Prioritizing corporations over workers and families

Prioritizing corporations over workers and families

Legislators have filed numerous bills this spring that they claim will help small businesses to recover from the coronavirus shutdown. In reality, those bills would drain millions of dollars of revenue that is needed to fund services that those businesses depend on. The bills are based on recommendations from a task force composed almost entirely of business interests and lobbyists. Melinda Deslatte of the Associated Press reports

The proposals, which won overwhelming support in the House Ways and Means Committee, are estimated to siphon $14 million and possibly millions more from the state treasury in the budget year that begins July 1. Those estimates would grow to at least $130 million over five years. The budget awaiting debate on the House floor, which assumes $9.2 billion in general state tax collections, doesn’t account for the tax cuts. Spending would have to be cut to stay in balance, if the tax measures win final passage.

The bills’ authors have deflected when asked which programs would be cut. 

Ways and Means Chairman Stuart Bishop, a Lafayette Republican, didn’t offer recommendations for where lawmakers should cut the budget to account for the tax cut he’s proposing – which would cost an estimated $9 million in the upcoming budget year and nearly $41 million over its five-year lifespan. “But I know if we don’t do something to protect the small mom-and-pop businesses in the state of Louisiana, the budget gaps will be bigger,” Bishop said. 


Legislature shoots its messenger

The Legislative Fiscal Office was created to ensure that policymakers have reliable and independent information about the cost of the bills they’re asked to consider. Its small staff of analysts and economists have a reputation for being objective, impartial and apolitical – which is critical, as they serve the needs of all legislators, not just the majority. This week the head of that office, John Carpenter, was forced out by House and Senate leaders, prompting speculation that the office may lose some of its heralded independence. Tyler Bridges of Nola.com | The Advocate broke the story

The ouster of Carpenter comes three weeks after state senators blasted a fiscal note that said a bill they favored could have prohibitive costs. The public rebuke of Carpenter’s office occurred on May 19 when a fiscal note produced by staffer Rebecca Robinson reported that a bill to kill lawsuits filed by coastal parishes against oil and gas companies could result in “a significant increase in expenditures” if the state were to take over the suits. That’s because, Robinson found, the Louisiana Department of Natural Resources estimated it would cost the state at least $4.3 million to take over each of the 43 cases, or up to possibly $185 million for all of them.

 

Educated, white workers less impacted by recession
New data from the Pew Research Center shows that Asian and Hispanic women, immigrants, young workers ages 16 to 24, and those without a college degree have been hit the hardest by the Covid-19 economic recession. Rakesh Kochhar explains how this downturn differs from the Great Recession: 

Workers with a college degree or higher education are much more likely to have the option to telework – 62% could in February compared with 22% of high school graduates who did not go to college, for example. While this helped limit job losses for college graduates from February to May, their experience in the Great Recession was different – their employment was virtually unchanged from 2007 to 2009.

 

Congress should continue expansion of unemployment insurance
Funding from the federal CARES Act provides people who are unemployed with extra weekly benefits that helps households stay solvent during the pandemic. The extra $600 per week also includes contract and gig workers who are excluded from state unemployment systems. But many of these benefits will expire on July 31, including the $600 weekly boost. Chad Stone of the Center on Budget and Policy Priorities says Congress should extend the benefits as part of the next stimulus bill:

While the economy may be starting to recover from the depths of the recession in the second half of this year, jobs and employers that existed when the layoffs began may no longer exist. Employers that have tried to hang on may go out of business even though the economy is recovering, leaving their employees without a job. Or it may not be safe to go back to work even as social distancing restraints are being relaxed. And without additional federal fiscal relief, massive state and local government job losses (1.6 million since February) will worsen as balanced budget requirements force state governments to slash their budgets.


Number of the Day

$130 million – Estimated five-year revenue loss from business tax breaks approved by the House Ways & Means Committee on Tuesday. (Source: The Associated Press)