Tax credits for working families, like the federal Earned Income Tax Credit and the Child Tax Credit, have a proven track record of lifting people out of poverty and putting children on the path to a brighter future. While Congress expanded both of these crucial programs as part of the American Rescue Plan Act, the expansions only apply to the current tax year. Bobbi Dempsey reports for Business Insider on why these federal expansions fall short.
As of now, the actions are only effective for the 2021 tax year. There is reason to hope that may change, though. In late March, dozens of Democratic senators sent a letter to President Biden urging him to make the changes to the CTC and EITC permanent. … These temporary expansions will definitely make a difference for these eligible families who are able to complete the steps necessary to receive them. But this is a limited, short-lived solution for a long-term problem.
Louisiana legislators don’t have to wait for the federal government to invest in Louisiana families. On Tuesday, the state House is scheduled to vote on bills that would create a new state tax credit for children and strengthen an existing tax credit for working families. Please contact your legislators and tell them to support Louisiana families by voting to strengthen the Earned Income Tax Credit and create a Strong Families Tax Credit. These investments in Louisiana’s kids will make a big difference for the people of our state.
Senate releases budget proposal
Flush with additional revenue thanks to an influx of federal cash and an improving state economy, the Senate Finance Committee put its stamp on the state budget on Monday by adding new money for higher education, health care and other priorities. The $37 billion operating budget for next year now moves to the Senate floor, along with companion bills that spend surplus dollars and additional cash recognized for the current fiscal year. The AP’s Melinda Deslatte breaks down what’s in the proposal.
The TOPS program would fully cover tuition costs for all eligible college students. The separate need-based Go Grant aid program for college students would grow larger. Payments to foster parents would increase. The Senate added $10.5 million to a tuition aid program for community college students and $18 million for an array of other higher education programs. Those include dollars for the university agricultural centers, a student athlete health and wellness study at Louisiana State University, equipment for LSU’s medical school in Shreveport, improvements at Southern University and turf replacement at Northwestern State University.
The Advocate’s Blake Paterson notes that public school teachers are in line for an $800 per year pay bump, but that senators declined to put additional dollars toward teacher pay after indicating last month that they planned to do so.
The House-approved budget already included pay raises of $800 for elementary and secondary school teachers and $400 for support staff like bus drivers and cafeteria workers — with the widespread expectation of an even higher raise pending additional revenues. That belief was further fueled by a press release from legislative leadership in late April, which lauded teachers for their sacrifices during the coronavirus pandemic and teased a larger bump in pay for the state’s public education workforce.
The House doesn’t care what voters think
Last November, Louisiana voters rejected – by 12 points – a constitutional amendment that would have hobbled the state budget by putting an artificial limit on state spending. Undaunted by the public’s wishes expressed at the ballot box, the Louisiana House on Monday approved a nearly identical measure with 70 votes, the bare minimum required to pass. David Jacobs of the Center Square reports on a measure that now heads to the Senate for more debate:
The measures would not reduce current state spending. Lawmakers already have the power to spend less money than they have, which makes the change unnecessary, critics have argued. Critics also have said tight spending limits can hinder a state’s recovery from a recession by forcing cuts to services. Rep. Mandie Landry, D-New Orleans, suggested it was a waste of resources to advance a measure voters soundly rejected last fall.
The only difference from last year’s failed measure is the wording of the ballot language. But the effect of this constitutional change is the same: It would force the state to make unnecessary cuts to vital services even in years when the state has enough revenue to fund public priorities.
Hiding corporate tax break data from the public
Last week, the Louisiana house advanced House Bill 456, by Rep. Rick Edmonds, which would hide important information about corporations that receive state tax credits and other subsidies. Under current law, companies enter into contracts with the state for lucrative tax breaks in exchange for a promise to create jobs. Critics argue that the bill would make it impossible to determine if those companies are actually creating the jobs they promise – or what those jobs actually pay. The Louisiana Illuminator’s Wesley Muller explains:
This bill isn’t about protecting the little guy,” [Rep. Barry] Ivey said. “It’s only about masking these issues for the big companies…This is what it’s about: $140 million given away to 123 companies…This bill would allow for no public accountability whatsoever. None. Zero.” Edmonds said the bill would still allow a company’s total paid wages to remain public, but Ivey said that would be of little use. For instance, a company might say it created 100 jobs with salaries totaling $5 million. That might mean the company is paying a $50,000 salary for each position, or it could mean the company is paying a $1 million salary to a single executive officer while the other 99 employees are part-time or temp workers earning $10,000 a year. It would be impossible to know, Ivey said, without line items to correlate salaries with the number of hours worked.
Number of the Day
22 cents – Amount of money that is returned to state coffers for every $1 the state spends to subsidize film and TV productions. The House Ways and Means Committee advanced a bill on Monday that would extend the film tax credit system for three more years. (Source: The Advocate)