Real preparations for the fiscal cliff begin

Real preparations for the fiscal cliff begin

The “fiscal cliff” has become a jargony term tossed around by legislators, politicos and journalists to describe the expiration of temporary taxes on June 30.

Number of the Day

$790 - Average annual rent increase for the 83,400 low-income households receiving federal rental assistance in Louisiana under the Trump housing plan. (Source: Center on Budget and Policy Priorities)

The “fiscal cliff” has become a jargony term tossed around by legislators, politicos and journalists to describe the expiration of temporary taxes on June 30. This week, the fiscal cliff will become very real for seniors, people with disabilities and children with complex medical needs, as they receive notices from the state that they may soon become ineligible for the services they receive. Maria Clark of Nola.com/The Times Picayune reports:

Regina Simmons is among the 37,000 elderly and disabled Louisiana residents who face losing their Medicaid benefits after July 1 due to a $648 million state budget shortfall. The Louisiana Department of Health is expected to start sending out notifications this week to people who have Medicaid coverage for long-term care.  Even if state lawmakers are able to come up with the money to cover the program before then, state officials said they had to warn Medicaid recipients that the cuts are a distinct possibility. Notifications will be sent to about 20,000 people living in nursing homes, thousands of people with disabilities living in group homes and those who receive home health care assistance.

Some of the people receiving notices from the state this week have been living in nursing facilities for a decade or more. Now, they and their family members are being forced to try to figure out what’s next:

Peggy Hoffman, executive director of Covenant Home, has been fielding calls from concerned families for weeks. The average age of the residents at the New Orleans nursing home is 85. “The families are distraught. They had a sense of security and now that security blanket is gone,” Hoffman said. As for the residents, “the ones who understand what is going on are crying all day,” she said. …”Some of my patients have been here for 10 years,” she said. “This is home, this is what they are familiar with. The attack on them is simply unnerving.”

Visit InvestLouisiana.org to learn more about the notices that are going out to vulnerable families this week, and to send a notice of your own to state lawmakers.

 

Will a ConCon really solve anything?
A handful of legislators and business groups are loudly calling for a state constitutional convention, in which a group of delegates could rewrite all or parts of the state’s governing charter. But supporters of the idea have been heavy on the rhetoric and light on the specifics – offering few details about what changes they’d like to see. Carol DeVille, president of the League of Women Voters of Louisiana, writes in a guest column in Nola.com/The Times Picayune, that a constitutional convention won’t solve the state’s fundamental challenges:

Convening a constitutional convention to remove protections from other parts of the budget will not solve the problem. Removing those protections will only allow us to move backwards in other areas. We can’t reap rewards if we don’t invest. … I also contend that if we in this state are willing to force women to give birth at all costs, but are supporting a budget that will force the closure of hospitals, cut Medicaid and SNAP benefits, provide no public transportation, and fail to provide quality education for all — and if we feel no need to bring wages of women into line with those of men — then we are not “pro-life.”  We are only “pro-birth.” Unless we are willing to invest in our state (which may include raising taxes and fees in some areas), this will not change, and we will never be a pro-life state. Our only solution is to end the regular session early so we can spend some time considering how we can all invest in Louisiana together.

Greater New Orleans, Inc. is among the groups backing a convention. Its president, Michael Hecht, lays out some things that could change:

Our state currently has the worst of both fiscal worlds: we look expensive but collect very little — and do this all under the cloud of a perennial “fiscal cliff.” Louisiana would be more competitive if we reduced or even eliminated income tax, reduced sales tax and eliminated the homestead exemption at the local level — what some call the “Texas Model.” In order to do this, a number of changes will be required, including removing deductibility for federal taxes and excess itemized deductions and the selective broadening of sales tax.

 

Child care bill stalled in Senate committee
Most legislators agree that putting more funding toward quality early care and education is a smart investment that will pay dividends in the long run – but they often struggle to actually find the money to invest in this critical priority area. That seems to be the case again this year, as a bill that would steer unclaimed property funds into childcare subsidies is running aground in the Senate Finance Committee. House Bill 513 is backed by Ready Louisiana, a coalition that includes child care advocates, the business community and LBP. The Nola.com/Times Picayune editorial board urges the Senate committee to approve the bill, especially because proponents have identified a source of funding outside the state’s general fund:

The bill easily passed the House, but it appears to be in trouble in the Senate Finance Committee. State Treasurer John Schroder believes the state should hold onto the money and create a trust fund that eventually will produce income. The Finance Committee is worried about approving anything that has a cost attached because of the budget deficit the state is facing July 1 when temporary taxes are scheduled to expire. … “The research is clear that investment in early care and education is one of the smartest investments our state can make,” Ready Louisiana said in a statement. The Senate Finance Committee ought to understand that.

 

Trump proposes rent hike for the working poor
Real estates investors and landlords were some of the biggest winners in the Trump tax cut enacted last year – largely due to the new tax deduction for pass-through income. But while the owners of property are getting richer, the Trump administration has decided to raise the rents of the working poor, the elderly and disabled who rely on federal housing assistance. Chuck Marr, director of federal tax policy for the Center on Budget and Policy Priorities, has the details:

Even as real estate investors receive expanded tax benefits, millions of low-income households would face sharp increases in rent under the Trump rent proposal. For example, parents working at low-wage jobs who receive federal rental assistance – some of whom various real estate developers depend upon to clean their buildings – would pay a larger share of their income in rent. The increase would be particularly large if they incur child care costs in order to work; those child care costs are currently deducted in determining how much rent these families must pay, but the Trump proposal would eliminate that deduction, boosting these families’ rents markedly. Overall, the affected low-income working families would pay $1,300 more a year in rent, on average, leaving less room in their already tight budgets for everything else.

 

Number of the Day:
$790 – Average annual rent increase for the 83,400 low-income households receiving federal rental assistance in Louisiana under the Trump housing plan. (Source: Center on Budget and Policy Priorities)