A new report from the Louisiana Budget Project concludes that Louisiana should extend — and double — the state’s earned income tax credit for low-income working residents.
According to the report, of the 24 states offering earned income tax credits to enhance the benefits of the federal tax credit by the same name, Louisiana’s EITC is the lowest of any state offering such credit. The funding for the extension of the credit, LBP maintains, could be funded by eliminating some of the endless tax credits offered to business and industry:
The EITC is only available to taxpayers who earn income through work during the year. It encourages work by effectively raising the earnings of low-wage workers as they work more hours. In fact, the credit was largely responsible for the increased labor force participation among single parents after the federal welfare overhaul of the 1990s. Not only does the credit encourage low-skilled workers to enter and stay in the job market, but many families spend their credit on necessities that help them work, like repair of a car or child care. They also use it to buy the basics, pay down debt and medical bills, or to move to a better neighborhood by paying first and last month’s rent.
The federal EITC lifted 6.3 million people out of poverty in 2010, including 3.3 million children. State credits leverage and amplify the impact of the federal credit. Louisiana has one of the highest poverty rates in the country, with one in five people living below the poverty line (about $23,000 for a family of four), including more than one in every four children. To thrive, Louisiana needs its families to succeed. Combating poverty and reversing the current trend will be key to Louisiana’s future.
In Louisiana, most of the benefits from the federal EITC—over 98 percent of all dollars—go to working families with children, though single workers and people without kids can also claim a small credit. Benefits are larger for families with two or three children and for families headed by married couples. The credit phases in as families earn more, until they reach the maximum benefit amount. As income rises, families eventually hit the phase-out range and their credit decreases gradually to zero (see graphic below). The gradual phase-out keeps families from abruptly losing the credit and reinforces the incentive to keep working and earning more. While families earning poverty-level wages receive the largest benefit from the EITC, it also gives families at somewhat higher income levels substantial help in making ends meet.
Workers who are eligible for the federal credit are automatically eligible for the state credit. This makes Louisiana’s credit easy and cheap to administer because it requires just one line on the state’s income tax form. This also means that nearly every dollar spent on the EITC goes directly to working families, rather than toward administrative costs.
MAY 24 Blogger Robert Mann posts this entry about the Baton Rouge Chamber's recent report on Louisiana's higher education system. It's critical to economic development, and yet our system is facing a "funding crisis" with no way to resolve it, the report says. The Chamber says control of tuition and fees must be returned to the higher ed governing boards.
MAY 24 Here's a NBC33 story about Tyrann Mathieu. He has signed with the Arizona Cardinals, inking a $3 million, four-year deal. He gets a signing bonus of $265K, but gets another, larger bonus if he doesn't get cut from the team for doing drugs. The deal reportedly includes mandatory tests and meetings for the player.
MAY 24 Jarvis DeBerry posts here about the redonkulus rhetoric that would have us believe NOLA is a safe city with a murder problem. Maybe the city's crime stats don't compare with its murder stats because you can't manipulate a murder, he says: a dead body's a dead body. It just doesn't make sense, he says, and his readers agree: a poll asks if they believe the city is safe, and more than 90 percent say no.
MAY 24 Jindal administration officials announced Thursday that the privatization of public health care is going to cost a lot more than they budgeted for, the Advocate reports here. "I'm so surprised," said no one. Anywhere. The cost they're projecting now is more than $1 billion - a lot more than the $626 million budgeted for it. And, it's more than it cost the state to operate those hospitals. So why are we doing this again?
MAY 24 Blogger CB Forgotston ridicules the recent PR campaign by the state GOP in the wake of a legislative auditor's request to both major parties. The GOP (apparently unaware that the Dems got the same request) started yammering about being targeted because it had "killed" a tax increase. CB finds that laughable, but it's also pretty funny that the GOP was comparing this episode to the IRS scandal (Because the President has so much to do with our state auditor. Right?).
MAY 24 Politico details some recent fund-raising efforts by Sen. David Vitter, which have raised the question of his future political plans. This time, it is a $5,000 per head "bayou weekend" that includes "Cajun cooking" and an all-caps "alligator hunt," the story reports. Funds raised go to a super PAC that can spend money to support Vitter in federal or state races, the story points out.
MAY 24 The pink building on Royal in the quarter was sold at a sheriff's sale Thursday, this Picayune story reports. An injunction that would have halted the sale wasn't enforced because the family failed to post a $150,000 bond, the story reports. So the owner of the mortgages on the building bought it, for nearly $7 million. Now the feuding family will have to negotiate with that company to get a lease on the building that has housed their business for close to 60 years.
MAY 23 This post in Louisiana Voice tells us about a bill by a Winnsboro lege that would require all public high school students to take at least one Course Choice online class in order to graduate. (What?) Blogger Tom Aswell says it's a monument to "waste and corruption," especially in light of the problems he's exposed with the program in recent weeks. Idaho had a similar program, but voters removed it by a 2-1 margin, Aswell says.
There will soon be a whole lot of shakin’ going on at Benny’s Sportshack Supplement Depot, a new concept by Opelousas native Benny Nele. Located at 2002 Johnston St., the supplement shop, smoothie bar and café, featuring hot off the press paninis and wraps, plans to open in late May.
Philip deMahy Sr., a once respected New Iberia ad exec, was sentenced May 2 to spend the next two years (he faced up to 100 years) in a state penitentiary after state and federal investigators found dozens of images depicting children engaged in lewd sexual acts on his personal computer.