MLPP Blog: Factually Speaking

Kansas’ experiment yields valuable lessons

Added June 9th, 2017 by Heidi Holliday | Email This Entry Email This Entry
Heidi Holliday

At the same time as Michigan has started talking about tax cuts that would significantly impact our budget for years—even decades—to come, Kansas successfully reversed a number of deep tax cuts that had reduced revenues and caused budget deficits over the past five years. What happened in Kansas has taught us that tax cuts do not mean economic growth and that with less comes less. We at the League have regularly pointed to Kansas as an example of what not to do but that what we really need are investments in the things that Michigan businesses, residents and communities really rely on—good schools, drivable roads, safe communities and clean water and air. The following guest blog from Heidi Holliday, Executive Director of the Kansas Center for Economic Growth, talks about the hard lessons that Kansas had to learn, but we are grateful to Kansas for learning those lessons so that we do not have to. Congratulations Kansans, you are now on the path to prosperity!

By Heidi Holliday, Executive Director, Kansas Center for Economic Growth

With the state facing yet another budget shortfall of $900 million, government leaders decided that enough was enough. Governor Sam Brownback, who heralded the 2012 experiment, was proposing yet more temporary band-aid approaches and more cuts to deal with the shortfalls. The Legislature chose a different path and instead sent the governor a bill that would raise more than $1.2 billion in new revenue over two years by, among other things, repealing a costly tax break for pass-through income, rebalancing individual income tax rates by reinstating a third tax bracket, and reversing course on the governor’s plan to eliminate our state income tax. Brownback vetoed the legislation but, with bipartisan support, the House and Senate quickly overrode the veto.

Kansas Statement T

Put simply, revenue matters. You can’t get something for nothing. We all want and deserve thriving communities with great schools, parks, and modern roads and bridges; and we chip in to pay for that. That’s what taxes are for.

Because of the scope of the 2012 changes, it didn’t take long before Kansans in every corner of the state began connecting the dots between the actions of state lawmakers and the quickly eroding quality of the things that make for a good economic foundation in every community. With every subsequent shortfall, the picture became more clear. Meanwhile, the promised economic boom—and the revenue rebound that would supposedly follow—never happened (as economists predicted). In the last few election cycles, voters have viewed candidates and their promises through a different lens, and the 2017 Legislature had the experience and public backing to chart a new course.

Most state tax codes, including ours, need further reform, but it’s high time that state tax policy adhere to one basic, proven (and now proven once again) principle—states need revenue to invest in the things that create thriving communities and a prosperous economy. Kansas just learned this lesson again, the hard way, so that your state doesn’t have to. You’re welcome.

— Heidi Holliday

Trump budget is anti-poor people, not anti-poverty

Added June 7th, 2017 by Gilda Z. Jacobs | Email This Entry Email This Entry
Gilda Z. Jacobs

From the First Tuesday newsletter
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This past month saw two disastrous pieces of public policy come out of Washington: the American Health Care Act (AHCA) passed by Republicans in the U.S. House of Representatives and President Donald Trump’s federal budget proposal.

three fifths cuts in trumps budgetWe provide a more substantive update on the AHCA below, but here’s what you really need to know: It raises costs, reduces coverage and slashes funding for states. In short, it’s bad, and we’re hopeful that leveler heads in the U.S. Senate will agree.

But that was just the appetizer. On May 23rd, President Trump released his budget proposal, and it is an all-out assault on people who are struggling in our state and our nation. We were expecting significant cuts to vital programs based on the president’s “skinny budget,” but it is far worse than anyone could imagine.

If the president is looking to make history and leave his mark, this awful budget will certainly do that. Our colleagues at the Center on Budget and Policy Priorities say that his budget “contains the largest dollar cuts to programs for low- and moderate-income people proposed by any president’s budget in the modern era,” cutting these programs by an estimated $2.5 trillion over the next decade. About 59% of the president’s budget cuts would come from programs and services that help struggling families build a better life and keep food on their tables, clothes on their backs and a roof over their heads.

