A bill that is nearing final passage in the Legislature is designed to protect Louisiana health care consumers in case the Affordable Care Act is struck down by the U.S. Supreme Court. But Senate Bill 173  is far from a comprehensive solution to the problems Louisianans would face if the federal law is overturned. Among other shortcomings, the bill would allow insurance companies to increase premiums on older customers above what is now allowed, and fails to include a provision of the ACA that requires insurers to enroll people regardless of health status. LBP senior policy analyst Stacey Roussel breaks down the bill in a new brief:

Where the Bill Falls Short:

Guaranteed issue: The bill does not include “guaranteed issue,” a provision of the ACA that requires health insurers to enroll people regardless of health status. While the bill says health insurance plans must cover pre-existing conditions, the lack of guaranteed issue means that people can be denied coverage outright based on their health status. This would be a huge step backward, especially for the up to 40% of applicants who were denied coverage pre-ACA based on their health status.

Age rating: The age rating is the maximum ratio between the premiums charged to the youngest population group and the oldest, typically 19 to 29 years old and 50 to 64 years old. Under existing federal law, older adults cannot be charged more than three times the premiums charged to younger adults. Senate Bill 173 increases this ratio to 5:1. According to a study on the effects of the change, the average yearly premiums for a 60 year old would increase $3,200 for a total of $17,900 each year. This creates a significant burden for older adults living on fixed incomes or struggling to make ends meet, but who are not yet eligible for Medicare.

“Will teachers even come back to school?”
With a little over a week remaining in the legislative session, Louisiana’s lawmakers still haven’t decided  on what a pay raise for the state’s public school teachers will look like. Two options are on the table: a change to teacher pay in the state’s school funding formula, that would carry over to future years, or a one-time pay bump guaranteed for next year only. As the Advocate’s Will Sentell explains, education leaders and lawmakers are sending signals that if the legislature opts for a one-year pay increase, public school teachers may respond with a walkout.  

“If it doesn’t happen the way it needs to will teachers even come back to school?” asked Shane Riddle, legislative and political director of the Louisiana Association of Educators, one of the state’s two teacher unions.

Gov. John Bel Edwards, the state Senate, and the Board of Elementary Secondary Education (BESE) all favor a permanent increase that would include a $1000 raise for teachers, a $500 raise for support workers, and a $39 million increase in general funding for public schools – the package included in BESE’s funding request. Earlier in the session, the House sent BESE’s request back to the board, asking them instead for a $1200 bonus for teachers and a $600 bonus for support workers, but no boost for public school funding. The legislature can vote yes or no on BESE’s funding request, but cannot make any changes themselves – BESE so far is holding firm to their original ask.

GOP’s tax law does little for workers, more for corporations
When the Republican Congress passed the Tax Cuts and Jobs Act in 2017, they promised that slashing taxes for corporations and the wealthy would boost the economic fortunes of workers and bosses alike. Two years out, the results are in, and while executives are reaping substantial rewards from corporate and individual tax breaks, their employees are no better off than before. According to a new report by the Congressional Research Service, the Republican tax law has contributed a minimal amount to economic growth. Meanwhile, however, corporate tax rates have declined by almost 50%. Despite the decline in corporate tax rates, individual taxes have not been impacted. Vox.com’s Dylan Scott provides a breakdown.

From 2017 to 2018, the estimated average corporate tax rate fell from 23.4% to 12.1% and individual income taxes as a percentage of personal income fell slightly from 9.6% to 9.2%.

Despite the fact that corporations benefited so heavily from the 2017 tax cut, employee bonuses remained largely flat.

“Although investment grew significantly, the growth patterns for different types of assets do not appear to be consistent with the direction and size of the supply-side incentive effects one would expect from the tax changes,” the CRS researchers said. “This potential outcome may raise questions about how much longer-run growth will result from the tax revision.”

K-12 funding stagnant across the country
While the U.S. economy has largely recovered since the Great Recession, that recovery hasn’t filtered down to the nation’s K-12 schools. According to new census data, states fund K-12 schools at lower levels today than they did at the start of the recession in 2008. Although overall spending has increased slightly in some of the states hardest hit by recession-era education cuts, states have shifted much of the cost of K-12 education onto local governments. Michael Leachman, of the Center on Budget and Policy Priorities, has more.

Nationally, combined state and local school funding per student has finally recovered from the recession. In the 2017 school year, it was $267 above the 2008 level, after adjusting for inflation — a modest 2 percent increase. But state funding was still $32 per student below pre-recession levels, while local funding was up $299.

Shifting from state to local funding worsens funding inequities between school districts: Since local school districts rely a great deal on local property taxes, schools in poorer areas wind up with fewer resources when the state picks up less of the tab.

States can offset local inequities using funding formulas that provide significantly more to lower-income districts, but only about 11 states did as of the 2015 school year, according to an analysis by the Education Law Center and Rutgers University’s Graduate School of Education. Since children of color are likelier than white children to attend high-poverty schools, largely due to historical racism and ongoing discrimination and bias, most states’ failure to better fund high-poverty schools perpetuates racial inequities.

Didja Know? Podcast 5-30-19
The latest episode of the Louisiana Budget Project’s new podcast series is out today. In this episode, we discuss Senate Bill 173, which is designed to protect Louisiana health care consumers in case the Affordable Care Act is struck down by the U.S. Supreme Court. We’ll also talk to Jan Moller to see what’s going on with the state budget and some tax bills that are making their way through the Legislature. But first, we talk to Danielle Satawa, chair of the Junior League of Baton Rouge’s Diaper Bank, about a bill by Sen. J.P. Morrell that would exempt diapers and feminine hygiene products from the state sales tax. Listen  here.

Number of the Day
68% – Percentage of young people held in residential custody because of technical violations of probation who were youth of color, in 2015. (Source: The Annie E. Casey Foundation)