The federal tax and budget megabill pushes more administrative and benefit costs for the Supplemental Nutrition Assistance Program (SNAP) to states. The LSU Manship School News team explains how these changes will affect Louisiana, which is heavily dependent on federal food assistance:
That shift will cost the state $42.3 million more in the fiscal year starting July 1. Louisiana’s additional spending could potentially grow to $151 million the following year if it cannot lower its error rate to a new standard in administering the program, according to the Louisiana Division of Administration. … More than 756,000 people in Louisiana, or 16% of the state’s population, rely on SNAP benefits. About 53% of them are children or elderly.
The federal law cuts SNAP by $187 billion over the next decade. Some of the SNAP spending reductions will be achieved through new, strict work reporting requirements. Many people could lose their benefits because of paperwork issues, not because they’re ineligible:
Jan Moller, the executive director of Invest in Louisiana, a non-partisan think tank that watches out for the poor, expressed concern that some eligible recipients might lose benefits because they did not fill out the correct form or never received it. Some also might have a disability that “is not yet approved by the right agency,” Moller said.
New Mexico provides universal child care
New Mexico Gov. Michelle Lujan Grisham signed legislation on Tuesday that provides universal child care to all families. The Land of Enchantment is the first state in the nation to provide this crucial resource. Joshua Bowling of Source New Mexico reports:
After the bill signing, she told reporters she believed that free childcare will ameliorate New Mexico’s deep-seated issues with child well-being. … Since November, Lujan Grisham said more than 16,000 new children have enrolled in free child care — and more than half of them were already eligible to receive free child care under the state’s previous requirements. “All of these families struggled for no reason,” she said. “This is maybe the most monumental, pivotal day in New Mexico’s past, its current and the opportunities for its future. We couldn’t be prouder.”
Louisiana and New Mexico routinely rank as some of the worst states for child well-being, according to the annual KIDS COUNT Data Book produced by the Annie E. Casey Foundation. Much of the money for New Mexico’s child care program comes from state trust funds made up primarily of oil and gas revenue:
“Major” changes in oil and gas revenue would affect the Early Childhood Trust Fund and other similar state funds. The new law allows the state to take up to $700 million from the $11 billion Early Childhood Education and Care Trust Fund to pay for universal child care over the next five years. State leaders created that fund in 2020 with about $300 million.
Louisiana, a major oil and gas producer, recently cut funding for early childhood education and could eliminate an additional 1,600 early education seats.
Child Tax Credit leaves out millions of children
The federal megabill included a small increase to the federal Child Tax Credit. But the increase excludes millions of children because their families don’t make enough money to qualify. And most of the enhanced benefits will go to middle- and high-income families. A new report from the Institute on Taxation and Economic Policy explains:
(M)iddle- and upper-income families with children will receive a larger CTC by a few hundred dollars on average, the lowest-income families will not see their CTC change. The richest 20 percent of Americans will receive the largest benefit from this change of any income group in 2026 while the poorest 20 percent will receive nothing. Ninety-nine percent of children in the poorest fifth of households will receive a reduced credit or no credit at all.
Joe Hughes, the report’s author, breaks down the different benefit amounts based on the age of a family’s youngest child:
Among households where the youngest child at home is less than six years old, 38 percent of children will not receive the full CTC in 2026. This contrasts with 27 percent of children in households where the youngest child is 6 or older. … This means that the current CTC is ill-targeted toward helping children during the most critical years of development.
Approximately 47% of Black families will not receive the full credit, compared to 22% of white families:
Due to historical factors, Black and Hispanic families, on average, have lower incomes than white and Asian families. Centuries of slavery, segregation, redlining, and exclusion from government programs that helped build wealth (such as the original GI Bill and FHA mortgages) left Black families with far less inherited wealth. The effects of these policies have persisted through generations, and the income from wealth in affected communities tends to be lower than non-affected communities.
A recent issue brief from Invest in Louisiana’s Paul Braun explains how the federal megabll will leave behind millions of working families this tax filing season.
Mandatory discounts for fortified roofs
Insurance companies will soon be required to provide discounts to homeowners with fortified roofs, under a bulletin released last week by Louisiana Insurance Commissioner Tim Temple. Homes with fortified roofs are more likely to sustain hurricane-force winds and have been hailed as a key part of the solution to the state’s property insurance crisis. The Times-Picayune | Baton Rouge Advocate’s Sam Karlin reports:
For south Louisiana homeowners with fortified roofs — the most common category — insurers will have to give a 29% discount on the hurricane portion of the premium. The hurricane portion is generally the largest contributor to the overall premium in parishes at-risk from hurricanes. Homeowners with fortified “gold” homes, which must include reinforced windows, doors and other bracing against wind, will get a 49% discount unless insurers justify a lower amount.
State Sen. Royce Duplessis, who proposed bills during the last two legislative sessions that would have mandated discounts for homes with fortified roofs, weighed in on Temple’s move:
Duplessis said it’s still worthwhile to debate his legislation, which is up for consideration again for the session that began Monday. Temple or a future insurance commissioner could unwind the rule in the future without legislative action. And, he noted, the rule only applies to the hurricane portion of the premium, not the entire cost. “I still think there’s more we can do,” he said. “I still think this is something we should not take off the table doing legislatively.”
Number of the Day
$212 – Increase in the average American senior’s Medicare premiums last year due to overpayments to private Medicare Advantage plans. Medicare Advantage is a highly lucrative market for insurers that now enroll half of all Medicare beneficiaries. (Source: U.S. Congress Joint Economic Committee via the Wall Street Journal)