Tax breaks for business, pay freezes for civil servants

Tax breaks for business, pay freezes for civil servants

A two-year stalemate between Gov. John Bel Edwards and state Treasurer John Schroder over control of unclaimed property funds ended Wednesday, with a deal that lets $37 million be plugged into next year’s revenue forecast. Instead of using the money to pay for things like child care services that lets struggling parents go back to work, a big chunk of it is being used to pay for millions of dollars in tax breaks for businesses. The deal was announced shortly before the Senate Finance Committee put its stamp on the $33 billion state budget, which also calls for halting $60 million in planned pay raises for state workers. As Nola.com | The Advocate’s Sam Karlin explains, the governor opposes the pay raise plan, which also faces scrutiny from the state Civil Service Commission:

Byron Decoteau, the commission’s director, said the body would likely try to negotiate an emergency rule surrounding the effort. The freeze on pay raises, if approved by the full Legislature, would also apply to legislative and judicial branch employees.

Next year’s budget is being propped up with more than $500 million in federal CARES Act relief dollars, and $90 million from the state’s rainy day fund. Without that money, there would be devastating cuts to healthcare, education and social services programs. As negotiations continue ahead of Tuesday’s adjournment, a major sticking point is the fate of a plan by the Edwards administration to change how Louisiana pays hospitals in the Medicaid program. The AP’s Melinda Deslatte reports

The new payment model, which still needs federal approval, is estimated to draw down an extra $745 million to $1 billion annually in federal cash for the state’s hospitals. Senators stripped that money from the budget proposal, saying they have received too few details about the complex changes from the administration to agree to the plans.

 

A shaky unemployment trust fund
Before the Covid-19 pandemic, Louisiana’s unemployment insurance system was among least prepared in the nation to weather a recession. Now, with hundreds of thousands of Louisianans relying on unemployment benefits to help keep the lights on while the state fights off a new spike in the deadly disease, the unemployment trust fund is showing signs of wear. Kristen Mosbrucker reports in The Advocate that half of the state’s reserves have been used up already, underlining the need for help from the federal government.

Some states have taken funds approved by Congress in the coronavirus-inspired CARES Act and used it to replenish unemployment trust funds. So far, Louisiana lawmakers have voted to carve out $300 million for small business grants and other programs. It’s unclear what might happen in Louisiana’s political arena with other federal funding. “If I had to choose between CARE Act money going into the (unemployment) trust fund or making sure a laid-off worker pays rent, I would go for the rent” through rental assistance programs, said Jan Moller, director of the Louisiana Budget Project. The existing unemployment system is already weak for workers, Moller said. “While the trust fund may have been healthy, the social safety net was not,” he said.

 

Hiding Covid at Angola
Prisons and jails, where incarcerated people live in close quarters with little ability to self-isolate, have seen some of the highest Covid-19 infection rates in the nation. But at the Louisiana State Penitentiary at Angola, which has long come under fire for its inadequate provision of medical care, testing for the virus remains scarce, despite a large stock of test kits and abundant evidence of symptoms among the men who are incarcerated there. ProPublica’s Anat Rubin, Tim Golden, Richard A. Webster report on a system that is leaving people at the prison cut off from timely care, and facing illness and death with little support:

In many cases, prisoners said, inmates who were obviously sick with the coronavirus were denied even cursory medical examinations, mostly because they did not register sufficiently high fevers. Men passed out and were told they were dehydrated. Others, who complained of bad coughs, aches, fatigue and stomach pains were treated with Tylenol, Pepto-Bismol and Tums. Countless sick prisoners were left to recover in their bunks, which are typically set less than 4 feet apart in Angola’s crowded dormitories. Firsthand accounts from 11 of those dormitories, which collectively house nearly 1,000 inmates, suggest that most of the men inside became infected.

 

Need-based aid needs more funding
When Gov. Bobby Jindal’s administration cut public funding for higher education, tuition at the state’s public institutions spiked. That higher tuition bill, combined with relatively low median incomes throughout Louisiana, have made public higher education far more accessible to the wealthy than to the poor. In the face of this reality, state policymakers have chosen to tilt the scales even further in favor of the rich, offering a large proportion of the state’s scholarship aid to families making more than $100,000 per year. As a result, Fritz Esker reports in the Louisiana Weekly, Louisiana’s students leave college carrying significant debt, and face the third-worst delinquency rate in the nation:

Davante Lewis, director of public affairs and outreach for the Louisiana Budget Project, said the state needs to invest more in need-based financial aid programs. TOPS receives 91 percent of the $331 million Louisiana spends each year on financial aid. But Lewis noted that 43 percent of TOPS recipients come from a family with a household income of over $100,000. The median household income in Louisiana is just over $47,000. So, many families in serious financial need are left out of TOPS. Go Grants, which are need-based grants of $300-3,000 a year, receive only $29 million in annual funding. This makes loans a necessity for many low-income people looking to obtain a college degree.

 

Number of the Day
$247 – Maximum weekly unemployment benefit in Louisiana, once federal pandemic unemployment compensation benefits expire at the end of July. (Source: Louisiana Workforce Commission)