Reports


Jenny Kinne

Jenny Kinne

Jenny Kinne

Jenny Kinne joined the League staff as community engagement specialist in 2016. Prior to joining the League, she worked for Planned Parenthood Advocates of Michigan, serving as West Michigan community organizer, where she built volunteer programming and community training initiatives to foster political activism.

Jenny holds a Bachelor of Arts in international relations and literature from American University.

Contact: jkinne@mlpp.org 

 

 

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.

 

Promoting the Healthy Michigan Plan: Budget cuts to outreach jeopardize success

Budget Brief JPG USE THIS ONEpdficonThe Michigan League for Public Policy advocates for adequate healthcare coverage for all Michiganians, with an emphasis on ensuring that all eligible people are aware of the health insurance options and services available to them and their families. The League supports full funding for the state’s Healthy Michigan Plan, and strongly opposed cuts in the 2017 budget that will reduce the state’s ability to reach out to the uninsured by marketing and advertising enrollment opportunities.

Lowering healthcare costs for all consumers, including employers who provide coverage, depends on reducing the ranks of the uninsured. When uninsured individuals need healthcare, especially in emergencies, many are unable to pay the costs out of their pocket. The cost of that uncompensated medical care has to be absorbed, and the solution has been to spread the responsibility for paying it across the healthcare system, increasing costs for everyone who receives care or pays insurance premiums, including employers.

The Healthy Michigan Plan

Michigan took a bold step to address this problem when it created the Healthy Michigan Plan in 2012—expanding access to comprehensive healthcare through the state’s Medicaid program to adults with low incomes.

bb-promoting-the-healthy-michigan-plan-pdfThe successful Healthy Michigan Plan was one of the first of its kind in the country, taking advantage of new flexibility in federal law to create a healthcare system that balances consumer protections, robust health coverage and positive self-care. The program uses incentives to encourage consumers to adopt healthy behaviors that can also contain costs over the long term, like quitting tobacco use and losing weight. Healthy Michigan enrollees pay a share of the cost, too, in the form of contributions to an account that pays a portion of the cost of services they use.

Eligible individuals are childless adults who often work in low-wage jobs without access to employer-sponsored coverage and don’t earn enough to purchase healthcare insurance.

The first round of enrollees included uninsured persons who were aware of the new option and how to enroll—sometimes with assistance. Reaching the remaining eligible population would not only help more Michigan residents with low incomes protect themselves against unexpected and potentially devastating medical bills, it would also lower healthcare costs for all by closing the healthcare insurance coverage gap. But doing so will require targeted outreach efforts and the funds to pay for them, including those cut in the 2017 budget.

Healthy Michigan Plan Funding and Outreach

The final 2017 Michigan budget includes the state funding needed to cover the decline in federal funding for the Healthy Michigan Plan which is scheduled for January 1, 2017. Currently, the federal government pays 100% of the costs of the Healthy Michigan Plan, the highest federal match ever paid out to states for covering eligible populations via the Medicaid program. Every enrollee in the program not only helps reduce Michigan’s uninsured population, but also brings needed federal funds back to the state to pay for it. While the percentage of the federal match decreases from the original 100% Michigan has enjoyed in the first few years of the program, it remains generous, declining slightly over the coming years until bottoming out at a 90% federal match to the state’s 10% share.

Governor Rick Snyder’s proposed budget for next year also called for level funding for the Healthy Michigan Plan call center ($19.5 million) and program marketing ($2 million). Unfortunately, over the opposition of the League and numerous other advocates, the Legislature reduced the Healthy Michigan Plan call center by $8.1 million ($1.6 million in state funds), and cut marketing and advertising funding by $1 million ($500,000 in state funds).

The League has opposed both budget and statutory restrictions on outreach for the Healthy Michigan Plan. Failure to reach out to cover the uninsured increases the hardships faced by many families with low incomes who do not have access to healthcare coverage. But it also ensures that healthcare costs will continue to rise for all residents individually and for the state as a whole due in part to the lack of preventative healthcare, overutilization of emergency rooms and uncompensated care.

