A new federal accounting rule requires most state and local government entities, including school boards, to disclose the costs of corporate tax abatements. Thanks to the new rule by the Government Accounting Standards Board, researchers are able to gain fresh insight into how much funding local school systems lose to business subsidies each year. The numbers for Louisiana are stark. According to a new report by Good Jobs First, Louisiana stands out for the amount of money that it takes from students to give to corporations:
Although we find very uneven compliance, it is already evident from the first year of the new disclosure data that some school districts are losing millions of dollars per year. That revenue could be used to hire back more teachers, reduce class size, restore student-support services and elective programs, and bring educators’ pay in line with similarly-educated professionals. With K-12 funding still lagging pre-recession levels in many states, tax abatements merit close scrutiny lest they undermine the skills of America’s future workforce. Three of the five most-affected school districts are in Louisiana parishes. Together, they were shortchanged more than $158 million—more than $2,500 for each enrolled student.
The report estimates that Louisiana lost $268 million in school funding due to subsidies, most of it through property tax exemptions granted to manufacturers. That’s enough money to hire 5,365 teachers at an average salary of $50,000 per year. Because significant gaps remain in the data available through these reports, the figures presented by Good Jobs First represent the minimum amount of school funding lost. In 2016, the most recent year for which data is available, Louisiana public schools spent $11,038 per student. 87.8 percent of Louisiana’s educational funding comes from state and local sources, with the remainder granted by the federal government.
Objective revenue estimates get political
For three decades, the Revenue Estimating Conference (REC) has furnished the state Legislature with non-partisan projections of how much tax revenue that Louisiana can expect to collect over the coming year, which is used to guide state spending. The process was established as a way to insulate the state budget process from politics to the greatest extent possible, driven by the understanding that nonpartisan state economists are better positioned than the politicians who write and approve the budget to evaluate the state’s economic situation. At the most recent REC meeting, however, Rep. Cameron Henry, standing in for an absent House Speaker Taylor Barras, tossed a wrench into the REC’s works, objecting to the economists’ projections and imperiling expenditures for a variety of state projects. Writing in The Advocate, retired children’s activist Sandra Adams called out Henry for injecting politics into a process that’s intended to shield budget process from political whims:
During the 2018 Legislative session, the Legislature voted to place certain items in the budget bill subject to recognition of additional revenue and approval of the Joint Committee on the Budget. The law that created the Revenue Estimating process requires it to review and revise, as necessary, the revenue estimate for the state by the end of December each year. Chairman Henry’s no vote on the new estimate means that critical needs of the state for which revenue is actually available cannot be met. The list is too long for me to detail in this letter. If Chairman Henry opposes one or more of the items, he could legally discuss them and ask the Joint Budget Committee to defer action on them. Surely he does not oppose everything on the list. The Conference is to meet again on Dec. 10. Louisiana would be well served if Scrooge Barras attends and votes on the revenue matter. There will be opportunities later for Grinch Henry to address items that members of Joint Budget may choose not to fund.
Bringing Medicaid out of the DOS-age
Until very recently, Louisiana’s Medicaid program was managed through a computer interface that bore more similarity to the systems in 1980s movies than to the device you’re reading the Dime on today. This month, however, the state rolled out a modern Medicaid enrollment and case management system that should provide more efficiency and better service for the approximately 1.6 million Louisianans enrolled in the program. The Advocate’s Elizabeth Crisp explains the changes:
The upgrade is stark. Workers no longer have to key functions into an antiquated, circa-1992 disk operating system, (DOS)-based platform, which relied heavily on individual determinations and paperwork. Now, Medicaid enrollment counselors can guide people through a state-of-the-art website or those interested in Medicaid can go online on their own. “It just wasn’t functional like it is now,” said state Medicaid deputy director Mitzi Hochheiser. The effort to move to a more standardized enrollment portal has been in the works for years. It cost about $71 million, 90 percent of which was covered by the federal government, and required weeks of retraining employees. But officials say the effort to bring the system into the 21st century will pay off in rooting out duplications, ineligibilities and other concerns that have been raised over the years. And it’s coming online at a time when the Medicaid program that covers nearly 1.7 million Louisiana residents has faced increased scrutiny.
Reports have emphasized that the new Medicaid system will address some concerns raised in a recent report by the legislative auditor. While the new system substantially streamlines and modernizes Medicaid eligibility verification, LBP’s Jeanie Donovan points out that the auditor’s summary of his findings, which relied on non-representative samples of Medicaid enrollees, drastically overstates the proportion of Medicaid recipients with income over the eligibility threshold.
The “random sample” study conducted by the auditor was not a random sample of all Medicaid expansion enrollees or even of all 195,306 single-person households in Medicaid expansion. Rather, it was a random sample of the 19,226 single-person households that the auditor pre-identified as having average quarterly income above the Medicaid eligibility income limit. The auditor then found that 82 of those 100 pre-identified individuals were ineligible for Medicaid at some point during their enrollment in the program. The audit then applied that rate to the entire pre-identified population and estimated that 15,958 individuals were enrolled in Medicaid but earned above the income limit. When compared to the entire single-person household Medicaid population of 195,306 individuals, the actual statistic is that 8.2 percent of single-person households enrolled in Medicaid expansion at some point had income above the Medicaid eligibility limit, far different from the 82 percent reported in the audit summary.
“Public charge” rule imperils coverage gains
Significant policy changes over the past decade have led to a substantial expansion of health coverage for U.S. citizen children with at least one non-citizen parent, improving their chances for better health outcomes throughout their lifetimes. Now, however, a proposed change to the rules for for determining who is eligible for U.S. permanent residency and citizenship may imperil that progress, according to a brief by The Urban Institute’s Genevieve M. Kenney, Jennifer M. Haley, and Robin Wang. The chilling effects of a proposed change to the “public charge” rule may cause families to drop coverage, out of the fear that accessing health benefits may make them ineligible for citizenship. As the authors explain in a summary of their findings:
From 2008 to 2016, policies such as the Affordable Care Act, Medicaid expansion, and CHIP reauthorization were put in place to increase health insurance coverage among the general population, which included targeted investments in outreach and enrollment for immigrant families. These investments were associated with narrowing gaps in Medicaid/CHIP participation and uninsurance between children with and without noncitizen parents. Evidence shows that public health insurance coverage improves access to preventive care, helps families gain financial stability, and leads to positive long-term educational, financial, and health outcomes for children. Under the new public charge rule, however, parents’ concerns about immigration-related consequences may cause them to drop coverage for which they or their children remain eligible, eroding hard-won gains in Medicaid/CHIP participation and declines in uninsurance among immigrant families.
There are still five days remaining to file a comment opposing changes to the public charge rule, which would force many families to choose between their citizenship and their health and wellness. You can submit your comment at protectingimmigrantfamilies.org.
Number of the Day:
25 percent – reduction in annual medical care costs for participants in the Supplemental Nutrition Assistance Program (formerly known as food stamps) as compared with non-participants. (Source: Center on Budget and Policy Priorities)