Reports


Willing to work and ready to learn: More adult education would strengthen Michigan’s economy

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Updated February 2017
Senior Policy Analyst, Peter Rurak

Michigan depends on its skilled workers, and much has been written and said about the need to build up our state’s workforce. Yet year after year in the state budget, state policymakers neglect to adequately fund adult education, making it less accessible for low-skilled workers who want to build their skills, become financially self-sufficient and contribute to Michigan’s economy. Adult education is the key to preparing these workers for occupational training and skilled employment, and better funding and an expanded role will enable it to meet the demand more effectively.

In the past, high school graduates could enter the middle class by getting jobs in the manufacturing sector immediately after graduation and moving eventually into skilled, higher-paying positions. Today, however, technological advances and offshore production have greatly decreased the need for unskilled, entry-level labor. A high school diploma by itself has far less value in the job market as a result, and employers increasingly prefer to hire skilled workers with a postsecondary credential such as a degree, certificate or license. With 9% of working age Michigan adults lacking a high school diploma, 1 out of 10 low-income working families having a parent that does not speak English well, and 6 out of 10 community college students needing remediation, it is clear that too many workers have basic skill deficiencies that make it difficult to attain such credentials.

Expanding adult education services to help more low-skilled but highly motivated individuals succeed in post-secondary training will benefit Michigan. Skilled workers help attract and keep businesses in the state, spend more in their local communities, pay more in taxes, and are less likely to become unemployed or need public assistance. On the other hand, continuing to neglect adult education keeps a segment of the population out of the skilled labor pool, which in turns keeps the need for public assistance high, slows the revitalization of struggling communities and wastes an opportunity to increase state revenues.

The Need for More Adult Education Services is Great

Adult education serves the segment of the population that does not have the basic skills necessary to gain secure, family-supporting employment, or to succeed in occupational training that leads to such employment. The term “basic skills” refers to the levels of reading, writing and mathematics that are associated with the attainment of a high school diploma and the ability to speak English proficiently. These skills are the foundation for building career-specific occupational skills that are in demand by the job market. While many adults without a high school diploma have deficiencies in one or more of these skill areas, some high school graduates also lose these skills over time or may not have completely mastered them while in high school. Adult education serves both sets of individuals.

Several indicators show that the number of working age adults needing adult education far surpasses those receiving it:

  • Over 210,000 Michigan adults age 25-44 lack a high school diploma or GED, yet fewer than 7% have enrolled in adult education in any year since 2004.1
  • More than 234,000 Michigan adults speak English less than “very well,” but fewer than 4% enroll in English as a Second Language adult education programs.2
  • Around 60% of community college students per year need to take developmental (remedial) education classes due to having not mastered one or more skill areas needed for postsecondary education or training.3

It is clear that too few students are getting the basic skills education they need to be able to succeed in occupational training and ultimately, to find a pathway out of low-wage, dead-end jobs and into a skilled career that enables them to support their families and prosper. As Michigan’s workforce development efforts attempt to move an increasing number of low-skilled workers into postsecondary credential programs, the demand for adult education will become even greater and so will the need for funding. (For more detailed statewide and county indicators of need, please see Appendices 1-2.)

Willing to Work fig 1

Adult Education is a Crucial Link to Postsecondary Education and Gainful Employment

Because workers and job seekers without postsecondary occupational skills and credentials will have an increasingly difficult time finding family-supporting employment in coming years, the goal for adult education must not be merely to acquire a GED, but to transition workers into postsecondary training leading to a degree or certificate.

According to a recent report by the Georgetown University Center on Education and the Workforce, 70% of jobs in Michigan will require some level of postsecondary education by 2020, including 37% requiring a “middle skills” credential such as an associate degree (which typically takes two years) or a vocational certificate (which usually takes less than two years).4 The sector with the highest number of projected middle skills job openings in Michigan is sales and office support, (43,000 openings for workers with an associate degree and 104,000 openings for workers with a credential that takes less than two years). Other sectors with a large number of projected middle skills openings are food and personal services and what the report terms “blue collar” occupations such as agriculture, construction and production.5 (For the complete Michigan employment and education forecast in the Georgetown University report, see Appendix 3.)

Helping low-skilled workers acquire postsecondary credentials that are in demand benefits not only those workers and their families, but also employers and the state as a whole. A skilled workforce will encourage businesses to stay, move to or expand in Michigan. Skilled workers earn and spend more money in their communities, which in turn helps other businesses and increases state revenues from income and sales taxes. Skilled workers are less likely to become unemployed or to need public assistance. Preparing more low-skilled workers for postsecondary training, therefore, needs to be a key component of Michigan’s workforce development strategy.

Willing to Work fig 2As seen in Figure 2, Michigan residents with “some college” or an associate degree have significantly higher earnings ($31,460) than those with only a high school diploma ($26,347) and are less likely to be in poverty. The combined percentage of Michigan residents in the former category (32.7%), however, is barely higher than the percent­age with only a high school diploma (29.9%), and well below the percentage without postsecondary education when those with less than a high school diploma (10.4%) are factored in. It is clear that many Michigan workers and their families would benefit from training leading to a postsecondary credential, and a significant number of those will need adult education to prepare them for such training. (Note: the “some college” category, in addition to including those who attained a certificate or license, includes those who took at least one postsecondary course but did not complete requirements for a credential. The earnings figures would likely be significantly higher if only credentialed workers are included.)

One population that Michigan should actively target for adult education is its residents with limited English proficiency. A recent Working Poor Families Project report cites data showing that between 2010 and 2030, immigrant workers will account for more than 90% of the nation’s workforce growth and that by 2030, one in five workers will be an immigrant. Despite this, 70% of limited-English adults in the United States do not have education beyond high school and 44% do not have the equivalent of a high school diploma. Of foreign-born workers with a high school diploma but no postsecondary credential, those who are proficient in English earn 39% more than those who are not.6

Willing to Work fig 3In Michigan, 23% of adults 25 years and over who speak a language other than English at home (and 35% who speak Spanish at home) do not have a high school diploma, compared with 10% who speak only English at home (Fig. 3). The poverty level is much higher for those who speak a language other than English (23%), especially for Spanish speakers (27%), than for those who speak only English (15%). With more than 234,000 adults in the state with limited English proficiency, Michigan should ensure that this population is targeted for adult education outreach and that there are adequate English as a Second Language programs—with adequate funding—in the areas of the state with the highest need.

To Be More Effective, Adult Education Must Fit Family and Work Schedules

Adult education is primarily taught in school buildings, literacy centers, Michigan Works! one-stop centers, and public libraries. In some counties, it is provided at county jails, Head Start buildings or Community Action Agencies. Because instruction is usually provided at a central location rather than in the context of family, school and/or work, adult learners often must make child care arrangements or even adjust work schedules in order to attend adult education classes.

Willing to Work fig 4For some adult learners, this “traditional” way of receiving adult education instruction works. For others, however, the time needed to complete an adult education program conflicts with family or work needs and prolongs the time before entering into postsecondary training—increasing the likelihood that some students will drop out before completion. If the student lives or works a long distance from the school building, transportation can be an additional barrier.

Conversely, integrating adult education instruction into other aspects of students’ lives, such as work, occupational training and family, can make their experience more relevant, their coursework easier, and the time to complete a program shorter. All of this will increase the likelihood of student success, and in turn help the adult education system better meet the needs of employers.

There are several ways to contextualize the delivery of adult learning:

  1. Use adult education as a two-generation strategy to improve the lives of both parents and children. A two-generation approach to fighting poverty devises programs and policies that seek to enhance children’s intellectual development in tandem with increasing their parents’ skills and ability to earn higher wages. As seen in Figure 4, roughly 17% to 22% of adult education participants in recent years are public assistance recipients and 6% to 9% report that they are single parents.7 Yet we see from Figure 5 that public assistance recipients, parents of pre-school and school age children, and rural students have very poor program completion rates. All of these categories have declined since 2013.

