Reason to celebrate, but more work ahead

Reason to celebrate, but more work ahead

While the immediate threat of the fiscal cliff is finally gone, it’s important to remember that this week’s revenue deal failed to solve the long-term structural problems with Louisiana’s tax structure.

Number of the Day

-12,040 - Reduction in the number of white children under 10 in Louisiana between 2010 and 2017. (Source: U.S. Census via The Brookings Institution)

While the immediate threat of the fiscal cliff is finally gone, it’s important to remember that this week’s revenue deal failed to solve the long-term structural problems with Louisiana’s tax structure. That hard work remains, and must happen if we are ever to make the new investments needed in education, health care and family stability. After the sine die parties and summer vacations, we hope lawmakers will return with new energy and ideas for reforming our state’s tax code, because as Nola.com/The Times Picayune’s Julia O’Donoghue points out, “tax reform” is on the list of major “losers” of the state’s recent budget and tax battles:

Edwards and Louisiana lawmakers have been promising since 2016 to create a more diverse and  comprehensive tax base — one that wouldn’t rely so heavily on sales taxes that to be harder on poor people. Several legislators also promised to look carefully at the business tax breaks Louisiana gives to see if any were worth eliminating. In the end, Edwards and the Legislature didn’t end up making any major changes to the tax system. They simply resolved the state’s financial instability by passing a slightly lower sales tax rate on a temporary basis again. Business tax breaks are also still in place, though some are slightly less generous than they used to be.

The Advocate’s Stephanie Grace wonders why it took so long to come up with a fairly simple solution:

So good for you, getting the job done just a week before the long-anticipated loss of $1 billion in temporary tax revenue, a week before you would have otherwise had to make massive cuts to higher education and other areas that your constituents really expect to see funded. Go ahead and celebrate. I can understand why it would feel so good to have accomplished something after such a long stretch of accomplishing nothing. But when the euphoria fades, maybe take a few moments to think about whether this needed to be so difficult in the first place, whether just doing your jobs really counts as an extraordinary accomplishment. Isn’t it just an ordinary one?

Nola.com/The Times-Picayune columnist Tim Morris writes that the best part of the tax compromise is its longevity.

The true value of the agreement comes in the terms of duration: seven years. The 0.45 percent sales tax extension will remain in force until mid-2025, a virtual lifetime in politics and the closest thing the state has had to financial stability since a certain former two-term governor packed up his dubious accounting methods and made a run for the White House. “The ghost of Bobby Jindal has finally left the building,” House Democratic Caucus Chairman Robert Johnson proclaimed Sunday (June 24) after lawmakers had finally reached agreement on a budget and how much to fund it.

The Advocate’s editorial board mourns a lost opportunity for tax reform:

In the short term, the deal will provide some predictability for state finances. But the downsides of these last months will become clearer over the long haul. One consequence of a seven-year increase in sales tax is precisely that: Louisiana appears to be likely to keep its unfortunate distinction of being the state with the highest sales tax rates in the country, when you count state and local collections. Building a better tax system has, so far, proven beyond this Legislature’s abilities.

Tyler Bridges has a long look at how the sausage was made:

To achieve the compromise, Edwards, the Democrats and the moderate Republicans who supported it had to accept some funding cuts. Barras and the other Republicans had to accept higher spending and also the likelihood that fervent anti-tax conservatives from their own party would attack them.

In case you missed it:  LBP’s statement on the Legislature’s third special session compromise.

 

A tale of two Farm Bills
The U.S. Senate is expected to vote on its bipartisan version of the Farm Bill on Thursday, after the House of Representatives narrowly passed a partisan and problematic version of its own last week. The Senate bill continues the longstanding tradition of nutrition program advocates and agricultural stakeholders working together to ensure that their respective programs are protected and strengthened in the omnibus bill. While the House Farm Bill would make substantial cuts to food benefits provided by the Supplemental Nutrition Assistance Program (SNAP), which serves more than 800,000 Louisianans, the Senate bill makes strategic improvements to the program. More, from the director of the DC-based Food Research and Action Center (FRAC):

Hundreds of state and national groups (pdf), including groups representing children, seniors, people with disabilities, and veterans, as well as many in the health care, education, religious, and business sectors, have come out in strong opposition to the [House] bill. Instead of passing a bill that would end or reduce struggling families’ access to food, Congress needs to support policies that end hunger and lift people out of poverty. The Senate Farm Bill (S. 3042) recognizes the important role of SNAP in addressing hunger and poverty, and provides a more constructive path to bipartisan passage of a Farm Bill with a strong SNAP component. As the legislative process continues, FRAC will continue to urge policymakers to reject H.R. 2’s SNAP cuts and instead maintain the approach adopted by the Senate Farm Bill, S. 3042.

FRAC is hosting a national call-in day to protect SNAP today, which you can take part in by calling 1-888-398-8702 and entering your zip code to be connected to your senators. Urge your senators to vote to protect and strengthen SNAP, to vote “Yes” on the Senate Agriculture Committee version of the Farm Bill (S. 3042), and to vote “No” on any and all harmful amendments that would cut or weaken SNAP.

 

Raise the Age to be implemented in March
On March 1, 2019, 17-years olds who are accused or convicted of a non-violent crime in Louisiana will no longer be placed in the adult criminal justice system, thanks to legislation passed in 2016. While the policy change will not apply retroactively, the state’s juvenile justice system does anticipate a gradual increase in children served and costs after the law takes effect. Up until the last moments of the budget debate, it appeared that the Office of Juvenile Justice would just have to absorb those increased costs, without any increase in funding from the state. But, as the AP’s Melinda Deslatte reports, a last minute budget amendment changed that:

In the final hours before they adjourned, lawmakers shuffled $4 million more than planned to the Office of Juvenile Justice’s budget for the financial year that begins in July. Agency spokeswoman Beth Touchet-Morgan said Monday that should be enough money to handle the influx of youth offenders expected in March when Louisiana’s age of adult prosecution rises. “We should be all right with where we are,” she said. “We’re feeling pretty confident that we’ll be able to serve those kids.”

 

Generation Z-plus

The demographics of America are shifting and the latest race and age data from the U.S. Census reveal the current group of children ages 0 to 10 in the country are the first minority-white generation. William H. Frey with The Brookings Institution discusses how strategic investments in the new majority-minority generation will be critical to ensuring a strong U.S. economy:

Hence, this generation, which might be called Generation Z-Plus, is the first truly minority white generation, at 49.6 percent white, where 26 percent of its members are Hispanics, 13.6 percent African-Americans, and nearly 10 percent include Asians and persons of two or more races. … As older baby boomers retire, there will be an increasing need for younger generations to contribute to a vibrant, productive labor force. Clearly the emerging minority white Generation Z-Plus—small in size and born since the onset of the Great Recession—will play a key role. This underscores the urgency of investing in the well-being of America’s racially diverse youth and their parents in the years and decades ahead.

 

Number of the Day
-12,040 – Reduction in the number of white children under 10 in Louisiana between 2010 and 2017. (Source: U.S. Census via The Brookings Institution)