Locals taking the lead on infrastructure

Locals taking the lead on infrastructure

Louisiana’s roads and bridges are a mess, and the money to pay for needed repairs and upgrades is woefully deficient thanks to a gasoline tax that hasn’t been raised in nearly 30 years. With the Legislature unlikely to act anytime soon, local governments are starting to take up some of the slack.

Number of the Day

$1.8 million - Average before-tax income of the richest 1 percent in 2015, roughly triple the amount it was in 1979 in inflation-adjusted dollars. (Source: The Washington Post)

Louisiana’s roads and bridges are a mess, and the money to pay for needed repairs and upgrades is woefully deficient thanks to a gasoline tax that hasn’t been raised in nearly 30 years. With the Legislature unlikely to act anytime soon, local governments are starting to take up some of the slack. In East Baton Rouge Parish, voters on Saturday agreed to a half-cent increase in the sales tax that will raise an estimated $912 million for a host of transportation projects over the 30 years. The Advocate’s Steve Hardy reports:

Saturday marked the second time (Mayor-President Sharon Weston) Broome tried to pass a roads tax. Last year she attempted a 5-mill property tax — the Better Transportation and Roads plan — but the Metro Council refused to put it on the ballot. The mayor’s administration put considerable time, reputation and political capital into passing a roads plan. Broome recalled her vow not to give up when the council spiked her first attempt and felt vindicated with passage of the tax Saturday night. The mayor pivoted to a sales tax in the new iteration. In addition to raising twice as much money as the millage, she hoped the sales tax would be more palatable to Baton Rouge voters, since commuters and tourists would also contribute.

Down the road in New Orleans, hospitality industry leaders are pushing for a new sales tax, while Mayor LaToya Cantrell wants to redirect taxes from existing hotel taxes to address chronic infrastructure needs. Beau Evans of Nola.com/The Times-Picayune:

The business proposal would restore the state sales tax back to 5 percent for certain transactions in the city. The current rate is 4.45 percent statewide, after state lawmakers finally agreed after four sessions earlier this year to put back a portion of the penny that expired June 30. The additional 0.55 percent of the tax would be levied only at New Orleans hotels, according to Stephen Perry, CEO of New Orleans and Co., the local convention and visitors bureau. Perry said the plan would generate about $6.75 million in annual revenue and be placed in a fund restricted for infrastructure initiatives. To jumpstart the work, Perry said the proposal calls for borrowing $81 million through a bond financed by the proposed tax revenue.

While Louisiana mayors have taken the lead, the biggest responsibility for financing critical infrastructure still lies with the state, which continues to abdicate its role. The inimitable Jim Beam of the Lake Charles American-Press explains:

One gasoline tax proposal being considered includes an initial six-cent increase — raising $180 million per year — followed by two-cent increases for several years later. The Advocate said no lawmaker has attached his name to that proposal. The Tax Foundation said indexing gas taxes for inflation is one of the most important actions states can take to create a more stable source for road and bridge construction and maintenance. Will Louisiana legislators do it with a 20-cent gasoline tax that is worth only 7 cents today? It makes sense, but don’t hold your breath waiting for it to happen.

 

New consumer watchdog is bad for consumers
The U.S. Senate — including both of Louisiana’s senators — voted last week to confirm Kathy Kraninger as the new director of the federal Consumer Financial Protection Bureau. The job was created during the Obama administration to serve as a watchdog over the financial industry and protect consumers against abuses by banks and consumer lenders. As the Rev. Dr. Willie Gable Jr. writes in The Advocate, Kraninger has committed to following the lead of outgoing director Mick Mulvaney, who has been much more interested in protecting the interests of predatory lenders than their customers.

With Mulvaney at the helm, the CFPB has been dropping cases and investigations against predatory lenders; pulling back on fighting lending discrimination and scams against college students; and trying to dismantle its own Payday Rule, which was issued to stop payday loans from trapping people in debt. The typical payday loan in Louisiana carries an annual interest rate of nearly 400 percent. This is sinful usury. Research shows taking out a payday loan increases the likelihood a person will lose their bank account, file for bankruptcy, or experience other long-term harms. Payday lenders disproportionately target the poor and communities of color. They also had targeted service members — setting up storefronts near military bases “like bears on a trout stream.” As a veteran and as a pastor whose congregants have been caught in debt traps, I’ve been especially appalled by payday lenders’ behavior.

 

The ACA’s ‘ticking time bombs’
With Democrats taking control of the U.S. House of Representatives in January, the assumption by many is that the Affordable Care Act is safe from any more legislative attempts to “repeal and replace.” But as Abbe R. Gluck and Erica Turret report in The New York Times, President Trump’s administrative actions are working to undermine the landmark health reform law and could result in millions of Americans losing coverage.

The administration has instituted administrative rules and guidance letters intended to undermine the insurance markets, trick the healthy into buying junk plans, and leave the less healthy with unaffordable premiums. It has also succeeded in reducing enrollment, making access to health care harder for the poor and immigrant populations and, for the first time in a decade, raising the number of uninsured children. To add insult to injury, it refuses to defend the A.C.A. in a ludicrous lawsuit in Texas — in which it now appears the judge may very well strike down a large part of the law, including the ban on pre-existing conditions. The entire A.C.A. is at stake. Don’t be fooled by the president’s claims that these problems are inherent in Obamacare.

 

What if the income stagnation story is wrong?
It’s become a common refrain in recent years that incomes for the very rich have grown rapidly while middle-class pay has stagnated. Robert Samuelson, writing for The Washington Post, says recent studies suggest that formulation is only half-true. While incomes at the top have indeed skyrocketed, median incomes have also grown in recent decades – albeit at a much slower pace. To wit:

Confusion arises because a multitude of studies purport to measure the same thing — the change in Americans’ incomes over time — and get widely different results. In theory, the task seems easy: Correct incomes for inflation (inflation erodes money’s purchasing power) and then see if incomes are rising, falling or stagnating. … Different assumptions lead to different conclusions. In his report, Rose examined seven studies. Two of them (the annual Census Bureau report on median incomes, and a 2003 study by economists Emmanuel Saez and Thomas Piketty) relied mainly on pre-tax incomes and limited transfers. It was the Saez-Piketty analysis that suggested economic stagnation for the masses, because — with the effect of taxes and transfers muted — the economy’s income gains seemed to flow disproportionately to the rich. A new study by Piketty, Saez and economist Gabriel Zucman qualifies this result. When the effect of taxes and many transfers were included, the top 10 percent didn’t capture all the gains. The median income jumped 33 percent from 1979 to 2014.

 

Number of the Day
$1.8 million – Average before-tax income of the richest 1 percent in 2015, roughly triple the amount it was in 1979 in inflation-adjusted dollars. (Source: The Washington Post)