Countdown to sine die

Countdown to sine die

Several important items remain unfinished as the Louisiana Legislature speeds toward its 6 p.m. adjournment. At the top of the list is the final passage of a complicated tax swap that, if passed, will go to voters this fall. The final plan would trade the elimination of two lucrative tax breaks for a cut in tax rates, resulting in a modest overall tax cut that mostly benefits the state’s wealthiest corporations and individuals. Legislators refused to provide an income boost for low-income working families who would have benefited from the Strong Families Tax Credits. Melinda Deslatte of the Associated Press has the story on the session’s missed opportunities and on the few bills still on the table that could still benefit low-income people in Louisiana: 

Democrats were still trying to push several tax break ideas, including the removal of state sales taxes from purchases of diapers and feminine hygiene projects and continuation of a 2018 expansion of a tax break program for the working poor called the Earned Income Tax Credit. (…) Rep. Ted James, a Baton Rouge Democrat and head of the Louisiana Legislative Black Caucus, said the remaining Democratic-backed tax break proposals faced resistance from some GOP lawmakers. “We’ve got some folks who would just rather help corporations than poor people,” James said. 

Correcting imbalances at the Department of Corrections
Louisiana is the most incarcerated state in the most incarcerated nation in the world. And while Black people are overrepresented in Louisiana’s prison population, they are also underrepresented in its leadership, according to a recent report by retired Black leaders from the Department of Corrections. The background and lived experience of leadership matters. And, while the agency has made some progress – Black people comprised 30% of leadership in 2020 compared to 21% in 2010  – the pace of change is much too slow. A staff editorial in The Advocate highlights the report’s findings: 

With language that is far too common these days because the truth hurts, the committee included a disturbing, overarching observation: “It is apparent to any objective observer that the underrepresentation of Black employees in senior-level positions within the department stems directly from the effects of institutional or systemic racism, coupled with the utilization of the ‘good old boy network’ — a circle of influence that excludes Blacks.”

Incarcerated people also face myriad obstacles when they are released. Alex Berger of the Center on Budget and Policy Priorities explains recent and proposed federal policy changes that help give people returning from incarceration a fairer chance at success: 

President Biden’s recovery package includes two key provisions to improve re-entry: (1) an end to the lifetime ban on SNAP (food stamp) benefits for people with drug-related felony convictions, and (2) an expansion of subsidized employment, which is a proven tool to enable returning citizens to overcome discrimination and societal barriers to entering the workforce. As lawmakers consider recovery legislation in the coming weeks, they also should broaden health care access to those leaving jail and prison. If enacted, all of these policies could significantly reduce the risk of reincarceration and promote equity.

Louisiana lifted its SNAP drug-felon ban in 2017, but state lawmakers recently shot down an opportunity to help people with a conviction record rebuild their lives and advance in their careers through automatic expungement. Julie O’Donoghue of the Louisiana Illuminator has the details:  

Louisiana’s expungement fee for criminal records is the most expensive in the country by a margin of $300, said Vanessa Spinazola, executive director of the Justice and Accountability Center of Louisiana. Her organization recruits attorneys to carry out expungements on a pro bono basis for clients. Only 20 percent of people eligible for an expungement in Louisiana take advantage of it, she said, in large part because people cannot afford it.

The high cost of failing to fund child care
High quality early child care can make a big impact on children, families and society, offering a 13% return for every dollar invested, with the highest returns coming from investments in the kids who face the greatest risks. But Louisiana has consistently refused to raise the revenue necessary to make the needed investments, even as we face the second-highest child poverty rate in the nation. This year, lawmakers have another opportunity to use state funds to help low-income families pay for seats at quality child care centers – and to trigger local matching dollars to increase the number of seats available to these families. While advocates continue to work for enough state funding to meet the need, Jefferson Parish officials recently made a small down payment. Chad Calder of The Advocate | has the story

While state matching funds should double the number of slots to 32, Councilman Scott Walker said the $225,000 approved at Wednesday’s council meeting “isn’t all that much, but hopefully we’ll be able to find a permanent funding source going forward at a much higher dollar amount.” (…) Jefferson Ready Start estimates that of the 28,000 children under 5 years old in Jefferson Parish, more than 21,000 come from disadvantaged families. And only 4,000 of those are served by publicly-funded seats in preK classes ranked “highly proficient” or “excellent” by the state.

100-year-old tax loophole 
The racial wealth gap in the United States is staggering, with white families holding eight times the wealth of Black families and five times that of Hispanic families. Access to real estate, limited for many non-white families by a long history of racist housing and tax policy, is a key driver of these disparities. Now, the Biden administration is taking aim at a loophole called a “like-kind exchange” that allows investors to defer taxes on their profits from selling an investment property if they use the proceeds to buy another property within 180 days. The administration says that capping this lucrative tax giveaway will raise $19.5 billion over 10 years. Joe Gose of The New York Times has the story

The government enacted the deferral mechanism in 1921 to fuel real estate transactions after tax rates had risen to 77 percent from 7 percent for top earners following World War I, said Steven M. Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center, a nonprofit research organization in Washington. At the time, capital gains were taxed as ordinary income, and the high rates had created a “lock in” effect that discouraged investors from selling assets, said Mr. Rosenthal, who would prefer to see a full repeal of Section 1031 versus mere adjustments

Number of the Day
– The share of Louisiana child care workers who would benefit from a $15 minimum wage in 2025. (Source: Economic Policy Institute)