Conservatives in the Legislature are once again combing through the state budget in search of things to cut rather than raising the revenue needed to support critical services. One task force is looking at dedicated funds, while another is examining the Medicaid program. But the inimitable Jim Beam of the Lake Charles American-Press notes that Louisiana’s taxes are low compared with other states’ – with the notable exception of the sales tax.
Louisiana had the nation’s third earliest Tax Freedom Day this year (April 7), which is the first day of the year in which citizens have theoretically earned enough income to pay their taxes. Mississippi was first on April 5 and Tennessee second on April 6. The state and local tax burden in Louisiana in 2012 was $2,950 per capita, which was 45th place. Only Texas, Tennessee, Wyoming, South Dakota and Alaska had lower tax burdens. New York was in first place with a tax burden of $6,993. In 2014, Louisiana’s state and local tax collections totaled $3,889 per capita to rank 39th. North Dakota was in first place with state and local tax collections totaling $9,746 per capita. Thanks to an extra one percent tax added last year that is supposed to go off the books next July, Louisiana’s state and local sales tax is a combined 9.98 percent, highest in the country.
The Advocate’s editorial board struck a similar note, writing that the main thing missing in the state’s budget debate is political will.
What has to be done has already been demonstrated for all to see, in public sessions of the tax policy committee earlier set up by lawmakers. But those recommendations are politically difficult and thus the Legislature kicks the can down the road one more time. Maybe July 1 is a real deadline, but at this point, at least a short-term renewal of all or part of the “emergency” sales tax will probably be necessary, insiders say. We don’t like that a bit: Legislators should have the courage to really fix this problem, permanently, not regress to the 1990s when “temporary” sales taxes had to be renewed every two years.
Spotlight on Medicaid managed care
When then-Gov. Bobby Jindal unilaterally turned over most of Louisiana’s Medicaid program to private insurance companies, state lawmakers were loath to criticize. But now that those contracts are up for renewal, many of the same legislators are calling for stronger oversight. The AP’s Melinda Deslatte reports:
Senate Finance Chairman Eric LaFleur, A Ville Platte Democrat, said he and other lawmakers didn’t dissect the deals enough when they were first put in place. He criticized the Jindal administration contracting process as too hurried, with too few quality assurances. “I think we were in a rush to privatize to put that on (Jindal’s) checklist. That’s not to say it’s no better. I think care is probably better,” LaFleur said. “But overall the process by which we picked these companies is not something a shrewd businessman should do.” However, LaFleur said uprooting companies quickly now could jeopardize access to services. Health department officials say the shift to managed care lessened growth in Medicaid costs by better coordinating patient care. Health Secretary Rebekah Gee said the contract extensions include more accountability and her department will do a more wide-ranging system redesign as it rebids the work.
One area likely to see extra scrutiny is prescription drugs, where legislators are zeroing in on “pharmacy benefit managers” that contract with private insurers and serve as middle managers in delivering prescription drugs to people covered by Medicaid. Again, Deslatte:
When a Medicaid patient gets a prescription from a pharmacy, the managed-care companies reimburse the pharmacies for the medication through “pharmacy benefits managers,” firms that are either owned by the managed-care companies or have a contractual relationship with them. The pharmacy benefits manager, however, often charges the managed-care company more for the drugs than the amount paid to pharmacists and then keeps the difference — in addition to a fee already paid to the company for its work, according to the task force letter. The health department’s contracts do not prohibit such financing arrangements, but do limit the payments for such “non-medical expenses” allowed under the deals, agency spokesman Bob Johannessen said in an email.
Race and economic success
Children who grow up poor are more likely to experience poverty as adults. In Louisiana and elsewhere, African American children are far more likely than their white counterparts to be poor. Policy decisions made at the state and national level can help ensure that all children grow up with the tools needed to become successful adults. To calculate how children of different races are faring at the state level, the Annie E. Casey Foundation has updated its Race for Results study, and the results for Louisiana are not great. Lea Skene reports for The Advocate:
Louisiana scored relatively poorly for all races when compared to other states, but scores were significantly lower for African-American children than for white children — the two largest racial segments of the state population. On a scale of 1 to 1,000 where a higher number means children have a better chance at prosperity later in life, white children in Louisiana scored 625 while black children scored 276 based on census data from 2013 to 2015. For African-American children, Louisiana received one of the lowest scores among the 44 states for which data was available — Ohio received the same score as Louisiana while Michigan scored lowest of those 44 states. (Data was not available for Hawaii, Montana, New Hampshire, South Dakota, Vermont and Wyoming.)
‘A tale of two countries’
The open enrollment period for people wishing to sign up for health coverage through the Affordable Care Act begins on Wednesday. While sabotage attempts by President Donald Trump’s administration is threatening to cause chaos and confusion across the country, it’s a very different story in the 12 states that elected to set up their own health insurance exchange instead of defaulting to the federal government. The AP’s Kyle Potter:
The 12 states with their own exchanges are free to chart their own course and make it easier on consumers. Nine have extended open enrollment beyond Dec. 15 – by a week in some states and six weeks in others. They also can make their own decisions about spending because their budgets are free from Washington politics. State-run exchanges typically pay for their operations through fees charged to insurers on plans sold through their marketplace. Minnesota, Colorado and Washington will continue heavy advertising for their exchanges. Thousands of enrollment specialists will continue to help consumers navigate insurance plans in California and New York. For many of these states, 2018 looks like a payoff for the political risks and costs they assumed when they decided to set up their own exchanges.
Number of the Day
74,000 – Number of children in Louisiana who hail from immigrant families (Source: Annie E. Casey Foundation)