The strong post-pandemic economy combined with federal relief dollars produced better-than-expected tax collections and increased revenue for states. But what goes up usually comes back down. Declining revenue from income and sales taxes will create significant budget shortfalls in the coming years, including in Louisiana. Fortunately, states across the country have record rainy-day funds to weather the downturn. Governing’s Alan Greenblatt explains what the tricky economic cycle means for state budgets:
The economy continues to grow, which is obviously good news for state budgets, yet lawmakers know they’re in for a period of retrenchment under any scenario, due to the winding down of federal COVID-19 funding programs. For that reason, even a return to normal budgeting — in which they will inevitably face tough trade-offs to make the numbers work out — may feel like a sudden shift into austerity.
In Louisiana there is the added risk posed by frequent, costly natural disasters, as Route Fifty’s Liz Farmer explains:
Local entities funded in part by states are also feeling the insurance squeeze. School districts throughout Louisiana, for example, are seeing dramatic cuts in coverage amid increasing costs. Ascension Parish, outside of Baton Rouge, now pays twice as much as it did five years ago for half as much property insurance coverage. … Additionally, states are dealing with increased volatility in their own spending on natural disaster response and recovery as the damage caused by extreme weather events becomes more costly.
Crime session nears denouement
Louisiana’s special session on crime is nearing the finish line, with lawmakers working on bills that are likely to make the Pelican State the most heavily incarcerated place in the world once again. Wednesday saw final approval of bills to publicly release sealed juvenile court records, require 17-year-olds to be tried as adults and allow anyone 18 or older to carry a concealed weapon without a permit or training. There’s no solid evidence that any of these proposals – and many others being rushed through this session – would actually reduce crime. The Times Picayune Baton Rouge Advocate’s Meghan Friedmann and James Finn report:
Black lawmakers blasted SB 3 (treating juveniles as adults) Wednesday, saying that Black youth make up a larger share of the prison population and would be disproportionately impacted. “I don’t think anyone believes those who commit a crime shouldn’t be punished, but I want you to look a little deeper,” said Rep. Alonzo Knox, D-New Orleans, noting that some youth in the system are abuse victims.
Proposals to restrict parole, gut good-time credits and expand the death penalty are set for debate on Thursday. The Times Picayune | Baton Rouge Advocate’s Julia Guilbeau has a great rundown of where the various bills stand.
Investments in early ed crucial for economic development
The vast majority of brain development occurs before children turn 5, making access to high-quality early care and education programs essential for future success. This access also enables working parents, especially working moms, to stay in the workforce. St. Tammany Corporation CEO Chris Masingill, in a letter to the Times Picayune | Baton Rouge Advocate, explains how investments in early childhood education are crucial for economic development.
Employee absences and turnover due to child care issues cost employers $762 million a year, causing Louisiana’s economy to lose $1.3 billion annually. Because of these concerns, national site selectors and location consultants have added availability and affordability of child care to the criteria they use to evaluate where businesses should locate and expand across the country. They see this as a primary business issue and regularly ask economic development organizations to provide child care facility data in requests for information related to prospective business attraction and expansion projects.
A Morning Consult poll from 2023 showed that family policies, such as paid leave, are important factors for adults looking to relocate to other states. The poll found that 61% of adults who said they planned to move in the next two years would be more likely to move to a state with a paid leave program.
Transparency bill to reveal true costs of college
State lawmakers in several states have created or are currently trying to pass legislation that requires higher education institutions to be more transparent about the full cost to students. Many times, financial aid is approved before students know the costs of fees, textbooks and other expenses for classes. Statelines’ Elaine S. Povich reports on transparency bills for college costs.
The cost of textbooks and other course materials is small compared with tuition. But those costs are sometimes the last hurdle standing between a student and classes, according to Kim Cook, CEO of the National College Attainment Network, a nonprofit coalition of colleges and other advocacy groups that works to help students afford higher education. “Any unanticipated costs for students could pose a barrier to attendance,” Cook said in an interview.
Number of the Day
2,160 – Number of Louisiana borrowers that had their student loans forgiven because of actions taken by President Joe Biden’s administration earlier this month. The borrowers collectively had $16.3 million in loans forgiven. (Source: U.S. Department of Education via BRProud)
