The voters’ decision to overwhelmingly reject a complicated tax proposal is reigniting the political debate over public school teacher pay. Amendment 2 would have, among other things, eliminated state trust funds that support education programs and use those dollars to replace annual stipends that teachers have received from the state the past two years. The amendment’s failure puts pressure on legislators to make sure Louisiana teachers – whose pay lags far behind their Southern and national peers – get a meaningful pay raise. The Louisiana Illuminator’s Julie O’Donoghue reports:
“That is probably going to end up being the lynchpin of the session,” said Rep. Julie Emerson, R-Carencro, author of the failed Amendment 2. “I really don’t know how that is going to go.” Keeping teacher pay level with the current year would be expensive. Lawmakers would have to find $200 million in Landry’s proposed budget to cover the expense of another temporary, yearly stipend or to make a similar permanent salary increase on July 1.
Gov. Jeff Landry did not include funding for a teacher pay raise in his executive budget proposal. The governor did, however, provide funding for other education initiatives, such as $50 million for the state’s new private school voucher program. The Times-PIcayune | Baton Rouge Advocate’s Elyse Carmosino explains if lawmakers can shuffle dollars around to cover the cost of a pay increase:
Last year’s proposed budget also did not initially include money for stipends. The governor agreed later to include the funding in exchange for $24 million in cuts to early childhood education subsidies. Richard Nelson, secretary of the Louisiana Department of Revenue, said this year’s steep budget shortfall will likely make it more difficult to find funding for teacher pay. “There’s just not as much wiggle room in the budget,” he said in an interview Monday.
The fact that Louisiana can’t pay its teachers what they deserve is proof the state doesn’t raise enough revenue. This revenue problem will only get worse after state lawmakers cut income taxes during last November’s special session. While the Legislature also passed a law that temporarily diverts vehicle sales tax dollars away from infrastructure megaprojects to make up some of the lost revenue, the bill for the costly tax cuts will eventually come due. Shannon Heckt of Louisiana First explains:
In two years, if the temporary pause of the construction funds diversion is lifted, the state faces a $568 million shortfall, [Appropriations Chairman Rep. Jack] McFarland said. The gap will only continue to grow if they don’t find a consistent revenue stream to help keep the budget balanced without hefty cuts. … McFarland said some of the revenue possibilities that did not pass in the special tax session, such as increasing the number of goods and services that fall under the sales tax, could be back on the table. It will be up to legislators to determine what they have the appetite for.
The secret to Minnesota’s success
Successful states have economies that provide families with access to high-quality schools, affordable health care and modern infrastructure – things that are financed by tax revenue. Many anti-tax advocates still claim that lower taxes create more prosperous states. Thomas Legg, writing in a guest column for the Minnesota Reformer, explains how the North Star State is more prosperous than its neighbors who have lower tax rates:
The higher income of the Minnesota median household covers the extra taxes several times over. There is no indication that the incomes in states with lower taxes are catching up to Minnesota. Wisconsin, the only state to see a substantial income decline relative to both Minnesota and the U.S. has reduced its tax burden over the same period. Minnesota has lower poverty; a slightly higher proportion of its population with health coverage; better education outcomes; and lower violent crime rates. These achievements are all expensive. It is hard to conclude that our higher taxes did not make these achievements possible.
An alternative to tax cuts
Senate Republicans are poised to pass a budget resolution this week that would permanently extend the 2017 Trump tax law, which heavily favored the wealthy and large corporations. The cost of permanently extending these temporary provisions would cost $5 trillion – the same amount as fixing a looming shortfall to Social Security. A new report from the Tax Policy Center provides a proposal that invests in working families as an alternative to extending the Tax Cuts and Jobs Act:
(T)he reform proposal analyzed in this report focuses on reforming and improving the EITC and the CTC to help them better meet the needs of working families in the 21st century. … In addition, the proposed credit reforms provide valuable investments in children, which research indicates will provide long-term benefits to society by fostering healthier, better educated citizens who are more likely to be employed. This proposal would also provide greater financial stability for low- and moderate-income workers without children, a population whose needs are largely overlooked in today’s tax code.
NBC News’ Sahil Kapur reports on how Senate GOP leaders are trying to skirt longstanding parliamentary customs in their rush to cut taxes:
The crux of the problem for Republicans is that extending Trump’s 2017 tax cuts would cost $4.6 trillion over a decade, according to the Congressional Budget Office, and they cannot make those tax breaks permanent without paying for them. But they have no hope of finding that much money in offsets. So instead, they want to use a new method called “current policy baseline” to score the cost of making those 2017 tax breaks permanent at $0, negating the need to pay for them after they expire at the end of this year.
Rural internet program on hold
The Biden administration’s $42 billion project to bring broadband internet to rural areas faces an uncertain future. The Trump administration has paused funding for the Broadband Equity Access and Deployment (BEAD) program as it considers changes, including transitioning away from underground fiber-optic cables to satellites from Starlink, which is owned by Elon Musk. The Washington Post’s Julian Mark reports on the headaches this move is causing for rural internet providers in Louisiana and other states:
“I really hope they don’t start over again because it’s a lot of work there that’s gone into that,” [Cajun Broadband co-owner Chris] Disher said. … Other recipients of Broadband Equity Access and Deployment (BEAD) grants have also expressed worries that years of planning to bring internet to underserved rural households could be stymied by the Trump administration’s shift in the program’s direction. Under the original plan, which Congress approved with bipartisan support in 2021, Louisiana was set to receive $1.4 billion as part of the $42 billion program.
Number of the Day
11% – Percentage of Americans who could not pay for medication and medical treatments during the last three months, the highest level since 2021. This percentage is equivalent to nearly 29 million people. (Source: Gallup)