Reports


Helping Children Succeed Through Michigan’s At-Risk Program

pdficonApril 2017
Eric Staats, Kids Count Intern

kids count and budget briefTo help improve educational outcomes, school districts must be able to provide additional services and resources to meet the needs of all students. This is the goal of the At-Risk School Aid program; it allocates additional funds to districts in order to assist students who need the most help so that their family’s economic situation does not impact their educational opportunities. Helping children succeed through michigans at risk program chart 1The At-Risk program is fundamental in providing all Michigan students with equitable resources to be successful. Students who are living in poverty face additional challenges in school compared with their peers who come from households with higher incomes. Similarly, students who are experiencing homelessness, are English language learners, or are facing other health or family difficulties often struggle more academically.

DISTRICTS WITH MORE STUDENTS AT RISK REQUIRE ADDITIONAL RESOURCES

Under the At-Risk program, districts receive 11.5% of a district’s foundation allowance multiplied by the number of students who receive free breakfast, lunch or milk. Those dollars can then be used to help students who are considered to be “at risk.” Students are considered to be at risk if one or more of the following criteria are met:

  • Helping children succeed through michigans at risk program chart 2Receive free or reduced-price meals;
  • Do not meet proficiency standards;
  • Are English language learners;
  • Are absent for long periods of time;
  • Have recently immigrated;
  • Are victims of child abuse or neglect;
  • Are homeless;
  • Are migrants;
  • Have a family history of school failure, incarceration and/or substance abuse;
  • Are pregnant or are a teen parent; and/or
  • Did not manage to complete high school in four years but are still continuing their education.

At-Risk funds can be used to reduce classroom sizes, which boosts educational achievement for students in general, but the positive results are comparatively much larger for students from households with low incomes since they’re more likely to be in larger classrooms. Funds also support programs for adult high school completion to ensure that students who don’t graduate high school within four years, of which students from households with low incomes are at a greater risk of, don’t get left behind. Additionally, the funds can be used for purchasing educational materials and equipment, hiring staff to support students who are at risk and developing new curriculum, all of which help to create a better educational experience for all students.

Helping children succeed through michigans at risk program chart 3The At-Risk program is important because districts across the state have vastly different proportions of students at risk. For example, in Lake County, 93.4% of students are eligible for free or reduced lunch and 45.2% of children are experiencing poverty. Without the At-Risk program, if schools in that county tried to provide additional programs to assist their at-risk students, the other programs in the school would suffer as a result. Compare Lake County to Livingston County, where the percentage of students who are eligible for free or reduced lunch is 21.1% and 8.1% of children are experiencing poverty. Lake County has proportionally more students with greater needs; therefore, more funding is required to provide necessary services and programs for their students and to create equity with communities such as Livingston County.

Michigan districts with a larger proportion of students at risk struggle to reach various benchmarks of student achievement compared with those with a smaller proportion of students from families with low incomes or who are at risk, and the At-Risk funding helps mitigate that difference. In the Michigan Education Finance Study, Augenblick, Palaich and Associates (APA) used a number of standards for evaluating the quality of districts and compared the districts that had above-average test scores to those that didn’t. The study found that the districts that met or exceeded the average had a significantly lower percentage of at-risk students in their district than those that fell below. One of the best ways to help these districts and students to succeed is to provide adequate and targeted resources and support.

RECOMMENDATIONS

Fully fund the At-Risk program: The program exists to ensure that districts with a larger proportion of students at risk can provide enhanced services to ameliorate the effects of poverty and related family stress. Increasing current funding would help to mitigate the burden placed on higher-risk districts. The fact is, it costs districts more to provide the necessary supports for students who are at risk. The recent Michigan Education Finance Study done by APA concluded that districts should be spending at least 30% more money on at-risk students. The At-Risk program is one of the best mechanisms to allow districts to reach that goal.

Expand the program to all school districts: Not all school districts are eligible for the At-Risk program. If a school is out-of-formula or a district is hold-harmless, it will not receive money from the At-Risk program. These are districts that have combined state and local per-pupil foundation allowances that are higher than the basic amount, even though they may have a high number of children living in or near poverty. This is particularly damaging in places like the Baldwin Community School District where 85% of its students qualify for free lunch, but it receives no At-Risk funding.

Block Granting Food Assistance: An Unnecessary Change That Would Hurt Michigan Families

pdficonApril 2017
Peter Ruark, Senior Policy Analyst

Block Granting Food Assistance SNAP chart 1The Supplemental Nutrition Assistance Program (SNAP), formerly called Food Stamps, is an important federal program that helps families and individuals put food on their tables. In place nationwide since 1964, it is available to households that are below 130% of the federal poverty level ($24,842 for a family of three). In February 2017, nearly 737,000 households in Michigan received SNAP benefits.