Willing to Work fig 5

Addressing the needs of these at-risk categories should be a top priority for both local program design and state policy. Examples of two-generation strategies on the program level include:

  • Providing child care and enrichment activities at adult education sites.
  • Offering adult education in programs such as Head Start that serve children (a very small number of counties in Michigan do this).
  • Making sure that individuals who enroll in adult education are made aware of public assistance for which they may be eligible.

On the state level, Michigan can implement two-generation polices that make it easier for parents to access child care or be involved with their children’s education while receiving basic skills instruction, examples of which include:

  • Making low-income adult education students categorically eligible for subsidized child care or raising the income eligibility level. Currently, a single parent with two children can get a subsidy only if her or his annual income is at or below 121% of the federal poverty guidelines ($24,708 in 2017).
  • Raising the child care subsidy level to a higher percentage of the market rate in order to cover more of the actual child care costs, and removing the paperwork barriers that discourage or prevent this population from making use of the subsidy even when eligible.8
  • Making adult education services an integral part of all Pathways to Potential school programs.9

There are also steps Michigan can take to make it easier for parents on cash assistance to complete their GED. Unfortunately, federal rules do not let GED completion count toward recipient work requirements unless the recipient is also working 20 hours per week in another work activity such as paid employment or community service. Because success in GED completion may be hampered by the need to juggle classes, homework, family needs and 20 hours of work, Michigan should consider waiving the 20-hour work requirement. This would enable cash assistance recipients to take adult education classes full-time and attain their GEDs more quickly, or to tend to their children’s needs and intellectual development while completing their GED. Even though Michigan would not be able to count such recipients toward its work participation rate, the state has a high enough percentage (over 60%) of recipients meeting the requirements and so can afford to be flexible in this area.10

In addition, the Working Poor Families Project recommends two curriculum-based steps for states to consider as part of a two-generation strategy: 1) Expand and contextualize state-approved adult education curriculum to cover family financial literacy and asset-building instruction, and 2) Incentivize local providers of Adult Basic Education Literacy and English as a Second Language services to include opportunities for child-parent learning, such as family literacy and numeracy activities.11 Both of these strategies can be undertaken in Michigan, provided there is additional funding.

2. Provide adult education in the community colleges as an alternative to costly developmental education. Many community college students must take developmental education classes due to having not mastered one or more basic skill areas. Each year, around 60% of community college students in Michigan are required to take at least one developmental education course (Fig. 6). Such classes cost the same as for-credit classes leading to a degree or credential, costing the student money and/or using up some of the student’s financial aid resources. Providing developmental education to large numbers of students also can create difficulty for community colleges due to staff costs.

Willing to Work fig 6

One way to solve this problem is for Michigan to allow (and provide funding for) community colleges and school districts to enter into cooperative agreements whereby students needing remediation can take adult education courses on the college campus that fulfill develop-mental education requirements. Because adult education is free, this will save the student money and underscore adult education’s important role as a transition program to postsecondary education.

Willing to Work fig 73. Provide adult education in the workplace as a part of on-the-job training. Until 2004, when adult education received a large funding cut, programs were sometimes offered in automobile and other manufacturing worksites. This enabled employees who were held back from advancing in their jobs by reading, language or mathematics deficiencies to receive basic skills training at the workplace. Following the cuts, many counties and school districts discontinued the practice and there are now fewer than 50 adults who participate in workplace literacy programs in most years (Fig. 7). Providing funding for on-site adult education serving low-skilled workers in their workplace (before or after work) can help workers avoid transportation barriers and save driving time, thus incentivizing them to participate.

4. Develop career pathway systems. Career pathways are ideally the best vehicle to deliver adult education. A career pathway is defined as “a well-articulated sequence of quality education and training offerings and supportive services that enable educationally underprepared youth and adults to advance over time to successively higher levels of education and employment in a given industry sector or occupation.”12 By linking basic skills training, career-specific occupational training, wraparound services (such as child care, transportation and/or financial services) and employment, they combine the three contextualized learning strategies discussed above.

Presently, if a low-skilled adult wants to acquire a credential and a skilled job, the required educational steps are usually sequential and mutually exclusive: first, the individual must participate in adult education to acquire a GED, then he or she must enroll in postsecondary education to acquire an occupational credential, and finally, he or she uses the newly gained credential to look for a job. Services are often provided in isolation, i.e. adult education is not used at community colleges in place of developmental education or integrated into on- the-job training.

By integrating the steps in the training sequence, career pathways enable low-skilled adults to learn basic skills in the context of occupational training leading to a credential; for example, English as a Second Language or high school mathematics is taught in a robotics or electrician training program leading to a certificate or license. Such programs shorten the time needed to obtain a postsecondary credential, because basic skills remediation is taught alongside of (or integrated into) occupational training rather than as a prerequisite. This is very important for adult learners with jobs and families, because the longer the time needed, the greater the likelihood of individuals dropping out prior to completion. Some career pathways programs provide supportive services such as child care, and some are directly connected to employment, with a guarantee of job placement upon successful completion.

Each of these expansions of adult education delivery will help adult learners persist in and complete their programs and will enable a larger number of individuals to participate. However, serving more people and serving them differently will require additional funding.

Michigan’s Shortsighted Neglect of Adult Education

Although the need for adult education is obvious, Michigan has undercut its accessibility in several ways, most notably in its drastic reduction of funding in 2004. This reduction was included in the then-governor’s budget and passed by the Legislature not due to a perceived decrease in need, but to reduce state spending during an especially tight budget period. Neither the current administration nor the Legislature has made an effort to restore the lost funding, even though the state has been in a generally stronger fiscal position for several years.

Following are the three ways Michigan has disinvested in this important workforce development tool:

State Appropriations: Michigan appropriated $80 million per year for adult education in budget years 1997 to 2001, decreased funding slightly in the following years, and then slashed funding to $20 million in budget year 2004. Adult education appropriations remained flat at $22 million for several years before being increased to $23.8 million beginning in 2016—a 70% reduction from 2001. Federal funding has not increased significantly to make up for the loss in state funding, so total funding for adult education in Michigan has dropped 60% since 2001, not accounting for inflation (Fig. 8).

Willing to Work fig 8

Administrative Set-Aside: Although the Legislature increased the adult education appropriation from $22 million to $25 million for budget year 2016, it continued the practice begun in budget year 2015 of cutting funds to providers by 5%, bringing the amount to $23.75 million. This is because adult education is now allocated through regional fiduciaries rather than directly to providers, and 5% of the existing base funding for adult education is now set aside for regional administration of the grant dollars. While it may make sense to provide administrative funding to fiduciaries, the state should appropriate additional funds for this purpose rather than take it from adult education providers.Willing to Work fig 9

Erosion: When adjusted for inflation, the $23.75 million appropriated for 2016-17 was equal to only $17.4 million in 2001 dollars.13 In inflation-adjusted dollars, Michigan reduced its state funding by 78% between 2001 and 2017, causing total funding for adult education to drop by 70% (Fig. 9).

Consequences of Adult Education Cuts

The funding cuts over the years have caused a drop in the number of students enrolling in, completing and advancing in adult education programs. Following the large funding reduction in the 2004 budget, student enrollment fell from more than 70,000 to less than 50,000, and has been below 30,000 for the past several years. The number completing an academic level dropped from more than 15,000 (and nearly 24,000 in one year) to between 9,000 and 12,000 most years.14 The percentage of enrollees completing a level has been between 30% and 40% most years, so there appears to be a direct correlation between the amount of funding and the number of students enrolling and completing (Fig. 10).

Willing to Work fig 10

In addition to serving fewer students than in the past, Michigan does not compare well with other Midwest states on student participation or success measures. It ranks close to the bottom of states nationwide in the percent of students enrolled in adult education relative to those without a high school diploma or GED. It also ranks in the bottom half of states in the percent of students who improve in beginning literacy skills and who have a goal of postsecondary training, though of the students with that goal, the percentage who successfully transition to postsecondary is somewhat higher relative to other states.