The League also urges policymakers to take advantage of all available federal funds. The sooner the state enrolls all eligible individuals, the sooner it receives the match at the highest level of federal contribution. Early savings to the state have already totaled more than $200 million through a combination of drawing down matching funds and shifting formerly state-funded healthcare programs to the Healthy Michigan Plan.

Many eligible individuals will never know about their opportunity to enroll in the Healthy Michigan Plan if it isn’t promoted publicly. By refusing to devote modest funds to reach the maximum number of eligible Michigan residents today, Michigan lawmakers are unnecessarily increasing the future long-term costs for all consumers and the state by turning away badly needed federal matching funds that can serve to fire up the economy while addressing the healthcare needs of low-wage workers.

Devoting resources to increase enrollment in the Healthy Michigan Plan helps close the coverage gap—a fundamental part of controlling healthcare costs for all. Taking explicit steps to ban funding today and in the future results in very modest, short-term savings, but it hurts Michigan residents and increases the state’s liabilities in the future. Instead of intentionally limiting promotion and, in turn, public awareness and use of this program, it’s time to celebrate the success of the Healthy Michigan Plan by investing in outreach and making sure all eligible Michigan residents are enrolled.

Time to end income inequality

pdficonJuly 2016
Legislative Coordinator, Rachel Richards

Michigan’s top 1% makes 22 times more than rest of workers

Time to end income inequality chart 1Michigan’s income inequality is a persistent and increasing problem that has a negative impact on the state’s residents and economy.1 Between 1947 and 1979, incomes at all levels increased at relatively similar rates for Michigan residents as well as nationally. In the late 1970s, there was a significant divergence as most of the income growth started going to the top earners and leaving the rest of Michigan residents behind.

Time to end income inequality chart 2Over the next 30-plus years, Michigan incomes fared worse than most of the rest of the nation. Between 1979 and 2013, overall incomes actually fell in the state. However, income decline in the bottom 99% solely caused this decline. In 1979, the top 1% of Michigan households held about 9% of the total income in the state. By 2013, the share of state income taken home by this group had nearly doubled to 17.9%, while the rest of Michigan residents saw their incomes decline.

Major income disparities exist between different genders and races. In 2014, Michigan women working full time still made only 74.6 cents for every $1 a full-time working male made. This is below the national average and ranks Michigan as one of the worst states in the Midwest region, trailing all of our immediate neighbors. In addition, women of color, and most men of color, continue to have lower median incomes than white, full-time working men.

Time to end income inequality chart 3Why Does This Matter?

Simply put, poverty in Michigan—especially for children—is still too high, and our state’s economic recovery is leaving too many people behind. Many workers have full-time jobs, but are still barely getting by as they struggle to provide for their families. At the same time, Michigan continues to favor policies that benefit the wealthy, such as its regressive tax structure, while reducing, capping and eliminating programs that help the most vulnerable.

Unfortunately, income inequalities do not simply affect what ends up in your bank account. According to the national Economic Policy Institute, increasing inequality might lead to lower income mobility in future generations. Lower-wage earners are less likely to have access to employer-sponsored health insurance coverage and paid sick and family leave, and are more likely to have underfunded retirement accounts. Income gaps affect the ability to pay for healthcare or save for retirement or a child’s college education, and reducing these gaps will have a positive impact on Michigan’s residents, communities and economy.

Time to end income inequality chart 4What Can Policymakers Do to Reduce Income Inequality?