There are currently efforts to convert SNAP from a federal entitlement program (in which eligibility and benefit levels, work requirements and other rules are set by the federal government and benefits go to all applicants who are eligible) to a block grant (in which states receive federal funding to set up their own food assistance programs with their own eligibility standards and program rules). This is a “solution looking for a problem” that would harm a program that is currently doing what it is intended to do and doing it well.

SNAP IS WORKING WELL IN ITS CURRENT FORM

In Michigan and across the country, SNAP is the federal means-tested program most responsive to poverty and unemployment, expanding to meet need during economic downturns and contracting when the need recedes.1 As shown in Figures 1 and 2, since 1994 (when underemployment data became available), the percentage of the Michigan population receiving food assistance has closely mirrored the percentage of workers who are underemployed.2 Likewise, since 2005 (when poverty data from the American Community Survey became available), the number of people receiving food assistance has generally responded to the number who are in poverty.

In addition to effectively targeting those most in need and responding to economic downturns, SNAP has one of the most rigorous payment accuracy systems of any public benefit program and devotes substantial resources to combatting fraud. The result is that in recent years, less than 4% of SNAP benefits were issued to ineligible households or in improper amounts.3 By ensuring that the money is distributed in the proper amounts only to those who qualify, the current SNAP system preserves the integrity of the program and of the public funds used to support it.

BLOCK GRANTING SNAP WOULD COMPROMISE ITS INTEGRITY AND EFFECTIVENESS

The 1996 federal “welfare reform” legislation converted cash assistance from the federally administered Aid to Families with Dependent Children program to the Temporary Assistance for Needy Families (TANF) block grant to states. States used their allocated TANF funds and their required state-matching dollars (called “maintenance of effort” or MOE) to set up their own cash assistance programs with their own eligibility standards, benefit amounts, time limits, sanctions, family caps and work requirements (within federal guidelines). In Michigan, the TANF cash assistance program is the Family Independence Program (FIP). In addition to providing cash assistance, states are allowed to use the funds for other programs as long as they fit into four general purposes of TANF.4

Block Granting Food Assistance SNAP fig 1Lessons learned from federal and state TANF policy decisions, and the nature of block granting itself, raise serious concern that block granting SNAP would lead to lower benefits, fewer struggling families receiving assistance and compromised program integrity. Here are several ways in which SNAP could be harmed:

  • Reductions in Overall Funding: Block granting is almost always accompanied by funding erosion if not outright cuts. In 1997, the first year of TANF, Michigan received a block grant of $775 million to provide cash assistance and fund other poverty-reducing programs. The federal government has not increased the basic block grant funding level to Michigan or other states in the 20 years since 1997. As a result, due to inflation, Michigan’s block grant value has eroded to $510.6 million in 1997 dollars, leaving Michigan with much less money with which to help families in need.5 SNAP funds, on the other hand, come to Michigan based on the number of households that qualify rather than on a fixed amount that erodes with time. Block granting SNAP will likely be accompanied by severe cuts and a general erosion of the block grant over time.6 The most recent U.S. House Republican budget resolution assumed a SNAP block grant beginning in 2021 with $125 billion in cuts through 2026.
  • Block Granting Food Assistance SNAP fig 2Prioritization of State Budget Fixes Over Direct Assistance: The ability to use TANF funds for purposes other than direct cash assistance encouraged Michigan (and other states) to fill budget holes by funding existing programs with TANF and MOE dollars instead of the state’s General Fund. While some of these programs target families with low incomes, others tend to help middle-income families and individuals, such as college financial aid. With the flexibility to supplant TANF dollars in this way, providing direct assistance becomes a low priority. This is in contrast to SNAP dollars, which go entirely to the provision of direct food assistance to households. Block granting SNAP may similarly result in state lawmakers diverting food assistance dollars to fill miscellaneous budget holes instead of supporting families who are most in need.
  • Block Granting Food Assistance SNAP fig 3A Perverse Incentive to Cut Families Off Assistance: Enabling states to supplant state budget dollars with TANF dollars creates a perverse incentive to reduce cash assistance to free up money for other uses. Even as Michigan’s poverty and jobless rates during the past 10 years reached record highs, Michigan’s Legislature enacted policies to reduce FIP cases, including keeping the initial eligibility level low (a family’s income must now be at half the federal poverty level to begin receiving FIP) and establishing stricter sanctions and time limits. As a result, in 2015 only 4.5% of Michigan residents in poverty received cash assistance. There are now fewer families receiving cash assistance in Michigan than at any time since the early 1960s, despite the fact that many families continue to struggle. Because all SNAP funds coming into Michigan are currently used for benefits that go directly to recipients, or the administration of those benefits, there is no financial incentive for the state to cut families off assistance—which will change if SNAP funding is block granted.