Michigan needs to expand the number of programs available to adults who have not completed high school, and facilitate student success by providing adult education in contextualized contexts as discussed previously. Likewise, because beginning literacy students are among the least skilled and most economically vulnerable of adult education students, providing literacy instruction in the context of the workplace or as a two-generation strategy can help those participants succeed at higher rates.

How Much Adult Education Funding Is Needed?

Dividing the total funding appropriated each fiscal year from FY 2012 through 2016 by the number of students served each of those years shows that the state pays approximately $1,266 per individual adult education student. Because most students attend adult education part time, this works out to roughly the same amount that school districts are supposed to receive per adult education full-time equivalent student ($2,850).15 Unfortunately, because funding levels to districts are based on the previous year’s enrollments, districts that have more registrations than the prior year have to work with much less than $2,850 per FTE. This puts them in the position of having to either turn students away or to be constrained in the type of instruction they can offer or the materials they can use.

From Program Years 2011-12 to 2015-16, when adult education received state and federal funds totaling between $35 million and $38 million per year, the state served an average of 28,340 adult education students per year. Assuming a cost of $1,266 per student, if total funding were to be increased by $10 million, then the state could serve approximately 7,900 more students—a 28% increase to 36,237 students. If the 7,900 additional students were between the ages of 25 and 44, then the percentage of individuals that age without a high school diploma or GED who are enrolled in adult education would go from 6% to 10%.

Figure 11 shows approximately how many more students the adult education system could serve if funding is increased. (The table does not account for inflation.) While the Michigan League for Public Policy does not necessarily recommend that only adults age 25-44 without a high school diploma be targeted for additional money, the percent of this population that would be served with increased funding serves as a useful benchmark for measuring the degree that adult education meets the need in Michigan.

Willing to Work fig 11

Recommendations

Increase Adult Education Funding

To ensure an adequate adult education funding base that will enable Michigan to meet the needs of its low-skilled workers and help them transition into postsecondary training, Michigan needs to:

  1. Increase adult education annual appropriations by $10 million to $30 million.
  2. Develop a formula for increasing adult education funding each year to keep up with inflation, rather than maintaining it at a flat level that will erode in value over time.
  3. Monitor developments in federal adult education funding and be prepared for any federal funding cuts in the future.

Provide Adult Education in Contextualized Environments

Low-skilled adults often have barriers that prevent them from participating or successfully completing adult education programs, and Michigan needs to try new ways to facilitate success for these learners. To connect adult education instruction with other aspects of students’ lives, Michigan should:

  1. Encourage and fund local adult education programs to offer classes in nontraditional settings such as community colleges, workplaces and sites in which parents can bring their children.
  2. Provide incentives for community colleges and school districts to enter into cooperative agreements in which adult education classes fulfill students’ developmental (remedial) education requirements, and remove any institutional barriers that prevent such cooperative agreements.
  3. Encourage employers to provide match funding for the provision of adult education instruction in the workplace.
  4. Encourage local adult education programs to become part of occupation-specific career pathway systems and provide funding for additional instructors.

Ensure that Adult Education is Part of the Pathway to Economic Security for Public Assistance Recipients

Public assistance recipients are among those with the greatest need for skill-building, which provides economic benefit to their families and positively affects their children’s skill development. To eliminate barriers that prevent members of this population from participating and successfully completing adult education programs, Michigan should:

  1. Allow adult education to satisfy Family Independence Program work requirements without imposing the federal requirement of 20 hours per week of other work activities. Michigan’s high work participation rate allows for some level of flexibility in this area.
  2. Build on the approach, begun under Governor Granholm with the Jobs, Education and Training (JET) program and expanded under Governor Snyder with the Partnership, Accountability, Training, Hope (PATH) program, of facilitating skill building for cash assistance recipients, while continuing to reject the “work first” philosophy that prioritizes short-term employment goals over long-term skill building and economic self-sufficiency.

Willing to Work Ready to Work graphic_1

See PDF for Appendices

Endnotes

  1. American Community Survey 1-year estimate, 2015. (The previous version of this paper used the 3-year estimate but that is no longer available.)
  2. Ibid.
  3. State of Michigan Dashboard using data from the Michigan Community College Association. (https://midashboard.michigan.gov/education, accessed on February 1, 2017.)
  4. Carnevale, Anthony P., Nicole Smith and Jeff Strohl, Recovery: Job Growth and Education Requirements through 2020, Georgetown University Center on Education and the Workforce, June 2013.
  5. Ibid.
  6. Shaffer, Barry, Strengthening State Adult Education Policies for English as a Second Language Populations, Working Poor Families Project, Fall 2014.
  7. A student is counted as receiving public assistance if he or she is receiving financial assistance from federal, state or local government agencies. (Note: Social Security benefits, unemployment insurance, and employment-funded disability are not included under this definition.)
  8. For more information on the subsidy level and on the barriers preventing low-income parents from accessing Michigan’s child care subsidy, see Sorenson, Pat, Failure to Invest in High-Quality Child Care Hurts Children and State’s Economy, Michigan League for Public Policy, September 2014. (http://www.mlpp.org/failure-to-invest-in-high-quality-child-care-hurts-children-and-states-economy)
  9. Pathways to Potential, a Michigan Department of Health and Human Services program, uses the school environment to assist parents and children in attendance, education, health, safety and self-sufficiency. For more information on this program, go to http://www.michigan.gov/dhs.
  10. For more information on the federal work requirements in the Temporary Assistance for Needy Families program, see Schott, Liz and Donna Pavetti, Changes in TANF Work Requirements Could Make Them More Effective in Promoting Employment, Center on Budget and Policy Priorities, February 26, 2013. (http://www.cbpp.org/files/2-26-13tanf.pdf)
  11. Bassett, Meegan Dugan, Considering Two-Generation Strategies in the States, Working Poor Families Project, Summer 2014.
  12. Center for Law and Social Policy, The Alliance for Quality Career Pathways Approach: Developing Criteria and Metrics for Quality Career Pathways, February 2013.
  13. Figures are calculated using the Bureau of Labor Statistics’ Consumer Price Index inflation calculator (http://data.bls.gov/cgi-bin/cpicalc.pl, accessed April 13, 2016).
  14. An academic level comprises two school grade levels.
  15. Michigan Workforce Development Agency, 2013-14 Section 107 Individual District Reports. (http://www.michigan.gov/documents/wda/Section_107_Requirements_503134_7.pdf, accessed on April 13,2016)

 

A first look at the governor’s 2017-2018 budget: Smart investments for families amidst revenue threats

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Budget Brief JPG USE THIS ONEInvestments in healthcare, child care and education—all needed to make Michigan a leading state and spur economic growth—are at the center of Gov. Rick Snyder’s proposed 2018 state budget. These investments, while an important step forward, come on the heels of years of inadequate support for state services and infrastructure and could be threatened by any legislative attempts to further reduce state revenues.

Highlights 2018 BudgetThe governor’s budget, which was presented to legislative leaders on February 8th, includes funding for many of the state services that the League supports, including the continuation of the Healthy Michigan Plan; an expansion of access to high-quality child care; increased funding for high-poverty schools and higher education; a boost in the annual school clothing allowance for families living in poverty and receiving income assistance; and expanded food assistance benefits for families with low incomes, seniors and persons with disabilities.

At the same time, leaders in the Michigan Legislature are moving to lower or phase out the state’s income tax—the source of $7 of every $10 in the state’s $10 billion General Fund, and one-fifth of state funding for schools.

Eliminating the state income tax entirely would create a $9 billion hole in Michigan’s budget and result in deep cuts to public schools, colleges and universities, public safety and public health. Even a 0.1 percentage point reduction in the state income tax would reduce state revenues by up to $250 million.

A rollback of the state’s income tax would be a foolhardy move that could derail the state’s recovery and long-term economic vitality. We commend the governor for recognizing that threat in his budget. However, even without another tax cut, projected state revenues will likely fall short of what is needed to rebuild the state’s infrastructure after years of neglect, or create lasting opportunities for children who have been left behind in the recent economic recovery. Michigan needs tax reforms that help families with low wages get a toehold in the economy, like the Earned Income Tax Credit, and that adequately fund basic public services like good roads and schools, clean air and water, and adequate police and fire protection.