Although income disparities at all levels continue at the national level, Michigan can implement state policies that can help bridge the divide:

  • Improve working conditions: Michigan’s minimum wage is improving, and will rise to $9.25 per hour by 2018. However, more can be done to help Michigan’s lowest-paid workers, such as further raising the minimum wage or eliminating the tipped wage to narrow the gap. Expanding access to high-quality child care would allow more low-wage earners the ability to find more secure and higher-paid employment. Finally, enacting earned paid leave policies would provide workers the necessary flexibility to care for themselves or family members without risking losing money or even their jobs.
  • Improve tax implications: Currently, Michigan’s lowest-income earners pay a higher rate in total state and local taxes than Michigan’s top earners; in fact, they pay nearly double the rate of the top 1%. Restoring Michigan’s Earned Income Tax Credit (EITC) to 20% of the federal credit, expanding the Homestead Property Tax Credit or implementing a fairer income tax, such as a graduated income tax, would let Michigan’s lowest-paid workers keep more of their hard-earned wages.
  • Improve job opportunities: As our economy expands, more jobs will require at least some college education, if not a certification, associate degree or bachelor’s degree. Improving K12 education—especially for children at risk of educational failure, increasing adult education and expanding access to post-secondary education would help retool Michigan’s workers for its new economy.

For almost four decades, Michigan’s income gap has been widening and it’s time to change that. State lawmakers must do more to adopt policies that will strengthen our economy, alleviate poverty and reduce income inequality for Michigan workers.

Time to end income inequality chart 5

 

 

 

 

 

 

 

 

 

 

 

Endnote

  1. Estelle Sommeiller, Mark Price, and Ellis Wazeter. Economic Policy Institute. Income inequality in the U.S. by state, metropolitan area, and county. Economic Analysis Research Network (EARN) Report. June 16, 2016. American Community Survey 1-year estimates, 2014. PolicyLink/PERE, National Equity Atlas, www.nationalequityatlas.org.

 

 

 

Michigan should eliminate its asset limit for food assistance

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July 2016
Senior Policy Analyst, Peter Ruark

What is the food assistance asset limit and why is it a problem?

Families who experience financial difficulty due to unemployment or a medical emergency often seek assistance from the Supplemental Nutrition Assistance Program (SNAP; formerly known as Food Stamps) for purchasing food. This assistance can help keep their household stable, including keeping food on the table for children, until the family can get back on its feet. Many seniors and people with disabilities also depend on SNAP to keep from going hungry.

MI Should Eliminate SNAP Asset TestUnfortunately, in some states including Michigan, there is a limit to how much a family can have in assets in order to be eligible for SNAP. This is commonly referred to as the “asset test.” Assets are resources available to purchase food, such as bank savings. Houses, personal property and retirement savings do not count as assets, although automobiles do. Michigan’s asset limit is $5,000, which means that if a Michigan family has more than $5,000 saved in a bank account or a savings plan, it must spend down its savings to below that level in order to qualify for food assistance. This policy essentially punishes families for saving for emergencies and for their children’s futures.

There is a federal asset limit for SNAP, but in 2002 the federal government gave each state the option to raise its asset limit or eliminate it entirely. Recognizing that the SNAP asset limit is counterproductive, 34 states and the District of Columbia have eliminated it. Michigan was one of the first states to eliminate the asset limit, but reinstated it in 2012, a time when many Michigan families were still struggling to make ends meet.

Is it unfair for Michigan to impose a SNAP asset limit when so many other states have eliminated theirs?

Yes. Michigan suffered more than most other states during the 2000s, including four years when it had the highest unemployment rate in the nation, and although its economy has improved to some degree, many families continue to struggle.

Families who have saved up money to weather future economic storms or to invest in their children’s future should not have to spend down all but $5,000 of their savings if they need to receive temporary help from SNAP. By requiring this, Michigan is punishing prudence and long-term thinking. Because SNAP functions for most households as a temporary stopgap (58% of new recipients leave the program within one year), it makes sense to allow families to retain their savings as they get back on their feet.

Why and how did Michigan reinstate the asset limit?

