A partial solution is not good enough

A partial solution is not good enough

The end of the second special session of 2018 is less than a week away, and the only major revenue bill to advance to the Senate is House Bill 27, by Rep. Lance Harris.

Number of the Day

$458,600,000 - Amount that would be raised by all revenue raising measures that are currently working their way through legislative process during the 2018 special session. Louisiana faces a shortfall of $648 million. (Source: LBP)

The end of the second special session of 2018 is less than a week away, and the only major revenue bill to advance to the Senate is House Bill 27, by Rep. Lance Harris. It would renew one-third of the temporary “clean penny” of sales tax that is scheduled to expire on June 30. It also would eliminate certain sales tax exemptions on the existing four pennies of state sales tax. When combined with other revenue bills, this package would still leave the state budget roughly $200 million short of the money that’s needed to solve the “fiscal cliff” and avoid unnecessary cuts to health care, higher education and other services. In a new blog post LBP’s Jan Moller analyzes the major flaws of Harris’ bill and provides a better solution to solving the budget shortfall.

A better solution than another inadequate, temporary budget patch is for lawmakers to come together around a bill that fills the entire $648 million shortfall, while leaving Louisiana taxpayers with a lower sales tax on July 1. The easiest way to do this would be for the Senate to amend the bill so that it renews one-half of the expiring sales tax. As it stands, House Bill 27 would leave lawmakers in the undesirable position of both voting for a tax increase but still having to cut services and programs that are important to their constituents. Majorities of Louisiana voters support tax increases to fund public education, higher education, health care and infrastructure. Solving this budget shortfall does not even require increasing taxes. It simply requires replacement or renewal of existing temporary taxes. It’s vital that the amount of tax revenue that’s replaced fills the full budget shortfall. The people of Louisiana deserve a solution that solves our full budget problem, funds the programs they care about, and protects the financial standing of the state.

 

Budget proposals advance
The House Appropriations Committee ended a stalemate that threatened the success of the second special session by advancing two budget proposals on Tuesday evening. One set of bills, by Appropriations Chairman Cameron Henry, assumes that the Legislature will refuse to address the full “fiscal cliff” and calls for cuts to higher education, substance abuse treatment, law enforcement and other programs. A competing plan by Rep. Walt Leger III would avoid major cuts to state services, but assumes that lawmakers agree to replace at least $643 million in expiring revenue. Both plans moved to the House floor, where they are expected to be taken up on Thursday. Nola.com/The Times Picayune’s Julia O’Donoghue breaks down the differences between the two proposals.

Leger’s plan assumes the Legislature will approve taxes totaling around $643 million to avoid any major budget reductions to state services and programs. Henry’s budget proposal accounts for $396 million in new taxes, the amount the House approved Monday night.  As a result, Henry’s budget also includes cuts to state services — around $90 million from the Louisiana Department of Health, $25.7 million from higher education and $24 million from prisoner housing. District attorneys would also receive $4 million less than expected. The TOPS college scholarship program would be funded at 90 percent — about $29.5 million short — for the 2018-2019 school year in Henry’s plan. While not set in stone, the $90 million cut to the health department would put at risk health care for medically fragile children, mental health services for Medicaid recipients and substance abuse treatment for Medicaid patients. To account for the cuts in Henry’s budget, the state would likely be forced to reduce the money paid to hospitals for in-patient mental health care treatment. It would also likely eliminate funding for residential substance abuse treatment programs, according to the health department.

 

Governor vetoes ban on inclusionary zoning
Gov. John Bel Edwards has vetoed a bill that would have take away one of the most effective tools local governments have to increase the availability of affordable housing: inclusionary zoning. These zoning policies require housing developers to set aside a certain portion of new units for low- and moderate-income residents in exchange for tax incentives or bonuses. In his veto message, the governor stressed the importance of passing inclusionary zoning laws and the consequences if local government do not act. Nola.com/The Times-Picayune’s Kevin Litten:

The governor noted that no locality in Louisiana, including New Orleans, has adopted affordable housing requirements, and he warned there could be consequences if such laws aren’t advanced. “If inclusionary zoning is an important tool for our cities and parishes, I encourage them to authorize and implement policies in this upcoming year,” Edwards wrote. “If local governments in Louisiana do not actively pursue these policies over the course of the next year, I will conclude that it is not their will to utilize these strategies and I will be inclined to sign a similar piece of legislation in the 2019 regular session.”

The bill by Sen. Danny Martiny had been heavily opposed by housing activists.

 

Health care groups blast new insurance rules
After Congress failed in its efforts to repeal the Affordable Care Act, President Trump responded by undermining the landmark health reform law by expanding the availability of short-term health plans and increasing access to unregulated “association” health plans. But a new analysis of health care groups’ feedback submitted to federal agencies shows the near unanimity of opposition to these ill-advised policies. The Los Angeles Times’ Noam Levey reports.

After analyzing thousands of official comment letters filed with federal agencies, we found that more than 95%  of healthcare groups that commented on the administration’s proposal to allow an expansion of so-called association health plans expressed serious concern or opposed the proposed rule.  And more than 98% of healthcare groups that commented on a proposal to loosen restrictions on short-term health plans criticized it, in many cases warning that the rule could gravely hurt sick patients. The outpouring came from more than 300 patient and consumer advocates, physician and nurse organizations and trade groups representing hospitals, clinics and health insurers across the country. Not a single organization that advocates for patients supported the Trump administration proposals.

Less than a year after his last failed attempt at health care “reform,” Sen. Bill Cassidy has released another plan that seeks to reorganize the American health-care system. Unfortunately, Cassidy’s 8-page wishlist would have many of the same devastating effects on Louisiana that LBP identified last year. The Advocate’s Bryn Stole reports.

Several of Cassidy’s suggestions released on Tuesday mirror proposals included in last fall’s effort Cassidy led with Sen. Lindsey Graham, R-South Carolina, to repeal and replace the Affordable Care Act. That effort came after earlier attempts fell short in the U.S. Senate. The Cassidy-Graham plan would have redirected much of the federal funding for insurance subsidies and expanded Medicaid coverage under the Affordable Care Act into flexible block grants for states, allowing state governments to reshape the health-insurance markets within their borders by expanding waivers to Obamacare requirements.

 

Number of the Day
$458,600,000 – Amount that would be raised by all revenue raising measures that are currently working their way through legislative process during the 2018 special session. Louisiana faces a shortfall of $648 million. (Source: LBP)