Percent of budget from federal sources 2017

Total Funding for 2018

The governor recommends a total state budget of $56.3 billion, an increase of 2.5%. State General Fund spending—the portion over which the Legislature has the most control—would increase by less than 2% to $10.1 billion.

At $10.3 billion, General Fund tax revenues are expected to climb back to 2008 levels next year, after dipping to a low of $7.7 billion during the Great Recession. However, the state’s purchasing power has dropped dramatically. When adjusted for inflation, ongoing General Fund revenues in the current year are lower than they were 50 years ago in the 1967-1968 budget when the state adopted the then-new personal and corporate income taxes.1

Federal dollars currently account for $4 of every $10 spent by the state, and the reliance on federal funds exceeds 70% in the Departments of Health and Human Services and Education. Uncertainties about federal spending under a new president and Congress make it even more critical that state leaders address the adequacy of Michigan’s tax system and resist risky efforts to further reduce state taxes.

Health

Healthy Michigan Plan: Uncertainty runs rampant for the Department of Health and Human Services as the new president and Congress debate the fate of the Affordable Care Act and Medicaid financing. However, the governor has proposed continuing the Healthy Michigan Plan, which has extended health coverage to over 600,000 individuals through a provision in the Affordable Care Act. The state is responsible for paying a share of the costs to maintain the program totaling $200.4 million in matching funds. The governor has recommended $4.1 billion in total funding to continue supporting the program.

Continuation of the Affordable Care Act and the Healthy Michigan Plan are critical for all Michiganians and the state’s economy. Michigan’s uninsured rate dropped by 45% under the Affordable Care Act, and one study shows that the state’s Medicaid expansion has resulted in more than 30,000 new jobs every year.

Many of the state’s residents have benefited:

  • Persons with pre-existing conditions like cancer, diabetes and asthma can no longer be denied coverage.
  • More than 70,000 young people who have not made the transition to jobs with insurance have been able to stay on their parents’ insurance until the age of 26.
  • Senior citizens and persons with disabilities are finding some relief from the high cost of prescription drugs.
  • Mental health parity provided coverage to those suffering from mental illness and substance use disorders.

For more on the reasons the Affordable Care Act is good for Michigan, see the League’s recent fact sheet.

Direct Care Worker Wages: The budget recommendation includes funding that would support wage increases for direct care workers who provide services through the state’s community mental health system. The $0.50 per hour increase is seen as an attempt to reduce the high rate of turnover for these individuals who provide support for some of our most vulnerable residents.

Non-Emergency Medical Transportation: Transportation to and from medical appointments can often be a challenge. The governor has requested an additional $12 million to expand the nonemergency medical transportation benefit into additional counties. Currently, services are provided only in Oakland, Wayne and Macomb counties.

Flint Water Crisis: As the Flint water crisis continues, the governor has recommended $13.4 million to support distribution of healthy food, breastfeeding support, school-based child and adolescent centers, lead abatement, the establishment of primary care medical homes, and additional water filters and water filter cartridges.

Mental and Physical Health Integration: A proposal from last year’s budget to consolidate both mental and physical health resulted in a work group to look at this proposal. While the work group’s final report is not due until March, the governor’s budget encourages continued conversations on how to coordinate services while maintaining the core values adopted by the work group.

Human Services

Food Assistance: The governor takes the important step of continuing to fund the “Heat and Eat” program that increases food assistance benefits for approximately 338,000 Michigan families. The expansion was first approved for this year with bipartisan support. For 2018, the governor provides $6.8 million to leverage federal funds, resulting in more than $300 million in food purchasing power for eligible families.

Income Assistance/Basic Needs:

  • Fewer children and families are receiving the help they need. Despite continuing high poverty rates—especially for children—the number of families eligible for basic income assistance through the state’s Family Independence Program (FIP) has fallen dramatically and is below the levels experienced during the Kennedy administration. The number of persons living in households receiving FIP fell nearly 30% in just the last few years, falling from 71,156 in 2015 (average monthly for budget year) to 50,865 in December of 2016. More than 3 of every 4 persons receiving FIP are children who are living in very deep poverty.

Among the reasons for the decline in FIP cases are state policies that limit eligibility, such as stringent lifetime limits and aggressive sanction policies—including a policy that can deny assistance to an entire family for the truancy of a single child. Funding for FIP continues to fall as caseloads decline. The initial appropriation for the program for the current budget year (2016-2017) was $97.7 million; the governor’s 2018 budget includes only $78.7 million—a reduction of nearly 20%.

  • Children’s clothing allowance is increased. The governor increases the clothing allowance for children receiving FIP from $140 per child to $200, with the total cost of the allowance rising from $6.3 million to $9 million. The governor initially proposed this $60 per-child increase for the current budget year, but it was not adopted by the Legislature.
  • Pathways to Potential program is expanded: The governor includes $5.6 million ($3.3 million in state general funds) to expand the Pathways to Potential program that places Department of Health and Human Services staff in schools to help connect families to needed community services, build school-community partnerships, lower the number of children who repeat grades or drop out, and reduce truancy. New funds in 2018 would be used to lower caseloads in some areas as well as expand into new schools. The governor recommends that priority for expansion be given to “priority schools” that rank among the lowest 5% in the state in achievement and “rising tide” schools—in 10 largely rural communities that have been targeted for economic development.
  • Increased payments to emergency homeless shelters: The governor increases the daily rate provided to emergency homeless shelters from $12 per night to $16 per client, at a total cost of $3.7 million. Even with this increase, Michigan’s per diem payment falls below comparable programs across the country. The governor’s office estimates that approximately 69,000 people were homeless in Michigan in 2015, of which 10,000 were chronically homeless. Among the chronically homeless, over 70% have mental health problems, 40% have substance use disorders and one-third have physical disabilities.

Child Abuse and Neglect:

  • Expansion of the Michigan Youth Opportunities Initiative: The governor includes $1.2 million to expand the Michigan Youth Opportunities Initiative to all Michigan counties (currently in 64 of Michigan’s 83 counties). The goal is to help young people who are in or have recently exited foster care (between the ages of 14 and 21) make a successful transition to independent living through housing, education, employment and community engagement. Youth are trained in leadership and advocacy and helped to build assets through individual development accounts, which are matched dollar for dollar up to $1,000 per year.
  • Foster home recruitment: The governor includes $2.3 million ($1.7 million in state general funds) to establish regional teams to recruit, train and support foster families.

Adult Services:

  • Increasing the number of adult services workers: The governor recommends $11.3 million ($8.1 million in state general funds) to increase the number of workers who can assist elderly adults and persons with disabilities, including those providing adult protective services, independent living services and adult community placement services. A 2014 audit found that Michigan was unable to respond quickly to reports of abuse, neglect or exploitation of adults—in large part because of growing referrals and staff reductions. Between 2002 and 2015, the number of adults needing protection from the state more than tripled, while the number of staff fell by 14%.
  • More funding to reduce waiting lists for home-delivered meals and in-home services: Despite funding increases in 2015 and the current budget year, as of September 2016, about 6,900 seniors and persons with disabilities were on waiting lists for home-delivered meals or other home services, such as chore services, personal care and home health assistance. As Michigan’s population ages, the need for services is expected to continue to increase. For 2018, the governor includes $3.6 million in additional funding, including $1.5 million for home-delivered meals and $2.1 million for in-home services.

Child Care and Early Education

Child Care:

  • Rate increase for child care providers: The governor includes $6.8 million in the current budget year (2017), along with $27.2 million in the 2018 budget year, to increase rates paid to child care providers by approximately 20%, effective July of this year. This increase would bring Michigan closer to the federally recommended payment level of the 75th percentile of market rate.

Child care providers are among the lowest-paid workers in Michigan and, nationwide, wages are so low that nearly half of child care providers qualify for some form of public assistance. Adequate rates can increase the supply of high-quality child care that parents need to work.

