The single biggest reason Louisiana’s economy hasn’t collapsed under the Covid-19 recession is the extra federal unemployment benefits helping jobless people pay the bills and keep the lights on. From March through July, workers were getting an extra $600 per week, which fell to $300 per week starting in August. But the last of those payments have now been made, and there is little prospect for new aid for the 360,000-plus Louisianans who depended on that relief to stay financially afloat. Nola.com |The Advocate’s Matt Sledge reports that workers are facing a double-whammy:
Louisiana is also exhausting the unemployment insurance trust fund used to pay out state benefits. In mid-June the trust fund had $617 million, but its balance was down to $89.5 million as of Wednesday. That means the state will soon need to start borrowing from the federal government to replenish the fund, and the maximum weekly state benefit will soon decline by $26. That will make Louisiana’s weekly benefit the lowest in the nation. The workforce commission’s advice for jobless residents facing rent and mortgage payments at the end of the week is to continue looking for work.
The ranks of the unemployed include 232,000 people who are receiving regular unemployment benefits from the state, plus an additional 135,000 gig workers and freelancers who are filing claims under a separate federal program. Nola.com | The Advocate’s Will Sentell reports that about 5,000 displaced workers will be retrained for new career opportunities in high-demand fields under a program launched by the Louisiana Community and Technical College System.
The posts include health, including nursing assistants and medical assistants; transportation, including crane operators and car and truck repair workers and construction workers, such as carpenters, electricians and plumbers. Other areas are information technology, manufacturing and electrical power-line installers.
A fiscal crisis for local government
Long before the Covid-19 pandemic wreaked havoc on Louisiana’s economy, dozens of municipalities – mainly in rural areas – were nearing fiscal insolvency. Now the problem has spread across the state. A new report from the state Legislative Auditor predicts that local governments will take in $714 million less in tax revenue between the start of the pandemic and June 30, 2021. Nola.com | The Advocate’s Mark Ballard reports that the shortfalls aren’t as steep as earlier estimates, but will still require cities and towns to reduce services that citizens expect:
What hurt, turned out to be the big cities, like Baton Rouge and New Orleans, whose population size doubles each day as workers commute to their jobs. Lunches are now being eaten around the kitchen table rather than at downtown restaurants. That bottle of milk isn’t being picked up on the way home but purchased down the street, (John) Gallagher (of the Louisiana Municipal Association) said. “Under the average scenario, 46 (73%) of the 63 parishes that levy a sales tax are projected to experience a decrease in sales taxes during fiscal year 2021, with Orleans Parish having the largest declines, including 12.7% in fiscal year 2020 and 29.3% in fiscal year 2021,” the auditors wrote.
The hospital price spiral
Nearly half of all Americans get their health insurance coverage through employer-paid private insurance. A new study by the Rand Corporation shows that hospitals often charge those insurers 2.5 times what the government pays for the same services through the Medicare program. Reed Abelson of The New York Times has more:
The findings cast doubt on the ability of private employers and insurers to competitively purchase health care for workers and their families compared to the federal government, said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, which helped fund the study. “You have this widening gap,” she said. Proponents of a so-called public option seize on such price-gouging news to argue that creating a government health plan that could use its clout to demand lower prices would help bring down the cost of care.
Eviction moratorium is an imperfect band-aid
People in Louisiana and across the country who rent their homes are being temporarily protected from eviction through a federal moratorium that lasts through December. While the bills pile up for overdue rent, groups that advocate for property owners are complaining that “mom-and-pop” landlords are being crushed by the moratorium. But Nola.com | The Advocate’s John Simerman reports that the issue isn’t that clear-cut:
Small-time landlords … suffer the most, said Donald Vallee, president of the Landlord Advisory Committee of New Orleans, the local landlords’ association. Vallee said New Orleans has about 7,600 landlords, with most renting 10 or fewer units. … Judging by eviction filings in New Orleans over the summer, however, it’s mostly property managers of large complexes that are filling the docket. The addresses on those eviction filings also suggest the brewing eviction crisis weighs heaviest on Black tenants in the city.
What is Race? Unpacking Racism in Our Structures & Institutions
The Louisiana Budget Project is partnering with LSU’s Reilly Center for Media & Public Affairs, Southern University’s Nelson Mandela College of Government and Social Sciences, NAACP Louisiana State Conference and LSU Office of Diversity, Equity & Inclusion on a series of moderated discussions about race and racism in America. The kickoff event is tomorrow at 3:30 p.m. via videoconference. Click here to register for “Racism: Dismantling the System” and to learn more about the panelists and moderators.
Programming notes: Do you have a child under 5 living in your home? If so, the Louisiana Policy Institute for Children wants to understand your child-care needs and how they’ve been affected by the Covid-19 pandemic. The institute is asking parents to fill out this poll, which is available in English, French, Spanish and Vietnamese and will take less than 15 minutes to complete.
Number of the Day
700 – Estimated number of local governments and government-assisted agencies in Louisiana that requested extra time to complete their annual audits because of the Covid-19 pandemic. In a typical year, about 50 entities request extensions. (Source: Nola.com | The Advocate)