House budget with major holes advances to the Senate

House budget with major holes advances to the Senate

TOPS scholarships, mental health services, substance abuse treatment and local sheriffs are just a few of the priorities that would be hit by severe cuts in the latest version of the 2018-19 budget that cleared the House on Thursday.

Number of the Day

25 - Number of inmates who died in East Baton Rouge Parish Jail from 2012-16 - a rate that is 2.5 times the national average. (Source: Reuters)

TOPS scholarships, mental health services, substance abuse treatment and local sheriffs are just a few of the priorities that would be hit by severe cuts in the latest version of the 2018-19 budget that cleared the House on Thursday. With just four days left in the special session, the action now moves to the Senate, which will spend the weekend debating the budget and related tax bills. The House version plugged in about $400 million in new revenue  – or about $250 million less than what’s needed to maintain current levels of services. The AP’s Melinda Deslatte:

Louisiana would give sheriffs less for housing state prisoners in their local jails and transitional work programs. Other public safety programs, including the juvenile justice office, would take a hit. The health department estimates its cut would top $500 million with lost federal and other matching dollars. Health officials say the department would eliminate or shrink mental health and substance abuse programs, along with services for children with developmental disabilities. The proposal prohibits cuts to Louisiana’s safety-net hospitals, nursing homes and certain programs for the elderly and disabled. House Republican leaders downplay the cuts’ impact, saying total spending across state government would drop by 1 percent and would be larger than what Louisiana spent two years earlier. The operating budget would spend about $300 million less next year than this year.

Elizabeth Crisp of the Advocate highlights the challenges of crafting a budget without knowing how much money will be available to spend:

In opening discussion on the supplemental spending bill, which had drawn many proposed amendments from members hoping to increase the funding wish list beyond $400 million, Henry urged members to “resist temptation” to spend more money as reflected in the Senate’s proposal. “We’ve already discussed problems with that bill,” he said, noting that House members oppose tax hikes on manufacturing and agriculture sectors, in particular. The House rejected all proposals to tack on additional revenue that may be approved later, except a $17 million amendment to fund programs for private and parochial schools if money becomes available.

 

Louisiana’s overall tax burden is low
Lawmakers often talk about Louisiana’s high taxes, but the state actually has one of the lowest overall tax burdens in the country. While Louisiana has the highest local and state combined sales tax, we have  relatively low per-capita property and income taxes, for individuals and corporations. The Tax Foundation ranks Louisiana 45th in the country for overall state and local tax burden. Kaylee Poche of the LSU Manship School News Services reports in the Daily Advertiser:

The state has a low total local and state tax burden compared to local income, but we have a very high sales tax,” said Jan Moller, executive director of the Louisiana Budget Project, a non-profit group that monitors how public policy affects low- to moderate-income families. The overall state tax level is important as legislators exchange increasingly sharp retorts about how much money to raise to fill a projected $648 million budget shortfall and how much to rely on cuts, mostly to high education and health care programs.Moller said a proposal in both the House and the Senate to extend a third of a cent of sales tax “would not be our first choice at tax reform. But since the Legislature refused to pass anything in 2017, I think it’s now our best hope at avoiding cuts that nobody wants.”“Nobody wants to throw people out of nursing homes, tell college students they’re not going to get the scholarship they were promised or close hospitals,” he added.

 

House committee kills modest EITC expansion
The House Ways and Means committee once again killed a proposal to expand the state Earned Income Tax Credit (EITC). Sen. J.P. Morrell’s SB 10 would have modestly increased Louisiana’s credit from 3.5 percent to 5 percent of the federal EITC, which would have offset some of the cost of the sales-tax renewal for low-income working families. The proposal sailed through the Senate with a vote of 30-5, but was voted down on a party-line vote in the House committee. Julia O’Donoghue of Nola.com| Times- Picayune:

Morrell said he sponsored the proposal to offset an anticipated higher sales tax rate the Legislature is likely to approve. His bill was tied to proposed legislation to raise sales taxes. If a higher sales tax rate did not get approved, the expanded earned income tax credit would not have gone into effect, he said. Louisiana’s state sales tax rate is supposed to drop from 5 percent to 4 percent July 1, but the Legislature is leaning toward a new rate of 4.3 percent to 4.5 percent to avoid large budget reductions. Sales taxes are more of a burden for the poor, according to economists, as they account for a larger portion of their household income compared with wealthier consumers. Louisiana has the highest average sales tax rate in the country, when local taxes are factored into the equation. Dropping the rate to 4.3 percent or 4.5 percent won’t remove Louisiana from the top of the list, state revenue officials said.

 

Public health is a worthy investment
The rising cost of health care has been a growing problem across the country. As lawmakers struggle to make health care more affordable, there is one area that would greatly benefit from an increase in funding: public health. Public health provides preventive services, interventions, and information that keep people from getting sick and needing more costly medical procedures. Historically, the United States has invested a far greater share of its health care dollars into clinical medical procedures than preventive measures. Health experts and professors, Austin Frakt and Aaron Carroll, write for the Upshot blog in The New York Times:

Of course, it’s hard to pin down total public health spending. In 2017, the budget for the Centers for Disease Control and Prevention — which almost all agree is public health spending — was about $12 billion.The budget for the Health Resources and Services Administration  — some of which is devoted to public health — was $10.7 billion. (The agency helps people who are uninsured or medically vulnerable gain access to health care.)The Agriculture Department spends more than $100 billion on nutrition assistance and about $1 billion on food safety, both of which arguably contribute to public health. But even if we’re generous, and call all of that public health spending, it’s dwarfed by what Americans spend on health care directly.This is made more surprising by the fact that public health investments are often so valuable that they pay for themselves. There’s no reason not to make them. In contrast, very few medical interventions pay for themselves; we typically hope that they are at least cost-effective, not that they save more than they cost.

 

Number of the Day
25 – Number of inmates who died in East Baton Rouge Parish Jail from 2012-16 – a rate that is 2.5 times the national average. (Source: Reuters)