Some time in the next few days – possibly this afternoon – Gov. John Bel Edwards will issue his call for the year’s second special session, where legislators will be asked to renew or replace up to $650 million in expiring tax revenue. This follows Friday’s attempt by the Senate Finance Committee to craft an operating budget using available revenue, which marks the fourth iteration of the 2018-19 budget. Like the previous three, it doesn’t come close to meeting Louisiana’s needs. The Advocate’s Elizabeth Crisp:
Food stamps? Gone. Agriculture centers throughout the state? Shuttered. Museums and state parks? Closed indefinitely. Meat inspectors? Terminated. Veterans cemetery program? Eliminated. “We are in a serious financial crisis because we do not have sufficient revenue to pay for the services that I think people expect,” Senate Finance Chair Eric LaFleur, D-Ville Platte, said. “Without the revenue that needs to be raised, government can’t function.”
The governor’s office, the House Appropriations Committee, the full House and now the Senate Finance Committee have all taken a crack at building a budget without new revenue, with sadly predictable results. It can’t be done without eviscerating either higher education, health care, or the basic day-to-day operations of state government. More important than the cuts in the “pretend” budget, the Finance Committee also passed a resolution by Sen. Jack Donahue that puts the panel on record as favoring increased revenues. Crisp again:
The Senate committee separately adopted two resolutions outlining the areas they view as priorities heading into a special session, including extending a portion of a one-cent sales tax that will roll off the books on July 1, charging sales taxes on items that would otherwise be exempt (a process commonly referred to in the State Capitol as “cleaning pennies”) and reviewing which tax credits are less lucrative to the state.
It seems inevitable that a sales-tax renewal will be the cornerstone of any special-session package, which means low-income households will be hit the hardest. LBP’s Neva Butkus, in a new policy brief, writes that legislators can mitigate that by increasing the Earned Income Tax Credit, and pairing that with a .75 percentage point renewal of the sales tax.
Louisiana was the first Southern state to enact an EITC, but our credit is the second lowest in the country. Increasing the credit from its current 3.5 percent to 10 percent would offset most of this burden for the bottom 40 percent of income earners. Louisiana’s credit would still be less than the national median of refundable state EITCs which is 15 percent, but would boost the take-home pay of nearly 1 in 3 tax filers.
Cash bail system is broken
On any given day in 2015, more than 500 people languished in New Orleans’ jail for no other reason than an inability to pay for bail. The result: a trickle of revenue for law enforcement, lots of money for commercial bail bonds companies and a harsh barrier to freedom for thousands of people accused of crimes that is rooted in racism. A new report from The Data Center, with help from the Vera Institute of Justice, lays out the facts. Heather Nolan of Nola.com/The Times-Picayune:
According to the Data Center report, people arrested in New Orleans pay $6.4 million annually to the money bail system. More than $1 million of that goes to Criminal District Court; $227,000 goes to three agencies — the sheriff, district attorney and public defender offices — and $4.7 million goes to commercial bail bond companies, the report said. The people paying those money bonds are disproportionately poor — 85 percent of people arrested in New Orleans are too poor to hire a lawyer — and black, according to the Data Center. Citing a 2018 Vera Institute analysis, the report said black people are arrested at 2-1/2 times the rate of white people in New Orleans.
Let them eat Trump steaks
President Donald Trump recently threatened to veto the federal Farm Bill unless it includes strict new work requirements for food stamp (Supplemental Nutrition Assistance Program) recipients. The New York Times’ Paul Krugman explains why this “fundamentally obscene spectacle” also has the potential to cause long-term economic harm to the country.
A vast majority of the program’s beneficiaries either are working — but at unstable jobs that pay low wages — or are children, elderly, disabled or essential family caregivers. Oh, and there’s strong evidence that children in low-income families that receive food stamps become more productive and healthier adults, which means that the program is actually good for long-run economic growth. Is it about the money? The enactment of the budget-busting 2017 tax cut proved once and for all, for anyone who had doubts, that Republicans don’t actually care about deficits. But even if they did care about deficits, the C.B.O. estimates that the proposed cuts to food stamps would save less than one percent, that’s right, one percent, of the revenue lost due to that tax cut. In fact, over the next decade the entire SNAP program, which helps 40 million Americans, will cost only about a third as much as the tax cut. No, it’s not about the money.
Decision day on unanimous juries
The House is scheduled to vote this afternoon on a ballot measure that, if approved, would remove Louisiana as one of only two states where people can be convicted of a felony without a unanimous jury verdict. That the bill by Sen. J.P. Morrell has gotten this far is somewhat remarkable, and, as The Advocate’s Gordon Russell reports, owes much to the support from conservative organizations.
No move to undo Louisiana’s unusual practice of allowing convictions with only 10 of 12 jurors’ votes has ever before gained serious traction. But the bill narrowly cleared the Senate with the required two-thirds majority last month, surprising even its author, Sen. J.P. Morrell, D-New Orleans. Its momentum has since snowballed. That’s because proponents have built a coalition that now spans both ends of the political spectrum, with the conservative Koch brothers and the Louisiana Family Forum recently declaring their allegiance.
Number of the Day
3.5 – Louisiana’s Earned Income Tax Credit, as a percentage of the federal credit. Increasing the credit to 10 percent would protect low-income families with children from the effects of renewing part of the “clean penny” of sales tax. (Source: LBP)