Block Granting Food Assistance SNAP fig 4Compromised Accuracy and Oversight: The federal SNAP program has an extremely low rate of error and fraud due to diligent federal investment and effort to build up program integrity and efficiency over the decades. Block granting SNAP could shift much of the error and fraud reduction responsibility to states, which do not have needed infrastructure and financial resources comparable to the federal government, resulting in misdirected funds and compromising the ability to effectively provide benefits to those who are supposed to receive them.

Michigan’s experience with TANF and cash assistance illustrates why block granting TANF has been harmful to families with low incomes and to the cash assistance program itself. As seen in Figure 3, while Michigan’s underemployment rate shot up during the 2000s to as high as 21.5% in 2009, the Family Independence Program remained disengaged from the hardship as caseloads remained flat. Likewise, Figure 4 illustrates how FIP was unresponsive to changes in the poverty rate during the past 10 years.

Rather than enact legislation that would harm a program that is working well and hurt struggling families in the process, Congress should build on SNAP’s success by updating household benefit levels to reflect current food prices and providing more support for food assistance recipients to participate in education and training that would increase their earnings.

ENDNOTES

  1. Rosenbaum, D., Block-Granting SNAP Would Abandon Decades-Long Federal Commitment to Reducing Hunger, Center on Budget and Policy Priorities, March 2017.
  2. The underemployment rate is the number of workers who are unemployed, who involuntarily work part time for economic reasons, and who are marginally attached to the labor force (not in labor force but have looked for a job in the past 12 months), divided by the total in the labor force and marginally attached to the labor force.
  3. Rosenbaum, op. cit.
  4. The four purposes of the TANF program are to: 1) provide assistance to needy families so that children can be cared for in their own homes; 2) reduce the dependency of needy parents by promoting job preparation, work and marriage; 3) prevent and reduce the incidence of out-of-wedlock pregnancies; and 4) encourage the formation and maintenance of two-parent families.
  5. Calculated using the online Bureau of Labor Statistics CPI Inflation Calculator on April 4, 2017.
  6. Rosenbaum, op. cit.

Protect healthcare for 650,000 Michiganians

pdficonApril 2017
Emily Schwarzkopf, Policy Analyst

Continuation of the Affordable Care Act (ACA) and the Healthy Michigan Plan are critical for Michigan residents and the state’s economy. In recognition of the program’s success, the governor recommended, and the League supports, sufficient funding for the Healthy Michigan Plan in the 2018 budget year.

Budget Brief JPG USE THIS ONE

Sixty percent of Healthy Michigan enrollees report that their ability to access primary care was better than prior to being enrolled, and 70% stated that they were more likely to contact a primary care provider before going to the emergency room. Eighty-six percent of enrollees have reported that their ability to pay their medical bills has improved since being enrolled in the program.

The program has also made a significant impact on Michigan’s economy. The Healthy Michigan Plan has resulted in 30,000 jobs annually, $2.3 billion in additional personal spending power, and $150 million in state tax revenue as a result of added economic activity. Further, 90% of hospitals report reductions in uncompensated care, with overall uncompensated care dropping by nearly 50% across the state.

BACKGROUND ON MEDICAID EXPANSION

When it was first passed, the ACA included a requirement that states expand Medicaid to those with family incomes at or below 133% of the federal poverty level. The existing Medicaid program generally had only covered the aged, blind and disabled up to 100% of poverty, with higher income levels for certain populations (children and pregnant women) and lower for others (childless adults).

However, the June 2012 United States Supreme Court decision questioning the constitutionality of the ACA (National Federation of Independent Business v. Sebelius) found the provision to require states to expand Medicaid unconstitutional. As a result, states were given the option to expand their Medicaid programs without penalty. State programs would be covered 100% by federal funding through calendar year 2016. The federal match rate will phase down to 90% over the next five calendar years: to 95% in 2017, 94% in 2018, 93% in 2019 and 90% in 2020 and all subsequent years.

BB Protect healtcare for 650,000 Michiganians chart 1The Healthy Michigan program has been shown to be incredibly successful for those receiving coverage through the plan. The benefits for Healthy Michigan enrollees must be based on federal benchmark coverage and include the 10 essential healthcare services. The plan also covers dental and vision services, hearing aids and nonemergency medical transportation.