In 2012, media publicity around a lottery winner continuing to receive food assistance while collecting winnings prompted the Michigan Legislature to pass Public Act 79, which states simply, “For the purposes of determining financial eligibility for the Family Independence Program or the Food Assistance Program administered under this act, the department shall apply an asset test.” That year, Michigan also passed Public Act 78, which requires that the Michigan Lottery inform the Department of Health and Human Services (DHHS) of lottery winnings of over $1,000, and that lottery and other gambling winnings be counted as unearned income (if received in installments) or as assets (if received in a lump sum) for determining continuing eligibility for SNAP benefits. The Department of Human Services (now the Department of Health and Human Services) responded by establishing an asset limit of $5,000.

What can Michigan do to make it easier for struggling families with some savings to receive food assistance?

Current law requires Michigan to have a SNAP asset limit but does not stipulate a specific amount; that is left up to DHHS to determine. The department can raise or lower the limit but cannot eliminate it under current law. Likewise, if the current law requiring an asset limit is eliminated, the department can still choose to impose an asset limit.

Because it would require only a departmental and not a legislative change, the easiest way to allow families to save more money while they are receiving SNAP benefits is to raise the limit rather than eliminate it entirely. Nebraska has an asset limit of $25,000, five times the amount of Michigan’s limit, allowing families to build savings while receiving assistance.

Michigan can also join the 34 states and District of Columbia in eliminating the asset limit entirely. This would require a legislative change to eliminate the requirement to impose an asset test, followed by a departmental action to remove the asset limit itself. If the Legislature wants to keep the restriction on lottery winnings, it would need to modify that wording accordingly.

MI Should Eliminate SNAP Asset Test (Read-Only)

 

Ask your candidates

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Taxes and revenues

1Since the 1970s, the federal Earned Income Tax Credit (EITC) has been considered a significant poverty reduction tool that encourages individuals to work. In 2006, Michigan created its own state-level EITC based on 20% of the federal tax credit. The governor and state lawmakers scaled back the Michigan EITC to 6% in 2011.

Would you support fully or partially restoring the state-level EITC to 10% or 20% of the federal tax credit?

2Michigan is one of only seven states that continues to rely on a flat income tax rather than a graduated income tax, like the federal income tax. States with graduated income tax structures tax at higher rates as income rises making it a more modern and equitable system.

Would you support reforming Michigan’s income tax structure from a flat income tax rate to a graduated one?

3Sales taxes are typically considered to be the most regressive type of tax, costing individuals earning low wages a larger proportion of their income compared to wealthier individuals. Expanding the sales tax to apply to services can serve to both increase revenue and make the sales tax less regressive. Even still, the sales tax will remain regressive, which is the reason some states offer sales tax credits to provide relief for individuals who earn the least.

Would you support extending the state’s sales tax to services with a sales tax credit for filers with low wages?

4While Michigan’s actual tax revenues have grown year after year, when adjusted for inflation, revenues are below 2000 levels by about 18%, and state lawmakers have continually pulled funds away from general state coffers to fund specific programs, such as road funding and the Personal Property Tax repeal reimbursements. At the same time, the costs of providing Michigan residents the most basic services have grown, increasing pressure on our budget. This has meant that programs have had to be funded at the expense of others, furthering Michigan’s disinvestment in its communities, education, infrastructure and other services on which its residents and businesses rely.

Would you support exploring new revenue sources or expanding existing ones, for example by eliminating outdated and unnecessary tax exemptions or credits, to fund vital state services?

Help for struggling people and families

5Out of 16 states offering families additional heating assistance to qualify for additional food benefits, Michigan was one of four that declined to add dollars to keep the Heat and Eat program going when federal rules changed. That means an average loss of $76 a month in food benefits for 150,000 families, seniors and people with disabilities. It would take only $3.2 million in state dollars to bring in $138 million in extra federal food assistance for these Michigan residents.

Do you favor spending $3.2 million to bring in this additional food assistance?

6Michigan has one of the most stringent income eligibility levels in the country for child care subsidies for families with low wages. Given the high cost of child care, without assistance many parents find themselves in the difficult position of relying on unstable or even unsafe arrangements for their children or placing their jobs in jeopardy.

