Reports


Governor’s Proposal Continues Healthy Kids Dental Expansion

 

The Healthy Kids Dental program is a public-private partnership between the Department of Community Health and Delta Dental of Michigan. The program is available to Medicaid-eligible children under age 21 in all but three counties. The program, administered by Delta Dental, uses Delta’s commercial network of dentists and pays higher rates than Medicaid.

Kalamazoo and Macomb counties were added Oct. 1, 2014, bringing the total number of children covered to 611,000 but leaving a large population of lowincome kids behind in Kent, Oakland and Wayne counties – nearly 400,000 kids.

The governor’s recommendation for the budget starting Oct. 1, 2015 includes $7.5 million in state funds, for a total of $22 million with federal funds, to expand Healthy Kids Dental coverage to children under age 9 in Kent, Oakland and Wayne counties. This proposal would add another 210,000 children to the program for a total of 821,000, but leaves behind more than 170,000 children age 9 and older.

Children’s Health Insurance Program (CHIP) Reauthorization Needed

 

The Children’s Health Insurance Program (CHIP) was created by Congress in 1997 to provide quality healthcare coverage for children under age 19 in families that earned too much to qualify for Medicaid, but could not afford to purchase private coverage. Michigan’s CHIP program is called MIChild.

Unless Congress acts, new funding for CHIP/MIChild will end on October 1, 2015. The resulting loss of federal funds to Michigan would exceed $100 million.

Michigan continues to have a very high rate of insured children, about 96%, in large measure due to Medicaid and MIChild. In 2012, about 92% of eligible children in Michigan participated in either Medicaid or MIChild. In February 2015, 40,846 children were enrolled in MIChild.

MIChild provides comprehensive coverage for $10 per month per family, a cost much lower than Marketplace plans. There are no copays for services. More than 90% of cases closed over the last three months were due to the child(ren) becoming eligible for Medicaid (reduction in family income) or the family did not pay premiums timely, indicating higher premiums in the Marketplace could be very problematic for the families.

In addition to general medical and dental benefits, other benefits offered include:

  • Medications
  • Immunizations
  • Inpatient and outpatient behavioral health services
  • Vision exams and corrective lenses
  • Hearing exams and hearing aids
  • Physical and occupational therapy
  • Services for speech, hearing and language disorders
  • Durable medical equipment

The Department of Community Health is exploring the conversion of the MIChild program to a Medicaid expansion program with the full range of Medicaid services. The program would become part of the state’s rebid for managed care organizations to cover Medicaid enrollees, rather than a separate program as it is now. This would allow newly eligible parents (under the state’s Medicaid expansion called the Healthy Michigan Plan) and their child(ren) to be enrolled in the same health plan. The $10 premium per family would be retained.

 

Cutting off Assistance to Families Won’t Improve School Attendance, Will Drive Up Poverty

 

Pushing families further into poverty will not increase school attendance rates. The Michigan Legislature is considering House Bill 4041 that would codify current Department of Human Services policy that terminates Family Independence Program, or cash assistance, for an entire family if a child between the ages of 6 and 15 is considered to be truant by their local school district. An entire family is punished for the actions of one child. If the student is 16 or older, only the truant child is removed from the case. The bill will not boost school attendance rates, but it will increase the number of children and families living in extreme poverty.

DHS policy should have the goal of helping families, not driving them deeper into economic crisis. The cash assistance program helps families experiencing temporary financial hardship and is available to those with incomes just above extreme poverty (income under half of the poverty level, or $9,385 for a family of three). Families receiving FIP have very few resources and already face a number of challenges, including inconsistent work schedules; lack of access to quality, affordable child care; and reliable transportation. Eliminating their cash assistance will do nothing to address these challenges and will make life more difficult for their children. The League has the following concerns with HB 4041:

 

Codifying current DHS policy ties the hands of the department. It becomes much more difficult to change policy after it is made into law. The department would lose any flexibility to adapt its policy to better serve the needs of the people.

Barriers to attending school are not addressed. Four of the top 10 reasons for missing school, as identified by the Michigan School-Justice Partnership, deal with transportation, child care, and lack of appropriate clothing for the weather. Eliminating a family’s cash assistance will only make these issues worse. Working oneon-one with families to identify and resolve the underlying issues—without reducing their resources—is a much better route to ensure that a child is ready and able to learn at school. HB 4041 does not include any type of required intervention.

Lack of due process to appeal a decision. At times, an illness or other situation results in a high number of absences. These could be excused absences depending on the school attendance policy. Individual situations should be recognized, and families should have a clear process for appealing a decision that terminates their assistance. While DHS policy does include an appeals process, this proposed law does not.

Full-family sanction for families with children between 6 and 15 years old is severe. There may be cases in which a parent is doing everything in their power to get their 14year-old to school, but the child—for whatever reason—does not arrive or stay in school. Terminating assistance for the entire family for the actions of one child could make it more difficult for other children in the family to get to school.

Unclear definition of truancy or attendance policy. Without a statewide definition of truancy and the variances across school districts in how truancy is defined, there will be inequitable impact on children and families.

Child poverty remains unacceptably high. From 2006 to 2012, the rate of children living in poverty in Michigan grew by 35%. The economic recovery has not touched everyone. More than 70% of program participants are children with an average age of 7. Cutting off assistance will undoubtedly harm children in these families the most at a time when the governor’s dashboard calls for reducing childhood poverty.

House Bill 4041, and the related DHS policy, is not the way to improve attendance rates or the lives of these families in either the short or long run. Codifying this DHS policy will only contribute to increasing child poverty and the number of families living in extreme poverty.

 

Interactive map

Michigan Must Ensure the Safety of Young Children in Child Care

 

Child care is a fact of life for the majority of Michigan parents, yet federal audits and studies have shown that because Michigan does not have enough child care inspectors, parents cannot rest assured that the care they choose is safe and meets even basic state licensing standards. To ensure basic health and safety, all child care centers and homes in the state are required to be licensed or registered, whether or not they accept low-income children receiving a state subsidy.

Nearly 60% of young children in Michigan live in homes where all parents are working, and more than half are in care at least one time each week. Without safe and stable child care, parents cannot work to support their children, and employers face threats to their bottom line from employee absenteeism and turnover.

Michigan’s Failure to Protect Children Exposed in Federal Audits

In unannounced visits, federal auditors found:

  • Half of the child care home providers and all of the centers that they visited had not done all required criminal record and protective services background checks on employees and other caregivers.
  • Centers that were not safe for children because of such violations as a blocked fire exit, hazardous substances within the reach of children, recalled cribs and unsupervised toddlers.

In national studies, Michigan was given a D grade because even though the state’s licensing regulations are adequate, it fails to ensure that providers are actually following the rules. Child care homes received a grade of F because Michigan is one of eight states that does not inspect homes before registration, and state law could allow for inspections only once every 10 years.