MICHIGAN’S FEDERAL WAIVERS

The legislation that created the Healthy Michigan program required Michigan to get two waivers from the federal government. The first waiver allowed the state to include cost-sharing requirements (including copays) and the use of health savings accounts into which newly-eligible enrollees would contribute. The contributions of enrollees could be reduced if certain healthy behaviors are addressed.

The second waiver limited the amount of time an enrollee could be enrolled in the Healthy Michigan Plan to 48 months. Once the 48-month cap is reached, an individual would have the opportunity to remain on Medicaid with higher cost-sharing requirements or purchase private insurance through the healthcare exchange and be considered eligible for premium tax credits. Both of these waivers were approved by the federal government.

Another important component of Michigan’s legislation is that should annual state savings and other nonfederal savings associated with the implementation of the program not be sufficient to cover the reduced federal match, the Healthy Michigan program would end. The state realizes savings from programs that were previously funded either partially or entirely by the state General Fund that are now covered in Healthy Michigan, including non-Medicaid mental health funding, Adult Benefits Waiver program, prisoner healthcare costs and Plan First! Waiver program costs. Savings can also be seen as a result of revenue from the Health Insurance Claims Assessment, the use tax on Medicaid managed care organizations, provider assessments and an established hospital quality assurance assessment program retainer on special hospital payments.

CONTINUED THREATS

Despite the recent defeat of the federal American Health Care Act, there is still the possibility that Congress will fundamentally change the way Medicaid funding is allocated and limit how long Medicaid expansion will continue. As Congress moves forward on other priorities, including tax reform, there is the possibility that Congress, in order pay for tax breaks, could shift the costs of the Medicaid program to the states through block grants or per capita caps. There also is a chance that Congress could make changes in Medicaid financing in the forthcoming federal budget or when the Children’s Health Insurance Plan (CHIP) funding is reauthorized in late summer or early fall. While the League encourages the Michigan Legislature to continue funding for the Healthy Michigan Plan in 2018 and beyond, it is also important to stay vigilant in protecting Medicaid funding and the Affordable Care Act.

THE GOVERNOR’S 2018 BUDGET RECOMMENDATION

The governor’s executive budget proposal includes continued funding for this critical program. Since the state is required to pay a share of the costs, the governor has recommended total funding of $4.1 billion, including a $200.4 million investment of state General Funds to cover the costs of the state’s match contribution. This amount does not take into account additional savings from revenue impacts or other budgetary savings created as result of the implementation of the Healthy Michigan Plan.

Increase adult education funding to prepare more workers for job training and skilled work

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April 2017
Peter Ruark, Senior Policy Analyst

Budget Brief JPG USE THIS ONEIn the 21st century economy, a high school diploma is simply not enough, as entry level job openings with a career track increasingly require a postsecondary credential such as a degree, certificate or license. Many Michigan workers lack certain basic skills needed to succeed in the occupational training leading to these credentials, either because they dropped out of high school or they passed classes without completely mastering the skills. Adult education is a crucial link that prepares these workers for training, credentials, and finally, skilled jobs.

BB League Recommendations Adult Ed chart 1The Problem

Although many workers need adult education, very few are enrolling in programs:

  • Over 210,000 Michigan adults age 25-44 lack a high school diploma or GED, yet fewer than 7% enroll in adult education.
  • More than 234,000 Michigan adults speak English less than “very well,” yet fewer than 5% enroll in English as a Second Language adult education programs.

Further, at least 60% of Michigan community college students each year need to take developmental (remedial) education classes due to not having mastered a skill area needed for postsecondary education or training. As such remediation has a tuition cost, this consumes a student’s money or financial aid and prolongs the time needed to obtain their degree or other credential, increasing the likelihood that the student will drop out of college before completion.

State and Federal Funding for Adult Education Has Been Cut

Michigan has greatly reduced its funding for adult education during the past 16 years. During budget years 1997 to 2001, state funding for adult education was at $80 million a year, but the Michigan Legislature cut funding drastically after that, to as low as $20 million annually. Adult education was funded at $22 million a year for several years, and last year the Legislature bumped up the funding to $25 million ($23.7 million with the 5% administrative set-aside). As federal funding has also been reduced, total funding for adult education in Michigan has dropped from $94.1 million in 2001 to only $37.4 million in 2016.

The funding cuts result in fewer people enrolling in and completing adult education programs. The decrease in total funding since 2001 has been accompanied by a 51% decline in enrollment, a 36% decrease in students completing a grade level and a 64% decrease in students completing and then advancing a grade level.BB League Recommendations Adult Ed chart 2

With more funding, adult education will be able to reach more students and will be able to facilitate student success by expanding into places such as community colleges, workplaces and sites in which parents can bring their children (i.e., Head Start).

