Louisiana took in about $500 million more than it spent during the 2018-19 fiscal year, a larger-than-expected budget surplus that state officials attribute to a surge in income tax receipts from individuals and corporations. This excess cash can be used to replenish the state’s rainy-day fund and make some long-overdue investments in road and bridge projects. The AP’s Melinda Deslatte explains that tax changes at the state and federal level, along with a strong economy, are behind the excess:
Louisiana has tied some of its tax deductions to federal income taxes, so a drop in federal tax liabilities under the congressional tax changes means Louisiana taxpayers and businesses owe more to the state. In addition, lawmakers passed several rounds of corporate tax break changes since 2015 that economists say have taken time to show up in tax collections.
Reminder: Surpluses (and deficits) occur when actual revenues come in above (or below) what economists projected. Commissioner of Administration Jay Dardenne said the current surplus is unrelated to the 0.45% sales tax renewal that was the linchpin of a hard-fought 2018 budget deal.
The ‘poor people’s jail’ in EBR
At any given moment, about 1,500 of the 1,700 people locked up in the East Baton Rouge Parish jail are people who have been arrested but not convicted of a crime. Many are accused of non-violent offenses and are stuck in jail for the sole reason that they don’t have enough money to post bail. The Advocate’s Grace Toohey takes an in-depth look at the broken pre-trial system in the state’s capital city.
Most of the inmates in East Baton Rouge Parish Prison are poor and black. They’re held for weeks before being charged with a crime — waiting for prosecutors to decide if they will move forward with a case — often after arrests for nonviolent or misdemeanor offenses, advocates say. … “Wealthy people don’t sit in jail. … This is a poor people’s system, a mental health system and an immigrant system,” said the Rev. Alexis Anderson, a local advocate for jail reform. “We’re walking around here pretending like this is anything even remotely close to justice.”
A better workforce starts with health insurance
The Advocate’s editorial board strikes an upbeat note about last week’s U.S. Census report that showed Louisiana’s uninsured rate is continuing to fall while more people across the country are going without coverage. Louisiana’s gains are due to the 2016 expansion of Medicaid, which has been good for patients but also the state’s economy.
Most of those folks are working long hours at low-paying jobs, trying to get by despite illness and injury, toiling through pain often enough; they make some money and are not dirt-poor but can’t afford the price of private health insurance. Health is about more than insurance, but if you’re sick, the care you get is obviously a matter of having coverage. Louisiana’s health ratings are not what they should be. Insurance coverage that promotes regular visits and medication from primary care providers is good for the state’s people and thus for its economy over the long term.
Who pays the taxes in Louisiana
The statewide primary is less than a month away, and candidates are arguing about state tax policy. Retired professor David Lindenfeld, writing in The Advocate, reminds us who pays the largest share of state and local taxes when measured as a percentage of income.
It is also well known that sales taxes are a regressive form of taxation, taking up a much higher proportion of personal income for the poor than for the rich. According to another study from the Institute for Taxation and Economic Policy entitled “Who Pays?,” the Louisiana taxpayers with the lowest 20% of incomes pay over 9% of that income in sales taxes — almost twice the average of the population as a whole.
Number of the Day
940.3% – Growth in CEO compensation from 1978 to 2018. Wages for the typical American worker grew 11.9% over that span. (Source: Economic Policy Institute)