The Problem: Too Few Child Care Inspectors and High Caseloads

  • Too few child care inspectors: Federal auditors point to the insufficient number of child care inspectors as the primary weakness in Michigan’s licensing system. Michigan currently has 70 child care licensing inspectors, with caseloads of 153 child care settings for every inspector. By contrast, the national average is 98:1, and the recommended standard is 50:1.
  • Thorough inspections are needed to ensure child safety: Currently, the on-site inspection of a child care center takes between five and 15 hours, depending on the amount of travel time required as well as the size of the center and the existence of any safety violations. Child care home inspections take between three and 10 hours. In addition to on-site inspections, workers must complete incident and other reports, review and approve corrective action plans, conduct investigations on facilities operating without a license or registration, and respond to complaints. Because there are 70 inspectors spread out over 83 counties, travel times can be as high as 60 minutes one way in south central lower Michigan to 120 miles in northern lower Michigan. In the Upper Peninsula, workers may need to drive up to 200 miles one way to complete an inspection.
  • Changes in federal law will increase workload: 
    • With high caseloads, Michigan cannot meet its current responsibilities to ensure safety for young children in care.
    • By Nov. 2016, the state will be required by federal law to step up its oversight to include a pre-licensure inspection for all centers and homes, as well as a yearly unannounced visit.
    • In addition, annual inspections of unlicensed providers receiving a state subsidy will be required. The Office of Great Start has testified that it cannot meet the new federal standards with its current staff.

The Solution

The governor’s 2016 budget includes $5.7 million in federal funds to hire new licensing inspectors and bring caseloads to the current national average of one inspector for every 98 child care settings. Because of declining child care caseloads, Michigan has additional federal Child Care Development Fund dollars to spend on quality improvements next year. Federal funds that are not spent will be returned to the federal government and reallocated to other states. No state dollars will be needed to provide this extra protection for Michigan’s children.

 

Willing to Work and Ready to Learn: More Adult Education Would Strengthen Michigan’s Economy

 

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, one out of four adults not speaking English well, and a large number of 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 221,500 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 225,000 Michigan adults speak English less than “very well,” but fewer than 5% 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 1-3.)

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 4.)

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.

As seen in Figure 2, Michigan residents with “some college” or an associate degree have significantly higher earnings ($31,209) than those with only a high school diploma ($25,648) and are less likely to be in poverty. The combined percentage of Michigan residents in the latter category (32.6%), however, is barely higher than the percent-age with only a high school diploma (30.4%), and well below the percentage without postsecondary education when those with less than a high school diploma (11.1%) 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

In Michigan, 24% 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 (28%), than for those who speak only English (15%). With more than 225,000 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.

For 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 one-fifth to one-quarter of adult education participants each year are public assistance recipients and 7% to 12% report that they are single parents.7 Yet we see from Figure 5 that public assistance recipients and parents of preschool and school age children have very poor program completion rates. Although each category improved in 2013 over 2012, single parents and public assistance recipients still have an extremely high rate of dropping out before completing programs.

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 income is at or below $23,880 per year (only 110% of 2015 federal poverty guidelines).
    • 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.

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 developmental education require-ments. 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.

3. 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 Fiscal Years 1997 to 2001, decreased funding slightly in the following years, and then slashed funding to $20 million in FY 2004. Adult education appropriations have been held at $22 million for the past several years—a 74% 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 been reduced by 64% since 2001, not accounting for inflation (Fig. 8).

 

Administrative Set-Aside: Although the $22 million the Legislature appropriated for FY 2015 is the same as the past several years, adult education providers are actually receiving a 5% cut, to $20.9 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 have an administrative set-aside for the fiduciary entities, the state should appropriate additional funds for this purpose rather than take it directly from adult education providers.

Erosion: When adjusted for inflation, the flat funding of $22 million per year since 2010 is actually a decrease each year. In 2014, that amount was equal to $20.4 million in 2010 dollars and $16.5 million in 2001 dollars.13 In inflation-adjusted dollars, Michigan reduced its state funding by 79% between 2001 and 2014, causing total funding for adult education to drop by 72% (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).

In addition to serving fewer students than in the past, Michigan does not compare well with other states on student participation or success measures (Fig. 11). 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 2000 through 2014 by the number of students served each of those years shows that the state pays approximately $1,240 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 Year 2009-10 to 2013-14, when adult education received state and federal funds totaling between $35.1 million and $36.7 million per year, the state served an average of 28,275 adult education students per year. Assuming a cost of $1,240 per student, if total funding were to be increased by $10 million, then the state could serve approximately 8,000 more students—a 28% increase to 36,600 students. If the 8,000 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 6.4% to 10%.

Figure 12 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.

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.
See PDF for Appendicies

 Endnotes

  1. American Community Survey, 2013.
  2. Working Poor Families Project data generated by the Population Reference Bureau from the American Community Survey, 2012..
  3. State of Michigan Dashboard using data from the Michigan Community College Association (https://midashboard.michigan.gov/education, accessed on February 5, 2015)
  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 2004.
  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 started in 2012 at schools in four Michigan cities, uses the school environment to assist parents and children in attendance, education, health, safety and self-sufficiency. The program will go statewide in 2015. 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, The 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 December 1, 2014). Figures for 2015 are not available at the time of this writing.
  14. An academic level comprises two school grade levels.
  15. Michigan Workforce Development Agency, 2013-14 Section 107 Individual District Reports (https://www.michigan.gov/wda/0,5303,7-304-64362-303842–,00.html, accessed on February 6, 2015)

Governor’s 2016 Budget: Impact on Children and Families

 

Governor Proposes Positive Investments Despite Threats to Revenues

While the governor has proposed a balanced budget for 2016 that includes important investments for children and families, there are many threats to the state’s fiscal health on the horizon. Top among them is the potential loss to the state and its economy if voters do not approve the bipartisan compromise transportation package, leaving few other options to fix the roads without further depleting scarce state funds needed for services for children and their families.

Also acting as an anchor dragging on the state budget are deep business tax cuts adopted in 2011, along with the expected costs of outstanding business tax credits, which are now projected to be up to $600 million a year through 2030, at a total state cost of $9.4 billion. Without replacing revenues, cuts of this magnitude could so weaken basic public services in Michigan, such as public safety, transportation, education and public health, that the state’s economy could be crippled for years to come.

Finally, significant cuts in the federal budget could have a disastrous effect on many health and human services in Michigan. Over 40% of the governor’s $53 billion budget for 2016 is supported by federal funds, and the state’s reliance on federal funds has been growing.

 

Important Steps Forward for Children and Their Families

Gov. Rick Snyder’s budget for 2016 includes many important investments in families and children, despite lower than expected revenues, including:

Continued funding for Michigan’s preschool program for low-income children. The governor maintains funding for Michigan’s successful Great Start Readiness preschool program for low-income 4-year-olds. Over the last two years, funding for the preschool program more than doubled, with the number of half-day slots increasing from 32,140 in 2013 to 63,250 in 2015.

A new initiative to improve reading by third grade. The governor proposes nearly $49 million for a new initiative to raise third-grade reading scores, including $23.6 million for childcare quality improvements. Included are:

  • Home visits for at-risk families to encourage early literacy activities and identify children with disabilities and developmental delays ($5 million).
  • Parent education pilot programs for families with children under age 4 ($1 million).
  • Testing of new elementary teachers on reading instruction capabilities prior to their certification to teach, as well as professional development for current teachers ($1.45 million).
  • Training of teachers and administrators in the use of literacy diagnostic tools ($1.45 million).
  • Additional instruction time for students who need extra assistance with reading, including after school, as well as summer school programs ($10 million).
  • New literacy coaches for K-3 teachers ($3 million).
  • Continued implementation of the Kindergarten Entry Assessment ($2.6 million).
  • A new oversight commission, with business and philanthropic leadership, to monitor progress toward improving third-grade reading proficiency.

