Another budget boom

Another budget boom

The start of the pandemic was greeted by dire predictions of fiscal doom for state budgets, as businesses shut their doors and unemployment spiked to record levels. Thanks to an influx of direct federal relief to states, the opposite has happened. The AP’s Melinda Deslatte reports that Louisiana finished the 2020-21 fiscal year with a $670 million budget surplus, and expects to have more money to spend in the current budget cycle. State lawmakers also have $1.3 billion in Covid-19 relief dollars that remain unallocated. 

Still, those who remember the post-Hurricane Katrina boost to state coffers – when recovery dollars poured in, construction surged in damaged areas and people replaced their storm-wrecked belongings – are cautioning against getting used to the budget largesse. They remember the large tax cuts that Republican then-Gov. Bobby Jindal and lawmakers approved based on a false economic surge, which led to budget problems that plagued Jindal’s tenure in office and large financial gaps that Edwards and new lawmakers inherited. 

Teacher shortage is growing worse
Public school teachers in Louisiana are paid $4,000 per year, on average, below their Southern peers and often get blamed unfairly when school test scores don’t measure up to public expectations. So it’s not surprising that school districts are having a hard time filling open positions. As The Advocate’s Will Sentell reports, the state’s teacher shortage has accelerated in recent years as retirements outstrip the state’s ability to train and recruit replacements. 

The ranks of students in the LSU School of Education plunged 57% in the past decade and 39% in the past five years, according to figures provided by the school. Teachers and other school personnel retirements shot up 25% from 2020 to 021, data compiled by the Teacher Retirement System of Louisiana shows. Doris Voitier, superintendent of the St. Bernard Parish School District and a veteran of 50 years in the profession, said today’s education landscape is unlike anything she has seen. … The shortage has a direct impact on day-to-day learning. A total of 23% of teachers are either uncertified or teaching outside their field of expertise, according to figures provided by the state Department of Education.

In 2018, Louisiana schools with high numbers of students of color had nearly seven times the proportion of uncertified teachers as schools with low numbers of students of color: nearly 1 in 5 teachers in high-minority schools did not have a full state certification, compared to about 1 in 40 in low-minority schools.

Pain, not gain, from cuts to unemployment aid
A few months ago business leaders in Louisiana and elsewhere were blaming the $300 a week in enhanced federal unemployment benefits for their failures to find people to fill the mostly low-paying jobs they were offering. State leaders, including Gov. John Bel Edwards, responded by cutting off those benefits early for people who had lost their jobs during the pandemic. Recently, the Associated Press went back and checked to see if the tactic worked: Did cutting off federal aid push people back into the workforce? The answer: no.

An analysis of state-by-state data by The Associated Press found that workforces in the 25 states that maintained the $300 payment actually grew slightly more from May through September, according to data released Friday, than they did in the 25 states that cut off the payment early, most of them in June. The $300-a-week federal check, on top of regular state jobless aid, meant that many of the unemployed received more in benefits than they earned at their old jobs.

Turns out it wasn’t unemployment benefits that were keeping some workers on the sidelines, but fear of catching Covid-19, problems with child care and other factors. Some people are retiring early, while others are holding out for better wages and benefits.  

The pandemic and the American South
Louisiana leads the South in job loss and the number of federally declared disasters since 2020, and joins most of its regional peers in being slow to distribute emergency rental assistance. All that could help explain why the Pelican State also has the nation’s highest rate of anxiety. Those are just some of the data points in a new report by the Southern Economic Advancement Project, Fair Count and the National Council on Citizenship that shows the impact of the Covid-19 pandemic on public health, employment, housing and other factors. 

The South is a vital region, and this pandemic is worsening our existing challenges and deepening our inequities. Now, it is our time to stand together and move from pandemic to prosperity. State and local governments prioritizing projects for the American Rescue Plan can use these funds to begin to eliminate structural disparities that ultimately determine health outcomes — such as access to good jobs, quality education, safe/walkable neighborhoods, healthy foods, and quality medical care. Addressing underlying disparities now will help ensure that communities of color are not disproportionately impacted by future health crises, whether they be more aggressive strains of Covid or emerging climate threats.

Number of the Day
27% – Decrease in the child poverty rate in 12 Southern states in July and August (from 15.8% to 11.5%, a 4.3 point drop), thanks to monthly Child Tax Credit payments (Source: Pandemic to Prosperity: South)