Resurrecting a bad idea

Resurrecting a bad idea

A decade ago, then-Gov. Bobby Jindal convinced himself that Louisiana should repeal its personal and corporate income tax and asked his top aides to concoct a plan. The results, in retrospect, were almost farcical: To replace the revenue from income taxes, Jindal proposed raising sales taxes to levels unseen anywhere else in America. Even then, the numbers didn’t add up, and the resulting plan would have raised taxes on low-income Louisianans and small businesses while ushering in more painful cuts to critical services. Rather than face a certain defeat in the Legislature, Jindal abandoned his scheme on the opening day of the 2013 legislative session. 

Undaunted by this historic failure, state Rep. Richard Nelson has convinced the House Ways & Means Committee to study how Louisiana could function without the nearly $5 billion a year that state government collects through income taxes (spoiler alert: It will either require massive budget cuts, or shifting the tax burden from wealthy people and corporations to middle- and lower-income Louisianans). The Illuminator’s Wesley Muller was there

The progressive Center on Budget and Policy Priorities points out that over the past two decades, more households moved from Florida, which doesn’t collect income taxes, to Georgia, North Carolina and nine other states with income taxes. Even with the highest income taxes of any Sun Belt state, North Carolina had more than double the net inbound migration than that of its no-income tax neighbor Tennessee, according to the Center on Budget and Policy Priorities.

The Advocate’s Will Sentell notes that repeal likely faces an uphill climb in the Legislature, especially in an election year. 

Efforts to eliminate the state income tax have been floated in the past, including by Nelson in 2021, but never gained enough political traction to go far.

Gannett’s Greg Hilburn repeats the canard that Louisiana’s tax structure is too complicated, but also notes that the state revenue forecast remains in flux thanks to uncertainties brought by the pandemic. 

“We’re seeing really high revenue, we know it’s probably going to come down. We have hurricane recovery, we have a lot of federal money being dropped in. We know it’s going to come down so we just caution you… if you’re tempted to cut just keep in mind we have a far way to fall at this point,” said Debbie Vivien, Chief Economist for the Legislative Fiscal Office. 

Striking for paid sick leave 
More than 57,000 American railway workers are threatening to strike, a move that could threaten the nation’s drinking water supply and prevent the critical deliveries of food, energy and key health products. As the Washington Post’s Jeff Stein, Lauren Kaori Gurley and Tyler Pager explain, employees at BNSF and Union Pacific are angry over new company policies that deny them paid sick and medical leave and can cause them to be fired for attending routine medical appointments:

Two of the largest rail carriers that mainly operate in the Western United States — BNSF and Union Pacific — are the companies with the points-based attendance policies. More than 700 BNSF employees have quit since it rolled out a points-based policy in February. Workers can be terminated if they run out of points, even in the case of a family emergency. Missing work on certain high-impact days, or planning ahead for a single doctor visit, can result in workers losing half or more of their allotted points. 

Encouraging news from the Census
The U.S. Census Bureau released new data on Tuesday showing that child poverty in America plunged to a historic low of 5.2% in 2021. That is largely due to federal pandemic aid, including the expansion of the Child Tax Credit, that kept millions of families financially afloat during the Covid-19 pandemic. But Congress let the expanded CTC expire at the end of December, which suggests that the numbers are now heading in the wrong direction. Center on Budget and Policy Priorities President Sharon Parrott elaborates

The data for 2021 show that the nation knows how to reduce poverty, broaden opportunity, and expand health coverage. Temporary measures drove progress. Policymakers should build on this experience to address the widespread insecurity and inequities that pre-dated the pandemic and will worsen if temporary relief measures aren’t replaced with longer-lasting policy advances. … The Child Tax Credit expansion drove the large reduction in child poverty between 2020 and 2021, Census data show. In the absence of the expansion, child poverty would have fallen to 8.1 percent, rather than 5.2 percent, and some 2.1 million more children would have lived in families with incomes below the poverty line.

Homelessnes on the rise
Federal pandemic relief allowed Louisiana to reduce its homeless population over the last two years, but expiring aid, soaring rent prices and a lack of eviction protection for renters have driven those numbers back up. The Louisiana Illuminator’s J.C. Canicosa explains how quickly and easily a person can become homeless in Louisiana. 

“Landlords could turn around and raise the rent or evict a family as soon as their assistance ended,” Hill said, “and in Louisiana, that was certainly the case.” Martha Kegel, executive director of Unity of Greater New Orleans, said the number of people without housing has risen and fallen drastically over the past two years. It depends on whether the homeless service organization has access to money to pay for low-cost hotel rooms to get people off the street, she said, and rent assistance for permanent housing.

Louisiana received additional funding for rental assistance earlier this year and is still accepting applications. 

Applicants could receive rental assistance as soon as three weeks after completing their forms, said Desireé Honoré Thomas, assistant commissioner for the Louisiana Division of Administration. The state program receives about 1,000 applications a week, Thomas said, adding that emergency rental assistance funds are expected to be 100% allocated by next month. “We just want people to know the program is still open,” Thomas said. “I know some people are still experiencing difficulties paying rent, as we’re seeing a spike of COVID at the moment.”

Number of the Day
5.2% – Child poverty rate in the United States in 2021, which was a record low. This historic reduction was largely due to the expanded Child Tax Credit and other government policies. (Source: U.S. Census Bureau via Center on Budget and Policy Priorities)