Budget gimmicks will not solve revenue problem

Budget gimmicks will not solve revenue problem

Using one-time money to pay for long term, ongoing expenses is not a sustainable way to run a household, let alone a state budget. But that’s exactly what House GOP leader Lance Harris is proposing as a fix for Louisiana’s fiscal cliff.

Number of the Day

$70 million - Amount the state has cut its Child Care Assistance Program since 2008. Legislation approved by the House Education committee on Thursday would restore $10 million in funding for the program. (Source: The Daily Advertiser)

Using one-time money to pay for long term, ongoing expenses is not a sustainable way to run a household, let alone a state budget. But that’s exactly what House GOP leader Lance Harris is proposing as a fix for Louisiana’s fiscal cliff. Harris has suggested to Gov. John Bel Edwards that the state use extra money in this year’s budget to “pre-pay” for one month of Medicaid funding, lessening the amount of money that would have to be included for Medicaid in next year’s budget. The AP’s star reporter, Melinda Deslatte explains:

Under the proposal, the state would then only make 11 months of those payments next year, thereby lessening state costs and shrinking the budget hole. “We need to reduce that gap, and this is one way to do it,” Harris said. But that would only cut costs for one year. Edwards said Harris’ proposal would be like the maneuvers used by former Gov. Bobby Jindal to piece together budgets and shuffle costs, continuing financial problems year after year when the short-term patches disappeared. Edwards said the maneuvers avoided making tough decisions about what level of taxes are needed to maintain government operation.

Harris’ idea is problematic not only because it suggests using one-time mMattatdfdfdfdoney for a recurring cost, but also because the state is already behind on one month of payments to Medicaid providers:

Louisiana already is behind on one set of Medicaid payments to the managed-care companies. In his last year in office, Jindal pushed back a monthly payment to help close a midyear deficit. Edwards and lawmakers continue to postpone that payment. It’s unclear when that extra month of payments will be made to get the state back on track. Edwards’ spending recommendations for next year didn’t include that back-owed debt, as the state already doesn’t have enough money to pay for its current programs and services.

 

Government shutdown averted

With so much activity in the Louisiana Legislature, it was easy to forget that Congress was hurtling toward a government shutdown this week. Fortunately, federal lawmakers were able to agree at the eleventh hour on Thursday night on an omnibus spending bill that will keep the federal government funded through the end of the federal fiscal year in September. Unfortunately, some critical priorities were left unaddressed, as Matthew Daly and Jill Colvin with The Associated Press explain:

[M]issing from the package was a renewal of federal insurance subsidies to curb premium costs on the Affordable Care Act exchanges. Trump ended some of those payments as part of his effort to scuttle President Barack Obama’s health care law, but Republicans have joined Democrats in trying to revive them. Bipartisan efforts to restore the subsidies, and provide additional help for insurance carriers, foundered over disagreements on how tight abortion restrictions should be on using the money for private insurance plans. Senate Republicans made a last-ditch effort to tuck the insurance provisions into the bill, but Democrats refused to yield on abortion restrictions.

Members of Congress also were not able to come to agreement on a solution for protecting “Dreamers,” or immigrants who have Deferred Action for Childhood Arrival (DACA) status. President Donald Trump tweeted Friday morning that he is considering vetoing the bipartisan spending package because it does not solve the problem of the expiring DACA program – a problem created by his own decision to end the program, which he announced in September.

 

Early education funding bill advances

Louisiana’s Child Care Assistance Program subsidizes the cost of early care and education for low-income children, so parents can return to work while the children receive high quality instruction and care. The social and economic benefits of the program are well-documented, but the state has cut the program substantially over the past eight years, which has resulted in 4,500 families on a growing waiting list. A bill that would provide assistance to those families on the waiting list took one important step forward yesterday. Devon Sanders with the LSU Manship School News Service reports:

The House Education Committee passed the bill unanimously, making it one of the few areas targeted for extra funding at a time when the Legislature is under pressure to make big budget cuts. “Nobody is against early childhood care,” Carter said. “Everybody is for it. The problem is, we haven’t been able to find a way to fund it.” The bill now goes to the House Appropriations Committee, where it could face greater scrutiny. The Appropriations Committee will play a central role in deciding funding levels for most programs as the Legislature attempts to deal with a projected $700 million gap.

 

Health care costs have biggest impact on household finances

Eight years ago, Americans listed gas prices and costs of food and consumer goods as having the biggest impact on their economic security. Now, health care costs have risen to the top of the list of things that impact household finances in the United States. Researchers at The Pew Charitable Trusts share the findings of their latest poll:

Among the factors that affect household finances, the public ranks the cost of health care and the prices of food and consumer goods highest. About half of Americans say the cost of health care affects their household’s financial situation a lot (53%), and nearly as many (48%) say the same about prices of food and consumer goods.

Rising health insurance premiums and dramatic increases in prescription drug costs, and unexpected medical bills are fueling economic anxiety among consumers. It’s not surprising that addressing prescription drug costs is one place of bipartisan agreement among U.S. consumers. Rachel Bluth with Kaiser Health News:

Drug prices are among the few areas of health policy where Americans seem to find consensus. Eighty percent of people said they think drug prices are too high, and both Democrats (65 percent) and Republicans (74 percent) agreed the industry has too much sway over lawmakers.

While the federal lawmakers are not jumping at the chance to reign in abuses by pharmaceutical companies, several pieces of legislation have been filed by Louisiana legislators to create more transparency in drug pricing, with the hope that greater transparency will lead to lower costs.

 

Number of the Day

$70 million – Amount the state has cut its Child Care Assistance Program since 2008. Legislation approved by the House Education committee on Thursday would restore $10 million in funding for the program. (Source: The Daily Advertiser)