The U.S. House of Representatives advanced a budget resolution along party lines on Tuesday that calls for $1.5 trillion in cuts from the federal budget to partially offset $4.5 trillion in tax cuts that would mainly flow to wealthy people and profitable corporations. Most of the budget cuts would fall on safety-net programs that serve people with low incomes, including an $880 billion cut to the Medicaid program. The Times Picayune | Baton Rouge Advocate’s Mark Ballard explains how Louisiana, which relies on Medicaid more than most other states, would be affected:
Healthcare accounts for $21.4 billion, or 43.4% of the state’s total budget. Louisiana taxpayers will be expected to put up $3.23 billion of that amount through the state general fund during the next fiscal year. Any decrease in federal funding would require the state to pay more. … “It would create some significant challenges,” said [Appropriations Committee chair Jack] McFarland, R-Winnfield. Basically, the state would have to cut services, reduce Medicaid rolls and find ways to come up with the money. “I don’t know how we would continue to look at reducing income taxes on the state level,” McFarland said.
Medicaid cuts would do nothing to make health care more affordable and accessible, and would in fact do the opposite. In Louisiana, where 1 in 3 people are covered by the program, the cuts could force hospitals, nursing homes and other private care providers to shut their doors:
“Such proposals would place immense financial pressure on healthcare providers across the state, particularly small and rural hospitals that often serve as their communities’ primary healthcare providers and leading employers,” Paul A. Salles, president of the Louisiana Hospital Association, wrote Johnson on Feb. 17. “Given that hospitals directly and indirectly support more than 308,000 jobs in Louisiana, the broader economic repercussions would be substantial.”
GOP leaders are downplaying the cuts to Medicaid, arguing that the budget resolution does not specifically mention the federal health care program. The New York Times’ Margot Sanger-Katz and Alicia Parlapiano explain why it’s next to impossible for GOP leaders to achieve their spending cut targets without slicing deeply into Medicaid.
(The budget resolution) instructs the House Energy and Commerce Committee, which has jurisdiction over the program, to cut spending by $880 billion over the next decade. … It’s not so simple as finding the cuts elsewhere. The special process, known as budget reconciliation, means Republicans will have to find all $880 billion from within the committee’s jurisdiction. That leaves them with fewer options than one might think.
A new fact sheet from Georgetown Center for Children and Families explains why Medicaid is vital to Louisiana.
A new report from the Urban Institute explains how reducing federal funding for Medicaid will shift costs to states and likely lead to coverage losses.
Tax breaks for college athletes
Louisiana college and high school athletes earning income through name, image and likeness (NIL) deals would be exempt from the state income tax, under legislation that is being prepared by Rep. Dixon McMakin of Baton Rouge. McMakin says the new law is needed to compete with schools in states, such as Florida and Texas, that have no income tax or to give Louisiana schools a recruiting advantage on those that do. While athletes compete against each other to determine winners and losers, experts aren’t keen on picking winners and losers in the tax code. The Times Picayune | Baton Rouge Advocate’s Alyse Pfeil reports:
Manish Bhatt, a senior policy analyst for the Tax Foundation, a nonpartisan Washington-based think tank, echoed that sentiment. “Strong, sound policy does not carve up the income tax and create a bunch of exemptions and loopholes such that it prevents broader reform — structurally sound reform — from taking root,” Bhatt said. Lawmakers should consider whether potential exemptions for NIL compensation would place an undue burden on other taxpayers, said Bhatt, who advised Gov. Jeff Landry ahead of a recent overhaul of Louisiana’s tax structure, which ultimately reduced and flattened state income taxes.
Landry plans to reopen shuttered youth prison
Gov. Jeff Landry’s administration plans to reopen a youth prison that was plagued by abusive guards and inadequate infrastructure and described as being too similar to adult facilities. Nearly 20 years ago, a bipartisan group of state lawmakers and former Gov. Bobby Jindal agreed to close the Jetson Center for Youth in Baker as part of a more therapeutic approach to Louisiana’s antiquated and brutal juvenile justice system. An ongoing conservative backlash against legislation passed in recent years is moving the state against that goal. The Louisiana Illuminator’s Julie O’Donoghue reports:
(R)eopening Jetson is seen by children’s advocates as another shift away from the therapeutic model for children convicted of crimes that the state attempted to implement – but never properly funded – when Gov. Bobby Jindal was governor. “We want community-based services. We want alternatives to incarceration,” said Antonio Travis, youth organizing manager for Families and Friends of Louisiana’s Incarcerated Children. “Taking kids away from their families is not a winning formula.”
Financial risk of nonprofits losing government grants
A federal judge on Tuesday indefinitely blocked the Trump administration’s federal funding freeze. Trump’s attempt to gut government grants would have posed an existential threat to nonprofit organizations across the country. A new tool from the Urban Institute lays out the financial risk:
Nationwide, 103,475 public charities reported receiving a total of over $267 billion from government grants in 2021. The inflation-adjusted total of over $300 billion represents almost three times the most recent estimates of foundation giving. In all but two of the 437 congressional districts in the United States, the typical nonprofit could not cover its expenses without its government grants. And in every state, between 60 and 80 percent of nonprofits that receive government grants would be at risk of a financial shortfall.
Number of the Day
74% – Percentage of Louisiana nursing home residents who are covered by Medicaid. (Source: Georgetown Center for Children and Families)