While the historic turnover on Capitol Hill has dominated headlines, the 2018 elections also brought big changes at the state level. Years of conservative momentum in statehouses around the country was reversed as Democrats captured seven governorships (losing one – in Alaska) and six legislative chambers. This means progressives from New Mexico to New York have fresh hopes for policy gains that have long eluded them. Amy Hanauer, writing in The American Prospect, surveys the landscape and explains why state policy is so important:

Minnesotans, with their comparatively generous social safety net, live seven years longer than people in conservative (and low-income) Mississippi. Louisianans are more than five times more likely to be in prison as Mainers. And in New York, where bargaining rights are better protected, roughly a quarter of workers enjoy the security and wage premium of union membership, compared with fewer than 4 percent in union-hostile South Carolina. While other factors contribute to these realities, it’s safe to say that state policy matters immensely. … When asked what’s now possible, James Jimenez, executive director of New Mexico Voices for Children in just-turned all-blue New Mexico, has one word: “everything.” “We have the opportunity to put forward an agenda focused on more than trickle-down, which defined the last eight years for New Mexico,” Jimenez says. “Early childhood education, K-12, home visiting, progressive tax reform, these are all back on the table.” New Mexico, where 75 percent of children are of color, ranks 50th on the Annie E. Casey Foundation’s child well-being index. Jimenez says deep investments could demonstrably change those rankings.

While most states just finished their elections, Louisiana’s political cycle is just ramping up. The governor’s office, all statewide offices and every seat in the House and Senate are on the October 22 primary ballot. The AP’s Melinda Deslatte previews the governor’s race and thinks Medicaid, criminal justice reform and tax policy will be big issues for Gov. John Bel Edwards and his Republican challengers.

After calling seven special sessions to deal with state financial troubles, Edwards highlights the stabilization of Louisiana’s operating budget with legislative passage of a seven-year sales tax renewal. The end of piecemeal financing to pay for state programs and services has won praise from national credit rating agencies. Instead of deep budget holes, state officials are talking about ways to spend surpluses. But conservative Republican lawmakers say those surpluses indicate the taxes pushed by Edwards and passed by their colleagues went too far. They say the governor turned too quickly to taxes to solve budget gaps and did too little to cut state spending. … Edwards’ ability to win a second term will hinge on whether Louisiana’s voters believe his perspective on the issues or the viewpoints promoted by one of his Republican opponents.

The economics of ‘soaking the rich’
Rep. Alexandria Ocasio-Cortez of New York caused quite a stir last week when she told an interviewer that she would support top marginal tax rates of more than 70 percent on extremely high incomes. Conservatives quickly denounced the idea as “insane.” But on closer inspection, it’s a concept that has worked very well in the past, including in America at a time when the middle class was thriving. New York Times columnist Paul Krugman explains:

The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? Only ignorant people like … um, Peter Diamond, Nobel laureate in economics and arguably the world’s leading expert on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with claims that he was unqualified. Really.) And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history. … Or to put it a bit more succinctly, when taxing the rich, all we should care about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue.

Bail reform in juvenile court
Children in New Orleans who are awaiting trial in juvenile court will no longer be kept behind bars because their families cannot afford to post bail. The policy change was announced last week by juvenile court judges in the city, who said children will be released to their parents pending trial unless there is a high likelihood that they will not return to court for a hearing. Heather Nolan with Nola.com/The Times-Picayune has more:

“Eliminating bail is as much about reducing the youth detention population and addressing racial disparities in juvenile justice as it is about financial issues,” Chief Judge Candice Anderson said in the release. “Orleans Parish Juvenile Court is committed to ensuring accountability and public safety, but lack of money cannot be a factor in determining whether a child is held in detention pre-trial.” The new policy took effect Dec. 19. It is the court’s second major policy change in five months. In July, the judges officially ended the practice of charging fees to families with children in the juvenile system. Those included fees for probation supervision, public defenders and medical exams.

The politics of food assistance
Columnist Dan Fagan doesn’t think the federal government should provide food assistance to adults who don’t work for at least 20 hours per week. Writing in The Advocate, Fagan supports a new Trump administration rule that would make it harder for states to get waivers from the three-month work requirement, even at times of high unemployment. The result of the rules change is that hundreds of thousands of low-income people would lose access to healthy, nutritious meals. The Center on Budget and Policy Priorities’ Bob Greenstein explains why the rule is too punitive:

Here’s one way to illustrate the proposed rule’s severity: Let’s say a state or local area had an overall unemployment rate of 6.8 percent. That usually would mean that African-American unemployment — which is generally about twice the white unemployment rate — would very likely be in double digits. And the rate for people of all races who are 25 and over and lack a high school diploma or GED would be around 10 percent. Nevertheless, the federal government would flatly deny a waiver request under the proposed rule. Destitute individuals with little chance of finding a job would be cut adrift. The proposal would hit hard at people who are between jobs or whose employers have cut their hours to less than 20 hours a week, which occurs not infrequently in the very-low-wage labor market even when the economy is strong. And it occurs even more frequently when the economy weakens and a possible recession looms — something that a growing number of economists predict for 2020 or 2021.

Number of the Day
2.2 million – Number of Americans who fall into the “coverage gap,” meaning they earn too much to get Medicaid coverage but not enough to qualify for health insurance subsidies under the Affordable Care Act. Louisiana doesn’t have this problem because it expanded Medicaid in 2016. (Source: The American Prospect)