SNAP cutsFood assistance through the federal Supplemental Nutrition Assistance Program (SNAP) would be slashed by $193 billion over 10 years, targeting the elderly, working families and workers struggling to find a job. On top of the massive cuts to Medicaid in the House-passed AHCA, Medicaid would be cut by an additional $600 billion over 10 years. Possible per capita caps on Medicaid would make it even worse.

People who are struggling economically are not the only vulnerable residents who are being exploited by this budget. Disability programs would be cut by $72 billion, including Social Security Disability Insurance for workers with disabilities and their families and Supplemental Security Income, which provides income assistance to individuals with low incomes, including children, with disabilities.

There are also significant cuts to Great Lakes funding, other protections for our air, land and water, and other programs that are essential to our quality of life and our way of life in Michigan.

As our recent 2017 Kids Count in Michigan Data Book and Making Ends Meet report show, millions of people and kids in Michigan are either living in poverty or barely getting by. Many families have yet to feel any economic recovery and are one emergency or unexpected expense away from financial disaster. More people are working, but in lower-paying jobs, and they depend on food assistance, Medicaid and other programs to survive—programs that would be decimated under President Trump’s budget. Michigan is particularly vulnerable to President Trump’s budget cuts, as we’re the second most reliant on federal funds of any state in the nation.

Our congressional delegation must oppose this budget and any others that follow in this same direction of harming our state’s most vulnerable residents, especially our children. They need to hear from the people that these appalling cuts will hurt and put names and faces to the lives that hang in the balance. If you or someone you know depends on food assistance, Medicaid, disability services or other federal programs, I urge everyone to share their story at Handsoff.org. And whether you use these programs yourself or just know that they are vital to a better Michigan for all, I encourage you to contact your congressperson directly and tell them to oppose the Trump budget or any other proposal that includes massive cuts to these programs.

— Gilda Z. Jacobs

Who counts?

Added June 1st, 2017 by Jenny Kinne | Email This Entry Email This Entry
Jenny Kinne

My favorite moment of last week happened in a crowded theater in Muskegon. Hundreds of people from across the state gathered to talk equity at the Lakeshore Ethnic Diversity Alliance’s 2017 Summit on Race & Inclusion, “Moving Toward Justice.” The day began with Dr. Phillip Atiba Goff, a self-described nerd and data enthusiast, speaking about how he uses statistics, education and a bit of dorky charm to work with public safety departments across the country to cut down on racial profiling and police violence.

In setting the stage for our day, he asked an important question—“Who counts?” As a country, we have very little data on our police departments, so when issues of police brutality come to the forefront, it is difficult to understand the frequency and cause of such problems. This is far from the only data that is missing when it comes to how public policy and community service programs affect people. Many people’s experiences are not being counted. When we do not count people, Dr. Goff asks, “How many stories are we missing?”

This question echoed in my brain later that day as I listened to Heather McGhee, president of Demos, give her take on today’s U.S. economy. Like myself, Heather is a millennial, so she opened her conversation with: “Millennials are this country’s largest and most diverse generation in American history, and they are the first generation of Americans who will not be better off financially than their parents.”

Sadly, this fact has transformed into a sentiment I hear too often—young people are not as hard-working, motivated, selfless, etc., as the workers of previous generations. I will remember Heather’s response for a long time:

  1. From the 1930s forward, we have steadily decreased taxes for the wealthy and made it harder for workers to collectively bargain. This was happening alongside immigration reform that transformed the demographics of our country.
  2. Diverse Hands Raised 533 x289We no longer live in a world where a person can have a union-wage job and support an entire family while saving for the future. Most two-parent homes in this country have both parents working, and there are no contemporary positions equivalent to post-war, unionized and entry-level manufacturing jobs. The fastest growing industry in the country is the service industry, and most service jobs offer low wages and no benefits packages.
  3. The Montgomery Effect—Before the Civil Rights Act, Montgomery, AL, had a state-of-the-art parks system. Their beautiful zoo, pool and downtown parks were the pride of the town. When the Civil Rights Act passed, the city of Montgomery drained their pool and sold their zoo animals rather than integrate. Similarly, prior to the entrée of women and people of color into the workforce, key social contracts were developed between government, business and labor. As more people demanded a seat at the table, these social contracts dissolved. Economic decisions often reflect the prejudices of the decision-makers.