More funding for children at risk of falling behind their peers academically. The governor recommends an additional $100 million for children at risk of falling behind their peers academically, bringing total funding to $409 million. Funds are to be used to ensure that children are reading at grade level by the end of third grade and are career and college ready when they graduate from high school. Funds are allocated based on the number of students eligible for free meals, giving districts that are educating a high number of low-income children additional resources.

An increase in the number of child care licensing inspectors the state needs to keep children safe. The governor recommends a 50% expansion in the number of child care licensing inspectors to ensure basic health and safety in child care settings. With one inspector for every 153 licensed child care centers and homes, Michigan has come under federal scrutiny for its failure to ensure compliance with child care licensing rules, including required criminal record and protective services background checks for teachers and caregivers. The governor includes $5.7 million to reduce the ratio to the national average of one inspector for every 98 child care settings.

Investments in child care quality through increases in payments to providers, and policy changes that allow families to keep their child care even if their incomes increase. The inability of parents to find reliable, high- quality child care affects businesses’ bottom lines because of employee absenteeism and turnover. In recent years, state funding for child care has dropped dramatically, along with the number of families who can receive help with high child care costs. The decline is partly due to changes in state policy, reimbursement rates that fall far below market rates, and income eligibility guidelines that create a “cliff” that results in families losing child care assistance if they receive a raise or new job at a higher wage—even though they cannot afford child care with their earnings alone. The governor’s budget begins to address those problems by:

  • Providing a rate increase for higher-quality child care providers of approximately 25 cents per hour. This year, small rate increases were given to providers who received three, four or five stars on the state’s quality rating system. For 2016, the governor proposes to also provide increases for providers earning two stars ($6.1 million).
  • Allowing families to remain eligible for child care for up to one year, even if their incomes rise ($16 million).
  • Permitting families that are eligible for care under Michigan’s current guidelines (121% of poverty) to continue to receive child care subsidies until household income exceeds 250% of poverty ($1.5 million).

An expansion of dental care to children ages 0-8 receiving Medicaid in the state’s most populous counties of Wayne, Oakland and Kent. The governor proposes to expand the Healthy Kids Dental program to an additional 210,000 children ages 0 through 8 in the three counties with an investment of $15.7 million ($5.4 million in state funds). With this expansion, 800,000 children statewide can access dental care, but more than 170,000 older children in Wayne, Oakland and Kent counties would still not be covered. Access to dental services is essential to prevent tooth decay, the No. 1 chronic disease in children.

What’s Missing From the Governor’s Budget?

Children are more likely to thrive when their parents are able to meet their basic needs, yet many critical state services that promote economic security continue to be underfunded.

Fewer families are receiving the income supports needed to ensure that they can provide adequate housing and meet their children’s other basic needs. The long-term effects of homelessness and extreme poverty on children are well documented, but policy changes over the last five years have reduced eligibility for income assistance programs, in part through stringent lifetime limits on assistance and the ending of income assistance for an entire family due to the truancy of a single child. Between 2007 and the current budget year, spending on income assistance in Michigan declined by 66%, despite continuing high child poverty rates.

The failure to increase income assistance payments has also pushed more children into extreme poverty. To be eligible for assistance, an average family of three must have an income below $9,780 annually and financial assets of less than $3,000. The maximum benefit for a family of three is $492 per month. Over 70% of those who benefit are children.

Between Oct. 1 and Dec. 31, 2014, nearly 2,400 children under the age of 6 were living in households that were sanctioned for failure to complete all steps required to retain full eligibility for income assistance. Approximately 85 families lost assistance because of lifetime limits during that quarter and 68 were affected by the state’s truancy policy.

More families are unable to adequately feed their children because of changes in food assistance policies and benefits. Fewer families can receive food assistance, and benefits have been reduced, in part the result of a state asset test. The Food Assistance Program (formerly the Food Stamp Program) is completely federally funded, with an average monthly benefit for a two-person household of $245. More than 70% of the families and individuals who get assistance with food receive no other cash assistance from the state. The number receiving food assistance began to fall in 2011, the same year that the state imposed a new asset limit. Between fiscal years 2011 and 2015, cases dropped by 13%. Over 40% of all food assistance recipients are children.

Michigan will continue to do too little to prevent child abuse and neglect. Almost one in every 10 children in Michigan lived in a family investigated for abuse or neglect in 2013, and almost 34,000 children ages 0 through 17 were confirmed victims. And, the numbers are growing—the rate of confirmed victims escalated by almost one-third between 2006 and 2013. Sadly, funding for the major programs to prevent child maltreatment has been reduced from $65.4 million in 2006 to $48.7 million in the governor’s budget proposal.

State investments in public health and children’s health services continue to lag. Two of every $3 spent on public health services is federal money. Over the last decade, nearly all increases in total public health funding have been from federal grants or other sources, while state investments have not been made. For 2016, the governor restores $1.5 million in funds to local public health departments, bringing funding to the level it was 10 years ago. Funding to expand home visiting services to at-risk families with young children in rural areas of the Upper Peninsula and Northern Lower Peninsula ($2.5 million in state funds) was kept at current year levels. A pilot program to improve child and adolescent health services and projects to test innovations in addressing a range of health issues, including health disparities in children, were also retained ($1.5 million).

Many public schools are struggling financially. The governor recommends a $75 per pupil increase for all districts. In addition, he proposes a 60% cut in funding currently available for school districts implementing best practices and the elimination of funding for performance grants ($51 million). Some districts that have been receiving best practice and performance grants will see a drop in per pupil funding under the governor’s plan, while others will benefit.

There have been needed increases recently in support for public schools, but they have not fully restored cuts taken during the Great Recession—even without factoring in the pressures created by inflation. In the current school year, districts receiving the minimum payment are still receiving $65 less per pupil than they were in 2011, and those at the maximum payment level are receiving $390 less per pupil.

 

 

 

Report: Promoting Early Literacy in Michigan

Full report | Fact Sheet

For the past several years, policymakers at the state and federal level have focused on improving student achievement as measured by standardized testing, and third grade is considered a pivotal age for mastery of reading skills. After the third grade, children will need reading skills to learn other subjects such as math and science, and to evaluate written text. Almost half of the material in the fourth grade curriculum requires grade-level reading skills.1 Three of every four students who do not read at grade level in the fourth grade will continue to struggle in high school, and thus be at high risk of not qraduating high school.

Early identification and intervention are key to improving literacy among youngsters: Schools alone cannot solve the problem. Michigan has a variety of programs that provide the foundation to literacy and academic achievement, but policymakers have not appropriated funding to address the level of need nor supported policies to improve economic insecurity, which has a well-documented negative impact on child health and academic achievement.

A critical part of Michigan’s  agenda to improve early literacy must address the role of widespread child poverty and the benefits of early intervention. Efforts must begin long before children reach the third grade or even kindergarten.

School readiness is a key strategy endorsed by the Campaign for Grade-Level Reading, a national collaboration of foundations, non-profits, states and communities focused on promoting strategies to improve third-grade reading.2

In 2012, a majority of the states had passed laws targeting improvement in literacy for early elementary students. Most of these states take a comprehensive approach with early identification, interventions and strategies in place to improve literacy, some beginning at birth.

