Manufacturing corporations in Louisiana have long benefited from one of the nation’s most generous tax-giveaway programs – the Industrial Tax Exemption Program (ITEP) – which provided 10 years of property-tax forgiveness with virtually no strings attached. But for local governments, ITEP came at a steep cost: the loss of millions of dollars in local property tax revenue at the whim of an unelected state-level board. Reforms ordered by Gov. John Bel Edwards in 2016 reduced the scope of the tax break and gave parish governments, school boards and sheriffs the right to accept or reject the applications. But those reforms could vanish in two years when a new governor takes office. Senate Bill 151 by Sen. Rogers Pope sought to enshrine local control over local property taxes in the state constitution. But the state’s powerful business lobby opposed the measure, so it died on Tuesday in a lopsided vote. The Advocate’s Sam Karlin reports:
In his speech on the floor, Pope argued that local officials familiar with what it takes to run a government – not the distant state Board of Commerce and Industry – should make decisions on the lucrative tax breaks. An animated Pope said Louisiana is the only state that let an unelected state board decide “whether locals are going to give up their damn tax money.”
Pope’s original bill was far more ambitious than the version that died on the Senate floor.
Together Louisiana successfully pushed for Edwards to roll back the program, which now requires companies to get locals’ approval before winning a tax break. Previously, the obscure Board of Commerce and Industry had that power, and it approved virtually every request that came their way. The changes also banned certain routine maintenance and required environmental projects from qualifying for tax breaks, and rolled back the amount of exemption to 80%, among other things. Pope’s bill originally called for enshrining all of Edwards’ changes into the constitution, but in an effort to win over more legislators, he pared it back to one thing: the ability of local governments to approve or reject the tax breaks.
Tax cuts now put future needs at risk
Louisiana isn’t the only state that is flush with unexpected, temporary tax revenue thanks to the influx of pandemic relief funds and the reopening of the economy. State revenues rose 17.6% last year over the previous year. Now, the New York Times’ Alan Rappeport writes, many states are responding to current largesse by cutting taxes. But while some states are making temporary tax changes or providing one-time credits, others are enacting permanent tax cuts that will make it harder to fund basic services in years to come.
Cutting taxes too deeply now could put states on weaker financial footing. The Tax Policy Center said its state tax revenue forecasts for the rest of this year and next year were “alarmingly weak” as states enacted tax cuts and spending plans. Fitch, the credit rating agency, said recently that immediate and permanent tax cuts could be risky in light of evolving economic conditions. “Substantial tax policy changes can negatively affect revenues and lead to long-term structural budget challenges, especially when enacted all at once in an uncertain economic environment,” Fitch said.
We still need Covid protections
Health and Human Services Secretary Xavier Becerra has until May 16 to decide whether to extend the federal Public Health Emergency (PHE) by an additional 90 days or let it expire on July 15. Once the emergency expires, states have to start reviewing their Medicaid caseloads to determine who is still eligible for coverage, and who makes too much to qualify. Dr. Moira Szilagyi and Joan Alker, writing in The Hill, warn that the PHE “winddown” could have particularly bad consequences for children, more than half of whom get coverage through the federal-state health insurance program.
An estimated 7 million children nationwide are at considerable risk of losing coverage when the PHE continuous eligibility protection ends. Many parents are so busy trying to meet the rising costs of rent, groceries and gas that they may not even realize that their child has lost coverage until they are in need of care. States are understaffed as they approach the mammoth task of renewing coverage of nearly 80 million people while they face workforce challenges confronting other employers. We also know that children of color and families with limited English proficiency are more likely to see a loss in coverage. Families of the children who slip through the cracks and lose coverage will wind up incurring large medical bills, medical debt or foregoing needed care.
Poor recordkeeping compounds injustices
Louisiana voters in 2018 overwhelmingly overturned a Jim Crow law that
allowed people to be convicted of crimes even when some jurors did not
believe they were guilty. Two years later, the U.S. Supreme Court ruled that this change did not affect earlier split-jury convictions. This meant that the approximately 1,500 in Louisiana still imprisoned on divided verdicts would need the Legislature to pass a law to provide them an opportunity at freedom. While legislation that would do just that is working its way through the Legislature, authorities face a daunting task in trying to determine who exactly was convicted by a non-unanimous jury. The Marshall Project’s Beth Schwartzapfel explains:
“Our record-keeping in the South is horrible,” said Jason Williams, the district attorney in the parish that includes New Orleans. “It has been very difficult just to find all of the records and information necessary to do a complete review.” … Racing the clock to find people sitting in prison due to split juries, three paralegals attended community meetings, visited prisons and sent letters trying to reach people who might have been convicted by a split jury. “Their job was talking to family members, walking them through documents that were in their closets. ‘You have a giant box. Let’s start in envelope one,’” said Johnson.
Poor recordkeeping practices in Louisiana’s prisons and jails have also led to people being imprisoned months or years past their release date, prompting a federal investigation.
Number of the Day
2% – Percentage of American businesses that are owned by Black people, who comprise 13% of the population. If business ownership was proportionate to population, there would be 872,200 Black-owned businesses (Source: Alliance for Entrepreneurial Equity via Axios)