The Advocate’s Lanny Keller argues in his weekly column that proximity to the 2019 elections means there’s still hope for a budget deal between Gov. John Bel Edwards and House GOP leaders. As legislators prepare to return to their districts and make the case for voters’ continued support, they’ll want to rack up as many accomplishments as they can. That includes securing funding for new infrastructure projects, over which the governor has special authority. The political calculus suggests that for many House members, earning favor with Gov. Edwards, or at least opening themselves up to negotiation on fiscal solutions, is the wise position to take the year before an election:
There are good reasons on the merits for the Legislature to agree to all or most of the long-term tax plans recommended last year by a panel of experts. The governor is backing some of them. As Edwards is eager to note, nobody thinks our system is efficient or effective in today’s world; an overhaul of the tax system is long overdue. But aside from those pure merits, the political implications of a governor showing he is getting things done in vote-rich metropolitan areas is a lesson in practical politics that members of the Legislature are probably not going to miss.
Government shutdown ahead?
Congressional Republican leaders re offering a six-year funding extension for the Children’s Health Insurance Program (CHIP) as part of negotiations to keep the federal government operating through February 16. Funding authorization for CHIP expired on Sept. 30, and Louisiana is scheduled to run out of federal money by March, threatening health coverage for more than 120,000 children in the Pelican State. The budget resolution does not, however, address the expiring Deferred Action for Childhood Arrivals program, which will likely be a major point of contention heading into Friday’s deadline. Scott Wong, Peter Sullivan and Melanie Zanona of The Hill write:
In the House, however, Democrats are adamantly opposed to any spending bill that does not include protections for recipients of the Obama-era Deferred Action for Childhood Arrivals (DACA) program. Trump rescinded the program last year and gave Congress until March 5 to come up with a permanent legal solution, but bipartisan negotiations on a DACA deal have been at a standstill in the wake of President Trump’s disparaging remarks about “shithole countries.” That means House Speaker Paul Ryan (R-Wis.) will need to rely on GOP votes to pass the fourth temporary funding patch since September.
Internet sales tax collections begin
The state Department of Revenue is rolling out a plan aimed at getting Louisianans to pay sales taxes on purchases made online. The Associated Press’s Melinda Deslatte reports that Louisiana residents who’ve shopped big box stores online can expect to receive a notice of taxes due, with the first of the annual notices going in the mail Jan. 31. Revenue Secretary Kimberly Robinson couldn’t estimate how much revenue would be raised, nor could the Legislative Fiscal Office when the bill mandating attempted collection passed in 2016:
The notice letters are supposed to include the total amount made in purchases in the prior calendar year, including a breakdown of dates and purchase amounts, along with a “clear statement that Louisiana use tax may be due,” the revenue department says. The letters will arrive in an envelope that is marked in all caps with the words: “Important Tax Document Enclosed.” They also could be sent electronically if the shopper agreed to that in writing. Retailers also must send annual reports to the revenue department, detailing what Louisiana customers spent with the store in the prior year.
Higher wages accompany job growth
New York is preparing to join the seven states that have abolished a two-tiered minimum wage – one for tipped workers and another for everyone else – and Washington, D.C. activists are attempting a ballot initiative on the issue. Like several other states, Louisiana relies on the federal government to set the minimum wage, which is currently $7.25 per hour for most employees and $2.13 per hour for tipped employees. Opponents often claim that a higher minimum wage kills jobs. According to Michael Paarlberg and Teófilo Reyes of The Washington Post, however, a study of the most recent tipped wage raise in New York suggests that isn’t so:
What we found was that in the year following the increase, full-service restaurant workers saw their average take-home pay (including wages and tips) go up 6.4 percent, a larger increase than in any neighboring state (none of which increased their tipped minimum wage in that period), while the number of these workers increased by 1.1 percent, or 3,751 new jobs.
Number of the Day
$2.13 – The minimum hourly wage for tipped workers in Louisiana. (Source: US Department of Labor)