  • Funds to increase oversight of child care providers: The governor also includes funding to comply with changes in federal law that require annual on-site visits to child care providers receiving a state subsidy who are not licensed by the state (potentially including relatives, neighbors and friends), as well as expanded fingerprinting and background checks.

With the total of $8.4 million in additional state funds, Michigan will have enough state match in 2018 to draw down all the federal child care funds to which it is entitled—something the state failed to do in recent years. These additional funds will help Michigan further improve its child care system. At the top of the list of needed changes is the state’s restrictive income eligibility level, which at 125% of the federal poverty level ($25,525 maximum for a family of 3), is one of the most restrictive in the country.

Great Start Readiness Preschool (GSRP) Program: The governor recommends level funding for the Great Start Readiness program ($243.6 million), which provides a high-quality preschool education for 4-year-olds from families with low wages. Currently the program is available to children from families with incomes below 250% of poverty, but districts can expand to children with incomes of up to 300% of poverty if they can demonstrate that all children under 250% of poverty have been served. The governor removes budget language permitting districts to receive GSRP payments for children whose families earn between 251% and 300% of poverty, but retains language allowing districts to charge tuition to continue to provide services in that income range.

Intermediate School District Early Childhood Grants: The governor recommends level funding for early childhood programs through Intermediate School Districts ($13.4 million). Funds are to serve children from birth through age 8, and must be used in part to convene local Great Start Collaboratives and Parent Coalitions to coordinate early childhood services.

K-12 Schools/Education

Per-Pupil Spending: Two of every $3 in the School Aid budget are used to support per-pupil payments, which are the primary source of funding for school operations. For 2018, the governor recommends an additional $128 million to raise per-pupil spending by between $50 and $100, with districts receiving the lowest payments per pupil receiving the largest increases. The goal is to further reduce the gap in state funding between the lowest-funded districts and the highest. With this increase, the minimum foundation allowance will increase to $7,611 per pupil, while the maximum will rise to $8,279, and the “equity gap” between the lowest- and highest-funded districts will fall to $668—down from $2,300 when Proposal A was first implemented.2

The governor also recommends some adjustments to the foundation allowance to recognize varying costs, including: (1) an additional $50 per pupil for high school students to recognize costs associated with the high school curricula (total of $22 million); and (2) a reduction of 20% in per-pupil payments to virtual-based schools that have little or no facility costs.

Declining Student Enrollment: Since Proposal A, the reliance on a per-pupil payment to determine school funding has meant that schools that experience rapidly declining enrollments have trouble—at least in the short term—making the cuts needed to adjust to large funding losses. For 2018, the number of pupils statewide is expected to decline again, and the governor includes $7 million in new funding for districts with enrollment declines of more than 5% in the last two years.

Funding for Students Academically at Risk:

  • Expanded funding for the School Aid At-Risk program: The governor recommends an additional $150 million for the School Aid At-Risk program—an increase of nearly 40%. The governor expands eligibility for At-Risk funds to all school districts and redefines student eligibility, goals and outcomes for the program.

The goals are to ensure: (1) that children are proficient in English language arts by the end of third grade and in mathematics by the end of 8th grade; (2) that students are attending school regularly; and (3) that high school graduates are career- and college-ready. The governor proposes that students would be eligible for the At-Risk program if they can receive either free- and reduced-price school meals; are in households receiving food or income assistance; or are homeless, migrants, in foster care or English language learners.

The expansion of income eligibility from free school meals (130% of poverty—current policy) to reduced-price school meals (185% of poverty) means that children living in families with incomes of up to approximately $37,800 (for a family of 3) would be considered eligible for purposes of At-Risk funding. The governor estimates that another 131,000 children could be served with these changes.

  • Funding for a new initiative to support high-poverty schools: Finally, the governor proposes $3.6 million to support partnerships between the Michigan Department of Education and communities to assist high-poverty districts with low achievement. The goal is to address many of the barriers to children’s learning, including health, safety and nutrition, as well as the needs of their parents for the education and training required to provide for their children.

Reading by Third Grade: The governor provides a small increase in funding for interventions to improve reading by third grade. With total funding of $26.9 million proposed, the governor doubles funding for early literacy coaches at Intermediate School Districts from $3 million to $6 million. The largest component of the initiative—funding for additional instructional time for children who are behind in reading—is retained at $17.5 million.

New Michigan law that allows for grade retention if children are not reading proficiently by third grade describes the reading assistance programs that schools must put in place to ensure student progress, including professional development by skilled early literacy coaches. With the stakes for children rising, funding for early literacy programs becomes even more critical.

Flint Crisis and Lead Poisoning Prevention:

  • Ongoing funding for Flint: The governor recommends a total of $8.73 million in the K-12 school budget to address the ongoing emergency related to lead exposure in Flint, including: (1) $2.6 million for school nurses and social workers; (2) $2.5 million for early childhood services, including early intervention; (3) $3 million to enroll children in the Great Start Readiness preschool program regardless of family income; and (4) $605,000 for nutritional services.
  • Continued funding for voluntary water testing in schools statewide: The governor also includes $4.5 million to pay for voluntary testing of water by school districts and nonpublic schools statewide.

Adult Education: The governor recommends flat funding of $25 million for adult education programs. This is a 70% reduction from budget years 1997 through 2001, when adult education was funded at $80 million, and a 78% reduction when accounting for inflation.

Postsecondary Education

Financial Aid: The governor recommends $5.3 million in new funding for the Tuition Incentive Program, which serves students from households that are eligible for Medicaid, bringing the total funding for the program to $58.3 million. This is expected to support 18,500 students in the upcoming school year. The governor recommends a combined increase of $11 million for the two other grant programs, the Michigan Tuition Grant (which helps students attend private not-for-profit institutions) and the Michigan Competitive Scholarship, both of which are means-tested based on the amount a family needs to meet tuition levels rather than household income.

Currently there is no state financial aid for students who have been out of high school more than 10 years, but the governor’s budget provides $2 million for the Part-Time Independent Student Grant, which helps this population and has not been funded since 2009.

Tuition Restraint: Tuition restraint is a cap on the amount a university may increase tuition costs in order to receive full funding from the state. The governor recommends lowering the cap from 4.2% to 3.8% or $475 per student, whichever is greater. The percentage amount is higher than the tuition restraint cap of 3.2% in the 2015 and 2016 budget years.

Corrections

two thirds of corrections budget_prison operations_fy2016-17Prison Population and Costs: After peaking in 2006, the prisoner population has declined and flattened, as have prison-related costs. The Department of Corrections budget is almost entirely funded with state general funds, and total spending is expected to remain at approximately $2 billion in 2018. Approximately $1.6 billion, or almost 80%, of the current budget for the Department of Corrections is used for custody, housing, healthcare, treatment programs and academic/vocational programs for prisoners.

Residential Alternative to Prison Program: The governor includes $1.5 million to expand the current Wayne Residential Alternative to Prison program to 13 counties on the west side of the state. The program provides sentencing options for probation violators who might otherwise be sentenced to prison.

Vocational Training for Prisoners: The governor maintains $2 million in state funding for the Vocational Village program for 200 prisoners in Jackson. The program trains prisoners in the skilled trades.

Goodwill Flip the Script: The governor eliminates funding for the Flip the Script program operated by Goodwill Industries in Wayne County. The program has been funded since the 2015 budget year, and provides education, job training and mentoring to 16- to 39-year-olds who have entered the criminal justice system—with the goal of keeping them out of the prison system.

Prisoner Healthcare and Mental Health Services: Between the 2002 and 2016 budget years, corrections spending overall increased at an average annual rate of 1%, while prisoner health and mental health services grew by nearly 3%.3 The governor has requested additional funding in the current budget year ($13.9 million) to expand drug treatment of prisoners with hepatitis C—with funding transferred from the Department of Health and Human Services. In addition, for 2018, the governor’s budget includes $2.3 million for cancer treatment costs, reflecting the fact that the number of inmates treated for cancer increased by 48% from 2015 to 2016, and that growth is expected to continue.