BB League Recommendations Adult Ed chart 3The Governor’s 2018 State Budget

The governor’s proposed budget continues to fund adult education at $25 million for budget year 2018. The Michigan League for Public Policy recommends that the adult education appropriation be increased by $10 million. At an estimated cost of $1,266 per student, this would enable approximately 7,900 more students to be served.

 

Governor proposes needed increases in still woefully underfunded human services budget

pdficonMarch 2017
Pat Sorenson, Senior Policy Analyst

Budget Brief JPG USE THIS ONEThe governor has proposed several increases in the 2018 state budget that would benefit Michigan children and families with low incomes, including funds to retain food assistance benefit increases approved this year and additional support for clothing for children in families receiving income assistance.

BB League recommendations graph 1These increases, while welcome, do not overcome years of disinvestment in basic subsistence programs for families living in deep poverty. Since 2007, state lawmakers have restricted eligibility for public assistance through more stringent lifetime limits, toughened sanctions—including the potential elimination of benefits for an entire family because of the truancy of one child—and imposed an asset test for food assistance benefits.

Childhood Poverty Matters

Partly as a result of these policy changes, the number of Michigan children eligible for the state’s primary income assistance program, the Family Independence Program (FIP), dwindled from over 150,000 in December of 2009 to under 40,000 in 2016—a reduction of nearly 75%. The FIP caseload is now at its lowest point since 1957.1

In the face of this decline, child poverty remained stubbornly high, rising from roughly 19% in 2009 to 23% in 2015—an increase of 19%. Poverty rates for children of color are even higher, with nearly half of all African-American children living below the poverty line, as well as 1 in 3 Latino children.

While often thought of as a program for adults, the reality is that nearly 8 in 10 FIP recipients are children and especially young children.2 The well-being of these children is of critical importance as research shows that exposure to chronic stress or adversity in the earliest years of life can BB League recommendations graph 2affect children’s emotional and cognitive development in ways that can be longlasting.

  • Healthy Births: Children of women living in poverty are more likely to be born too small and too early—putting them at an immediate disadvantage developmentally.
  • Health and Mental Health: Children from families with low incomes are more likely to suffer from asthma and be hospitalized unnecessarily, as well as be exposed to environmental toxins. Some of these health problems persist into adulthood. Adults who were exposed to more stress early in life are more likely to have a range of health problems, including alcoholism, depression, heart disease and diabetes.3
  • Academic Achievement: Poverty has long been connected to poorer performance in school, with more recent research suggesting that the conditions of poverty might actually disturb brain development.4 By the end of four years of high school, economically disadvantaged students are more likely to have dropped out without a diploma (15% vs. 9% for all students).5

BB League recommendations graph 3With poverty comes substandard housing, exposure to environmental threats like lead, less access to healthy food, unsafe neighborhoods, and inadequate healthcare and child care. To be successful, strategies to address childhood poverty must be two-generational, recognizing the impact of family economic stress on parental health, parenting, and access to work-related supports like child care and transportation.

FIP Helps Stabilize Families and Provides for Children’s Basic Needs

Children’s Clothing Allowance: Children in families receiving FIP live in very deep poverty. The FIP payment represents less than one-third of the federal poverty line ($18,871 for a family of three in 2015) and only 63% of poverty when the family receives federally funded food assistance.

With fewer children being served by FIP and benefit levels basically stalled (maximum of $492 per month for a family of three, with average monthly payments of $366 in 2016), it has become more difficult to juggle housing, transportation and other necessary costs, as well as provide children with decent clothing for school or other personal needs. The governor’s recommendation to expand the clothing allowance for children in families receiving FIP is a small way to recognize those costs.

Pathways to Potential: The governor has also recommended an increase in funding for the Pathways to Potential program that places “success coaches” in schools to identify barriers faced by students and their families and make appropriate referrals to services in both the public and private sector. This model has promise for meaningful school/community partnerships and a two-generational approach to school success for all children. Currently in 259 schools in 34 counties, the funding increase would allow the program to expand to more schools with low student achievement, as well as additional rural areas.

Access to Adequate Healthy Food Matters

The Supplemental Nutrition Assistance Program (SNAP) is the primary federal program to curb hunger and funds Michigan’s Food Assistance Program (FAP). The beneficiaries include children, working parents, seniors and people with disabilities.

Research has shown that the program has been highly effective.

