U.S. Sen. Bill Cassidy and some of his GOP colleagues in the upper chamber are backing a modest increase to the federal minimum wage. Legislation by Sens. Mitt Romney and Tom Cotton would raise the federal minimum from $7.25 per hour to $11 per hour over the next four years, with smaller businesses given more time to follow the new law. Any rise in the federal minimum wage would mean a raise for workers in Louisiana, which remains one of five states without a minimum wage law. The Shreveport Times’ Greg Hilburn reports.
Congress hasn’t raised the federal minimum wage since 2007, though surveys like a Pew Research Center poll show as many as two-thirds of Americans support an increase of up to $15 per hour. In Louisiana, a 2019 LSU poll showed 82% support for a minimum wage of up to $8.50. A previous attempt by Romney, Cassidy and their Republican allies in 2021 to raise the wage to $10 an hour failed in the Democrat-controlled Senate because it wasn’t considered a large enough increase. The new effort will almost certainly run into roadblocks with Democrats again.
Note: The value of the federal minimum wage in 2022 would have been $12.23 if it had kept up with inflation since 1968.
Bad time to hold up disaster relief funding
Disaster relief funding is being held up as part of the ongoing fight to avert a federal government shutdown. The gridlock has led FEMA to pause projects all over the country, including some in Louisiana. This comes at a time when the United States has already experienced a record number of extreme-weather events for one year, which have cost more than $1 billion, and remains in the peak of hurricane season. The Advocate’s Mark Ballard reports:
What happens if in the meantime a big storm hits and exhausts the Disaster Relief Fund? [Rep. Troy] Carter asked. … [FEMA’S Deanne] Criswell responded: “Given our current state, it (the fund’s balance) would be insufficient to cover all of our ongoing life-saving operations … We would have to further reduce those types of life-saving operations that we are working on based on the amount of funding we have available.”
Tax breaks need more scrutiny
Louisiana gives away more than $7 billion each year through various tax exemptions, exclusions and other tax breaks, usually without public scrutiny. But research has consistently shown that tax incentives play a small role in a business’ decision to locate or or expand, and that states would receive the bulk of new jobs without the giveaways. Meanwhile, the incentives take tax dollars away from things that companies do prioritize, such as low rates of poverty, an educated workforce and reliable infrastructure. Route Fifty’s Katherine Barrett and Richard Greene explain how putting more scrutiny on state tax incentives could control the potential waste of public tax dollars.
A superior approach, agree many, is to dole out incentives on a performance basis, so that companies don’t get any tax abatements until they’ve delivered on the promises made. Explains Ellen Harpel, founder of Smart Incentives, “If you’re using a claw back, then the money is already out of the door. [But for states] using performance-based incentives in which there are milestones, the payments are only made when they’re reached.” Adds Greg LeRoy, executive director of Good Jobs First, “while politicians would hesitate to pull the trigger on a claw back, in part because it may be seen as kicking a company while it’s down, the performance-based structure doesn’t force them to deal with that. It’s clean.”
Reality check: A bill to tighten scrutiny for state tax breaks died during the recently concluded legislative session. Rep. Stuart Bishop’s House BIll 641 would have eliminated more than 100 tax breaks unless lawmakers approve each of them on a case-by-case basis by Jan. 1, 2027.
Auditing child abuse and neglect
A recent state legislative audit found that Louisiana had 101,000 documented instance of child abuse or neglect from 2018 through 2022. The audit identified procedural problems with how the Department of Children and Family Services receives these reports. The Lafayatte’s Daily Advertiser’s William Taylor Potter reports that the child welfare agency, which has been underfunded for years, will need to hire more people to support its child abuse hotline and online portal.
The audit showed that the department does have a target for the number of calls answered live, where the caller did not request a callback due to the line being busy. The target is set at 66%, the audit said, and the rate is currently about 60%. In response, Ricks said the department would research best practices in order to develop performance goals for those data points. Once those targets are set, DCFS will look at the data on a weekly, monthly and quarterly basis.
Number of the Day
53.6% – Louisiana’s percentage of state revenue from federal funds for state fiscal year 2021. Only Alaska had a higher percentage. (Source: Pew Trusts)