Endnotes

  1. E. Jeffries, State Budget Overview, Senate Fiscal Agency (October 1, 2016).
  2. Excludes the 37 “hold harmless” districts whose revenue per pupil exceeds the basic/maximum foundation allowance.
  3. R. Risko, Budget Briefing: Corrections, House Fiscal Agency (January 2017). 

 

Who benefits: Income tax rate cut to 3.9% helps wealthy most

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February 2017
Legislative Coordinator, Rachel Richards

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Budget Year 2017

Budget Brief JPG USE THIS ONE

Promoting the Healthy Michigan Plan: Budget Cuts to Outreach Jeopardize Success Aug 26, 2016

The 2017 State Budget Fails to Protect All Children and Families and Perpetuates Economic Disparities June 6, 2016

Increase Reforms and Support Services in Department of Corrections Budget May 12, 2016

Flint and Beyond: Cities in Crisis Need More Funding from the State May 12, 2016

Budget Funding for Adult Education, Training Will Help Workers and Boost Economy May 10, 2016

More Funding Needed for Low-Income Students and Families in 2017 School Aid, Education Budgets May 5, 2016

Support for Struggling Families Hinges on 2017 Health and Human Services Budget May 4, 2016

Give Michigan’s Prison Reentry Population the Tools to Thrive April 14, 2016

Helping Children Succeed Through Michigan’s At-Risk Funding April 7, 2016

Michigan Continues to Underfund Adult Education, Hamper Workers and Economy April 7, 2016

Michigan Needs to Expand Child Care Support to Keep Families Working April 5, 2016

A First Look at the Governor’s 2016-2017 Budget: Short-Term Fixes, Long-Term Challenges Feb. 26, 2016

Budget Testimony

Apr 11, 2016: Letter sent to House and Senate Appropriations Committees on reinstating the Part-Time Independent Student Grant
Mar 16, 2016: Memorandum: Presented to House Education Appropriations Subcommittee
Mar 16, 2016: Memorandum: 2017 School Aid and Michigan Department of Education budgets
Mar 15, 2016: Presented to the House Appropriations on School Aid Funding – Section 107
Mar 9, 2o16: Section 107 adult education funding
Mar 7, 2016: Presented to the House Appropriations Committee concerning Detroit public schools
Mar 3, 2016: League comments about the Governor’s proposed DHHS budget to the House Appropriations
Mar 1, 2016: League comments about the Governor’s proposed DHHS budget for the upcoming fiscal year to the Senate Appropriations
Jan 27, 2016: The League supports HB 5220, Flint supplemental

 

 

10 reasons the Affordable Care Act is good for Michigan

pdficonFebruary 2017
Policy Analyst, Emily Schwarzkopf

ACA good for Michigan

 

 

 

 

Michigan League for Public Policy 2018 budget priorities

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Race, place & policy matter in education

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October 2016
Senior Policy Analyst, Pat Sorenson

Despite strong rhetoric from policymakers and candidates about the importance of a high-quality education for all children, deep disparities persist in educational opportunities for Michigan children based on income, race and geography. The lack of equity in education has wide repercussions for Michigan’s economy and next generation.

Educational disparities do not occur in a vacuum and can be traced to public policies that limit employment and housing options for many parents, place children in schools without the resources to meet their needs, and often create insurmountable barriers to the American dream of a better life for our children and grandchildren.

Why Equity Matters

race-place-policy-matter-in-ed-graphic-1There is a common misconception that educational policies leading to greater racial equity are the same as those that increase equality. These terms cannot be used interchangeably. To create equity, it is necessary to provide the additional resources needed to overcome the consistent, institutional barriers that children of color have faced in Michigan’s educational pipeline. For example, providing the same per-pupil funding to all schools across the state would increase equality in educational financing, but would not create equity by helping children overcome accumulated obstacles that have resulted in an achievement gap. To achieve equity, state funding must fully recognize the higher costs associated with educating children in high-poverty schools.

Diversity in Michigan’s Public Schools

  • Total students: In the 2015-16 school year, there were 1,540,005 students in Michigan schools. Of those, 46% were economically disadvantaged.1race-place-policy-matter-in-ed-graphic-2
  • Students of color much more likely to be economically disadvantaged. African-American students in Michigan are twice as likely to be economically disadvantaged than their White peers, with 3 of every 4 African-American students living in families with low incomes or other risk factors.race-place-policy-matter-in-ed-graphic-3
  • The teachers in Michigan public schools are less diverse than the student body. While only 67% of the student body are White, 91% of the teachers were White. By contrast, African-American students represented 18% of all students, but only 6% of the state’s teaching staff is African-American.race-place-policy-matter-in-ed-graphic-4

The Barriers to Equity in Education

Children who are low income and children of color face a range of barriers to educational opportunity and achievement.

  • Lack of economic and educational opportunities for parents. The League supports a two-generation approach to strengthening families and creating greater opportunity. Research shows a link between maternal education and outcomes for children, and given the relationship between poverty and school achievement, the state must simultaneously focus on educational supports to parents and their children.

In Michigan, Latino and African-American parents are much more likely to lack a high school diploma, dramatically limiting their job opportunities, income and housing choices. The problems many struggling families face have been shown to be related to school achievement including homelessness or poor housing, chronic health conditions, unsafe neighborhoods or schools, exposure to environmental toxins, lack of access to healthy food, as well as parents’ own struggles with literacy, stress and related mental health issues.

race-place-policy-matter-in-ed-graphic-5Particularly startling is research showing that the conditions of poverty during the earliest years of life can actually disturb children’s brain development in ways that account for up to 20% of the achievement gap between children from high- and low-income families. Sadly, that gap in brain development continues into adulthood.2

Parents with low incomes are more likely to encounter housing problems and their children are more likely to have to change schools mid-year—disrupting their educations. Housing problems are very common for families with low incomes, and many cannot find an affordable home for their children.

The result can be multiple moves for children, some of which disrupt school attendance. Overall, 9% of economically disadvantaged students changed schools during the 2014-15 school year in Michigan. A closer look at race and ethnicity shows that more than 1 in 10 African-American students changed schools, compared to only 4% of White students. Frequent moves can disrupt children’s achievement.race-place-policy-matter-in-ed-graphic-6

  • race-place-policy-matter-in-ed-graphic-7Budget and public policies that don’t adequately address the costs associated with educating children in high-poverty schools. Students in schools with high numbers of children living with families with low incomes (receiving federal Title I services for disadvantaged youths) are 45% more likely to not be reading proficiently by fourth grade. The relationship between poverty and educational achievement is clear, yet funding for high-poverty schools is falling short in Michigan. Because of historical and systemic discrimination over many years, disproportionate numbers of children of color live in high-poverty neighborhoods where schools are struggling and closing.

Michigan’s At-Risk School Aid program was established to help school districts address the extra costs associated with educating children in high-poverty neighborhoods and schools. Funds are provided to districts based on the number of children receiving free schools meals (130% of poverty or about $26,000 for a family of three). Sadly, the At-Risk program has only been fully funded for two years since it was created in 1995, and is currently approximately $135 million below the level needed to meet the formula set in law. The cumulative shortfall in At-Risk funding stands at $2 billion.race-place-policy-matter-in-ed-graphic-8

  • Inequitable discipline practices. In addition to the higher rate of suspensions, African-American and American Indian students in the state are more than twice as likely to be expelled from school. Disparities in suspensions begin early. Nationwide, Black preschool children are 3.6 times as likely to receive one or more out-of-school suspensions as White preschool children.

race-place-policy-matter-in-ed-graphic-9Preschool expulsion has been identified as a problem by the Michigan Department of Education, which is now developing proposed guidelines for early childhood educators.3 Also moving forward in the state Legislature are bills to address Michigan’s tough zero tolerance disciplinary laws and policies, and promote restorative practices that give children a second chance.

