Louisiana’s Medicaid program is the largest item in the state budget, and consumes more state general-fund dollars than anything except education. It also is a lifeline for nearly 1.8 million Louisiana citizens who are either low-income or have a disability. To better understand this vital program, the Louisiana Budget Project has developed two new resources aimed at helping lawmakers, the media and the general public. Understanding Medicaid in Louisiana is a chart book that uses graphs and tables to explain how the program works and how it impacts the health, academic and economic outcomes of the state. The chart book is accompanied by a video where Louisianans who have benefited from Medicaid expansion explain what gaining coverage has meant to them.
“While the chart book provides compelling data and information related to the critical role of Medicaid, the stories provide living, breathing examples of how Medicaid is saving lives and boosting financial security in our state,” said Jan Moller, Executive Director of the Louisiana Budget Project. “The stories also show how expanding eligibility has helped keep Louisianans out of the emergency room and helped ensure that they’re healthy enough to learn, work and care for their families.”
New Orleans City Council moves to reign in ITEP
A committee of the New Orleans City Council has approved new rules aimed at reigning in costly tax breaks given to manufacturers. Companies seeking property tax breaks through the Industrial Tax Exemption Program (ITEP) would have to create well-paying jobs and meet other requirements under the ordinance, which was approved by the council’s Economic Development Committee. If approved by the full City Council, businesses would be required to create jobs paying at least $18 an hour, and the jobs must be located in areas that are struggling economically. The New Orleans Advocate’s Jessica Williams reports:
For the ten years ending in 2016, tax breaks awarded in the name of industrial development resulted in a loss of $13.7 billion in local tax revenues across Louisiana, according to the Louisiana Tax Commission. Orleans Parish gave up $112 million over the same period. Critics argued there was little to show in job creation or other local economic benefits. Louisiana lost more than 36,000 manufacturing jobs from 2001 to 2016, according to federal data. … Erika Zucker of Together Louisiana, a faith-based nonprofit that has been a leading advocate for tax-break reform, said the rules were needed after New Orleans lost a net 76 jobs since 1998 but gave up $10.6 million in tax breaks last year, and more than $160 million over two decades, to the ITEP program. The city of New Orleans expects to take in $401 million in taxes next year, $146 million of which is estimated to come from property taxes.
(Full disclosure: LBP Director Jan Moller is a member of the Board of Commerce & Industry, which oversees ITEP.)
Senate passes farm bill
The U.S. Senate passed a compromised farm bill on Tuesday, which resembles an earlier bipartisan version from the upper chamber that protected the Supplemental Nutrition Assistance Program and did not include punitive work requirements for recipients of the popular program. The bill, which passed on an 87 – 13 vote, now moves to the House of Representatives, where a vote is expected as early as Wednesday. Louisiana’s senators split on the bill, with Sen. Bill Cassidy in favor and Sen. John Kennedy opposing. While the exclusion of work requirements is good news for many low-income families, there is still cause for concern. The Washington Post’s Jeff Stein reports:
The bill includes SNAP revisions, although they won’t shrink individual benefits. The final bill does include several new changes to the SNAP program, though none will restrict families’ food stamp benefits, according to congressional aides. Among them is a new National Accuracy Clearinghouse, which would prevent individuals from receiving food stamp benefits in multiple states. The final farm bill also eliminates an awards program that gave states up to $48 million a year in federal funding for high performances related to program access and payment accuracy. The projected savings from these changes will be plowed back into food banks and other nutrition assistance programs, aides said. Congress is not binding the White House on food stamps. The Trump administration has signaled its intention to cut food stamps without approval from Congress, and the farm bill does not bind the White House’s hands, according to congressional aides. The Agriculture Department has already floated weakening the waivers it gives states to temporarily suspend some food-stamp work requirements.
Slashed IRS budget is good news for wealthy tax cheats
The Internal Revenue Service is a popular punching bag, but the agency plays a vital role in ensuring that all Americans pay their fair share in taxes and that people with means can’t game the system. In recent years, however, sustained budget cuts have drastically reduced the staff available to pursue tax dodgers, making it easier for wealthy people and corporations to skirt their obligations and imperiling funding for vital government services. An extensive new investigation by Paul Kiel, Jesse Eisinger for the Atlantic explains:
Without enough staff, the IRS has slashed even basic functions. It has drastically pulled back from pursuing people who don’t bother filing their tax returns. New investigations of “nonfilers,” as they’re called, dropped from 2.4 million in 2011 to 362,000 last year. According to the inspector general for the IRS, the reduction results in at least $3 billion in lost revenue each year. Meanwhile, collections from people who do file but don’t pay have plummeted. Tax obligations expire after 10 years if the IRS doesn’t pursue them. Such expirations were relatively infrequent before the budget cuts began. In 2010, $482 million in tax debts lapsed. By 2017, according to internal IRS collection reports, that figure had risen to $8.3 billion, 17 times as much as in 2010. The IRS’s ability to investigate criminals has atrophied as well. Corporations and the wealthy are the biggest beneficiaries of the IRS’s decay. Most Americans’ interaction with the IRS is largely automated. But it takes specialized, well-trained personnel to audit a business or a billionaire or to unravel a tax scheme—and those employees are leaving in droves and taking their expertise with them. For the country’s largest corporations, the danger of being hit with a billion-dollar tax bill has greatly diminished. For the rich, who research shows evade taxes the most, the IRS has become less and less of a force to be feared.
While wealthy tax avoiders have benefitted from the agency’s reduced enforcement capacity, poor taxpayers continue to be audited at high rates.
The story has been different for poor taxpayers. The IRS oversees one of the government’s largest anti-poverty programs, the earned income-tax credit, which provides cash to the working poor. Under continued pressure from Republicans, the IRS has long made a priority of auditing people who receive that money, and as the IRS has shrunk, those audits have consumed even more resources, accounting for 36 percent of audits last year. The credit’s recipients—whose annual income is typically less than $20,000—are now examined at rates similar to those who make $500,000 to $1 million a year. Only people with incomes above $1 million are examined much more frequently.
Number of the Day
$112 million – Amount of revenue Orleans Parish gave up in property tax exemptions through ITEP over a 10-year period ending in 2016. (Source: New Orleans Advocate)