  • Access to food assistance reduces both poverty and food insecurity, especially among children.6
  • Maternal receipt of food assistance during pregnancy reduces the incidence of low birthweight.
  • Young children with access to food assistance and better diets are healthier, less likely to be obese as adults and more likely to complete high school.
  • Diminished food budgets at the end of the month—when food assistance benefits have run out—have been linked to serious health problems related to chronic conditions such as diabetes, as well as increased disciplinary events among school-aged children.7

State Policies to Ensure Access to Nutritious Foods Are Critical

Benefits for Michigan’s FAP are entirely federally funded. To be eligible for assistance, families must have incomes below approximately 200% of poverty or $40,840 for a family of three in 2017. Approximately 1.4 million Michigan residents currently receive food assistance through FAP, with children representing 4 of every 10 beneficiaries. The average family of two receives only $228 monthly.8

“Heat and Eat” Policy: This year, the Michigan Legislature approved $6.7 million in state funding to reinstate the “heat and eat” policy that allows Michigan to leverage additional federal SNAP funds and increase food assistance benefits for more than 350,000 Michigan families, seniors and people with disabilities. For 2018, the governor recommends $6.8 million to continue the program as a smart way to leverage more than $300 million in federal funding to prevent hunger.

Asset Test for FAP: In 2002, the federal government gave states the option to decide if and how they would include a family’s assets when determining eligibility for benefits. Since that time, approximately 35 states have eliminated their asset tests. Michigan was one of the first states to eliminate the asset test but reinstated it in 2012. To receive FAP benefits, applicants must now have less than $5,000 in assets—including the value of vehicles after certain exemptions.

Limits on assets increase state administrative costs—which are funded by the state at 50% of total costs—by requiring state workers to verify additional information, and could discourage families with low incomes from saving a portion of their wages to create the small cushion required to meet crises like a car repair needed to keep their jobs.

The Governor’s 2018 State Budget

Continue federal funding for “heat and eat” food assistance benefits. The governor includes $6.8 million in state funds to allow this program to continue, drawing down more than $300 million in federal funding and increasing food assistance to over 350,000 working parents, children, seniors and persons with disabilities in the state.

Increase the clothing allowance for children in families receiving income assistance. The governor provides a total of $9 million (up from $6.3 million this year) for the clothing allowance for children receiving FIP, with new funds dedicated to increasing the allowance from $140 per child each year to $200.

Expand Pathways to Potential. The governor includes $5.6 million, including $3.3 million in state funds, to expand the Pathways to Potential program that places staff in schools to help connect families to needed community services. New funds in 2018 would be used to lower caseloads in some areas of the state as well as expand into new schools. Priority for expansion would be given to schools with low achievement or those in rural communities that have been targeted for economic development.

Endnotes

  1. Field Operations Administration Overview: Fiscal Year 2018, Michigan Department of Health and Human Services
  2. Family Independence Program: Total Recipients, Adults and Children, Michigan Department of Health and Human Services (January 2017).
  3. In Brief: The Impact of Early Adversity on Children’s Development, Center on the Developing Child, Harvard University; National Conference of State Legislatures, and the NGA Center for Best Practices.
  4. Kwon, D., Poverty Disturbs Children’s Brain Development and Academic Performance, Scientific American (July 22, 2015).
  5. 2014-15 Graduation Dropout Snapshot, Statewide 4-Year (2015 Graduation Cohort), MI School Data, Center for Educational Performance and Information.
  6. Food insecurity is defined as lacking the resources necessary for consistent and dependable access to food.
  7. Long-Term Benefits of the Supplemental Nutrition Assistance Program, White House Council of Economic Advisers (December 2015).
  8. Trend Report of Key Program Statistics through January 2017, Michigan Department of Health and Human Services.

Think the federal budget doesn’t matter to states? (Federal funds as a % of Michigan budget)

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Think the federal budget does not matter to states

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Harriet McTigue

Harriet McTigue

Harriet McTigue

Harriet McTigue joined the League as the Kids Count research associate in 2017. Prior to the League, she worked for the Michigan State University Sexual Assault Program as an advocacy coordinator, providing services to victims and helping to decrease sexual violence in the greater Lansing area. Prior to that, she worked for the Michigan State University Office of the Vice President for Research and Graduate Studies, assisting the university in increasing grant funding.

Harriet holds a Bachelor of Arts in public policy with minors in women’s and gender studies, and economics, as well as a Master of Arts in public policy, both from Michigan State University.

Contact: hmctigue@mlpp.org

Restore the Part-Time Independent Student Grant in the 2018 budget

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March 2017
Peter Ruark, Senior Policy Analyst

Budget Brief JPG USE THIS ONECurrently, Michigan has no financial aid grants for students who have been out of high school for more than 10 years and want to go to a public university or community college. Eliminated in 2010, the Part-Time Independent Student Grant addresses this specific need and should be reinstated in the 2018 budget.