When you combine these three realities, it is no wonder we see a shrinking middle class and a growing gap between the classes. The price of entry into today’s middle class is simply too high for many working families and millennials.

Why don’t we hear this story? Instead, we hear that millennials, people of color, immigrants and poor people are causing the collapse of the middle class. The real experiences of these people are not being counted and given meaning in today’s political rhetoric.

Thank you to LEDA for this incredible experience! Please be sure to learn more about this organization, and I would recommend their annual race summit to anyone. I hope you will be as inspired as I am to create a better Michigan for all!

The Lakeshore Ethnic Diversity Alliance (LEDA) works in West Michigan to dismantle barriers to ensure people of all ethnic backgrounds have equal access to participate fully in the life of the community. Every year, LEDA holds a Summit where they bring together thought leaders from across the country and Michigan to discuss racial equity and inclusion.

— Jenny Kinne

130,000 Michigan workers have had wages stolen by employers

Added May 31st, 2017 by Peter Ruark | Email This Entry Email This Entry
Peter Ruark

People across the political spectrum may differ in their ideas about how high the minimum wage should be and how often it should be increased, but there is a general consensus that if a minimum wage is put into law, it should be honored. Many people may be surprised, however, at the frequency with which such laws are flouted and workers are paid less than minimum wage.

A recent report from the Economic Policy Institute (EPI) finds that in Michigan and other states, minimum wage theft often occurs. From 2013 to 2015, approximately 130,000 Michigan workers experienced a minimum wage violation, with an average underpayment of $2.05 per hour (or $3,300 if for a full year). According to the report, minimum wage theft can take one or more of the following forms:

  • Overt minimum wage violations: Paying workers less than the legal minimum wage;
  • Overtime violations: Failing to pay nonexempt employees time-and-a-half for hours worked in excess of 40 hours per week;
  • Off-the-clock violations: Asking employees to work off-the-clock before or after their shifts;
  • Meal break violations: Denying workers their legal meal breaks;
  • Pay stub and illegal deductions: Taking illegal deductions from workers’ wages or not distributing employee pay stubs;
  • Tipped minimum wage violations: Confiscating tips from workers or failing to pay tipped workers the difference between their tips and the legal minimum wage (the tipped wage is also too low in general); or
  • Employee misclassification violations: Misclassifying employees as independent contractors to pay a wage lower than the legal minimum.

workers wages stolen by employersMore than 61% of Michigan’s workers experiencing minimum wage theft are women. Black and Hispanic workers are more likely to be victims than White workers or workers of other races, and Hispanic workers experience the most severe wage theft ($2.47 average hourly underpayment, compared with $2.11 for White workers and $1.72 for Black workers). Workers in the “food or drink service” industry are the most likely to be exploited, with 21.3% of such workers having experienced at least one minimum wage violation and workers in that industry making up 38.2% of the total number of Michigan workers experiencing violations. Nine out of 10 workers experiencing minimum wage theft are U.S.-born citizens.

The report estimates that nationally, unscrupulous employers are stealing around $15 billion annually from employees in minimum wage violations—an amount that exceeds the value of property crimes (robberies, burglaries, larceny and motor vehicle theft) committed in the United States each year, which in 2015 was $12.7 billion. One can surmise that in Michigan most cases of wage theft are not reported; the Michigan Department of Licensing and Regulatory Affairs says that each year it receives over 5,000 claims and collects more than $2.0 million in wages and fringe benefits owed to Michigan workers—clearly far below EPI’s estimate of the frequency and magnitude of wage theft occurrence.

