The federal pandemic relief that propped up child care providers across the country expired Sept. 30, and the Century Foundation estimates that 70,000 child care programs could be forced to close as a result. Several states, including Louisiana, are trying to make up for the loss of federal funding by raising state dollars to support parents who can’t afford the cost of a quality child care center. Stateline’s Robbie Sequeira, reporting in the Louisiana Illuminator:
Even officials from some of the states highlighted in the Century Foundation report as being most at risk told Stateline that they aren’t perched on the edge of a funding cliff. West Virginia officials said they are confident that children there, a quarter of whom live in poverty, will not lose access to child care subsidies. In May, the state pulled $24 million from its Temporary Assistance for Needy Families (TANF) program to pay for the subsidies, enough to continue them through next August.
Route Fifty’s Molly Bolan notes that some states are trying to fill the gap with tax credits, which play a critical role in helping families but aren’t nearly enough to fill the void left by the loss of federal support:
On Tuesday, the Bipartisan Policy Center published a report that examines four tax credits that states can implement to help families access child care: the child and dependent care tax credit, the earned income tax credit, the employer-provided child care tax credit and the aforementioned child tax credits. Most states have their own versions of at least one of these benefits, the report notes, though 13 don’t have any. Four states—Colorado, New Mexico, New York and Oregon—have all four tax credits, according to Brittany Walsh, associate director of the center’s Early Childhood Initiative.
The revenue slowdown is here
America’s economy recovered faster from the pandemic than most economists predicted, and has stayed strong in recent months despite fears of a recession. The result has been strong growth in state tax revenues, which has produced a string of budget surpluses and allowed states to make new investments in education and other priorities. New research from Justin Theal and Alexandre Fall of Pew Trusts suggests that a slowdown is underway:
In the first quarter of 2023, total state tax revenue fell for the third quarter in a row on a year-over-year basis, but it remained higher than before the pandemic-driven downturn in early 2020. Collections were 15.6% greater than those for the final quarter of 2019, after adjusting for inflation and averaging across four quarters to smooth seasonal fluctuations. Tax collections were above pre-pandemic levels in every state.
Footnote: Louisiana is much better prepared to weather an economic downturn than it was during the last slowdown, as the state’s rainy-day reserve funds have grown tenfold since 2016.
Is it time to worry about the deficit?
New York Times columnist (and Nobel Laureate) Paul Krugman has often been critical of the deficit scolds in Congress and conservative think tanks, who call for deep cuts to federal programs in an effort to balance the budget. But the recent uptick in long-term interest rates has made borrowing much more expensive, and made deficits a bigger concern. In his latest analysis, Krugman writes that it’s a good time to reduce the gap between federal revenues and spending – but the solution isn’t to cut programs like Medicare and Social Security.
The problem is obvious. Conservatives always want to cut taxes, especially for the rich, even though polls suggest that most Americans believe that the rich pay too little. Republicans are even trying to deprive the I.R.S. of the resources it needs to go after wealthy tax cheats. And while Democrats are at least willing to tax the rich, that by itself won’t be enough (although it would help). And they aren’t willing to take the political heat for proposing tax hikes on the middle class.
Faith leaders push for clemency
Louisiana religious leaders are not giving up on their efforts to gain clemency for people sitting on Death Row, despite a recent deal that threatens to scuttle the process until a new governor takes office in January. The Advocate’s Matt Bruce reports from the Governor’s Mansion, where leaders rallied on Tuesday and Sister Helen Prejean was among a small group that met with Gov. John Bel Edwards.
Clemency supporters insist Louisiana’s death penalty system is flawed, with a disproportionate number of minorities and people with documented intellectual disabilities condemned to death row. “We make plenty of mistakes,” Prejean said. “We are filled with racial bias. When White people are killed, the death penalty is sought. When people of color are killed, it isn’t sought.”
Edwards had hoped to get clemency hearings for 55 of the 57 people currently sentenced to die for their crimes. But the deal struck earlier this month between the Pardon Board and Attorney General Jeff Landry means only five prisoners could potentially get their sentences reduced before Edwards leaves office on Jan. 8.
Number of the Day
-1.3% – Tax collections in Louisiana through the 1st Quarter of 2023, compared to pre-Covid revenue trends. (Source: Pew Trusts)