Alternate methods to document proficiency in the third grade vary by state. Since many states have only recently implemented these procedures, it is too early to assess the results. For example, despite significant gains for Tennessee students, higher-income students benefited more. Furthermore, the impact on children, families, teachers and districts of emergency takeovers by the state and closing of neighborhood schools has not been assessed.

The Michigan Picture

Roughly 40% or 40,000 of the state’s third-graders demonstrated reading skills that were rated below proficiency (Level 2), as defined in the 2013 MEAP; 10,000 of those showed minimal skills, rated as “not proficient” (Level 4).3

The percentage of third-graders at Level 4 in each county ranges from a low of 3% in Dickinson and Charlevoix to 19% in Oscoda. In some of the most populous counties, such as Wayne, Saginaw and Genesee, 9-10% of third-graders performed at the lowest level. The cost of earlier intervention strategies pales in comparison with the cost of high school dropouts in the current economy.

As Michigan looks to align its standards with the Common Core—English and math standards developed by the Council of Chief State Officers and the National Governors Center for Best Practice—the test results would more likely reflect Michigan student performance on the national test where almost seven of every 10 fourth-graders (69%) in the state did not demonstrate grade-level skills. The NAEP 2013 Grade 4 reading test results dropped the state to a ranking of 37th among the 50 states, according to the 2014 national KIDS COUNT report.4

Family income makes a difference in academic achievement.

Similar to the nation, in Michigan the difference in reading proficiency between children from low- and higher-income families is dramatic.5 Roughly 80% of fourth-graders from Michigan’s low-income families did not demonstrate proficiency on the 2013 NAEP compared with just over half (56%) of those in higher-income families. The gap widened between 2009 and 2013 as children from higher-income families exceeded the gains of those from low-income families. In Michigan schools, the higher the concentration of children from low-income families, the larger the percentage of children not demonstrating proficient reading skills.

The number of children in Michigan who live in low-income families has escalated dramatically since the economic downturn and sluggish recovery. Between 2006 and 2013 Michigan experienced a 34% increase in the percentage of students eligible for free or reduced price meals in the School Lunch Program: Almost half of all public K-12 students were eligible in 2013 compared with just over one of every three in 2006. All the growth in eligibility occurred among students qualifying with family incomes below 130% of the poverty level—roughly nine of every 10 students eligible for the program.

Proficiency rates for students closely track family income as reflected in eligibility for free or reduced price school meals. In Michigan’s 15 largest counties the percentages of third-graders scoring proficient on the MEAP reflected the percentage of low-income students: The lower the percentage of students eligible, the higher the percentage proficient. The relationship held for both traditional and charter schools, also known as public school academies. Michigan also has the largest concentration of children in high-poverty neighborhoods in the country (15%)—thereby compounding the negative impact of family economic insecurity.

The impact of the state’s economic decline on families has been aggravated by state cuts in programs designed to blunt the impact of business cycle downturns on families and children. Either the eligibility standards or the benefit amount for several programs, including unemployment insurance, the state Earned Income Tax Credit, cash assistance (FIP), child care subsidies and food stamps (SNAP), have all been reduced in the last few years, at the same time as job growth lagged and wages stagnated or fell in the sluggish recovery.

Mass incarceration exacts a profound toll on African American children and communities.

While social support programs have waned in Michigan, the number of prisoners in the corrections system remains at record highs. Almost 50,000 children in Michigan have a parent in state prison, excluding jail and federal prison, and almost half of all prisoners lived with their children prior to their arrest.

A recent study found that the absence of a parent due to incarceration can have a worse impact than parental absence due to divorce or death.6 Having a parent in prison or jail was “linked to a greater incidence of attention deficit disorder/attention deficit hyperactivity disorder (ADD/ADHD), behavioral or conduct problems, learning disabilities, speech or other language problems and developmental delays.”7

The prison population, disproportionately minority males, has resulted in worsening unemployment and decreasing family stability in communities of color. The prison experience itself can compromise physical and mental health and, once saddled with a prison record, ex-offenders struggle to find employment. The cost of parental incarceration also falls on their families and children. African American children are three times more likely to have a parent incarcerated as the national average: In the U.S. one of every nine African American children has an incarcerated parent compared with one of every 28 children of all race/ethniticy in the U.S.8

School readiness begins at birth.

Physical and emotional health from birth forms the bedrock for academic achievement. Babies who weigh less than five and one-half pounds at birth or spend less than 37 weeks in utero are much more likely to experience developmental delay, chronic disease or even death. In 2012, roughly 17,000 Michigan babies were born either too soon or too small or both. These fragile infants can often spend extra weeks or even months in intensive care and then need special services in early childhood and later years.

A healthy pregnancy improves the likelihood of a healthy birth.

The roughly 29% of mothers who do not receive adequate prenatal care, defined as beginning in the critical first three months of pregnancy and continuing regularly throughout the pregnancy, are at higher risk of an unhealthy birth than those who have timely regular care. Increased access to health insurance and medical care through the Healthy Michigan Plan, the state expansion of Medicaid under the Affordable Care Act, will increase the likelihood that more women will be in better physical health overall should they become pregnant. Uninsured women are more likely to delay prenatal care because of cost concerns or lack of a medical home and suffer from untreated chronic health conditions, which can compromise a healthy birth.

Expanded access to health insurance through the Healthy Michigan Plan benefits low-income parents and also other adults likely to be involved in children’s lives, such as caretaker relatives, childless adults and 19- and 20-year-olds.9 Improvements in the well-being of the significant adults in children’s lives will benefit those children, particularly in the early years.

All eight strategies outlined in the state’s Infant Mortality Reduction Plan focus on improving the likelihood of a healthy birth and infancy.10 The strategies include promoting safe sleep practices for infants, expanding home visits to high-risk women and reducing unintended pregnancies. However, in the last two budgets policymakers have allocated only one tenth of the funding required to fully implement the plan.

Parents matter.

The early years are a critical developmental stage when the brain undergoes its most dramatic growth and the capacity that supports future literacy is developed. The quality of the interaction between children and their parents and other caregivers in the early days and months affects the emotional and social well-being of the child as well as his/her cognitive development.11 Providing supports and training on fostering communication and nurturing behavior with infants, especially for parents and caregivers in low-income communities where resources are limited, can make a critical difference for healthy development, physically and emotionally. Children who arrive at kindergarten without social emotional skills are less likely to be able to focus on reading and math.

The resources available in the neighborhood and community to support families with children play a critical role for parents. Parents who are stressed by financial worries, health problems and mental illness can unwittingly trigger a chronic and severe response in their children that compromises development. Researchers have now documented the lifelong consequences of so-called “toxic stress” that causes a chemical response in the developing brain resulting in a negative impact on behavior and the ability to learn.

Early interventions, such as evidenced-based home visiting programs, can improve maternal and infant interactions, provide access to supportive programs and expand overall well-being, high school graduation and employment. Research on early brain development has demonstrated how vital nurturing relationships are to the social-emotional health of young children. Sustained support for parents of young children to foster maternal and infant bonding provides a foundation for positive interaction and eventual academic success.

Michigan has been able to expand its home visiting programs dramatically through its successful applications for federal funds totaling $34 million authorized in the Affordable Care Act. State funding, on the other hand, has actually fallen; the Executive Budget recommendations between Fiscal Years 2006 and 2015 reduced state funding for public health. The governor’s recommendation to invest $5 million in home visiting for Fiscal Year 2016 would be funneled through the School Aid budget to Intermediate School Districts.