Wage theft is costly to society. Federal and state income taxes, along with payroll taxes that support Social Security and Medicare, are not fully deducted at the levels they should be. Moreover, when lower-paid workers are not paid the entire earnings that they are due, they likely spend less at local businesses and pay less in state sales taxes than they otherwise would. The hardship caused to workers should itself be a reason for alarm and outrage at wage theft, but the costs that are passed on to businesses, entitlement programs and state budgets provide an additional reason to take this crime seriously.

The League’s Making Ends Meet report shows that it’s nearly impossible to get by on minimum wage in Michigan, and we support raising the minimum wage and instituting other policies to protect wages and support workers. If you believe that you have been the victim of a wage theft violation, you can file a complaint with the State of Michigan. More information on how to do that is available here.

— Peter Ruark

CB…oh no?!

Added May 26th, 2017 by Emily Schwarzkopf | Email This Entry Email This Entry
Emily Schwarzkopf

Earlier this month, the House Republicans in Congress passed the American Health Care Act (AHCA) without an updated Congressional Budget Office (CBO) score. The CBO is an independent, nonpartisan office that analyzes the cost and impact of proposed federal legislation. Wednesday, in full nerd behavior I anxiously awaited the release of the new report.

While earlier versions of the AHCA revealed that over 24 million people would lose their health coverage, the effect of amendments that allowed for waivers for essential health benefits and pre-existing conditions was not yet known … until now. (Yes, 20 days after the bill was voted on by the House). What we know from the newest CBO score is that not much has changed. According to the report released yesterday:

CBO Uninsured Rate F 448 x 457

  • 23 million more people would be uninsured by 2026;
  • $8 billion dollars allocated for high-risk pools would not be sufficient to cover the large increases in premiums for high-cost enrollees;
  • Medicaid enrollment (including children, people with disabilities and the elderly) would decrease by 14 million people;
  • People needing maternity, substance abuse & mental health care would incur thousands of dollars in extra out-of-pocket costs in states who apply for a waiver.
  • Premiums would go up 20 percent more than current law in 2018.
  • In states that pursue waivers, the report says that average premiums would fall but “less healthy people would face extremely high premiums.”

Last week, our national partners at the Center on Budget and Policy Priorities released two reports on the effects the AHCA has on rural America and home- and community-based services. Both of these reports once again put on display the great harm this legislation would bring.

One of the things that really stood out to me was the huge effect the AHCA would have on our rural Michiganians. In Michigan, 113,800 people in rural communities gained coverage through Michigan’s Healthy Michigan Plan. That’s nearly 20 percent of the total enrollment of the program. Those suffering from opioid addiction (of which rural Michigan has been greatly affected) have been particularly helped by the expansion of Medicaid. The coverage gained allowed these people to access the necessary treatment and education they need to fight this growing epidemic.

Home- and community-based services are optional services that states are not required to provide but many individuals rely on as a way to receive care at home rather than in a nursing home. In 2013, 102,810 Michigan residents relied on these services. Restructuring Medicaid through per capita caps and the ultimate end of Medicaid expansion would result in a significant cost shift to states, so much that states could choose to no longer provide these important services to seniors and people and kids with disabilities.

There is no doubt that the Affordable Care Act needs to be improved and as the U.S. Senate moves forward in its process, we can hope that they look at this data to develop legislation that rejects caps on the Medicaid program, continues successful Medicaid expansion programs—including Michigan’s Healthy Michigan program, and increases the number of insured individuals.

We know you are being pulled in a lot of directions right now, but we still have a lot of work to do on the healthcare front and we need you to keep fighting. We have a helpful website set up with our coalition partners so you can contact your member of Congress, and all these reports to help keep you informed on the devastating impact of the AHCA. And they come in handy when you battle your friends on the intricacies of Medicaid financing … oh wait, I’m the only one that does that?

— Emily Schwarzkopf

CREC yourself before you wreck yourself

Added May 19th, 2017 by Alex Rossman | Email This Entry Email This Entry
Alex Rossman

“CREC yourself before you wreck yourself.” For the last 11 years, I have been trying to slip that joke into my work in the Legislature and now the League. And I had an epiphany yesterday that I might finally be able to do it…as long as I put my own name on it.

