Corporations over people at the Legislature

Corporations over people at the Legislature

The Louisiana Legislature is nearing the Tuesday finish line of its special session with two major issues still unresolved – the $33 billion state operating budget and the battle over tort “reform.” On Sunday, the Senate made the job of passing the budget a little more difficult by approving two new corporate tax breaks. Nola.com | The Advocate’s Tyler Bridges reports

The regular and special sessions have seen the full expression of the most conservative Republican majority in memory, one that is bent on providing tax breaks to businesses and targeting the activities of trial lawyers, who are perhaps the biggest campaign contributors to the Democratic Party.

Over the weekend, Bridges examined the biggest battle line of the session: the line between conservatives who want to steer government resources to corporations, and progressives who advocate for direct aid to people. 

During the regular session, Democrats sponsored measures that would have expanded sick leave for workers and given greater protection to renters facing eviction now. Republicans killed those bills during committee hearings. Workers and unemployed workers especially need help now, said Jan Moller, director of the Louisiana Budget Project, a left-leaning Baton Rouge nonprofit that favors higher spending on education and health care. “A huge number of people in the state are one missed paycheck away from needing help to put food on the table,” Moller said.

LBP’s analysis of the major tax break bills can be found here. 

 

The problem with dynamic scoring
The political battles over tort “reform” and corporate tax cuts have garnered the biggest headlines at the Legislature this special session. But Nola.com | The Advocate’s Mark Ballard believes the most enduring legacy of the past 30 days will be the putsch at the nonpartisan Legislative Fiscal Office, where longtime chief John Carpenter was replaced by a candidate who promises to take a more favorable view of tax cut legislation, using a flawed evaluation method called “dynamic scoring” that many other states have already discarded. 

Fiscal notes in Louisiana and most other states use static scoring, which is basically how much money the proposal costs and will take out of the state budget. It’s, basically, the raw cost of building a bridge. Dynamic scoring estimates the revenue from increased economic activity — new jobs and goods sold — created by the project, making the legislation more attractive. … About 15 states have adopted dynamic scoring over the past decade, with most abandoning the idea. 

 

Racism and property taxes
As some Americans engage in a renewed reckoning with structural racism, some communities are looking at the ways their tax systems have historically discriminated against Black people. As Stateline’s Teresa Wiltz reports, recent investigations in cities around the country have found Black homeowners paying higher property taxes than their white counterparts, relative to the value of their homes.  

A March report by the Louisiana legislative auditor found that the Orleans Parish assessor failed to appraise 18% of the residential and commercial properties that it should have reappraised in the 2020 tax year, and had conducted “land-only” reappraisals of 38% of properties, instead of including the value of the building as required by state law. The section of the city that wasn’t assessed was home to the wealthiest properties in New Orleans, said Broderick Bagert, a lead organizer with Together Louisiana, a statewide network of more than 250 religious and civic organizations that is pushing for big changes to the tax assessment process in the city. “It means that the poorer you are, the more your property taxes have gone up relative to the value of your house,” Bagert said in an interview. “This is not just an abstract fairness question. This is a question that can impact whether people can stay in their homes and stay in the city.”

 

Cities and states look for new revenue streams
Louisiana is far from the only state that has seen a major downturn in revenue collections with the Covid-19 pandemic. Cities and states around the country are dealing with massive budget gaps, and so far 1.5 million public sector workers have lost their jobs. The Washington Post’s Tony Romm reports that some localities are looking to raise new revenue as a way to help stop the hemorrhaging. 

Budget experts increasingly believe they may have little choice to consider those more drastic measures in the face of Washington intransigence. City and state officials have spent months pleading with federal lawmakers to authorize as much as $1 trillion in new aid to help them close their deficits and stave off the worst economic consequences of the coronavirus pandemic. … “Given the size of the problem, they’re going to have to use every tool at their disposal,” said Elizabeth McNichol, a senior fellow specializing in state fiscal issues at the Center on Budget and Policy Priorities, a left-leaning think tank. “That includes spending cuts and revenue increases.”

 

Number of the Day
1,722,000 – Number of people working in Louisiana in April, about 275,000 fewer than before the pandemic (Source: The Advocate)