While parents want to prepare their children for success in school, they may not have the latest tools or knowledge. In some Michigan districts one-third of births are to mothers who do not have a high school diploma. Minnesota, one of the top 10 states for reading proficiency among fourth-graders, offers a weekly class, Early Childhood Family Education, for children ages 0-4 and their parents in every school district in the state.12 Education professionals model activities and interaction for parents and children, and parents have their own group session on issues with which they are struggling. The program is offered to all parents with a sliding fee based on income. Participants from all income levels have participated over its 40-year history.

Lead poisoning continues to threaten children in Michigan.

Roughly 3,600 of the state’s toddlers ages 1-2 who were tested in 2013 had lead exposure (5 or more micrograms of lead per deciliter of blood) that would require case management.13 Toddlers are particularly vulnerable to lead poisoning due to their developing nervous system and their hand-to-mouth behavior. Lead dust generated by friction in windows and doors with multiple layers of paint poses a serious risk.

Decades of research have established the negative impact of early lead exposure on cognitive development. One research study found the amount of lead in students’ teeth was linked to lower IQ and academic performance.14 Eleven years later, a follow-up found those students with the highest levels of lead as youngsters were seven times less likely to graduate from high school. Recent MRI studies have shown that higher blood lead levels in early childhood correlates with brain damage, especially in the prefrontal cortex that regulates decision-making and impulse control, among young adults.

While the removal of lead from gasoline and paint has helped protect many children from the impact of lead, the presence of lead-based paint in the state’s older homes in rural and urban areas continues to threaten child health and well-being. In recent years Michigan’s childhood lead poisoning prevention program has limped along with support from federal block grants to continue surveillance, provide education about lead risk to professionals working with young children and their families, support some direct prevention activities and sustain limited case management in the most affected areas. The Department of Community Health has been able to maintain crucial services, but there is a critical need for case management and housing alternatives for families in lead-compromised housing.

In the 2014 budget just over $1 million was allocated to remediate lead in housing, and in 2015 the funding was bumped to $1.75 million. This expansion in funding supports remediation and provides more children with safe housing. With such clear evidence of lead’s detrimental impact on children’s capacity to learn, policymakers should continue to support investments to eradicate the risk to children from such exposure.

Access to quality child care for infants and young children is a challenge.

Low-income women are less likely to have access to paid sick or vacation time or maternity leave so access to reliable child care is critical as they must often return or even find work to support the family. (A pregnancy or a birth can cost them their jobs.)15 The risk of job loss increases with birth complications for the mother or infant.

Michigan’s already low child care subsidy hourly rate does not pay extra for children with special needs, and the standard rates for the age groups have fallen far below the recommended rate standard. For example, in 2012 the state subsidy for a 4-year-old in center care was $433 a month—less than half the market rate that year.16 In July 2014 the subsidy rate was raised for providers with 3-5 stars but, as of August, 82% of the almost 10,000 child care providers/programs had achieved only basic licensing requirements in the quality rating system. Roughly two of five children in subsidized care rely on unlicensed relative or neighbor care.

In fact, participation in Michigan’s child care subsidy program has plummeted despite the high level of need among Michigan’s low-income families. The state has one of the lowest eligibility levels in the country: Only families with income barely over poverty level (120%)—$1,990 a month for a family of three—qualify for the subsidy. In most states families with income above 150% or near double the poverty level remain eligible for a subsidy. Child care for only one preschool child represents a significant expense in a low-income family: The average monthly cost of full-time child care ($532) in Michigan for one preschool child would consume almost half of a full-time minimum wage income.17

Despite this level of need, few families can access the program. The average monthly caseload dropped from 65,000 families to 22,000 between FY 2005 and FY 2014.18 Spending for the program dropped over 70% in the same period. Yet one of every eight parents in Michigan’s low-income families with young children reported that lack of access to child care had meant someone in the family had to quit a job, not take a job or greatly change a job, according to the National Survey of Child Health (2011-12). High turnover in low-wage employment and Michigan’s pay-by-the-hour subsidy policy compromises both quality and stability in child care.

Opportunities to attend high-quality preschool need to continue to expand in Michigan.

While Michigan dramatically expanded its Great Start Readiness program for 4-year-olds in 2013 and 2014, research shows that starting preschool at age 3 yields cumulative effects, particularly in literacy skills.19 In one study children completing the second year of preschool demonstrated more mastery of decoding and letter recognition than those who attended only one year. Similarly, the 2010 Head Start Impact Study found significant differences in outcomes for children who started the program as 3- or 4-year-olds. The findings suggest that the number of years of participation in Head Start matters and that starting Head Start earlier is associated with stronger and lasting outcomes. “The 3-year-old cohort demonstrated more numerous and sustained outcomes in areas such as cognition, social-emotional development, health factors, and supportive parenting practices.”20

A preschool setting for 3-year-olds, especially those at highest risk, also provides an opportunity to build social-emotional competence at a younger age, as well as influencing parents earlier through modeling positive interactions and connecting them with resources to improve their own physical, emotional and financial well-being. Such comprehensive programs provide support to families at a critical point for both parents and children. These relationships are more difficult to alter once family dynamics become entrenched and children reach the K-12 system with its more formal settings, larger classes and institutional demands.

Smaller classes in the early grades are a key strategy to improve reading skills.

While Michigan’s Great Start to Readiness Program for 4-year-olds mandates one adult to every eight children, some kindergarten classes in Michigan number 30 to 40 with one teacher, according to anecdotal evidence. Unfortunately, such large classes seem to occur more in schools and districts with large concentrations of low-income children. National standards recommend one teacher per 18 students in kindergarten.22

Smaller class sizes in the early grades ease the transition into the K-12 system. Studies have found that smaller classes result in teachers spending less time on discipline and more time on instruction. Furthermore, students are more likely to participate and have more positive relationships with their classmates.23 Even more critical, researchers found that disadvantaged students benefit the most from smaller class size.

Early intervention programs for children and their families can make a critical difference.

A growing body of research shows that early relationships are not only critical to social/emotional development but are closely linked to brain development and physical health—the building blocks of school readiness. Early screenings with standardized tools can identify social and emotional problems in young children so services can be provided as early as possible. Easy and fair reimbursement policies for primary care doctors will encourage screenings.

Emotional health should be viewed as essential as physical health and be part of all programs for young children and their families. Providing proven services that support social and emotional well-being to families, caregivers and preschool providers can ensure the mental health needs of young children in all settings are identified and addressed.

Babies need loving relationships with adults in order to develop social-emotional skills.

Social-emotional skills fostered by stable loving relationships beginning in infancy with caregivers provide a foundation for a child’s ability to make friends, follow directions, control emotions, solve problems and focus on tasks.24 Michigan has been a leader in promoting infant mental health. Currently, more than 1,550 children and their families receive Infant Mental Health Home Visiting services annually (funded through the Community Mental Health system/Medicaid). IMH Home Visiting programs offer weekly home visiting by IMH-Endorsed®, Master-level therapists to Medicaid-eligible families who are at high risk for abuse, neglect or poor parenting. The program serves pregnant women and families with babies from birth through 47 months, including families with children in foster care. The emphasis is on the reduction of risk and enhancement of strengths to better assure that children are ready to learn. Thousands more receive IMH-informed services through programs such as some Early Head Start and Early On programs.25

For Medicaid-eligible children, primary healthcare providers are directed to administer a psychosocial/behavioral assessment and developmental screening at each scheduled well-child visit. Practitioners are advised to use a validated and standardized screening instrument, as recommended by the American Academy of Pediatrics.

