Landry eyes severance tax cut

Landry eyes severance tax cut

A transition committee for Gov. Jeff Landry has recommended phasing out Louisiana’s severance tax for oil production. House Speaker Phillip DeVillier has unsuccessfully pushed the idea for several years. During last year’s debate, LSU Center for Energy Studies researcher Greg Upton testified that Louisiana already has a competitive severance tax structure, and a reduction would lead to less money in state coffers and have a minimal effect on new production and jobs.  The Times Picayune | Baton Rouge Advocate’s Robert Stewart reports:  

Jan Moller, executive director of the Louisiana Budget Project, argued that oil production is far more dependent on the global price of oil than a local severance tax. Though shift in the tax wouldn’t be as seismic today as it would have been 40 years ago, Moller said, any difference in revenue is still critical. “If you cut the severance tax, that’s less money that you have available to invest in teachers and students and health care and infrastructure and all of the other things that build a good community,” he said.

The committee also recommended examining the local approval process for the state’s Industrial Tax Exemption Program, but still favors allowing local governments the ability to approve or deny applications. 

Moller, the Budget Project leader and a member of the Board of Commerce and Industry, which approves ITEP breaks, said he believes the ITEP process is not broken. He supports the idea of extra layers for corporations seeking tax breaks that can reach hundreds of millions of dollars. In addition, criticisms that the new ITEP rules would turn companies away also haven’t borne fruit, Moller said. “It’s been eight years almost (since the ITEP changes), and people are still coming in and investing in this state,” he said.


Prison labor tied to popular food brands
Prison labor has provided hundreds of millions of dollars in agricultural products to popular food brands, according to a two-year investigation by the Associated Press. Goods tied to American prison labor are imported by countries that have been banned from exporting into the United States because of their use of forced labor. The prisoners who toil away in fields typically work for little or no pay and lack basic workplace protections. The AP’s Robin McDowell and Margie Mason, reporting from Louisiana’s maximum security prison in Angola, explain how America’s prison labor system resembles modern day slavery. 

Calvin Thomas, who spent more than 17 years at Angola, said anyone who refused to work, didn’t produce enough or just stepped outside the long straight rows knew there would be consequences. “If he shoots the gun in the air because you done passed that line, that means you’re going to get locked up and you’re going to have to pay for that bullet that he shot,” said Thomas, adding that some days were so blistering hot the guards’ horses would collapse. “You can’t call it anything else,” he said. “It’s just slavery.”

As McDowell and Mason explain, work-release programs have become very profitable:

In Louisiana, where more than 1,200 companies hire prisoners through work release, sheriffs get anywhere from about $10 to $20 a day for each state prisoner they house in local jails to help ease overcrowding. And they can deduct more than half of the wages earned by those contracted out to companies – a huge revenue stream for small counties.


More people are being classified as gig workers
More workers are being classified as independent contractors as corporations try to exploit the “gig” economy. No longer confined to ride-share and food-delivery services, the gig economy is poised to grow as corporations look to expand the definition of who qualifies as a gig worker. New York University’s Terri Gerstein, in a guest essay for the New York Times, explains: 

Because workplace laws protect employees and not independent contractors, gig companies like Uber and Lyft save a bucket of money on both wages and taxes by avoiding the obligations that every other employer must follow: wage-related laws as well as unemployment, Social Security and Medicare taxes. As a result, gig workers can find themselves paid sub-minimum wages, for example, or left without workers’ compensation when injured or killed on the job. Another consequence is that law-abiding employers face unfair competition with businesses that don’t follow the rules, and critical safety-net programs like unemployment insurance lose badly needed funds.


Lessons learned from the Medicaid unwind
States across the country are kicking people off their Medicaid rolls as pandemic-era coverage protections have expired. The vast majority of the 362,000 Louisianans who lost coverage through Dec. 31 were dropped for procedural reasons, not because they were ineligible. The Center on Budget and Policy Priorities’ Jennifer Wagner provides some lessons learned from the massive process that can improve Medicaid. 

While it is not too late to improve the unwinding process, we must also look ahead to permanently fixing inefficiencies in Medicaid applications and renewals. These inefficiencies are burdening enrollees and eligibility workers and resulting in incorrect denials and terminations of coverage. A first step would be to make sure states follow the law. … Even when states meet the technical letter of the law, some do so ineffectively.


Number of the Day
55.8% – Percentage share of renters in the New Orleans-Metairie metro area that are considered “cost burdened,” meaning they must spend more than 30% of their income on housing costs. The number of Americans who are considered cost-burdened reached a record high of 22.4 million in 2022. (Source: Harvard Joint Center for Housing Studies via the Washington Post)