Now what?

Now what?

The Legislature’s latest attempt to fix Louisiana’s $1 billion “fiscal cliff” ended in failure on Monday, as the House could not overcome the political stalemate that made it impossible to pass any revenue bills.

Number of the Day

3.2 percent - Percent growth in the economic value of arts and cultural production in Louisiana from 2014 to 2015. (Source: Bureau of Economic Analysis)

The Legislature’s latest attempt to fix Louisiana’s $1 billion “fiscal cliff” ended in failure on Monday, as the House could not overcome the political stalemate that made it impossible to pass any revenue bills. As politicians argued over who is to blame, the Legislature will begin its regular session next week with a revenue forecast that is at least $700 million below current-year levels. Unless the stalemate is broken, that means a new round of cuts for higher education and Medicaid programs that serve low-income families. The Advocate’s Elizabeth Crisp reports the next special is already in the works.

The regular session is scheduled to end June 4, but [Governor] Edwards and House and Senate leaders said Monday that they would support a plan to end the regular session early and then hold another special session starting in May. “I’m hopeful we can do it – we need to do it,” Edwards said. “It’s clear that up to now there has been a lack of a sense of urgency.” Special sessions cost the state about $60,000 a day. Holding a special session when lawmakers would normally be in the regular session would reduce the extra costs. But it’s unclear whether yet another special session would even bear fruit in the House, which became particularly acerbic as the latest special session stretched on. At several points, members took to deep personal jabs at each other and the governor.

While the political debate centers on how to stabilize the state budget, talk of long-term structural reforms are on the back burner. Melinda Deslatte of the Associated Press reports:

After months of work, the Task Force on Structural Changes in Budget and Tax Policy advised sweeping changes to Louisiana’s sales, personal income and property tax policies. The recommendations would lower tax rates, broaden what items are subject to taxes and reduce the number of complicated state tax breaks. The task force suggested ending an expiring 1 percent state sales tax, in exchange for charging sales taxes on services such as cable television. It suggested lowering personal and corporate income tax rates by removing large tax deductions, and doing away with the corporate franchise tax. The panel proposed phasing out a local property tax charged on inventory, to save the state millions on a tax break given to businesses paying the tax. But that rewrite never happened, bogged down amid political and philosophical disputes between Democratic Gov. John Bel Edwards and the majority-Republican House, which bottled up every bill that mirrored the task force recommendations.

The Advocate’s editorial board, justifiably grumpy at having skipped part of the Oscars telecast to watch the Legislature’s meltdown, says both sides are to blame.

Lawmakers took another cue from Hollywood, leaving their constituents with a fiscal cliffhanger. It might all be as entertaining as the latest blockbuster if the consequences weren’t so sad, the stakes so high. With no clear means to fund basic state services and popular programs like the TOPS scholarship for college students, the Legislature will soon enter a regular session obligated to craft a budget based on Draconian cuts. This is, to use another Tinseltown analogy, yet the latest sequel to a story we’ve seen too many times, as partisan divisions at the State Capitol prevent meaningful compromise. But the failure of the special session was about more than differences between Republicans and Democrats. It was also about a fundamental lack of cohesion within the parties themselves.

The real losers, of course, are the millions of Louisiana residents who depend on a strong and stable state budget. LBP’s Jan Moller:  

The Legislature’s failure means thousands of college students won’t know until June if Louisiana will honor its promise of a scholarship. It means doctors, hospitals, clinics, and other Medicaid providers will have to wait for months to find out if they’ll have the resources to care for Louisiana’s poorest and most vulnerable residents. It should be clear to everyone by now that the Legislature cannot simply cut its way to a balanced budget. The cuts-only mindset is what created our fiscal crisis in the first place, and the only way to address it is for legislators to agree on a revenue plan that supports the investments in education, health and public safety that are needed for all Louisianans to reach their full potential.

 

Cell tax squeaked through

Amid the dysfunction, lawmakers did manage to pass one tiny tax bill, which slightly increases a tax on wireless phones to finance services for people who are deaf or hard of hearing. It raises the monthly tax on wireless devices and headsets from 4.5 cents to 5 cents, which will raise $213,000 per year that will go into a special fund. Julia O’Donoghue has the story in Nola.com/The Times-Picayune.

Gov. John Bel Edwards has said he will sign the tax hike into law. The bill was the only tax hike to get out of the House during a special session that was supposed to be about raising money to help solve Louisiana’s budget crisis, but this tax increase does nothing to help with Louisiana’s fiscal problems. House Bill 27 increases a monthly tax on wireless phone devices and headsets from 4.5 cents to 5 cents. All of the money generated by this tax increase goes toward services for the deaf and hard of hearing. The services include interpreters for legislative hearings and closed captioning for state government meetings.

 

Health policy at a crossroads

President Donald Trump’s efforts to undermine the Affordable Care Act and strip away the health care coverage gains made possible under that law fly in the face of historical trends. James Morone and Dr. David Blumenthal, writing in Health Affairs, note that every modern American president has sought to expand health coverage. But that pattern ended after Barack Obama pushed the ACA through Congress, and Republicans offered no alternative plan. The Commonwealth Fund has a helpful summary:

Coverage expansions have occurred for decades, with stops, starts, and occasional backsliding. Time will reveal whether the current era represents a lasting break with the past or whether the arc of history will continue to “bend toward coverage.”

 

Cassidy wants transparency

U.S. Sen. Bill Cassidy wants hospitals, physicians and other health care providers to be more transparent about the costs they incur and the prices they charge for various services. He recently joined with a bipartisan group of senators who wrote a letter to health care interest groups, think tanks and advocates asking for feedback on how to make prices more transparent. Bryn Stole has the story in The Advocate.

But giving patients up-front information about how much hospital or clinic services are going to cost could bring down prices by encouraging patients to push back on tests or procedures that aren’t urgent or necessary, said Davante Lewis, federal policy advocate for the Louisiana Budget Project, a left-of-center group that advocates for low- and moderate-income families. “We are extremely pleased to see Sen. Cassidy working on legislation that empowers consumers and focuses on providing better coverage,” Lewis said. “This is an initiative that will help all in health-care and make it more affordable, efficient and transparent for the average consumer.”

 

Number of the Day

3.2 percent – Percent growth in the economic value of arts and cultural production in Louisiana from 2014 to 2015. (Source: Bureau of Economic Analysis)