Michigan’s early intervention services are limited.

The first three years of a child’s life provide a critical period of opportunity to address and minimize delays in development. Early interventions can decrease future needs for special education and other more intensive services. Such interventions address individual cognitive, physical and social-emotional development, as well as language and speech to strengthen the foundation of learning skills. Developmental screenings are an important mechanism for identifying children with delays. Unfortunately only one of every four parents of young children ages 10 months to 5 years in Michigan reported their child had received a developmental screening during a healthcare visit in the past year.26

Michigan’s Early On program is funded with federal dollars through IDEA Part C.27 The Michigan Department of Education distributes roughly $8 million through formula grants based on child population to the state’s 57 Intermediate School Districts to identify and provide services to eligible children and their families.

In 2013, less than 3% of children ages 0-2 were identified with a disability or developmental delay and received some kind of early intervention service, which could have consisted of a single visit during the year. A 2006 estimate, based on a variety of risk factors, suggested that almost 8% of the state’s infants and toddlers might benefit from early intervention.

Unfortunately federal funding does not cover the services necessary to meet the needs of the children and their families who participate in the program, according to a recent state audit.28 Each state sets its own standard for services eligible through Part C, and Michigan has one of the lowest eligibility thresholds in the nation, despite instituting more restrictions effective July 2010 and not investing any state dollars into the program.29 The audit revealed that many Intermediate School Districts limited services to Part C-only eligible children and did not ensure qualified professionals were providing the services.30 Furthermore, significant differences occur in access and quality of services across districts, which raises issues with equal access, and the state department was not monitoring ISD compliance with federal regulations.

A majority (60%) of Early On-eligible children do not meet the more stringent standards to qualify for services through state-funded Michigan Mandatory Special Education. Children and their families eligible for Special Education services received comprehensive services provided by qualified personnel, according to the audit. Michigan is the only state in the nation that has two different programs with different eligibility standards for services to this age group. To add to the confusion, Early On services are coordinated through the Office of Great Start, while special education services are coordinated through the Office of Special Education.

The lack of services for Part C-eligible children is not a new problem. Comments summarized from public meetings in nine locations throughout the state 14 years ago as part of a report to the U.S. Department of Education noted that available Part C services were “being maxed out with the dollars that are available now.”31 The report cited a need for:

  • training for all stakeholders, including parents, teachers, administrators, and especially general practice physicians;
  • consistent information about available services;
  • system-wide accountability and oversight; and
  • more effective support system for parents of children with disabilities.

These same themes were echoed in the recent audit report. In response to the audit, MDE’s Office of Special Education and Office of Great Start designed a special project that included on-site child file reviews in five ISDs. The results of that investigation are to be shared with MDE’s deputy superintendents.

The steep rise in the numbers of children ages 3-5 eligible for Special Education compared with the youngest children suggests that children might have been in need of services at a younger age but were not identified. The number escalates fivefold between the two age groups—ages 0-2 and 3-5. However, identification is especially difficult during the earliest years as lags in development become more evident as children age, and sometimes families are reluctant to admit their children need special education or have a problem.

Children struggle to learn to read for a variety of reasons, including hereditary conditions such as dyslexia. Dyslexia, which affects 5-17% of school-age children, often causes difficulty in decoding words, slows reading speed and interferes with comprehension of written text.32 It has no known cause and does not reflect a lack of intelligence or motivation. It does not qualify as a disability or a Special Education category, but standard reading instruction techniques do not work for children affected by dyslexia.

Children whose dyslexia is not addressed can face academic problems as standardized testing with timed sequences become more and more prevalent as a way of assessing student achievement. Furthermore, schools generally do not address the special needs of children with dyslexia, and techniques for teaching reading to children with dyslexia are not part of the curriculum at most universities.

Attendance Matters

Another strategy to improve literacy among third-graders is to address chronic absenteeism early—even at preschool. The youngest and oldest students in the K-12 system have the highest levels of chronic absenteeism. For children to learn they must be present—physically and emotionally—in the classroom on a regular basis. Researchers have documented that children who are chronically absent, defined as missing 10% of school days for any reason during the school year, have lower levels of achievement and increased likelihood of dropping out of school.33 Early intervention is critical as children who are often absent tend to be so over multiple years so they fall further and further behind regular attendees.

Until recently few schools reviewed individual attendance. Generally schools would track average daily attendance, but a school can have 90% average daily attendance with 40% of its students chronically absent because different children are absent on different days.34 In some Michigan districts school administrators are focused on addressing the causes of unexcused absences.

According to an analysis of 2011-12 attendance data in districts throughout the state, more than one-quarter of students in at least 10 Michigan school districts missed two full weeks of school with unexcused absences.35 Similar to other states, which have varying definitions of chronic absenteeism, the analysis found rates highest in urban and rural areas where child poverty tends to be more prevalent.

By focusing on children in the early grades, barriers to regular attendance can be addressed early. An analysis of absenteeism among students grades 1-3 in 20 school districts within the Kent Intermediate School District, found that chronically absent children were twice as likely to fall below grade-level reading skills by grade three as regular attendees. Almost one-quarter of children who missed 10% or more of school (18 days) in grades 1-3 scored below the proficiency standard in Grade three reading compared with 12% of students with less than 10% absenteeism.36 The study, which was done in collaboration with the Kent County Services Network, is designed to help leadership formulate a plan to address absenteeism.

Children in early elementary grades are chronically absent for multiple reasons including, but not limited to, illness, transportation, parental physical or mental health and concerns about bullying or safety.

Poverty Matters

Children in low-income families who have the most to gain by regular school attendance also have the greatest barriers, such as illness, transportation, hunger, toothaches, lead poisoning, asthma, housing mobility and homelessness. They also may be more susceptible to bullying or harassment as they change schools more frequently due to instability in parental employment or housing and live in neighborhoods where safe routes to school are an issue. With the decline of neighborhood-based schools, particularly in urban areas of the state, safe-routes-to-school initiatives become more critical as charter schools and schools of choice are not required to provide transportation for their students.

Children in low-income families also are at particularly high risk of lead poisoning due to nutritional deficits, particularly iron and calcium, and the higher likelihood of living in older rental housing units. Between 2005 and 2012 child poverty escalated by roughly one-third in the state, placing more children at risk. In 2013 roughly one of every three children, ages 0-8, lived in families that qualified for the Supplemental Nutrition Assistance Program (food stamps) with income just slightly above the poverty level.

Policymakers usually treat standardized test results, chronic absenteeism and dropout rates as “school” problems that are not related to the strength of other systems such as health, human services, transportation and housing. To its credit, Michigan has supported more than 100 school-based or school-linked health centers, although mostly in middle and high schools.