Would you support the use of state and available federal funds to expand child care subsidies to more families with low incomes?

7Children in families that must rely temporarily on state income assistance live in increasingly deep poverty as a result of the very low payments provided by the state (a maximum of $492/month for a family of three). Michigan provides a one-time payment of $140 for all school-age children in families receiving Family Independence Program assistance so children can start school with at least a decent set of clothes, but with current prices, this doesn’t carry children very far into the school year.

Would you support an increase in the annual school clothing allowance to ensure that children can purchase the clothes, shoes and overcoats needed for school?

8Food assistance (Supplemental Nutrition Assistance Program) helps families experiencing financial difficulties purchase food, helping parents feed and provide for their children without disrupting their lives. In 2012, Michigan passed a law that required the state to limit the amount of assets a person could have in order to qualify for food assistance. This was implemented just as the state was exiting a decade-long recession and at a time when most states (about two-thirds plus D.C.) were eliminating their own asset tests. This penalizes families that have saved for emergencies, for their retirements or for their children’s futures by requiring them to spend their assets in order to receive food assistance.

Would you support legislation or policy changes that either increase the asset limit on food assistance or completely eliminate the requirement, joining most other states in the nation in doing so?

Addressing child poverty and education

9Nearly half (49.9%) of Michigan third-graders did not demonstrate proficiency in English Language Arts (reading and writing) in 2015. Legislation under consideration would require that third-graders who are not proficient in English Language Arts as measured by the state test would be required to repeat the grade; although, if the student is proficient in other subjects, then instruction for those may be given in a fourth-grade classroom. Alternate tests and portfolios may be used to document reading skills and some good cause exemptions are provided, however, the school superintendent would make the final decision. Critics contend research on retention shows a higher likelihood of dropout for retained students while supporters of retention decry the negative impact of social promotion.

Would you support mandatory retention of Michigan third-graders who are not proficient in English Language Arts ?

10Child poverty in Michigan has escalated by almost 60% over the last 15 years. Almost 1 of every 4 children in the state lives in a family with income below the poverty level: $19,000 for a family of three and $24,000 for a family of four. Several policy initiatives to alleviate child poverty have been suggested, such as reinstating the state Earned Income Tax Credit to 20% of the federal EITC, expanding adult education and other workforce development opportunities, and raising the child care subsidy and eligibility so parents earning low wages can have access to child care.

Would you support any of these initiatives?

11Michigan has been a leader in investments in preschool programs for 4-year-olds, but funding for families with infants and toddlers living in poverty or near poverty has declined—despite scientific evidence that the first three years of life are when children’s brains are growing most rapidly, affecting their lifelong development, learning and achievement.

Would you support additional state funds for proven programs for parents of very young children, including home visiting, parenting programs and Early On?

12One in 10 children, or 228,000, in Michigan have had a parent in their household incarcerated at some point in their lives—one of the highest rates and largest populations of children impacted in the country. Having a parent incarcerated can lead to increased poverty, stress and unstable environments, affecting kids’ health and academic performance. Additionally, approximately 95% of Michigan’s prison population will return to the community after serving their sentences making reentry and family reunification services critical for the formerly incarcerated, their children and communities.

Would you support a comprehensive, multigeneration approach, including the expansion of support programs, family reunification and reentry services, to ensure that the needs of children and their parents, families and communities are met while a parent is incarcerated and upon their return home?

13With the recent housing bubble burst dropping property taxes, declining enrollment and the inability of the state to fully invest in K-12 education, many Michigan schools have fallen into financial crisis. Recently the state legislatively dissolved two school districts and Detroit Public Schools, our largest public school district, nearly fell into bankruptcy despite years of state control. Two other schools have emergency managers, and two are under a consent agreement, with many more under deficit elimination plans or state review.

Do you believe the state should be doing more and providing more financial help to Detroit Public Schools and other school districts that have fallen into, or are on the verge of falling into, financial crisis?

