Poor and middle-income families in Louisiana pay state and local taxes at a higher rate than the wealthiest families. That’s the key takeaway from the latest state-by-state breakdown of tax distribution by income groups from the Institute on Taxation and Economic Policy (ITEP). Louisiana’s tax structure is the 14th most regressive in the nation. The Advocate’s columnist, James Gill, looks at the report and what Louisiana could do to create a fairer tax system.

Everyone knows that the recipe for a progressive tax system must include reducing sales tax rates and a switch of emphasis to income taxes. You don’t need a degree in economics to see that sales taxes penalize households living hand-to-mouth while the rich have plenty left over to invest in stocks and bonds. That was a truth universally acknowledged 20 years ago, when advocates of reform also pointed out that income taxes produce more reliable revenues that grow as the economy expands. Thus in 2002 Louisiana adopted the Stelly Plan, which cut sales taxes and boosted income taxes in a more or less revenue-neutral fashion. That was accomplished by state constitutional amendment, so the idea had broad public support to begin with. But people notice higher income taxes, while savings at the shops do not register so strongly. Besides, many taxpayers figured that their income taxes had gone up by more than their sales tax payments went down, and no doubt they were right. If the poor are to get a break, it is obvious that their wealthier fellow citizens have to pick up the tab. A lot of taxpayers nevertheless felt they had been sold a bill of goods and then State-Rep. Vic Stelly, for whom the plan was named, suffered the traditional fate of the prophet in his own country.

A lost decade in K-12 funding
State government spends more general fund dollars on public education each year than on any other item in the state budget – about $3.6 billion in the 2017-18 fiscal year. In the years prior to 2008, the state’s investment in the Minimum Foundation Program funding formula would increase by a 2.75 percent inflation factor, with half of the new money going to boost teacher pay. But those inflationary increases stopped at the dawn of the Great Recession, and the decade of stagnant funding that followed has meant fewer dollars for students and classrooms and a greater financial burden on local school districts. LBP’s Neva Butkus breaks it down in a new report released this morning:

• The failure to continue cost-of-living adjustments has reduced equitable school funding by $6.8 billion over the past decade.
• Louisiana’s base per pupil spending of $3,961 would need to be $700 higher today just to keep up with inflation since 2008.
• The erosion of state support has forced almost every local school district to increase their contribution to education to make up the difference.
• Distributing state education dollars through the state funding formula, the Minimum Foundation Program, plays an integral role in ensuring equity in school funding, but failure to keep up with inflation is shortchanging students across the state, with students in low-income districts losing out the most.
• All local governments, regardless of wealth, have contributed more than their expected share of school funding over the last decade.

Work requirement strain food pantries
States around the country are making it harder for low-income adults to access food assistance, imposing work and volunteer requirements designed to encourage “self-sufficiency” among people who don’t always have enough resources to feed themselves. That has increased the pressure on local food pantries, which have seen rising demand for food even as the national economy improves. The Washington Post’s Robert Samuels paid a visit to tiny Nelsonville, Ohio, to see how a family-operated food pantry is coping with changing times:

More and more states are imposing stricter time limits and increasing work requirements for residents seeking assistance. Rather than focusing on giving money through monthly checks or food stamps, state governments are making greater investments in employment training, child care and education. These changes are the result of an escalating national debate over where and when the government should involve itself in the lives of the poor. That debate became even more intense earlier this year after a coalition of rural mayors in this part of Ohio discovered that more than $500 million of federal money sent to the state for anti-poverty efforts had yet to be used. … Soon after she took over operations, Sheskey arranged to move the pantry to a grocery store that had long gone out of business. In 2015, they were serving about 200 families each month. Three years later, that number had grown to almost 700 — all of them depending on Sheskey and Lafferty to find food to restock their shelves.

A rare political consensus on Amendment 2
As Louisianans – and voters across the country – head to the polls Tuesday in a time of deep political divisions, there is one issue on the state ballot that is bridging that divide. Amendment 2, which would raise the standard for conviction in most felony cases by requiring unanimous jury verdicts, would put Louisiana in line with 48 other states, the District of Columbia and the federal government. It has attracted an unlikely coalition of supporters from opposite ends of the political spectrum, as Nola.com/The Times-Picayune columnist Jarvis DeBerry writes:

Those who routinely march for justice are on board, as well as those who often worry that the government has too much power. The Koch network, which is reviled by liberals, and George Soros’ Open Society Foundations, which is demonized by conservatives, have both contributed to the campaign to change Louisiana’s law and require unanimous verdicts for convictions. Even the politically powerful Louisiana District Attorney’s Association has maintained a position of neutrality. That’s remarkable, considering that prosecutors currently benefit from a law that allows them to convict defendants if only 10 of 12 jurors think the state has proved its case. Not only has the LDAA remained neutral, but some of its members have actually come out in support of the constitutional amendment.

Number of the Day
$700 – The extra money Louisiana would be spending, per-pupil, had K-12 education spending kept up with inflation since 2008. (Source: Louisiana Budget Project research)