This morning marks the annual ritual when members of the public are invited to testify to the Senate Finance Committee about the state budget. It holds special resonance this year, as the current version of next year’s operating budget does not include enough revenue to fund higher education and Medicaid services. One or the other (or both) must be cut unless legislators agree to meet in a special session to renew or replace expiring taxes. The AP’s Melinda Deslatte reports that legislators are taking their sweet old time in completing their regular session work:
Republican House Speaker Taylor Barras and GOP Senate President John Alario both say they agree with the concept of an early end, to move into the tax session. But Barras has resisted Alario’s proposal to put the commitment to an early adjournment in legislation. The governor’s initial target date was May 14 to start the special session. That’s clearly not going to happen. Of more than 1,400 bills filed this session, only about two dozen have been signed into law. While many others have been shelved or rejected, hundreds of other measures are somewhere in the legislative process, awaiting final decisions. House committees still are combing through House bills this week, proposals just reaching the first step of a multi-step legislative process.
In the meantime, people who depend on state services are receiving warning letters that they might be cut off on July 1 if the stalemate is not resolved. Gannett’s Greg Hilburn notes that 37,000 nursing home residents could be affected by the Medicaid cuts:
“The Louisiana Department of Health is beginning the process of notifying all impacted enrollees that some people may lose their Medicaid eligibility,” Department of Health spokesman Bob Johannessen said. “The goal of the department is to give notice to all affected people as soon as possible in order that they begin developing their appropriate plans. “This notification process will begin (this) week. Something could happen to put it on hold, but everything is ready.”
“Greed and arrogance at the highest level”
A bill that seeks to expand the predatory lending industry in Louisiana is so bad that it has even drawn opposition from local payday lenders. As the Business Report’s Catie Burkes reports, Senate Bill 365 (which cleared the Senate last week) is backed by national payday lending corporations and being pushed by a high-powered phalanx of lobbyists.
National payday lending companies are pushing the bill as a safeguard for their business model in case the Consumer Financial Protection Bureau imposes new regulations in 2019. Still, opponents argue the industry preys on vulnerable low-income borrowers, trapping them in an endless cycle of debt. When the bill passed through the Senate last week, 20-17, there was no clear partisan split on votes. That’s because it’s a battle between local and national companies, says Troy McCullen, president of the Louisiana Cash Advance Association, who adds that all local payday loan associations oppose the legislation. McCullen calls the bill a “vehicle to expand another loan product at a higher rate,” saying it’s a “ploy by national companies to enrich themselves.”
LBP’s state policy fellow, Carmen Green, co-authored an op-ed for Morning Consult that argues the federal rule that spawned the Louisiana legislation is needed to protect consumers from harmful lending practices.
The CFPB’s rule targets the most abusive short-term lending practices to protect consumers, while paving the way for more responsible lenders to emerge with safer alternatives. Under the new rule, lenders will generally be required to determine upfront that borrowers can pay back the amount they owe without immediately re-borrowing. Lenders will also be prevented from repeatedly debiting consumers’ bank accounts without permission, which can trigger costly overdraft fees and increase the risk of account closures.
The farm bill would hurt the poor
Every few years, Congress undertakes the massive task of passing a farm bill – legislation that affects everything from farms, grocers and insurance companies to the millions of Americans who depend on federal assistance to afford basic nutrition. The latest version of the bill would impose strict work and training requirements for some adults, which has opened up a partisan rift on Capitol Hill. The Advocate’s Bryn Stole reports:
The food stamp program has historically helped hold together a coalition of urban and rural lawmakers to pass the package — a combination of farm subsidies and food aid for low-income Americans — which comes up roughly every five years. The proposal to add work requirements may threaten that coalition and complicate passage of one of the last must-pass bills on Congress’ agenda this year. … Opponents of the changes, however, contend the bill’s 20-hour-per-week work requirement doesn’t square with the reality of the job market for many low-income working Americans. Many hold down service jobs in retail or restaurants with unpredictable hours or bounce between temporary gigs, said Davante Lewis, federal policy advocate at the Louisiana Budget Project, a left-of-center group that advocates for low- and moderate-income Louisiana families. “Their schedules are determined by a corporation or manager. One week they might get 30 hours, then the next three weeks they hardly get anything,” said Lewis. “There’s this belief that those individuals who come from low-income families and are looking for some assistance to make ends meet somehow are defrauding the government and are lazy — that’s just not the case.”
Louisiana’s sluggish economy
Louisiana was the only state in the country to lose economic ground in 2017, according to new data from the Bureau of Economic Analysis that showed a small year-over-year decline in overall economic activity. While critics were quick to point fingers at Gov. John Bel Edwards, The Advocate’s Sam Karlin spoke with economists who said the stagnation is closely tied to the global price of oil and other factors beyond the administration’s control.
The decline in GDP also suggests the state’s economy is not diversified enough to weather the type of prolonged downturn seen since oil prices fell off a cliff several years ago. “We’re not completely undiversified, but we don’t have the kind of diversification that if your oil and gas sector goes weak you can recover quickly,” Albrecht said. An oil and gas boom has exploded in the shale fields in places like Texas, where horizontal drilling technology has made onshore extraction cheaper and more lucrative than offshore drilling, traditionally a large part of Louisiana’s economy.
Number of the Day
3 percent – Amount that local school boards could charge teachers’ unions for collecting dues on their behalf, under legislation backed by business interests. The costs would likely be passed on to teachers. (Source: Will Sentell, The Advocate)