Many states, including Louisiana, have seen big budget windfalls because of federal relief aimed at lessening the impact of the Covid-19 pandemic. The stimulus payments that helped families put food on the table during the pandemic also helped states collect more taxes and revenues. As the Advocate’s Mark Ballard explains, higher-than-expected collections of individual and general sales taxes have boosted state revenues in the Pelican State.
“When money from the federal government started kicking in, households started to spend in purchases of goods that are covered by the state sales taxes as opposed to services that aren’t taxed,” said Legislative Fiscal Officer [Alan] Boxberger. Meanwhile, employment has been increasing and is now about 94% of the February 2020 peak. But workers in Louisiana now are, generally, being paid more and putting in more hours, he said. “That has got us back to the trend line for personal income tax,” Boxberger said. “It did stimulate the economy by addressing the deficiencies with the workforce,” House Appropriations Chair Jerome “Zee” Zeringue said Monday about the federal stimulus dollars.
The good times are unlikely to last. Louisiana is staring at an $800 million fiscal cliff in 2025, when a $0.45 cent increase to the state sales tax expires and the state starts diverting sales tax revenue from new car sales from the state’s general fund. Legislators must ensure that they do not use surplus dollars to make short-sighted decisions during this year’s legislative session – like cutting taxes – that will prevent them from tackling budget shortfalls in the near future.
A sudden cut to meals for kids
Millions of students could lose access to free and reduced-priced meals after Republicans in Congress objected to extending pandemic-related school meal flexibilities in an evolving package to fund the federal government. The U.S. Department of Agriculture estimates that funding for school cafeterias will drop by more than 40% if key waivers aren’t renewed, even while supply chain disruptions have raised prices and made many ingredients scarce, and school kitchens continue to face labor shortages. As the Washington Post’s Laura Reilly and Tony Romm explain, this hasty exclusion could lead to schools scrambling to figure out how to feed kids.
“Ninety percent of schools are using the waivers and only 75 percent of them are breaking even,” said Stacy Dean, USDA deputy undersecretary. “If your revenue is too low for your costs, you either need to go somewhere else for your revenue or you have to cut costs, which could mean lower-quality food, layoffs or trimming back programs like after-school snacks and breakfast, which has a particular impact on low-income students.”
Lynching is (finally) a hate crime
After more than a century of failed attempts, Congress approved a bill that would make lynching a federal hate crime. The failure to outlaw lynchings for more than 120 years after the original bill was introduced shows America’s tepid response to a heinous act that has long terrorized Black communities. The New York Times’ Emily Cochrane reports.
“Although no legislation will reverse the pain and fear felt by those victims, their loved ones and Black communities, this legislation is a necessary step America must take to heal from the racialized violence that has permeated its history,” Senator Cory Booker, Democrat of New Jersey and a sponsor of the legislation, said in a statement Monday.
Louisiana utilities charge inordinate late fees
Major utility companies in Louisiana charge some of the highest late fees in the country. The high late fees typically punish the people who are least able to afford their bills, disproportionately affecting Black and Hispanic households. As the AP’s Jasen Lo explains, for some companies like Entergy, the late fees make up a larger portion of profits than the national average, leaving many customers with tougher choices between paying the power bill and affording other necessities.
Mary Boyd, who is 83 and lives in New Orleans, said her expensive energy utility bills from Entergy — a major utility provider in Louisiana and three other Southern states — were causing her to choose between medication, and other expenses such as repairing the damage to her fence caused by Hurricane Ida. “I am sick. I have high blood pressure, asthma and arthritis,” Boyd said. “Now just imagine this, this three hundred and some dollars energy bill takes away from food and other things.”
Number of the Day
20 – The United States’ national ranking for best places for working women. (Source: The Economist)