In addition, under the Pathways to Potential program, the Department of Human Services places workers, called “coaches,” in schools. This outreach began in 2012 as part of a truancy prevention effort in response to high crime rates in four urban areas: Detroit, Saginaw, Flint and Pontiac. As of fall 2014, 160 schools throughout the state host the program. While DHS workers help connect families to services to facilitate school attendance, lack of cooperation by families on cash assistance or continued truancy by their children can result in the termination of the benefits that cover basic needs for the whole family. This approach further deprives all of the children in the family.

Due to such policy changes, many more families now face increased risk of homelessness and hunger. Policies that have imposed lifetime limits on cash assistance for low-wage workers with children fail to recognize the instability of employment in the low-wage sector. Parents who cycle in and out of low-wage part-time jobs to support their families in a period of sustained relatively high unemployment rarely qualify for unemployment benefits so the cash assistance program is the only option. Large numbers of families who subsist on incomes below poverty level do not qualify for the program because of the low eligibility level: Only families with incomes below roughly half the poverty level ($814 monthly) qualify for assistance. The maximum cash assistance grant ($492 a month for a family of three) does not cover the average Fair Market Rent for a family in any Michigan county.

While policymakers have restricted access to programs that address economic insecurity, more initiatives have targeted child health. One of the most successful efforts in the state to address the health needs of low-income children has been the systematic expansion of the Healthy Kids Dental program, a public-private partnership between the Department of Community Health and Delta Dental of Michigan. Now in 80 of the 83 counties, the program features higher payment rates and simplified administration to increase access to dental care for Medicaid-eligible children. The last three counties without HKD are among the most populous and most diverse so it is critical to expand the program to provide equitable access to care. With tooth decay the number one chronic disease among children, HKD is an important investment for the state. Children afflicted by tooth decay and toothaches are more likely to miss school and struggle to concentrate even when present. Poor oral health in childhood also compromises permanent teeth and affects overall health into adulthood.

Recommendations to Improve Literacy Among Early Elementary Children in Michigan

The most rapid and critical development occurs in the first three years of life. Programs that foster maternal and infant mental and physical health in those early years are key strategies to improve physical, cognitive and social-emotional development. Healthy development in the early years provides the foundation for literacy in the early grades.

1. Strengthen and expand existing systems for young children and their families.

  • Infant Mortality Reduction ($2 million/$11 million needed): Roughly 17,000 infants are born too small or too soon each year putting them at risk for developmental delay, chronic disease and even death. Funding the priorities in the Infant Mortality Reduction Plan would increase healthy births. In FY 2015 roughly $2 million was allocated.
  • Childhood lead poisoning prevention ($1.25 million/$11 million needed): Even trace amounts of this substance can stunt cognitive development and affect behavior with lifelong impact. Roughly 4,000 young children ages 0-2 who were tested in 2013 had lead in their systems.
  • Early On ($0/$100 million needed): Early intervention for children with developmental delay or disability can make a critical difference to these children, their families and their communities. Full funding for the program to meet current levels of need would cost an estimated $100 million; currently the state relies only on federal funding of roughly $8 million to provide program services. Addressing conditions that could interfere with school readiness improves opportunities for early literacy.
  • Child care subsidy ($136 million/$500 million needed): Michigan has one of the lowest eligibility levels and reimbursement rates in the country. A good job is the best route out of poverty, but parents who cannot access affordable and reliable child care have difficulties finding and keeping a job. Lack of stability in child care also compromises quality.
  • Preschool for 3-year-olds (flexibility with existing funds): Michigan has made great strides in expanding access to preschool for 4-year olds, but public preschool programs for 3-year-olds in the state are very limited. Research studies document that children who have attended two years of preschool have higher scores for literacy skills than those attending only one year. Allowing ISDs to use GSRP funds to expand access for 3-year-olds and evaluate the outcomes would better tailor funding to community needs and could result in even greater gains in social-emotional development and literacy skills.
  • Healthy Kids Dental ($22 million needed): Medicaid-eligible children in only three counties in Michigan do not have access to Healthy Kids Dental. These also are the counties with the largest populations of children of color. Toothaches and decay interfere with regular attendance and learning. The $22.5 million investment by the state would bring nearly $44 million in federal funds.

 2. Address the connection between poverty and academic achievement.

  • Restore the State Earned Income Tax Credit($252 million needed): This credit rewards work and lifts families above poverty. Currently at 6% from a high of 20% of the federal credit, the additional income can make a crucial difference to child well-being.
  • Reform the criminal justice system and enact policies that reduce disproportionate incarceration of African American males. The impact of the justice system on communities of color is particularly staggering. Mass incarceration is a key driver of poverty. A criminal record can result in lifelong barriers to employment and education.

 

This research was funded by the Annie E. Casey Foundation. We thank them for their support but acknowledge that the findings and conclusions presented in this report are those of the author alone, and do not necessarily reflect the opinions of the Foundation.

 