BB Restore part-time independent student grant in 2018 budget GRAPH 1The Problem

The decision by workers to get trained in new skills is often made more than 10 years after graduation from high school. While state financial aid helps many students of traditional college age, there are no state financial aid programs to help students attend public community colleges or universities if they have been out of high school for more than 10 years. Two of the three existing grant programs explicitly exclude such individuals from eligibility, and the third is available only to those attending a private, not-for-profit institution. Additionally, none of the grant programs are available to students who go to college less than half time, even though that is sometimes the most workable choice for those who are working and raising a family.

BB Restore part-time independent student grant in 2018 budget TABLE 1The Governor’s 2018 State Budget

The governor’s 2018 budget includes $2 million to reinstate the Part-Time Independent Student Grant.

The League Recommends

Until 2010, Michigan offered two grants to older students: the Part-Time Independent Student Grant (formerly called the Adult Part-Time Grant) and the Educational Opportunity Grant (which was also available to qualifying “traditional” students). Given that the two grants previously available for this population were funded at a total of more than $4.7 million during the most recent years prior to their elimination, we urge the House and Senate to join the governor in reinstating the Part-Time Independent Student Grant and appropriate $4.7 million in funding to meet the true need for financial assistance for this group of older students and workers.

BB Restore part-time independent student grant in 2018 budget TABLE 2

Child care for working families–A foundation for growing the state’s economy

pdficonMarch 2017
Pat Sorenson, Senior Policy Analyst

BB Child Care March_17_2017 chart 1Access to child care is a necessity for working parents and a foundation for Michigan’s economic growth and vitality. Sadly, Budget Brief JPG USE THIS ONEMichigan ranks among the lowest states in the country in its investments in child care for families with low and moderate incomes—even turning back federal child care funds because of restrictive state policies that prevented families from getting the care they needed to work and support their families.

High-quality child care moves Michigan forward in two ways:

  1. Child care is an engine for economic development because it helps parents work or participate in the training and education they need to move forward. For employers, it increases the pool of workers and can reduce absenteeism and turnover—a threat to their bottom line.
  2. High-quality child care provides the learning environment very young children need to be prepared for preschool and ultimately success in kindergarten and beyond—including the critical benchmark of reading by third grade.

BB Child Care BibsMarch_17_2017 chart 2The High Cost of Child Care

The cost of placing one infant in a child care center in Michigan ($10,178 in 2015) is nearly as much as the annual cost of tuition at a public four-year college ($11,994) and exceeds the median annual cost of rent ($9,168).1 For parents with two children in a child care center, annual child care costs are nearly $18,500.2 Child care expenses are a heavy financial lift for many of the state’s working parents but are particularly burdensome for families with low wages.

For families living at or near the federal poverty level, child care costs can be an absolute barrier to employment, often forcing parents to rely on a patchwork of relatives, neighbors and friends who may be unable to make long-term commitments. The predictable results are frequent work disruptions that can jeopardize their jobs, or the tough decision to leave their children in care they don’t believe is safe or adequate.

BB Child Care March_17_2017 chart 3The Low Wages of Child Care Workers

Child care providers are some of the lowest-paid workers in the state. Despite the incontrovertible scientific evidence that the first three years of life are when children’s brains grow most quickly, setting the stage for lifelong learning and success, the annual median wages provided to people caring for young children fall below those of veterinary assistants, animal control workers, manicurists and telemarketers.

Michigan’s Child Care Subsidy Program

Michigan’s Child Development and Care (CDC) program helps families with low wages who are working, completing high school/GED courses, participating in job training programs or engaging in family preservation activities. Parents can choose care in a range of settings if providers are available locally and affordable, including licensed child care centers, child care group/family homes or with unlicensed family, friends and neighbors.

Michigan has very restrictive child care policies and, as a result, the number of families receiving assistance has dropped dramatically, along with child care expenditures.

  • Between 2009 and 2016, the number of families receiving child care subsidies fell by nearly 70%, from 74,557 to 23,411 (monthly averages).
  • The dollars flowing to communities to help support working parents, employers and the local economy fell by over 70%, from $30.2 million monthly to only $8.4 million.

Payments to Providers Are Too Low to Ensure Access and Quality

The rates paid to child care providers depend on the age of the child and the type of setting, including the number of stars a provider has in the state’s five-star quality rating system. Payments range from $1.35 per hour for unlicensed providers to a maximum of $4.75 per hour for infants and toddlers in a five-star child care center. While tiered reimbursements can create good incentives for quality improvements, the reality is that in Michigan’s grossly underfunded child care system, most child care providers are not receiving the higher payment rates. In February of this year, 60% of the 8,434 child care programs in Michigan received the base child care rate because they had 0 or 1 star in the quality rating system.3

In addition to low rates, the complexity of the provider payment process threatens the supply of high-quality care for children. Michigan is one of only a handful of states that pay child care providers on an hourly basis. Without predictable income, it is even more difficult for providers to maintain their businesses and accept children with subsidies.

