Back from the brink

Back from the brink

The Legislature’s special session nears its midpoint with a critical package of tax and budget bills having cleared their most difficult hurdle. Meeting for a rare Sunday afternoon session, the House Ways & Means Committee approved two major tax bills - one on sales taxes and one on income tax - while the Health & Welfare Committee advanced Medicaid bills sought by conservatives.

Number of the Day

$432 million - Total projected revenue raised by the tax bills approved by the House Ways & Means Committee on Sunday. That still leave the Legislature $260 million short of what’s needed to address the July 1 fiscal cliff. (Source: Nola.com/The Times-Picayune)

The Legislature’s special session nears its midpoint with a critical package of tax and budget bills having cleared their most difficult hurdle. Meeting for a rare Sunday afternoon session, the House Ways & Means Committee approved two major tax bills – one on sales taxes and one on income tax – while the Health & Welfare Committee advanced Medicaid bills sought by conservatives. The AP’s Melinda Deslatte, as always, was there:

After a week without votes on tax bills, the House committee voted 12-5 Sunday to advance a measure that would temporarily renew one-quarter of an expiring 1 percent sales tax and temporarily eliminate some sales tax breaks, to raise an estimated $300 million a year. A separate 10-7 vote advanced a proposal by Rep. Walt Leger, a New Orleans Democrat, that would cut tax breaks for middle- and upper-income taxpayers who itemize deductions on their income tax returns, to raise $79 million a year. The approach is backed by Democrats.

The bills would not represent a major reform of Louisiana’s troubled tax structure, nor would they raise sufficient revenue to fill the $1 billion hole caused by temporary taxes that expire on July 1 – a fact that was pointed out by members from both sides of the aisle.

Rep. Barry Ivey, a Baton Rouge Republican, opposed the tax measures, lamenting that state lawmakers have refused efforts to do a more wholesale rewrite of Louisiana’s tax laws. Lawmakers spurned Ivey’s proposals last year, along with a tax package recommended by a task force of tax and policy experts. “It’s a money grab to solve a legitimate problem,” Ivey said. “We’re basically doing the lazy, easy thing.” Leger replied: “It’s become obvious that real, long-term structural reform is not possible at this time.”

The next big test comes today, when the bills – along with a plan by House Speaker Taylor Barras to set an arbitrary limit on what the state can spend each year – face votes on the House floor.

 

Re-working the Medicaid work requirement

The Medicaid work requirement bill (HB 3) sought by House conservatives as a condition of agreeing to fix a $1 billion budget hole has been heavily amended by the Health & Welfare Committee and is measurably better as a result. The amendments, approved Sunday, calls for the Louisiana Department of Health to submit a plan to the health care committees in the state House and Senate that will connect adult Medicaid recipients with work or “community engagement” opportunities. The Advocate’s Elizabeth Crisp and Mark Ballard:

The House Health & Welfare Committee agreed to a scaled-back version of legislation that will instruct the state Department of Health to develop work requirements for the Medicaid health care program for the poor. The legislation was amended to include a line that it would not have the effect of forcing people to lose their insurance. Gov. John Bel Edwards’ administration supported the work requirement proposal that is being sent to the full House for consideration. “This is a holistic bill; it’s a non-punitive bill that we have worked with (sponsor Rep. Frank Hoffman) on,” said Louisiana Department of Health Secretary Dr. Rebekah Gee.

Loyola’s Bill Quigley and Travis England of the National Center for Law and Economic Justice argue that work requirements are illegal under federal law, in addition to being bad policy.

Work requirements violate the express terms of the Medicaid Act. Unlike other federal-state partnerships, such as Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program the Medicaid Act neither requires nor permits the imposition of work requirements. Restricting medical services to those who can demonstrate they are working or meeting other work-related reporting obligations is plainly inconsistent with the purposes of Medicaid. Such a proposal does not “furnish” medical assistance; it impedes access to it.

 

Oil and the state budget

It wasn’t that long ago in Louisiana that revenue from oil and gas extraction made up more than 40 percent of the state general fund budget. Today that figure is 4.3 percent. The Advocate’s editorial board notes that the mineral largesse of years past caused state government to start funding priorities at the local level that remain embedded in the state budget even as Louisiana struggles to pay its bills.

Today’s crisis in the State Capitol involves disputes over the non-mineral revenues that are nine out of 10 of the dollars in the general fund. But the numerous grants of state revenues to locals have never gone away, nor have most of the tax breaks to businesses and individuals, and despite a game plan for rationalizing the state tax system, lawmakers refuse to do any heavy lifting. Those who don’t want to pay the bills are not fiscal conservatives. They’re in denial, waiting for an oil boom to save them from their own poor judgment.

 

Louisiana’s vanishing coast

The remarkable series of stories in the New York Times this weekend – published after a yearlong collaboration with Nola.com/The Times-Picayune – is far too rich and complex to be summarized in a paragraph. The reporters tell the story of the town of Lafitte to illustrate the larger danger faced by coastal communities that are slowly being consumed by the Gulf of Mexico.

Last year, Louisiana officials acknowledged for the first time that even with a vast restoration program, even with tens of billions of dollars they do not have, they no longer believed they could build land fast enough to offset the losses. Plotted on a map, their projections show 40-mile swaths, encompassing Jean Lafitte and everything below it, splashed in red to denote that, without action, they will disappear within decades. The crisis has become existential, with policymakers confronting choices about which communities they can afford to rescue.

Do yourself a favor and set aside some time in your day to read the whole thing, if you haven’t already.

 

Number of the Day

$432 million – Total projected revenue raised by the tax bills approved by the House Ways & Means Committee on Sunday. That still leave the Legislature $260 million short of what’s needed to address the July 1 fiscal cliff. (Source: Nola.com/The Times-Picayune)