The battle over business tax breaks

The battle over business tax breaks

The agenda for the Legislature’s ongoing special session was largely crafted by businesses and their lobbyists, with little regard for the front-line workers who’ve been most affected by the Covid-19 pandemic. Bills backed by the business lobby would add to the state’s revenue shortfalls by cutting taxes on profitable companies, and by redirecting our tax dollars to new subsidy programs for retailers and restaurants. Gov. John Bel Edwards argues that the state can’t afford new tax breaks given the shortfalls that already exist. Melinda Deslatte of the Associated Press breaks it down:

The continuing disagreement over how best to respond to the outbreak in a state that was once a national hot spot for the virus surfaced in Tuesday’s debate over four measures that would expand existing business tax incentive programs and suspend part of a tax charged on businesses. … In several instances, the financial impact of the bills isn’t entirely clear, raising questions about how lawmakers will balance the budget without knowing the tax breaks’ costs. And it’s unclear if Democratic Gov. John Bel Edwards will agree to many of the tax proposals if they reach his desk. | The Advocate’s Sam Karlin reports that some of the governor’s allies believe business lobbyists are using the pandemic as cover to push legislation such as “tort reform” that they’ve advocated for years. 

Rep. Ted James, a Baton Rouge Democrat, argued that Bishop’s legislation, and other tax breaks that won approval in the House Tuesday, would do little to help small businesses, and said if the state keeps “giving out taxpayer dollars to corporations,” lawmakers won’t have money left to fund things like infrastructure projects.


Wealthy families taking most of college financial aid
As the economic fallout from the pandemic continues, colleges will likely face major budget shortfalls. As higher education researchers Martin Kurzweil and Josh Wyner explain in the New York Times, cash-strapped institutions may respond by using their scarce financial aid funds to target wealthy students, leaving students in need with limited assistance:  

Because schools will be starved for money because of Covid-19 closures, they may look to offset a potentially historic decrease in enrollment by competing for a shrinking pool of wealthier students. Simultaneously, countless colleges are anticipating declines in revenue since more campuses will be closed, meaning they could be even hungrier for the tuition fees wealthy families pay. (Most merit scholarships aren’t anywhere near full rides.) Currently, merit aid and financial aid are effectively in the same pot at most schools, so the funds for the increase we expect in merit-based aid are likely to be culled from the pool of financial aid available to talented students from working class families.


Systemic racism and Covid-19
Black Americans make up an alarming proportion of Covid-19 deaths. Research continues to show that the pandemic’s disparate impact on Black people is attributable not simply to underlying medical conditions, but to systemic racism. The Stat News’ Sharon Begley has more:  

The higher the percentage of Black residents in a county, the higher its death rate from Covid-19 — even after accounting for income, health insurance coverage, rates of diabetes and obesity, and public transit use, finds a new study by researchers at the MIT Sloan School of Management. With those plausible explanations ruled out, “the causal mechanism has to be something else,” said applied economist Chris Knittel, the study’s senior author. “If I were a public official, I’d be looking at differences in the quality of insurance, conditions such as chronic stress, and systemic discrimination.”


Equity and progress in education
The murder of George Floyd by Minneapolis police has shined an overdue light on the structural barriers that Black people face in Louisiana and elsewhere. These barriers are especially steep in education – from birth through college – where generations of discrimination have left communities of color with lower educational attainment than whites, and fewer economic opportunities as a result. Council for a Better Louisiana President Barry Erwin, writing in | The Advocate, believes that Louisiana has the means to make progress, if policymakers act with appropriate urgency.

All of these plans are good. All of them can work. But they won’t have a chance unless we raise the level of urgency around them and implement them with fidelity. It is unfortunate that the COVID-19 crisis re-directed the discussions we could have had about all of this during the 2020 legislative session. But it’s not too late.


Come work with us
LBP is accepting applications for paid, part-time interns in its Baton Rouge office for Summer 2020. This is an exciting opportunity for candidates interested in developing research, data analysis, writing and advocacy skills. Apply today!


Number of the Day
70% – The percentage of people working outside their home who are not receiving hazard pay, wage increase, or a bonus in spite of greater risks associated with the coronavirus pandemic. (Source: Economic Policy Institute