I also need to give it a proper explanation, as there’s probably a small sliver of people who know what CREC is AND get 90s Ice Cube lyrics. CREC stands for Consensus Revenue Estimating Conference. Held in January and May of every year, CREC is comprised of the directors of the House and Senate Fiscal Agencies and the state treasurer or budget director.

These fiscal experts analyze and report on economic indicators and state revenue projections. The consensus that is reached during the January conference becomes the revenue basis for the governor’s budget proposal, and the consensus reached during the May conference become the revenue basis for the budget bills passed by the Legislature.

The May Consensus Revenue Estimating Conference was earlier this week, and the news on state revenues is not great. But there is a silver lining, at least to me—it makes “wreck yourself” particularly relevant.

Since January, some Michigan legislators have been really hot on cutting the state income tax. This is a bad idea on its face, but especially in this current context. As League CEO Gilda Z. Jacobs said, “Given the fluctuations in state revenues, it was and continues to be foolhardy to consider tax cuts that would further jeopardize state services.”

if-only-i-had-checked-myselfSee! “CREC yourself before you wreck yourself” is not just a (bad) pun—it’s a valid point. The very intent of the Consensus Revenue Estimating Conference is for lawmakers to check themselves and incorporate these estimates into their state spending and budgets. And if they don’t take these forecasts seriously and make poor fiscal decisions, they stand to wreck our state budget, our state services and ultimately our state.

The Legislature needs to let talk of an income tax cut die. And when the House and Senate budget committees begin meeting soon, lawmakers should be sensible and strategic with our state dollars, investing in the programs and services that support our workers and families and get the most bang for our state bucks. For example, increasing state funding for child care and heating assistance can leverage hundreds of millions of dollars in federal funding.

The next few weeks are critical to the state budget and the priorities you and I value. To help you get involved, the League has put together a timeline and advocacy tips on the state budget. We also continue to produce budget briefs on some of the issues that are most important to us and to you: supporting education, including child care, K-12 schools and colleges and universities, protecting healthcare and the Healthy Michigan Plan, and reducing incarceration and providing adequate support for prisoners.

Whether you can work a rap reference in or not, I hope you will join the League in standing up for these budget priorities and urging lawmakers to make smart investments in our state’s future.

Alex Rossman

Trump’s tax plan is wrong for the nation

Added May 12th, 2017 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

When the Trump administration released its tax plan in April, it was light on the specifics. If I were a teacher, I would give the vague outline an “I” for incomplete. But what is clear is that the president’s tax plan will provide huge tax breaks for the wealthy and businesses, fuzzy promises for the rest of us, and will do nothing to help our nation grow.

The tax plan, by cutting the federal business tax rate from 35% to 15%, will be a huge tax break for businesses. Currently, most businesses don’t pay the top statutory rate due to other tax breaks, and the effective corporate tax rates are in line with other high-income developed companies. Additionally, by making this rate available to all types of businesses and not just corporate entities, wealthy individuals can recharacterize their incomes to take advantage of the lower business rate. This will also do nothing for most small businesses, since many of them already pay taxes at a lower individual effective rate.

tax cuttingThe Trump tax plan is a huge tax break for the wealthiest taxpayers. Along with cutting top marginal tax rates, the plan completely eliminates the alternative minimum tax, allowing wealthy taxpayers to avoid paying taxes by taking advantage of tax breaks. Additionally, the estate tax, which is only paid on the portion of an estate that exceeds $5.5 million per person, would be repealed. Only the heirs of the wealthiest 2 out of every 1,000 estates currently pay the estate tax, and very few small businesses and farms have to pay the estate tax. These changes would allow the wealthiest taxpayers to drastically reduce their taxes.

