A Medicaid trust fund for the elderly. The Coastal Protection and Restoration Authority. The health plan for state workers. Pension fund payments for probation and parole officers. Those are just a few of the funds that state legislators raided in recent years so the money could be spent on ongoing government operations. All told, such fund raids depleted the state’s assets by $2.4 billion over a four-year period, according to a new audit. The Nola.com/Times-Picayune editorial board writes that enough is enough, and that it’s time for legislators to stop jumping from crisis to crisis and make the necessary reforms.
The sales tax is set to expire July 1, 2018, and the state is facing a more than $1 billion drop in revenues. Lawmakers refused to deal with that “fiscal cliff” this year, but they will have to come up with a solution before July. Some House leaders have resisted replacing the sales tax with another revenue stream. But they haven’t come up with a way to cut $1 billion from the state’s $9.4 billion general fund without slashing essential services. Legislators ought to reform the way Louisiana raises and spends money as they close the gap in the next budget.
Failure to reauthorize CHIP hurts children and state budget
Congress approved an emergency spending bill this week, which means lawmakers have two more weeks to agree on a bill to fund the federal government and reauthorize the Children’s Health Insurance Program, which expired on Oct. 1. The stakes are big for Louisiana, which only has enough money to pay for CHIP (financed with a mix of state and federal dollars) through mid-January. Gov. John Bel Edwards sent a letter to the state’s congressional delegation outlining the gains Louisiana has made through LaCHIP:
LaCHIP now covers more than 122,000 Louisiana children with a full spectrum of care. Thanks to LaCHIP, we are proud to boast one of the lowest uninsured rates among children in the nation. Consequently, since 2003 Louisiana’s rate of uninsured children fell from 11.1 percent to just 3.8 percent in 2015….This program is of utmost importance to our Louisiana families and I implore you to act quickly to reauthorize it. Caring for Louisiana’s vulnerable children and giving them a healthy start at life pays enormous dividends for the health of our state. Please help us continue this good work.
Not only would failing to reauthorize CHIP hurt Louisiana families, but it would also exacerbate the ongoing budget crisis Louisiana is facing. Julia O’Donoghue with Nola.com/The Times-Picayune explains:
Losing federal funding would also cause the state’s already daunting budget crisis to grow even larger. Due to federal regulations, the state would still be on the hook for covering 115,000 children’s health insurance through September 2019 — but without the federal money to help foot the bill. This means Louisiana would have to find an additional $50 million through June 30 and then another $126 million in the next budget cycle to cover the program. State health officials said they would likely have to cut other health programs to cover the costs, officials said earlier this week.
More bad news for middle-class families
Hundreds of thousands of Louisiana households that claim tax deductions for mortgage interest, property taxes or donations to charity would lose that ability under the House and Senate tax bills, according to a new report from the Institute on Taxation and Economic Policy (ITEP):
The House and Senate’s tax plans would have significant impacts on all of these deductions. But the rushed nature of the debate, combined with the fact that many of those changes would happen indirectly—because of the elimination of the state income tax deduction or increases to the standard deduction, for instance—means that many of those impacts are not well understood by ordinary Americans or perhaps even their representatives in Congress. As ITEP has argued before, there are good reasons to consider reforming itemized deductions to improve their effectiveness or fairness. But the House and Senate’s approach to that task leave much to be desired.
Louisiana is a prime example of how middle-class families will be affected. Under the House bill, 62 percent of high-income households (Top 1 percent) in Louisiana would receive a deduction on their property taxes, while only 1 percent of middle-income households (middle 60 percent) would receive the same deduction.
Families benefit from Medicaid expansion
Louisiana knows firsthand the benefits of Medicaid expansion, with nearly 450,000 Louisianans acquiring health insurance since July 1, 2016. However, new research from Georgetown University Health Policy Institute Center for Children and Families reiterates the effects of expanding the popular program and its benefits to both children and parents.
In fact, a recent study in the respected journal Health Affairs found that extending Medicaid eligibility to more adults (including parents) under the Affordable Care Act meant over 700,000 children gained health coverage nationwide. This effect was largest when parents got Medicaid coverage in the 32 states (and DC) where Medicaid was expanded. If the remaining 19 non-expansion states expanded Medicaid, 200,000 additional children would gain health coverage through existing programs. And a new study in the journal Pediatrics found that when Medicaid is expanded to parents, children in low-income families were much more likely to get regular well-child visits – meaning covering parents directly resulted in better care for children.
Number of the Day
$2.4 billion – Decrease in net state assets from 2013 to 2017, thanks in large part to the Legislature tapping dedicated funds to pay ongoing expenses in government. (Source: Louisiana Legislative Auditor)