The Consequences of Cumulative Educational Inequities

      • Differences in achievement are evident by fourth grade. Eight of 10 African-American students and two-thirds of Latino children are not proficient in English/Language Arts by the end of third grade based on the state’s M-STEP test.race-place-policy-matter-in-ed-graphic-10
      • Fewer children of color are completing high school on time, cutting short their chances of a higher education or a job leading to economic opportunities. In the 2014-15 school year, the high school dropout rate for African-American, Hispanic and Native American youths was more than twice the rate for White students.race-place-policy-matter-in-ed-graphic-11
      • Fewer youths of color are college-ready. Based on SAT test scores, only 1 in 10 African-American high school students in Michigan were college ready in 2015-16, compared to 4 of every 10 White students.race-place-policy-matter-in-ed-graphic-12
      • Having faced inequities from the earliest years, fewer young adults of color in Michigan are able to access the higher education needed to succeed. Approximately one-third of African-American young adults in Michigan are in college or have completed college, compared to more than half of White adults ages 18-24.race-place-policy-matter-in-ed-graphic-13
      • Lower levels of employment and earnings. Higher dropout rates and less access to a college degree have potentially lifelong repercussions for families of color. In Michigan, the median earnings of adults (25 years and over) with less than a high school degree is approximately $18,000, compared to more than $31,000 for those with some college or an associate degree and nearly $49,000 for those with a bachelor’s degree.4

Policies Needed to Promote Equity in Education in Michigan

It has been well documented that one of the leading contributors to economic opportunity and security is access to a high-quality education from cradle to career. As Michigan becomes more diverse, it will not succeed in creating a competitive educational system or economy if all children don’t have the opportunity to succeed. Michigan policymakers have the opportunity to make Michigan a leader through strategic investments that create educational equity.

      • Create a two-generation educational agenda that addresses literacy levels and educational achievement for parents and their children, including access to post-secondary education for parents through adequate means-tested financial aid, access to high-quality child care, early literacy supports for children to improve reading by third grade, and services to improve parent literacy skills.
      • Fully fund the state’s At-Risk School Aid program and provide other funds needed to improve high-poverty schools and serve students who have faced racial and economic barriers to success.
      • Invest in the earliest years of life, including access to affordable, high-quality child care services and early education, early intervention services such as Early On, and programs to address young children’s social and emotional growth and development.
      • Adopt and enforce school disciplinary policies that reduce inequities in suspensions and expulsions, including policies for preschool-age children and restorative justice practices.

Endnotes

      1. Students are economically disadvantaged if they are determined eligible for free or reduced-price meals (185% poverty), are in households receiving food or cash assistance, are homeless, migrant or in foster care.
      2. Kwon, D., “Poverty Disturbs Children’s Brain Development and Academic Performance,” Scientific American (July 22, 2015).
      3. Key Highlights on Equity and Opportunity Gaps in Our Nation’s Public Schools, 2013-2014 Civil Rights Data Collection, U.S. Department of Education Office for Civil Rights (June 7, 2016).
      4. Median Earnings in the Past 12 Months (in 2014 inflation-adjusted dollars) by Sex by Educational Attainment for the Population 25 Years and Over, 2010-2014 American Community Survey 5-Year Estimates, U.S. Census Bureau.

 

Vote yes for regional transit in Southeast Michigan

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September 2016
Mario Gruszczynski, Intern

In November, voters in Wayne, Oakland, Macomb and Washtenaw counties will decide whether to approve a plan that would finally bring regional transit to Southeast Michigan. The plan would include Bus Rapid Transit, a Regional Rail connecting Ann Arbor and Detroit, and Cross-County Connector Buses. For a house with a taxable value of $100,000, a homeowner would pay a millage of about $120 per year. The plan is the most significant attempt at regional cooperation in the last 40 years. This effort recognizes that communities in Southeast Michigan are bound by a shared fate, even as division has characterized area politics for generations. It is a way forward, addressing both the practical challenges the region currently faces as well as the historical inequities that have divided it. Voters must capitalize on this opportunity for regionalism and approve the ballot initiative to move toward a more connected Southeast Michigan.

vote-yes-chart-1The Problems with the Region’s Current Transit System:

  • Southeast Michigan’s current regional transit system, the Suburban Mobility Authority for Regional Transportation (SMART), is underfunded compared to other U.S. metropolitan areas.
  • SMART does not reach much of metro Detroit, as many communities have opted out of service.
  • A lack of regional transit perpetuates economic inequality. According to the national Economic Policy Institute, the region ranks third worst in terms of economic inequality in Michigan. For workers with low incomes who cannot afford a car, a lack of reliable transportation can hinder upward mobility.

Regional Transit Will Help:

Young People: 73% of Detroit millennials want better public transportation. If the region wants to retain young talent, public officials must understand the kinds of communities in which young people want to live. Graduating with significant debt burdens, many college graduates rely on public transportation in the absence of a car.

Senior Citizens: Some seniors may be less able to drive as they age. 83% of older Americans say public transit provides easy access to things in everyday life.

Workers: Southeast Michigan is a regional economy. Michiganians travel across the region every day to work. Currently, 92% of jobs in the region are inaccessible by public transportation. That means that without a car, workers have very few options when it comes to work.

Employers: A connected region will create a new group of potential employees and customers who were previously unable to access these businesses. A well-funded regional transit system will be more reliable in getting workers to their jobs in a predictable and timely manner.

The Region and State: Southeast Michigan continues to lag behind the nation’s other metropolitan areas in terms of investment in public transit. This makes the region less competitive for new businesses and young professionals. In order to compete in the fast-changing economy of today, the region needs a competitive infrastructure. As the largest metropolitan area in the state, Michigan’s people and economy as a whole will benefit from a better connected Southeast Michigan.

vote-yes-chart-2Vote Yes

This November, vote for a better regional transit system that will bring Southeast Michigan and its communities together. To learn more about the Regional Master Transit Plan, check out the Regional Transit Authority’s website. To learn more about the ballot initiative, check out Citizens for Connecting our Communities.

Regional Transit Authority’s Master Plan: http://www.rtamichigan.org/masterplan/

Citizens for Connecting our Communities: http://voteyesforregionaltransit.com

Michigan families continue to struggle

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September 2016
Senior Policy Analyst, Peter Ruark

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Back to school report: Rising tuition and weak state funding and financial aid create more student debt

pdficonSeptember 2016
Senior Policy Analyst, Peter Ruark

Back to school graphic 1As Michigan college students start school, they face increasingly high tuition and an unprecedented level of student loan debt that stands to linger their whole lives. At the same time, Michigan’s state-funded financial aid hasn’t kept up with tuition costs and older students cannot get any state financial aid at all. While Michigan’s economy and job market continue to demand well-educated workers, too many students are unable to afford a college degree altogether and many more are incurring a mountain of debt to pursue one. Current state policies are hurting college access and affordability and the state’s workforce and job market. Michigan policymakers should make changes so that postsecondary education is more affordable.

Public University Tuition in Michigan is Rising Far Faster than Inflation and Pell Grants

Between 2003 and 2015, tuition more than doubled at almost every Michigan university and increased by more than 150% at several schools. This increase far surpassed the rate of inflation; if each university had only raised its costs to students to keep up with inflation, tuition in 2015 would have been only 20.4% higher than in 2003.

Back to school graphic 2University tuition is also rising faster than the national Pell Grant, a subsidy the U.S. federal government provides for students with financial need to pay for college, which as a result covers a far lower percentage of the university tuition “sticker price.” In 2003, the average Pell Grant covered from 40% (University of Michigan-Ann Arbor) to 66% (Saginaw Valley State University) of tuition, but by 2015, it covered less than 40% of tuition at nearly all Michigan universities and less than 30% at three (Fig. 1).

While college costs are rising across the nation, it is particularly bad in Michigan. Michigan universities have raised tuition so much that the state’s average tuition cost was the sixth highest in the nation and second highest in the Midwest during the 2015-16 school year. Michigan’s community colleges, on the other hand, have the lowest tuition in the Midwest and the 16th lowest in the nation (Fig. 2).

