The fragile Louisiana economy

The fragile Louisiana economy

Louisiana’s economy, battered by the Covid-19 pandemic and the unemployment it has caused, is poised to take another big hit at the end of July. That’s when the extra $600 per week in federal unemployment benefits is set to expire. Other federal aid, such as the Paycheck Protection Program that is helping businesses keep workers on the payroll, will also be mostly gone by then. Bryn Stole and Chad Calder report for | The Advocate

“When that expires, a lot of people are going to be destitute,” predicts Jan Moller, executive director of the Louisiana Budget Project, a left-leaning group that advocates for working families. “I think that’s true around the country, but I think it’s especially true in Louisiana because of our economy. … The particular make-up of Louisiana’s economy makes us uniquely vulnerable.” Once Louisiana unemployment benefits fall back to no more than $247 a week … they won’t cover rent and utilities for most people, let alone food, gas, car payments, student loans or credit card debt. And even that modest level of aid may be at risk: Ava Dejoie, Louisiana’s labor secretary, warned on Friday that the state’s unemployment trust fund — which has paid out more than $2.85 billion in claims since March 22 — “could go bankrupt.”

Despite some recent positive news in the national jobs report, initial unemployment claims in Louisiana ticked up again in the week ending June 30 to 21,879 up from 19,334 the prior week. Kristen Mosbrucker of The Advocate has the story: 

The recession in Louisiana is expected to last longer than the nation overall and unemployment isn’t generally projected to drop back down to 10% until the end of 2021. “People should think of this small step back as a yellow flag that it’s going to be a long road to recovery, you can’t just count down the days until everyone gets their job back,” (ULL economist Stephen) Barnes said. 

Heidi Shierholz of the Economic Policy Institute highlights the high cost of doing nothing and the federal aid that is needed to help combat the recession: 

Policymakers need to do much, much more to fight this recession and set our economy up for a strong recovery, which will not happen without intervention. For example, without massive federal aid to state and local governments, 5.3 million workers in the public and private sector will likely lose their jobs by the end of 2021. 


Politicizing the fiscal office
The Legislative Fiscal Office exists to provide state legislators with the most honest and accurate assessment of how much various bills could end up costing the state. The longtime head of that office, John Carpenter, was sacked last week, and House and Senate leaders reportedly want a replacement who takes a more generous view of proposed tax cuts. | The Advocate columnist Stephanie Grace writes that it follows a trend that began when GOP leaders politicized another independent body, the Revenue Estimating Conference, because the state economists’ forecasts didn’t suit their political preferences. 

Under the guise of independence, Republican legislative leaders who’ve served alongside Democratic Gov. John Bel Edwards have been gradually amping up the Washington-style partisan gamesmanship in Baton Rouge. That’s true on a range of issues, including setting rules for civil trials. But nowhere is it more apparent than in how these lawmakers approach issues surrounding the state budget. | The Advocate columnist James Gill notes that Carpenter’s departure came after legislators objected to being told that a bill designed to kill parish lawsuits against oil companies could cost the state $185 million. 

In the just-concluded regular session, Carpenter approved a report prepared by staffer Rebecca Robinson that a bill designed to protect legislators’ friends and benefactors in the oil business could require an upfront expenditure of around $185 million in taxpayer money. That was clearly a sound estimate, backed up in the report by abundant evidence.


Business is pulling the strings at the Legislature
Corporations and their lobbyists have long held influence with state legislators. But the new leadership in the House and Senate has kicked that up a notch, to where business groups are setting the legislative agenda for the current special session and working to enact long-held goals. The Associated Press’ Melinda Deslatte reports

(L)egislators are advancing a package of business-backed tax breaks, including some measures that would reverse hard-fought efforts across the last two legislative terms to scale back tax credits and exemptions that ballooned well beyond expectations and helped create systemic budget gaps. In a strong sign of their influence, business lobbyists and local Chambers of Commerce crafted much of the agenda for the ongoing special session.


Racism and free speech at LSU
A viral video of an incoming LSU freshman shouting racial slur has sparked calls for his expulsion from black student leaders, and drawn Louisiana’s flagship university into a debate about the limits of free speech at a public institution. The Advocate’s Brooks Kubena has a thoughtful look at the issue.

Legal experts say LSU is a public university, therefore a quasi-government agency, and subsequently cannot expel the incoming student — despite the calls from black student leadership to do so — for speech that is protected under the law. Yet, as nationwide protests against police brutality and racial injustice continue in the backdrop, law experts, higher education officials and social activists are among those who wonder if this is the time for an amendment that would give public universities more leeway to punish such speech.


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
7.8% – Percentage of general revenue spent on police in 150 large American cities. That’s a 1.2 percentage-point increase since the late 1970s, during a period when crime has fallen significantly. (Source: The New York Times)