A frequent talking point among opponents of tax reform is that Louisiana’s structural budget problems can be fixed by removing the legal restrictions that protect various pots of money. These “statutory dedications” make up nearly 13 percent of the state budget, and some insiders insist that repealing these dedications so the money can be spent elsewhere is the magic elixir that will solve the state’s fiscal woes. The Advocate editorial board says it’s not nearly as simple as it sounds.

Sometimes, this is money that is not really the state’s money, although it formally goes through the appropriations process; rather, it could be industry fees that are passed by the Legislature, usually with the agreement of the industry involved, to promote something like, say, equine studies for agriculture or racetracks. Often, the dedications carve out state revenues that go to local governments — maybe even local sports facilities. … We also note, given the impasse between Edwards and the House GOP’s anti-tax conservatives, how little trust and cooperation the current budget crisis has engendered. Once you start suggesting repeal of dozens of dedications — each precious to a particular interest group — one enters a political minefield.

House taking advice from Washington

House Republicans – who are the primary roadblock to solving the $1 billion “fiscal cliff” in a responsible fashion – are reportedly planning to offer ideas this week to counter the governor’s plan. To help them figure things out, state House leaders met with U.S. Sen. John Kennedy  during last week’s Washington Mardi Gras celebration. Julia O’Donoghue of Nola.com/The Times-Picayune reports:  

While the Republicans met with Kennedy, Edwards was and continues waiting on Barras to deliver a list of budget controls the House GOP might want in exchange for voting to renew or raise taxes. The governor expected to hear from the speaker by the end of the day Monday.  Barras and Edwards, a Democrat, attended Washington Mardi Gras for a few days, but the two did not meet to discuss the budget. On Friday, Barras said proposals for closing Louisiana’s billion-dollar budget gap had not been nailed down yet and were changing every few hours.

Katie Gagliano and Sarah Gamard, reporting for Manship School News Service in Gambit, said House leaders plan to announce their “ideas” for budget reform today, and announce which revenue-raising options they might support by Friday.

Rep. Julie Stokes, R-Kenner, said she has heard several revenue-raising ideas floated among GOP legislators, including a possible two-year renewal of half of the one-cent increase that was added in 2016 to the state’s portion of the sales tax.  That increase, which brought the state’s share of the sales tax to five cents, is due to expire at the end of June. It was meant to give the Legislature time to come up with a permanent solution.

Opportunity Zones

The Great Recession may have ended in June 2009, but many people in the country have yet to see the benefits as economic growth and job growth have disproportionately been concentrated in large cities. From 2010-2016, metropolitan areas with at least one million people have accounted for nearly three-quarters of the nation’s job growth. The New York Times’ Jim Tankersley reports on a little-noticed part of the federal tax bill that seeks to counter this imbalance by creating “Opportunity Zones” that will lure investment to neglected areas:

It instructs governors in each state and territory, along with the mayor of the District of Columbia, to designate Opportunity Zones from a pool of low-income, high-poverty census tracts, subject to certification by the Treasury secretary. States cannot nominate all their qualifying tracts for that status — they are limited to only a quarter of eligible tracts. Investors, like banks or hedge funds, then create Opportunity Funds to seed either new businesses in those areas, expansions of existing ones or real estate development. The people who invest in Opportunity Funds are able to minimize their tax burden through preferential treatment of capital gains.

Early child care is essential

Access to early child care is critical for success later in life, as 80 percent of brain development takes place between birth to age 3. Unfortunately, a dismal amount of at risk children age 0 to 3 – less than 15 percent – have access to any publicly funded early care in Louisiana. Melanie Bronfin, executive director of the Louisiana Policy Institute for Children, explains in an Advocate op-ed how the lack of access to early care negatively affects children and families for years to come and urges fellow citizens to take notice when the issue is discussed during the legislative session.

The repercussions of this are felt throughout the K-12 education system and beyond as a child struggles to keep up in a classroom or even stay in school as he or she ages after starting school behind. But even closer to home, imagine the stress working parents feel as they turn their child’s care and development over to a private provider where the quality of care may be insufficient. More than six of 10 children in our state under age 5 live in homes where both parents, or their single parent, work, and 40 percent of all of the primary breadwinners in Louisiana are working moms. Sixteen percent of parents with young children quit their full-time jobs because of child care issues. Two out of five working parents missed a day of work over the previous three months; one out of five went from full- to part-time employment, and more than one out of 10 turned down a promotion because of child care issues.

 

Number of the Day
12.7  – Percent of 2018-2019 executive budget that is made up of statutory dedications (Source: Division of Administration)