It may come down to a tenth of a penny

It may come down to a tenth of a penny

With a July 1 deadline looming to agree on a revenue package, Gov. John Bel Edwards asked lawmakers to put partisan politics aside as they convened Monday for the year’s third special session.

Number of the Day

100 million - the difference in revenue between a 4.4 and 4.5 percent sales tax rate. (Source: The Advocate)

With a July 1 deadline looming to agree on a revenue package, Gov. John Bel Edwards asked lawmakers to put partisan politics aside as they convened Monday for the year’s third special session. Once again, the focus is on renewing a half-penny of expiring sales tax, which would generate enough revenue to finance higher education, public safety, food assistance and other programs that are currently “below the line” in next year’s budget. Melinda Deslatte of AP has more:

Edwards, senators and a majority of House members supported moving the rate to 4.5 percent in July, to raise about $500 million. House Republican leaders instead sought a 4.33 percent rate to raise about $400 million. Now, some Republicans in the House are floating a 4.4 percent rate. The proposals also involve removing or scaling back some sales tax breaks, particularly sales tax exemptions that larger businesses receive.

While a half-penny would fund all the “below the line” items that the Legislature prioritized, a 4.4 percent renewal would leave serious gaps. Elizabeth Crisp of The Advocate has more:

House Speaker Taylor Barras, R-New Iberia, said that he’s still working to find which revenue bill will win support from two-thirds of the chamber, 70 votes, that tax bills must get to pass the House. … The debate largely comes down to one-tenth of a penny now – extending one-half of the expiring sales tax versus extending two-fifths of it, meaning the state rate would go from 5 percent to 4.4 percent on July 1. … “Both have a great deal of interest,” Barras said. For taxpayers, the difference is about 10 cents on a $100 purchase. The difference in revenue is about $100 million.

The House Ways & Means Committee – where revenue bills must start – held a hearing this morning where members received testimony from Commissioner of Administration Jay Dardenne. It plans to vote on bills starting on Wednesday.

 

The South before SNAP
No program is more vulnerable to budget cuts in the current special session than Supplemental Nutrition Assistance Program (SNAP), which provides food to nearly 900,000 Louisianans each month – most of them kids, elderly or disabled. The Department of Children and Family Services reports that it won’t have enough money to administer the program beyond January if the Legislature won’t agree on a revenue package. Writing in Nola.com/The Times-Picayune, three leaders of New Orleans’ Jewish community remind us what conditions were like for poor people before the federal food program was expanded in the 1970s.

Reports from the 1920s and ’30s reveal a high incidence of malnutrition-related diseases in the American South: a mass of poor people stricken with the sores and dementia of pellagra and the bone deformations of rickets. In the 1960s, before the reforms that led to the modern system of government food assistance, the nation was scandalized by reports of children in the Mississippi Delta unable to stand for lack of food and by footage of infants dying of malnutrition broadcast on the evening news. In 1969, President Richard Nixon wrote to Congress voicing his concern about the state of hunger in America: “that hunger and malnutrition should persist in a land such as ours,” he wrote, “is embarrassing and intolerable.”

 

The safety net and extreme poverty
New research shows how shifts in safety-net policies have shifted resources towards the working poor – or families hovering just around the poverty line – while cutting support for families in extreme poverty. Hilary W. Hoynes and Diane Whitmore Schanzenbach of the National Bureau of Economic Research (NBER) have determined that today nearly 80 percent of safety net spending goes to families with earnings, a significant shift from the 30 percent in the early nineties. Today, only 20 percent of safety net spending goes to families without earnings. Brynne Keith-Jennings of the Center on Budget and Policy Priorities reflects on these new findings and how they apply to newly proposed changes to programs like the Supplemental Nutrition Assistance Program (SNAP):

As key drivers of these trends, the authors cite both the expansion of tax credits for working families and the sharp decline in cash assistance, which was previously available to a substantially larger share of poor families and families without earnings. As our own research shows, in the mid-1990s, for every 100 poor families with children, 68 received cash assistance. Today, only 23 do. These findings are particularly relevant to the current debate over SNAP. Unlike some other parts of the safety net, SNAP has become more effective at serving families with earnings while remaining effective at protecting children from severe poverty. As cash assistance has become far less available to very poor families with children, SNAP has partially filled the gap. SNAP has also become a much more effective work support, so when poor parents work in low-wage jobs, they can receive SNAP to supplement their low earnings.

 

Funding juvenile justice
Louisiana’s juvenile justice system is understaffed, underfunded and plagued by increasing levels of violence. It also is threatened with more than $25 million in additional cuts if lawmakers don’t agree to a revenue package in the next nine days. Part of the money would be used to fund the operation of a new, $11 million detention facility in Avoyelles Parish that was built with state tax dollars but has yet to open.  The Advocate’s editorial board has more on the sad state of Louisiana’s juvenile justice system.

The most recent proposed budget cut — $11 million — would cause the state Office of Juvenile Justice to shutter five regional offices, eliminate 114 positions and “pretty much eliminate our ability to provide probation services,” director James Bueche said. … “Legally, we’re bound to offer probation services, but we’re not going to have the staff to do it,” he added. “I’m not sure what state the agency is going to be in.” The latest proposed cuts come as the state’s juvenile system prepares to absorb an influx of 17-year-old offenders who will no longer be tried as adults — the result of the 2016 “raise the age” law. That’s a good law, we think, but it is vital that the state — and ultimately that means the taxpayer — fund operations that work, and not just generate headlines for bad behavior by the youthful inmates.

 

Number of the Day
100 million – the difference in revenue between a 4.4 and 4.5 percent sales tax rate. (Source: The Advocate)