greater priority should be placed on those with high skills. Both of these claims fly in the face of census statistics that show that current immigration levels are increasingly vital to the growth of much of America, and that recent arrivals are more highly skilled than ever before. Current immigration is especially important for areas that are losing domestic migrants to other parts of the country including nearly half of the nation’s 100 largest metropolitan areas.

According to Frey’s analysis of Census data, Baton Rouge had a net loss of 2,313 residents due to domestic migration from 2010 – 2016. However, this was offset by a gain of 7,503 people via international migration. In April, a group of 1,470 economists from across the ideological spectrum wrote to Congressional leaders about the benefits of migration to communities.

The undersigned economists represent a broad swath of political and economic views. Among us are Republicans and Democrats alike. Some of us favor free markets while others have championed for a larger role for government in the economy. But on some issues there is near universal agreement. One such issue concerns the broad economic benefit that immigrants to this country bring.

A new path on criminal justice

The Pew Charitable Trusts’ Adam Gelb walks through the package of criminal justice reform bills passed by the Legislature and signed into law by Gov. John Bel Edwards earlier this year.

The bipartisan package of 10 bills is designed to steer less serious offenders away from prison, strengthen alternatives to imprisonment, reduce prison terms for those who can be safely supervised in the community, and remove barriers to successful re-entry. The reforms should allow Louisiana to shed its status as the state with the nation’s highest imprisonment rate by the end of 2018. The state projects that the measures will reduce the prison and community supervision populations by 10 and 12 percent, respectively, over 10 years and avoid $262 million in spending. The state will reinvest an estimated $184 million of the savings in local programs to reduce recidivism and in services for crime victims.

And while the Dime was away for July, The New York Times’s editorial board praised the bipartisan reform package:

Meanwhile, Louisiana is following a growing number of states in applying an empirical, data-based approach. A politically diverse coalition of Louisianans understood that the state would see the benefits of reduced prison populations and increased public safety. And in the end their support made the reforms’ passage possible.

Number of the Day

4 – Number of jobs created by Stixis, a technology firm whose deal with the state required creation of 900 jobs by 2019 to qualify for tax credits. (Source: Greater Baton Rouge Business Report)