Playing politics with the revenue forecast

Playing politics with the revenue forecast

Per the state’s balanced budget requirement, the Legislature must enact an annual budget that spends only the amount of revenue the state is expected to collect in a given year. As a result, the governor and budget writers in the Legislature must have an agreed upon revenue estimate before crafting their budget proposals for the next fiscal year.

Number of the Day

242 - Percentage increase in the income of the top 1 percent in the United States since 1979, after taxes and transfers, compared to a 46 percent increase for the middle class.  (Source: The Congressional Budget Office via The Brookings Institution)

Per the state’s balanced budget requirement, the Legislature must enact an annual budget that spends only the amount of revenue the state is expected to collect in a given year. As a result, the governor and budget writers in the Legislature must have an agreed upon revenue estimate before crafting their budget proposals for the next fiscal year. That forecast is provided and updated on an ongoing basis by state economists, who present their projections to the Revenue Estimating Conference (REC), which in turn adopts the official revenue forecast. This process is typically fairly perfunctory; that is until House Appropriations Chairman Cameron Henry (who attended the REC meeting only as a proxy for House Speaker Taylor Barras) threw a wrench into the process. The Advocate’s Stephanie Grace:

But by torpedoing the required unanimous vote by the conference’s four members — a designee of Democratic Gov. John Bel Edwards, in this case Commissioner of Administration Jay Dardenne; Senate President John Alario and LSU economist Jim Richardson are the others — Henry essentially ignored the experts and introduced his usual disruptive legislative tactics into a new arena. Practically, that means that the state can’t spend the $43 million in newly recognized money on needs the Legislature has already outlined, with corrections, sheriffs and juvenile justice as the biggest beneficiaries. As for next year, the unrecognized but predicted revenue, as of now, can’t go toward the teacher pay raise that both parties say they support.

The inimitable Jim Beam of the Lake Charles American Press spells out exactly what’s on the line:

The Associated Press said $43 million in current budget needs couldn’t be funded at the regular session. Included in that $43 million is $16.3 million for the state Department of Corrections, $10.8 million for the Office of Juvenile Justice, and $10.5 million for Louisiana sheriffs who house state prisoners in their local jails. Funding for seven other agencies or departments would also be possible. The Corrections money would fund a pay increase already given to prison workers in order to improve safety and curb the high employee turnover rate. The Juvenile funds would open a new juvenile prison in Bunkie to get youngsters out of adult prisons. The $190 million in the next fiscal year would go a long way towards funding a $1,000 annual pay raise for teachers and $500 for support personnel. However, none of the extra money can be spent because Henry refused to approve the revenue forecasts.

 

Feds ignore public comments on Kentucky Medicaid proposal
Late on a Tuesday evening just before the Thanksgiving holiday, the Trump administration announced it had again approved a highly controversial Medicaid proposal submitted by Kentucky. The proposal, which takes health insurance away from low-income people who don’t work enough hours or can’t afford to pay premiums, has already been declared illegal once, but federal health officials are encouraging Kentucky to forge ahead with the unpopular proposals.  Judy Solomon with the Center on Budget and Policy Priorities explains:

The court vacated the Centers for Medicare & Medicaid Services’ (CMS) previous approval because it failed to consider the number of people who would lose coverage — more than 95,000 in a typical month, according to the state’s own estimates. CMS then held a second 30-day public comment period on the waiver and received almost 9,500 unduplicated comments, with 96 percent opposing an approval. Yet the re-approved waiver, which CMS announced in a letter that it released yesterday, is almost identical to the original.

If Kentucky moves forward with implementation of the policy, it likely can expect to have the same disastrous results as Arkansas, the first state to kick people off Medicaid if they cannot meet the required hours of work each month. The Washington Post’s Catherine Rampell tells the story of Adrian McGonigal, an Arkansan who was working full-time but ending up losing his health insurance and his job as a result of the new policy:

Like many I spoke with, McGonigal says he got confusing and sometimes conflicting information from the state’s Department of Human Services, which told him to report online. He doesn’t have a cellphone or computer, so he borrowed his sister-in-law’s smartphone. “I thought that everything was good,” he told me in an interview for The Post and “PBS NewsHour.” “I thought it was just a one-time deal that you reported it, and then that was it.” It wasn’t.  The state wanted him to report monthly . He learned this only when his pharmacy told him his insurance had been canceled. After that, he couldn’t afford his medication. His COPD flared up and he landed in the emergency room. And he missed lots of work. “I tried to stick it out, and still go to work, but I just couldn’t do it,” he said. Ultimately, reluctantly, his supervisor let him go.

 

Bipartisan farm bill advances
Congress has reached a deal on a farm bill that leaves SNAP (formerly food stamps) intact, without any harmful changes to the program. This comes after months of attempts by President Donald Trump and House Republicans to cut funding for food assistance in the farm bill This should come as a major relief to the nearly 400,000 families in Louisiana, including 23,000 veterans and 328,000 children, who could’ve been caught up in the red tape and bureaucracy of the federal proposals.  The Washington Post’s Jeff Stein has the story:

The House and Senate have been deadlocked over multiple issues in the bill, including provisions in the House bill that would add new work requirements for older food stamp recipients and for parents of children age 6 and older. But those provisions have been stripped in the compromise package, Sen. Pat Roberts (R-Kan.), chair of the Senate Agriculture Committee, confirmed Thursday. The farm bill deal was confirmed Thursday by House and Senate lawmakers from both parties. If finalized, it would break a months-long congressional impasse over legislation that doles out billions of federal dollars in food aid, agriculture subsidies and conservation funds.

The farm bill now heads to the president’s desk.

 

Saying farewell to a friend of Louisiana
President George H.W. Bush grew up in New England and made his home in Texas, but he had a special fondness for the Bayou State. As the country says goodbye to the 41st president this week, The Advocate’s Tyler Bridges looks back on the connections and experiences President Bush had in Louisiana:

One of Bush’s last connections to Louisiana came after Hurricane Rita devastated southwest Louisiana in 2005. A year later, he went to Cameron Parish with a $2 million check for a hospital destroyed by Rita, and he returned three years later, with his health beginning to fail, to tour the reopened facility. … Cameron held a special meaning for Bush, as he told the crowd in 2006, because of another hurricane, Audrey, which struck the parish in 1957 and left a trail of death and destruction. Bush remembered visiting immediately afterward to check on his oil company’s operations and while there helping to load drowned victims in body bags onto a barge.

 

Number of the Day
242 – Percentage increase in the income of the top 1 percent in the United States since 1979, after taxes and transfers, compared to a 46 percent increase for the middle class.  (Source: The Congressional Budget Office via The Brookings Institution)