The details as it relates to the rest of us are hazy. The plan calls for reducing the number of tax brackets and reducing the top marginal rate to 35%, but does not provide the income ranges for those brackets. The standard deduction would be doubled, and all tax breaks except for the mortgage interest deduction and the deduction for charitable giving would be eliminated. And the plan promises to provide tax relief for families with child care expenses but does not explain how. Given the lack of specifics, it’s unclear whether taxpayers with low to middle incomes would actually benefit under the plan.

This tax plan does nothing to help the economy. Costing between $3 and $7 trillion over the next decade, according to recent estimates, it will increase our deficit and require steep budget cuts that will likely disproportionately impact our most vulnerable residents—working families, seniors and children. And any revenue lost won’t be made up through economic growth. Research has repeatedly shown that providing tax breaks to wealthy individuals and businesses don’t provide the job boost that is promised.

Instead of cutting taxes, we need a federal tax plan that can help our nation and our economy grow. Tax reform should raise revenue so that we can increase investments in things that help our economy—education, roads and access to healthcare—while also continuing to provide a social safety net for those who fall on hard times. The plan should deliver tax relief to our working families and those who need it most, such as expanding the federal Earned Income Tax Credit for working adults that aren’t raising children in their homes. A tax plan that works for all American taxpayers, helps grow the economy and allows us to pay for our most basic needs is one that will work for our nation.

— Rachel Richards

State budget exploits the Unemployment Insurance crisis

Added May 10th, 2017 by Peter Ruark | Email This Entry Email This Entry
Peter Ruark

Remember when we blogged about the tens of thousands of workers wrongly accused of Unemployment Insurance fraud, with 93% of computer-generated fraud determinations in the initial investigation found to be in error? And how those workers were socked with huge repayment charges and penalties for those instances of fraud they did not actually commit? And how families subsequently had wages garnished, lives disrupted and dreams deferred as a result?

Well, the well-worn self-help adage about turning crisis into opportunity seems to be at play—although in this case it is twisted to mean turning working families’ ongoing crises into an opportunity to free up state dollars in the budget. The House Appropriations Committee decided that the huge increase in penalties paid from the pockets of workers who did no wrong provided an opportunity to supplant some General Fund dollars with that money, and the full House adopted the committee’s proposal. This is not the first time in recent months that this has been done; the Legislature and governor also used $10 million of that money last January to make up for a budget shortfall, and the state is currently being sued to return the money.

sources of funding for going pro and community venturesWhen a worker who has received Unemployment Insurance (UI) is determined to have received it fraudulently, they pay back the benefits they wrongly received plus penalties and interest. The repaid benefits are put back into the UI Trust Fund from which they came, and the penalties and interest are put into the UI Contingent Fund’s Penalty and Interest Account (PIA). Money from this account is not used for benefits, but for administration of the UI program, and may also be used for job training programs. The PIA balance swelled from $3.1 million in 2011 to $154.7 million in 2016, largely due to money collected wrongly from workers in response to false fraud determinations.

The current year budget pays for a training program, Going Pro, with $25.6 million from the PIA and $5.3 million from the General Fund. The governor’s proposed 2018 budget continues to fund Going Pro with $25.6 million in PIA dollars, and increases General Fund funding for the program to $15.3 million, to put total funding for the program at $40.9 million. In other words, the governor’s budget continues to draw from the PIA but does not pull any “new” money out of the account to fund the increase for the program.

The House budget proposal, on the other hand, increases funding for Going Pro to the same level as the governor’s proposal but funds it entirely with PIA dollars: $25.6 million equivalent to current funding and $15.9 million in “new” PIA dollars. The House budget also takes another $9.8 million from the PIA to fund another existing training program, Community Ventures, so the House’s total raid on the money taken from penalties and interest on workers is $51.7 million (House budget summary, pages 45-46). The Senate budget also takes “new” dollars out of the PIA to fund training, but at the significantly lower level of $5 million for Going Pro (Senate budget summary, page 15).