Back to school fig 1Back to school fig 2

 

Back to school fig 3

There is a direct correlation, in Michigan and around the country, between state support for public universities and tuition costs. Between 2003 and 2017, Michigan cut university funding by more than $262 million, a 30% decrease in public support after adjusting for inflation (Fig. 3). The cuts have resulted in students and their families being charged higher tuition to make up for universities’ lost state revenue. As shown in Fig. 4, from 1990 to 2002, the share of public college operating costs borne by students (before application of financial aid and scholarships and not counting endowments or donations) ranged from 39% to 44% each year. In 2004, the student’s share of expenses began to exceed the amount the state paid per student, and in the past several years it has remained at or around 70%. One might call this decrease in state funding a “slow privatization” of Michigan’s public university system.

Back to school fig 4

This is a larger problem in Michigan than in the other Midwest states. Michigan students pay a higher share of universities’ college expenses than in any other Midwest state and pay the sixth-highest share in the nation. Michigan universities also rank third in the nation for the amount of tuition money per full-time equivalent (FTE) student that goes toward operating expenses (Fig. 5)Back to school fig 5

Rising Tuition Means Debt

Of Michigan college students who graduated in 2014, 62% graduated with debt. Student debt averaged $29,450, the ninth highest average debt level in the nation and more than $10,000 higher than students in Utah and New Mexico.1 While there is not racial data on student debt at the state level, national studies have shown great racial disparity regarding the amount of debt owed by students of color. The Urban Institute has found that African-American students and their families owe significantly more in student debt ($43,725) than individuals of other races, and that Latino parents and grandparents incur the most student debt on behalf of their children (Fig. 6).2

As might be expected due to the relatively low tuition, community college students nationwide are far more likely than students at other types of institutions to be able to finish and graduate from college without taking out student loans (61%). This is a real contrast to graduates of for-profit colleges, where only 12-14% graduate without borrowing money for tuition.3

Back to school fig 6On the other hand, 88% of graduates of for-profit four-year colleges have taken out student loans, and 62% have student debt of at least $24,300 (Fig. 7).4 These loans often come with exorbitant interest rates, further complicating students’ ability to pay them off. Loan defaults by students at these schools (whether they have graduated or not) are also far higher (22%) than at public (9%) or not-for-profit (8%) four-year colleges.5 While students at private, for-profit colleges (both two- and four-year) make up about 13% of the nation’s college enrollment, they account for nearly half of all student loan defaults.6 In addition to the larger debt burden students at for-profit schools carry, factors in the high default rate might also be the higher likelihood of such students to experience substantial unemployment since leaving school, and the lower earnings they have six years after starting college than their counterparts at public and nonprofit institutions.7Back to school fig 7

State Financial Aid Falls Far Short of Need

As data shows, tuition is rising very rapidly, Pell Grants do not cover a large enough portion of costs by themselves to keep college affordable for low-income students, and student loans with high interest rates are resulting in unprecedented levels of student debt. These factors make it imperative that Michigan maintain a robust need-based financial aid system, yet policymakers have been doing the opposite. The state invests far less in need-based grants proportional to its student population than most other states and has completely eliminated state financial aid for students over age 30 attending a public community college or university.

Back to school fig 8One indicator of whether a state is spending enough on financial aid is the number of dollars spent on such grants per FTE student. The national average of state spending on need-based grants is $533 per FTE undergraduate student, yet Michigan spends only 42% of that amount ($223) and only one-quarter of the $870 that Indiana spends (Fig. 8).

This has not always been the case. In the early 1990s, Michigan was among the top ten states in need-based financial aid spending. Since then, however, the state’s investment has fallen by more than half when adjusted for inflation and Michigan is now in the bottom half of states for need-based grant spending per FTE undergraduate student (Fig. 9).Back to school fig 9

In addition, while Michigan’s three need-based higher education grant programs are available to “traditional” college students who begin attending immediately or soon after high school graduation and are not raising families, 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:

  • Tuition Incentive Program: Eligibility rules require applicants to apply prior to high school or GED completion and before their 20th birthday, and the award must be used within 10 years of high school or GED completion—effectively preventing anyone older than age 28-30 from using the award.
  • Michigan Competitive Scholarship: Workers are ineligible if they are out of high school for more than 10 years, preventing students who graduated “on time” at age 18 from using the award once they pass age 28.
  • Michigan Tuition Grant: Workers and parents of any age are eligible, but their postsecondary education must be at a private not-for-profit institution. It is not available for use at community colleges, which offer programs specifically designed for students who are working or raising families.

Another aspect of Michigan’s three grant programs is detrimental to the growing number of students who are working parents even if they are otherwise eligible: none of the three current grant programs are available to students enrolled less than half time or who are in short-term occupational programs. Students who are juggling employment, family and school must often go less than half time or enroll in a short-term program due to having to work and care for family members. While low-income adult students are likely to need employment to support their families and finance their education, working more than a few hours at a job can often result in lower grades and even dropping out. But not having financial aid may discourage adult learners from going to school less than half time. For many workers, this pits work and school against each other, with both often suffering.

In 2010, the Michigan Legislature eliminated a number of grant programs that were available to adult learners: the Part-Time Independent Student Grant, the Michigan Educational Opportunity Grant, the Michigan Nursing Scholarship and the state Work-Study program. In 2015, the Michigan Senate included $6 million in state budget funding for the Part-Time Independent Student Grant for the 2015-16 school year, but this was removed from the final appropriations bill.

For more on Michigan’s need-based financial aid funding and awards, please see the appendices.

Policy Recommendations to Reduce College Costs and Student Debt

Michigan legislators should make the following policy changes to make postsecondary education more afford-able for its residents, both traditional college students age 18-24 and the growing number of nontraditional students who often have full-time jobs and families to support.

1. Restore the state funding that has been cut from public universities and community colleges over the past several years, coupling significantly increased budget funding for higher education institutions with stronger tuition restraint or tuition reduction requirements on the schools.

2. Enact legislation to require clear and accurate information in the recruitment materials of for-profit colleges (including online colleges without a physical location in Michigan) regarding student loans, educational quality, job placement and expected earnings. Ensure that the Michigan Attorney General has enforcement powers in this area and that students have the right to seek redress for noncompliance or law violations.

3. Make need-based financial aid grants available to older workers by:

a. Reauthorizing funding for the Part-Time Independent Student Grant and/or the Educational Opportunity Grant, both of which were specifically designed to serve adult learners in a wide variety of circumstances.

b. Modifying the eligibility rules of the Michigan Competitive Scholarship and/or the Tuition Incentive Program to allow older workers to qualify and to allow the money to be used for less than half-time enrollment or for short-term occupational programs.

4. Ensure that there is financial aid help for students going to college less than half time or who are in short-term programs.

5. Implement a state Work-Study program that subsidizes academically relevant work for low-income adult students while paying a livable wage. Studies have shown that working students are less likely to drop out or suffer academic setbacks if their work is related to their courses of study. Although the traditional Work-Study program was ended in 2010, Michigan could replace it with a carefully targeted program that connects employment with academics.8

6. Support policies that can help alleviate hardship for low-income students, including policies that permit low-income students to receive public assistance such as cash assistance, food assistance or subsidized child care.

Appendices

Endnotes:

  1. The Institute for College Access & Success, Student Debt and the Class of 2014, October 2015.
  2. Braga, Breno, Racial and Ethnic Differences in Family Student Loan Debt, Urban Institute, July 2016.
  3. Smith, Peter & Leslie Parrish, Do Students of Color Profit from For-Profit College? Poor Outcomes and High Debt Hamper Attendees’ Futures, The Center for Responsible Lending, October 2014.
  4. Ibid.
  5. Ibid.
  6. Ibid.
  7. Deming, David J., Claudia Goldin, and Lawrence F. Katz, The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?, Journal of Economic Perspectives—Volume 26, Winter 2012.
  8. For more information, see Alstadt, D., Earn to Learn: How States Can Reimagine and Reinvest in Work-Study to Help Low-Income Adults Pay for College, Enhance Their Academic Studies, and Prepare for Post-College Careers, The Working Poor Families Project, Spring 2014.

 

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