After months of behind-the-scenes conversations and public posturing, Gov. John Bel Edwards is expected to decide today whether to call the Legislature into a special session to deal with the state’s $1 billion fiscal cliff. Edwards has said previously that he won’t call a session without an “agreement in principle” with House leaders on a revenue package to replace some of the $1.4 billion in temporary taxes and tax-credit rollbacks that expire on July 1. It’s unclear whether such a deal will come together today as the governor meets with House Speaker Taylor Barras and Senate President John Alario. But the AP’s Melinda Deslatte reports that all signs point to a session starting on Feb. 19:
Edwards is pushing a tax package that could raise or maintain higher taxes on businesses and middle- and upper-income earners. But even his proposal isn’t enough to close the full budget shortfall. It’s unclear where there may be agreement between Edwards and lawmakers. Barras said an Edwards proposal to charge sales taxes on services like cable television and Netflix is a non-starter with House Republicans. Some GOP lawmakers are suggesting renewal of all or part of an expiring 1 percent state sales tax, but Edwards opposes the idea.
House leaders have rejected tax reform proposals advanced by a task force they created in 2016, and similar ideas laid out by LBP, the Tax Foundation and a team of public finance economists. Instead, as Julia O’Donoghue reports for Nola.com/The Times-Picayune, they are proposing to renew part of the “temporary” sales tax enacted in 2016.
Barras said the House Republican leadership is looking at a budget-closing plan that would retain a higher state sales tax rate beyond July 1 by a quarter or half a percent. Under certain scenarios being discussed, the speaker has said a quarter of a percent of the higher sales tax rate could be permanent and another quarter of a percent of the higher sales tax rate could be temporary.
GOP leaders also have issued a set of demands as a condition of agreeing to fill part of the budget shortfall, including work requirements for some Medicaid recipients and a new, arbitrary limit on what the state can spend each year. None of the budget “reforms” would help address the fiscal cliff.
The critical importance of early childhood
It’s no secret that the best public investments – in terms of long-term returns – come from money spent on high-quality early care and education programs. The brain development that happens before age 4 has lifelong implications. But this lesson is sometimes lost on state policymakers, as Nola.com/The Times-Picayune notes in its lead editorial.
The Legislature passed a comprehensive preschool act in 2012, acknowledging the connection between early education and a child’s later academic success. But lawmakers have yet to provide money for all the provisions. State funding for pre-kindergarten classes was cut for the current budget year, and lawmakers added no money to a child care assistance program for low-income parents who are working or attending school. The “Losing Ground” report noted that the Legislature has decreased funding for early childhood education for eight years in a row. “What we have documented in this report with LSU, Loyola and Entergy’s help is how critical these programs are to our employers and employees. Six out of every 10 mothers with an infant will return to work in the first year of the child’s life,” Louisiana Policy Institute for Children director Melanie Bronfin said when the report was released. “Yet the lack of stable, accessible programs in our state greatly impacts their productivity as well as their employer’s.”
The high cost of being poor
Bank of America announced recently that a basic checking account would come with new fees totaling nearly $150 a year. But those fees are waived for consumers who have minimum balances above $1,500. As the Brookings Institution’s Aaron Klein writes, it’s just the latest way that America’s financial services industry punishes low- to moderate-income working families while benefiting the wealthy.
Antiquated and unnecessarily slow, this system indirectly imposes large costs on middle and working class families, in the process actually redistributing money up the income scale. … Meanwhile, credit cards that lower-income consumers are ineligible to receive reward wealthy users for money spent. The richer you are, the better your rewards. And while our system operates at a scale larger than major U.S. government programs, it has largely gone unnoticed by policy makers and income inequality scholars. As a result, the less money you have, the more money you spend just to be able to use money.
Making the most of second chances
The landmark criminal justice reforms approved by the Legislature last year have led to some 2,000 non-violent offenders winning early release from their sentences. The Advocate recently profiled four of them to see how they are coping with life after prison, which caught the attention of the inimitable Jim Beam of the Lake Charles American-Press.
Now, months after the release of some 2,000 prisoners last November, a clearer picture is beginning to emerge. The newspaper reported that of the 2,000 prisoners released, 76 have been re-arrested. Corrections officials said that number is not any higher than normal.
He then quotes Collis Temple Jr. of Baton Rouge, who owns a company where 53-year-old John Trahan has begun rebuilding his life after serving time on a drug charge.
“He is a model citizen. The reality is that people like John who’ve made mistakes, it’s important and imperative that we give them a holistic opportunity to come back to society and live like normal, regular folks. If we don’t do that, we’re not really giving folks a second shot at life that they deserve.” We should also remember that part of “The Lord’s Prayer” that says, “And forgive us our trespasses, as we forgive those who trespass against us.”
Number of the Day
$220 million – Annual revenue that would be generated by making one-fourth of the 1-penny sales tax permanent, which would plug less than 25 percent of the $1 billion fiscal cliff. (Source: Nola.com/The Times-Picayune)