The appropriations bills will now go to conference committee, and the conferees (who have not yet been named) will have a choice regarding job training programs and the Unemployment Insurance Penalty and Interest Account:

  • Go with the House proposal to take out $51.7 million;
  • Go with the Senate proposal to take out $30.6 million;
  • Go with the governor’s proposal to take out $25.6 million; or
  • Take out a different amount, or none at all.

In normal circumstances, when penalties and interest are taken only from UI claimants that actually committed fraud, it could be argued that using dollars from the account for training programs when the balance is high is defensible—although the ability to do so creates a perverse incentive to collect as much in penalties as possible and that in itself is problematic. In this case, however, it is morally wrong to use money unjustly taken from working families even as those families are still struggling from the fallout of the state’s mistakes. This crisis should not be used as an opportunity to free up dollars in the state budget.

Regarding UI and the high PIA balance, Michigan needs to focus on one thing: making restitution to the tens of thousands of workers and families who were wrongly accused of fraud. We urge the conference committee to refrain from using surplus PIA dollars for any purpose other than restitution for the workers from whom the dollars were wrongly taken in the first place.

One additional point: in addition to the 93% of erroneous determinations in the first investigation, which looked at only computer-generated fraud determinations, an investigation into a more recent batch of fraud determinations that involved some human oversight showed that 44% were wrongly determined to be fraudulent. Because even with human involvement nearly half of claimants determined to be fraudulent were wrongly accused, this problem cannot be blamed solely on computers; it is a far-reaching structural problem in which claimants appear to be “guilty until proven innocent.”

— Peter Ruark

Highlights and upcoming challenges in state budget

Added May 3rd, 2017 by Gilda Z. Jacobs | Email This Entry Email This Entry
Gilda Z. Jacobs

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We are likely in the last month of the state budget process and there are many issues of great importance to our state’s most vulnerable residents still to be decided. The League is fighting hard for those who have not experienced the economic comeback. Our voice, and your voice, are so important.

As we have highlighted in the past few months, Governor Rick Snyder’s budget recommendation included a number of the League’s priorities. We need to ensure that those recommendations end up in the final budget.

MI Capitol and MI FlagInitially some of the budget bills passed out by the House and Senate Appropriations subcommittees had left much to be desired and missed the mark on many of our top priorities. But negotiations continued and lawmakers ended up including some important funding increases in the budget bills that have been passed out of the House and Senate Appropriations committees and sent to the floor.

The House and Senate budget bills both include $6.8 million in funding necessary to fix the “Heat and Eat” issue, leveraging millions of dollars in federal funding and extending food assistance to 338,000 kids, families, seniors and persons with disabilities.

The House and Senate budgets also included funding for Double Up Food Bucks in Flint that will enable Bridge Card recipients to receive a matching amount (up to $20 per day) when they use their food assistance benefits to buy Michigan-grown fresh fruits and vegetables. In general, urban residents in Michigan have less access to fresh fruits and vegetables. But healthy foods are even more essential in Flint because the nutrients in fresh produce help counteract the impacts of lead exposure.

Education is another focus of ours, especially increasing necessary funding for at-risk students. The governor proposed a $150 million increase to at-risk funding, and the House budget passed out of committee included the same. The Senate education budget included $100 million for at-risk funding.

The League also supports payment increases for child care providers, as well as a boost in income eligibility levels. The House agreed with the governor to include $27.2 million for rate increases for child care providers, while the Senate provided $23.8 million for increased child care provider rates and $5.8 million to increase the income eligibility threshold from 125% to 130% of poverty.

Protecting the Healthy Michigan Plan is another top priority for the League, at the federal level and in the state budget. Both the House and Senate budgets continued funding for the Healthy Michigan Plan.

The League continues to push for increased funding in the Department of Health and Human Services budget to support kids and families in need, and the House and Senate budgets differ on several line items that we will be weighing in on in conference committees, including increasing the annual clothing allowance for children in families that receive cash assistance from the Family Independence Program.

