The politics of a budget surplus

The politics of a budget surplus

State lawmakers have nearly $3 billion in “one-time” revenue to allocate during their upcoming session, thanks to a healthy budget surplus, leftover pandemic relief and unobligated current-year tax revenue. It’s Louisiana’s biggest fiscal windfall since the years immediately following Hurricane Katrina, when federal reconstruction dollars and a spike in energy prices led to massive budget surpluses. The Advocate’s Mark Ballard reports that lawmakers are beginning this year’s budget deliberations with those lessons in mind – even though they’re at risk of repeating the same mistakes. 

Back then, legislators and Republican Gov. Bobby Jindal decided to return the largesse to taxpayers by dismantling part of Louisiana’s tax structure, which sent the state spiraling into a decade of deficits. … The other reality is that in 2025 the nearly half-cent increase to the sales tax — added to stabilize the state’s revenues — will expire. At the same time, money from new vehicle sales taxes will be diverted from the general fund, which pays salaries and services, and into a dedication to pay for roads and bridges. That means a reduction of about $800 million that can only be made up by raising taxes, cutting services, or improving the economy to the point that tax collections cover what will be missing, (House Appropriations Committee Chairman Jerome “Zee”) Zeringue said.

Defunding public schools
Louisiana’s top business lobbying group is leading a legislative effort to siphon money from public schools. The Advocate’s Will Sentell reports on several bills on tap for the upcoming legislative session that would establish “education savings accounts” that would give some parents the ability to opt out of public school – and take the state’s contribution to the education funding formula with them. 

The arrangements are called education savings accounts, which backers call the next generation of school choice in a state where 1 of 4 schools was rated “D” or “F” in the last pre-pandemic snapshot. They would give families access to the state’s share of annual school aid – around $5,500 per year – to help pay for private school tuition, tutoring services, supplemental materials or technological devices. That money now goes from the state to local school districts to help educate children.

Louisiana’s public schools are struggling to attract and retain teachers, who are paid well below their Southern and national peers. The school-defunding bills have the backing of the Louisiana Association of Business and Industry and conservative policy organizations that have long been hostile to public education. 

The critical federal safety-net
Louisiana’s high rate of poverty and susceptibility to natural disasters means we receive more financial support from the federal government, on a per-capita basis, than almost any other state. More than half the current-year state budget is composed of federal funds – the vast majority of which supports Medicaid services, disaster recovery and transportation needs. The Advocate’s Mark Ballard provides some important context

Those poverty rates translate into larger federal contributions than are given to richer states to help pay for a wide range of projects that subsidize healthcare, food, and shelter for those who can’t afford it on their own, said Brod Bagert, of Together Louisiana, a New Orleans-based statewide network of religious congregations and civic organizations. “Fossil fuel extraction has been in a steady decline for generations and we haven’t figured out how to replace those jobs,” said Jan Moller, director of the Louisiana Budget Project, a Baton Rouge group that researches and advocates policies for low- and middle-income families. Pointing to a recent United Way of Southeast Louisiana study, Moller noted that 828,255 Louisiana households — 48 percent — could not afford basic needs such as housing, childcare, food, transportation, health care, and technology in 2016 – the third highest percentage in all 50 states.

Black women need paid family leave
America remains the world’s only major industrialized country where working parents are not guaranteed paid leave in connection with the birth or adoption of a child, or a major medical emergency. While the need for paid leave stretches across racial, gender and economic lines, it is particularly acute for Black women, as the Center for American Progress notes in a new policy brief: 

In particular, the experiences of Black women, who have among the highest labor force participation rates but also work disproportionately in low-paid jobs with few benefits, are instructive. Their experiences make clear that policy supports to assist women, in and out of the workforce, with caregiving challenges are essential to build on the country’s recovery to date, help women retain jobs without eroding their economic stability, and ensure that no one is left behind. … Indeed, the vast majority of Black mothers—more than 80 percent—are sole, primary, or co-breadwinners for their households. This is a far greater share than that of mothers from other racial or ethnic groups, demonstrating how vital Black women’s earnings are to their families’ economic security.

Number of the Day
5.9 million – The number of leaves that are needed – but not taken – by working women in America each year (Source: Center for American Progress)