“A Katrina-sized downgrade”

“A Katrina-sized downgrade”

Louisiana is facing an almost $1 billion budget shortfall in the upcoming fiscal year, which threatens the state’s ability to provide essential services to its citizens. The forecast, adopted by the Revenue Estimating Conference, is the first official revenue projection since the Covid-19 pandemic began wreaking havoc on the state’s economy. The AP’s Melinda Deslatte explains what’s causing this historic budget hole: 

Louisiana has two separate problems depressing state tax collections: widespread unemployment and shuttered businesses from the virus outbreak and a resulting steep decline in oil prices worsened by an international feud. More than 310,000 people have qualified for unemployment benefits. … With the changes, the state revenue forecast fell from $12.5 billion next year to $11.5 billion. The ripple effect could be even larger. The state will lose federal matching dollars if it can’t afford to put up its share of a program’s cost, for example.


Making a bad situation much worse The Covid-19 recession will put unprecedented strains on the state’s ability to provide education, healthcare and other vital services to its residents. A business-led legislative task force is proposing to deepen the budget hole with a series of corporate tax breaks. The House Committee on Ways and Means bowed to industry pressure on Monday, advancing resolutions that would temporarily suspend the state severance tax on oil and gas production and the corporate franchise tax. The Advocate’s Mark Ballard and Sam Karlin report

Seventy-nine opponents to the (severance tax) resolution emailed members of the committee. If they had appeared in person, and insisted, the committee would have had to hear their testimony. The emails were added to the record a few minutes before the vote. … Jan Moller, head of the Louisiana Budget Project, wrote in opposition to the bill that it would mean $514 million the state cannot use to “educate our children, pay our police officers or pay the doctors and hospitals that are caring for us during this pandemic. […] We ask that you use Louisiana’s limited resources to prioritize our hospitals, our low-income families, our students and the Main Street businesses that need your help — not to give a tax break to the oil & gas industry.” Moller wrote.

The franchise tax resolution (House Concurrent Resolution 66) was heavily amended to make it apply only to small businesses, which dramatically reduced its overall cost from more than $400 million to around $9 million. 


Hypocritical blame game
There’s an ugly narrative going around that African Americans are more vulnerable to Covid-19 because of “lifestyle choices” — that they, not centuries of structural racism, are to blame for disproportionate death rates from the virus. The Baton Rouge Business Report’s Stephanie Reigel explains the hypocrisy behind this line of thinking. 

It’s worth noting that public investment in things like a robust mass transit system, which could make it easier for those without a car to get to a grocery store that sells fresh produce, and initiatives that seek to attract supermarkets to food deserts, are typically decried by many of the same people who have so little patience for those who can’t seem to bootstrap their way out of poverty or the COVID-19 high-risk categories.


Obamacare’s civil rights legacy
Unequal access to healthcare— from segregated medical facilities to disparities in insurance coverage — has long been an obstacle for people of color in the south and elsewhere in America. And while the Affordable Care Act improved access for many, it has far from solved the nation’s health equity problems. The Los Angeles Times’ Noam M. Levey explains the landmark healthcare law’s civil rights legacy along the Mississippi river, and the efforts – past and present – to deny African Americans access to medical care. 

“What we’ve experienced in the last few years has been nothing short of amazing,” said Terrence Aikens, who led efforts at the West Memphis clinic to enroll patients in health insurance through the 2010 health law. And yet, even now, as the Affordable Care Act enters its second decade, the gains feel tenuous to many here. The law’s opponents — including Arkansas’ governor and the Trump administration — are working to get the Supreme Court to overturn it. “It is such a difficult history, and we have come so far,” said Ward-Jones, the director of the West Memphis clinic. “Sometimes, though, it feels like we take two steps forward and one step back.”


A community conversation on Covid-19 and race
The Louisiana Budget Project is partnering with LSU’s Reilly Center for Media & Public Affairs on a community discussion about the centrality of structural racism in the Covid-19 pandemic. The one-hour event will take place Wednesday, May 13 at 3:30 p.m. CST. An Unequal Relationship: Race and Covid-19 will be hosted by LBP’s Director of Public Affairs and Outreach, Davante Lewis, and include public policy experts and advocates from across the country. Click here to register. The event will also be streamed via Facebook Live on LBP’s Facebook page.

On Thursday, May 14 at 10 a.m., LBP Executive Director, Jan Moller, will be discussing the state revenue crisis and its implications for the budget in a one-hour seminar on Zoom hosted by Together Baton Rouge. You can register for the seminar by clicking here.   


Number of the Day
9.6% – Projected shortfall in state general fund revenues in the 2020-21 budget year, compared to the Jan. 31 estimate by the Division of Administration. (Source: Revenue Estimating Conference; staff research)