Child Care Eligibility Levels Are Among the Lowest in the Country

In 2016, Michigan had the lowest income eligibility levels in the country for child care assistance and second lowest as a percentage of state median income. Even with the increase to 125% of poverty in 2017 ($25,525 for a family of three), Michigan’s eligibility cutoff remains at the bottom. Without an expansion of eligibility, many families will struggle to enter the job market, and the long-term prospects for their children are bleak. Research has consistently shown that growing up under the stresses of poverty can affect children’s ability to learn and succeed later in life.

The Governor’s 2018 State Budget

  • Increase child care payments: The governor includes $6.8 million in the current budget year (2017), along with $27.2 million in the 2018 budget, to increase rates paid to child care providers by approximately 20%, effective in July of this year.
  • Increase oversight of child care providers: The governor recommends $2.2 million for annual on-site visits to unlicensed child care providers, as well as expanded fingerprinting and background checks. These changes are mandated as part of the federal reauthorization of the Child Care Development Block Grant.

Endnotes

1. Parents and the High Cost of Child Care, 2016 Report, Child Care Aware.
2. Ibid.
3. Great Start to Quality Participation Data (February 1, 2017).

Medicaid Block Grants and Per Capita Caps are bad for Michigan’s health

pdficonMarch 2017
Emily Schwarzkopf, Policy Analyst

Medicaid, along with Medicare, was signed into law in 1965 to extend coverage to families and individuals with low incomes, including seniors, children and individuals with disabilities. Medicaid programs are operated by individual states but within federal guidelines, which can give states the opportunity to be innovative in the design and administration of the program. As the program currently stands, the federal government guarantees coverage for all eligible individuals and secures a set of covered services for enrollees. In Michigan, the traditional Medicaid program covers over 1.8 million Michiganians and over 650,000 are enrolled in the state’s Medicaid expansion program, the Healthy Michigan Plan.

As Congress debates repealing and replacing the Affordable Care Act, there is one common theme in plans that have been put forward: fundamental changes to the way Medicaid is financed. These proposals include distributing Medicaid funding to states through block grants, or setting a per capita cap on the amount per enrollee. Either of these approaches put Medicaid and the Michigan residents that depend on it in jeopardy.

What is a Block Grant?

A block grant is a fixed amount of money that the federal government gives to a state for a specific purpose. In this case, the federal government would send each state a specific amount of funding to support the entirety of the Medicaid program.

What is a Per Capita Cap?

Under a per capita cap, the federal government pays the state a fixed amount of money per enrollee.

What Are the Effects?

Per capita caps and block grants limit the amount of federal funding that states receive, shifting costs to states, hurting local economies, and putting quality coverage for seniors, people with disabilities and families with kids at risk. On the budgetary front, the use of per capita caps would result in a savings to the federal budget by ultimately increasing the financial liability and risk to states. This shift could result in significant financial stress on state budgets. It would require lawmakers to look seriously at funding priorities. In order to balance the strain on state budgets to provide benefits, states may be forced to cut other vital programs including education, public safety or infrastructure. And in some cases, states may just decide to limit spending on Medicaid, resulting in fewer people having health coverage.

These types of funding changes lock states into a fixed funding level that will only be adjusted for inflation. This funding is not expected to keep up with the growth of Medicaid costs and will result in increased cuts to Medicaid in Michigan and around the country. The anticipated cuts will reduce state flexibility and may make it harder for lawmakers to adjust to changes and alter the program in the future.

Medicaid block grants graphicBy reducing federal funding, states may be forced to make eligibility changes to the Medicaid program. Some of these changes could be eliminating entire eligibility categories, such as childless adults or seniors in nursing homes, decreasing income eligibility levels or setting enrollment caps.

Beyond budget and enrollment impacts, changes to coverage and access for beneficiaries is also a strong possibility. States could opt to eliminate or reduce benefits, establish or increase cost-sharing, reduce payments to providers, or forego state efforts to address emerging public health concerns (like the opioid epidemic).

As the Medicaid program currently stands, states already have a lot of flexibility when it comes to the design of their program and in many states, including Michigan, it is running efficiently and effectively. Any sort of cap or block grant would severely limit state strategies for integrated care and the ability to address social determinants of health, greatly harming our state’s most vulnerable residents. These plans will put Michigan’s fiscal health at risk along with the health of the nearly 2.5 million people who depend on the state’s Medicaid program.

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