The House and Senate budget bills are still disconcerting in many areas, especially when compared with the governor’s budget proposal. With state revenues stable for the time-being, the governor’s budget sought to counter the years of cuts and disinvestments to many programs. But the House and Senate did not follow suit. The House’s drastic cuts to the governor’s proposed budget are especially frustrating, as they are likely being done to help pay for a meaningless state income tax cut that has already failed once.

The Legislature raided unemployment funds to supplant General Fund dollars for job training programs—with much of that money coming from workers who were falsely accused of committing fraud in the first place. The House and Senate budget bills increased the amount of money that is being diverted from the School Aid Fund and K-12 schools to postsecondary education, and failed to increase funding for adult education that enables workers to complete high school. The House also cut the governor’s recommended increases for two adult financial aid programs in half, and did not include any money for the Part-Time Independent Student Grant in its Higher Education budget.

We are also very concerned about potential federal budget cuts, both general cuts and changes to federal funding for food assistance and other important programs and services. Federal funds make up 42% of the state budget, and we continue to work hard to make sure Michigan members of Congress understand the impact of budget cuts on Michigan residents.

But the state budget continues to be our greatest focus for making a difference in the lives of Michigan residents, and we urge you to stay involved as well during the Legislature’s ongoing budget negotiations. Before lawmakers head up to Mackinac Island next month to hobnob and “talk” policy, I hope they’ll capitalize on this chance to pass good policy and ensure their constituents are healthy, safe and economically secure.

— Gilda Z. Jacobs

We need more, not less funding for at-risk students

Added April 27th, 2017 by Eric Staats | Email This Entry Email This Entry
Eric Staats

Not all students in the state are the same and neither are their educational needs. When a student walks into school, they carry with them all of the problems they could be experiencing at home, like poverty, abuse, malnutrition, or minimal parental support. That can make it much more difficult for them to achieve their academic potential. It is important for lawmakers to be aware of these differences and keep them in mind when allocating funds to districts, as some districts have more students who need additional support. Without sufficient funding for schools, students who need extra help could be in danger of falling behind. That’s why the state needs to fully fund the At-Risk program and expand its eligibility.

Currently under the program, districts are allocated funds based on the number of their students that are eligible for free school meals. These funds can be used to support students who are considered “at risk.” While the primary goal of the program is to make sure these students meet third-grade reading benchmarks and graduate from high school, the dollars can also support other activities proven to benefit at-risk students, like decreasing class sizes to give teachers more individual time with students who need it, providing adult high school completion programs to increase overall graduation rates, hiring support staff to assist students and investing in new curriculum geared towards helping students with additional challenges.

Helping children succeed through michigans at risk program chart 3As of now, the program is underfunded. There are currently several different proposals to increase funding going through the Michigan Legislature, but even the most generous of those would still short the program by $78 million. When it comes to supporting students in need, we need more, not less.

The need for more funding is best illustrated in the differences in graduation rates between students who are economically disadvantaged and those that are not. The 2016 graduation rate for students from families with low incomes was 67% while the rate for all other students was 88%. Additionally, there are disparities by income levels in 2016 tests for third-grade reading proficiency: nearly 69% of students whose families have low incomes are not proficient, but for students not from families with low incomes, there are almost 38% not proficient. At-risk students experience additional difficulties and barriers in attaining the same level of academic success as their peers, and the state is not doing enough to rectify this apparent imbalance.

There are multiple factors that can contribute to this difference and explain the need for additional support. Parents who live below the poverty line are less likely to be able to be involved in their child’s academic career, because many work untraditional hours or more than one job, for example, which can present challenges to being more involved. The additional stress that comes from living in poverty or moving multiple times can deteriorate the physical and mental health of students in the long-term, and their ability to focus and learn at school in the short-term. Schools need to be able to assist all students to counteract these issues; the fact that the At-Risk program can provide funding to specifically target students who need the most support is what makes it so beneficial.

The proposed increases in state budget funding to the At-Risk program are important to help those who need it most. The financial status of a student’s parents should not have such a large effect on that student’s success in school, and increasing funding for the At-Risk program is an effective way to change that.

— Eric Staats

 

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