Jobs and the economy

14Workers who are laid off, or who work in low-paying jobs, can often improve their financial situation by building skills at a community college or university. However, Michigan’s financial aid grants are not available to workers who have been out of high school more than 10 years. There was a legislative proposal last year to reinstate the Part-Time Independent Student Grant, which helps older workers (including many with families and full-time jobs) go back to school and get a degree. This grant was discontinued in 2009.

Would you support the reinstatement of the Part-Time Independent Student Grant to help older workers get the skills they need for family-supporting jobs?

15Although Michigan’s economy and unemployment rate have improved, there are many workers still seeking work, and there continue to be businesses that for some reason or another face difficulty and need to lay off workers. Yet, Michigan is one of a few states that allows unemployed workers to receive up to only 20 weeks of Unemployment Insurance (UI) while they look for jobs—nearly all other states have a maximum of 26 allowable weeks of UI which Michigan also provided until cutting back in 2011. While some unemployed workers find another job within 20 weeks of becoming unemployed, it is important that they have additional weeks if they do not to prevent further family disruption.

Would you support reinstating the 26-week maximum for unemployed workers to receive Unemployment Insurance while they look for work?

16More than 1.7 million (44%) Michigan workers cannot take time off with pay when they or one of their children are ill. Becoming sick puts these workers in the difficult position of having to either stay home and lose wages, or go to work and risk becoming sicker and exposing coworkers (and often the public) to illness. Parents feel pressure to forgo needed medical care for themselves and their children, and to send their child to school sick because they cannot miss work to take care of them. An earned sick leave law similar to what several other states and cities have would help Michigan workers by requiring most employers to bank sick time for their workers based on the number of hours they have worked.

Would you support a Michigan earned sick leave law?

Criminal justice reform

17Michigan is one of nine states that automatically charges 17-year-olds as adults in the criminal justice system. In nearly every other aspect of the law, whether it is voting, buying a lottery ticket, serving in the military or signing a contract, 18 years of age is legally required, yet 17-year-old youths must be prosecuted, convicted and sentenced as adults in criminal courts in Michigan. Research on development shows that 17-year-olds are not adults and are better served in juvenile justice systems.

Would you support raising the age of juvenile jurisdiction to age 18?

18Persons of color are arrested, detained and incarcerated at higher rates in Michigan as well as around the country, though national statistics demonstrate that higher crime rates do not account for this disparity. While only comprising 14% of Michigan’s population, African-Americans comprise over half, or 53%, of the state’s prison population, and they are detained at a rate more than six times higher than white people.

Do you support training for police, judges and others in the criminal justice system, along with the use of a race equity policy tool, to expand understanding of the disparate impact of the system and its policies on communities of color?

19An estimated 20-25% of prisoners have been diagnosed with severe mental illness and many more with mental health problems. Nine of every 10 prisoners with severe mental illness also suffer from substance use disorders, and upwards of 65% of those with mental health symptoms do not receive treatment. Michigan has recognized the need for alternatives to incarceration for those suffering from behavioral health issues by implementing mental health courts and substance abuse programs for those serving time and on probation and parole.

Do you support diversion programs and improved mental health and substance abuse treatment programs within prison facilities to improve access for incarcerated people?

Flint water crisis

20In April 2014, Flint switched its drinking water source to the highly corrosive Flint River, and a decision to not properly treat the water caused lead to be leached from the pipes into the water. This resulted in thousands of Flint residents, including children, being poisoned by the water they drink daily. Unfortunately, lead poisoning has no cure, and all Flint residents, especially children, will require lifelong services to help detect and treat developmental and educational delays and health problems caused by lead. Furthermore, lead continues to be a problem in almost all of our communities, either through lead pipes or lead in paint in older homes, and it needs to be remedied statewide.

Would you support continuing to provide long-term funding to help residents affected by the Flint water crisis? Would you also support looking at a statewide solution to abate existing lead, prevent future poisoning and provide services to those already affected?

 

 

 

 

 

 

 

 

 

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