Endnotes

  1. EARLY WARNING! Why Reading by the End of Third Grade Matters. A KIDS COUNT Special Report from the Annie E. Casey Foundation citing research from The Children’s Reading Foundation.
  2. The Campaign for Grade-Level Reading. http://gradelevelreading.net
  3. Standards are in flux as the MEAP, which was due to be phased out in the 2014-15 school year, was reinstated at the behest of the Legislature in spring of 2014 after a three-year phase-in to a test based on the Common Core Standards.
  4. National Assessment of Educational Progress (NAEP) or the National Report Card provides state-level data on student achievement on various subjects and grade levels based on tests administered every two years to a sample of state students.
  5. Low-income is defined as family income less than 185 percent of the federal poverty level—the eligibility level for free or reduced price in the School Lunch Program ($43,000 for a two-parent family of four). Income data were not available until 2009 in NAEP data.
  6. Krisin Turney. Stress Proliferation Across Generations? Examining the Relationship Between Parental Incarceration and Childhood Health. Presented August 16, 2014, San Francisco, American Sociological Association’s 109th Annual Meeting.
  7. Ibid.
  8. Amanda Alexander. Addressing the Needs of Children of Incarcerated Parents. Presentation. August 2014.
  9. Income eligibility for the Healthy Michigan Plan is set at less than 133 percent of the federal poverty level (up to $15,521 for an individual or $31,721 for a family of four).
  10. Michigan Infant Mortality Reduction plan is available online at http://www.michigan.gov/documents/mdch/MichiganIMReductionPlan_393783_7.pdf.
  11. Jack Shankoff. Center on the Developing Child. Harvard University.
  12. Ron French. Smartest kids: Teaching starts early, with special focus on the poor, in Minnesota. Bridge Magazine. September 14, 2014.
  13. These levels are adjusted periodically by the Centers for Disease Control and Prevention.
  14. Harold Needham et al. The Long-Term Effects of Exposure to Low Doses of Lead in Childhood — An 11-Year Follow-up Report. The New England Journal of Medicine. January 11, 1990. http://www.nejm.org/doi/full/10.1056/NEJM199001113220203#t=articleTop
  15. Liz Ben-Ishai. Access to Paid Leave: An Overlooked Aspect of Economic & Social Inequality. CLASP. April 14, 2014.
  16. Pat Sorenson. Failure to Invest in High-Quality Child Care Hurts Children and State’s Economy. Michigan League for Public Policy. Lansing, MI. September 2014.
  17. Kids Count in Michigan. Michigan Profile 2013. http://www.mlpp.org/kids-count/michigan-2/mi-data-book-2013
  18. Pat Sorenson. Failure to Invest in High-Quality Child Care Hurts Children and State’s Economy. Michigan League for Public Policy. Lansing, MI. September 2014.
  19. Lori E. Skibbea, Carol McDonald Connorb, Frederick J. Morrisonc, Abigail M. Jewkesd. Schooling effects on preschoolers’ self-regulation, early literacy, and language growth. Early Childhood Research Quarterly 26 (2011). pp 42-49.
  20. Child Trends. Research-based Responses to Key Questions about the 2010 Head Start Impact Study. Child Trends Early Childhood Highlights. Volume 2. Issue 1. January 28, 2011.
  21. Hirokazu Yoshikawa et al. Investing in Our Future: The Evidence Base on Preschool Education. http://fcd-us.org/resources/evidence-base-preschool
  22. Sheila Smith, Mercedes Ekono, Taylor Robbins. State Policies through a Two-Generation Lens: Strengthening the Collective Impact of Policies that Affect the Life Course of Young Children and their Parents. National Center for Children in Poverty, Mailman School of Public Health, Columbia University. September 2014.
  23. Gail Braverman. Class size and student achievement: what school leaders must know! Michigan Association of School Boards Journal. Spring 2002 Journal Special Report.
  24. Social and Emotional Health of Children Birth to Age 8 Fact Sheet. www.michigan.gov/socialemotionalhealth
  25. Summary provided by Deborah Weatherston, PhD., IMH-E®Executive Director, MI-AIMH.
  26. National Survey of Child Health 2011/2012 NSCH National Chartbook Profile for Michigan vs. Nationwide.
  27. This program is funded as Part C of the Individuals with Disabilities Education Improvement Act of 2004 to establish an interagency program for coordinating efforts with and across community and governmental agencies to address the needs of children younger than 3 years old who have developmental needs.
  28. Michigan Office of the Auditor General. Performance Audit of Early On – Michigan Department of Education. November 2013. http://www.audgen.michigan.gov/finalpdfs/13_14/r313200012.pdf
  29. Ibid.
  30. Ibid.
  31. Public Sector Consultants, Inc. Fall 2000 Meeting Responses Summary. Part of the U.S. Department of Education’s Continuous Improvement Monitoring Process. Appendix D. January 2001.
  32. Michigan Dyslexia Institute, Inc. https://www.dyslexia.net/WhatIsDyslexia.html
  33. Robert Balfanz and Vaughan Byrnes. Chronic Absenteeism: Summarizing What We Know From Nationally Available Data. Baltimore: Johns Hopkins University Center for Social Organization of Schools. 2012. This source provided all the data cited in this discussion.
  34. Ibid.
  35. Chris Andrews. Michigan’s 91,000 truant students: skipping school, skipping opportunity. Bridge Magazine. October 9, 2013.
  36. Community Research Institute. FINAL REPORT Chronic Early Absenteeism: Prevalence and MEAP Performance in Kent ISD, Kent County, Michigan. Grand Valley University, Grand Rapids, Michigan. 2011. (Attendance data from 2006-09).

Promoting Early Literacy in Michigan

 

We all can agree that children should be provided the supports they need to become literate by the end of the third grade. Most students who fail to reach this critical milestone fall further behind and often drop out before earning a high school diploma. Low-income students are at higher risk of low literacy skills than their peers from higher-income families and well-resourced schools.

INVEST: States that have seen the most dramatic improvements in early literacy have made substantial investments in early interventions. Without additional funding, schools with large numbers of disadvantaged students are hampered in their efforts. For example, the substantial gains in reading proficiency among Florida students were aided by $165 million to support reading specialists and summer programs.

CURRENT SITUATION IN MICHIGAN: Roughly 40,000 of the state’s third-graders did not demonstrate proficiency in MEAP reading in 2013, and 10,000 of those had scores at the most elementary level (4)—NOT proficient.

 

EARLY INTERVENTION IS PREVENTION: Let’s begin by strengthening existing systems for maternal and infant health, child lead poisoning prevention, early intervention for children with disabilities or developmental delays and improved access to subsidized high quality child care. Expanded access to preschool for 3-year-olds and dental care for Medicaid-eligible children would also enhance readiness.

POVERTY: The clear connection between poverty and academic achievement must be addressed. Raising the state Earned Income Tax Credit and strengthening family supports will improve achievement. Parents in low-wage jobs with minimal benefits need family-friendly policies at work and in government programs.

 

A First Look at the Governor’s Fiscal Year 2016 Budget

Governor Proposes Positive Investments Despite Revenue Losses

Gov. Rick Snyder’s budget for Fiscal Year 2016 includes many important investments in families and children, despite lower than expected revenues, including:

  • A new $49 million initiative to improve reading by third grade;
  • $100 million in additional funding for children at risk of falling behind their peers academically;
  • Funding to expand the number of child care licensing inspectors the state needs to keep children safe;
  • Increases in child care provider payments and policy changes that allow families to keep their child care even if their incomes increase;
  • Increased investment in dental payments for adult Medicaid enrollees to promote access;
  • An expansion of dental care to children ages 0-8 receiving Medicaid in the state’s most populous counties of Wayne, Oakland and Kent;
  • An increase in funding for mental health services for people not eligible for Medicaid;
  • $6 million in new funding for community college independent part-time student grants; and
  • Increased funding for universities contingent on limits in tuition increases of 2.8% or less.

Despite these wins for lower-wage families and their children, there are many critical state services that continue to be underfunded, ultimately thwarting the state’s economic growth. Children are living in deeper poverty in Michigan in part because of policy changes that reduced eligibility for income assistance programs – including stringent lifetime caps on assistance and the elimination of income support for an entire family due to the truancy of a single child. Fewer families can receive food assistance and food assistance benefits have been reduced, in part the result of a state asset test. And, while there have been small increases recently in support for public schools, universities and communities, in most cases, they have not fully restored cuts taken during the Great Recession even without factoring in the pressures created by inflationary increases in costs.

While the governor has proposed a balanced budget for 2016, there are many threats to the state’s fiscal health on the horizon. Top among them is the potential loss to the state and its economy if voters do not approve the bipartisan, compromise transportation package, leaving the state with few other options to fix the roads without further depleting scarce state funds needed for other vital state services.

Also acting as an anchor dragging on the state budget are the deep business tax cuts adopted in 2011, along with the expected costs of outstanding business tax credits, which are now projected to be up to $600 million a year through 2030, at a total state cost of $9.4 billion. Without offsetting revenues, cuts of this magnitude could so weaken basic public services in Michigan such as public safety, transportation, education and public health that the state’s economy could be crippled for years to come.

The 2016 Executive Budget

While Michigan’s economy is growing, shortsighted tax policy decisions by state lawmakers created budget shortfalls in excess of $300 million this year and $500 million in the upcoming fiscal year. Most of the shortfall is the result of deep cuts in business taxes that were approved by the Michigan Legislature in 2011 – in the face of known outstanding business tax credits that are expected to be a drain on the budget for many years to come.

As part of the effort to balance the current year budget, the governor issued an Executive Order on Feb. 11 cutting nearly $103 million in state funds, with additional cuts to be taken through mid-year budget-cutting legislation. Together, these cuts will essentially zero out overall funding increases in the current budget year, and many of the reductions are maintained or expanded in the governor’s 2016 budget proposal.

The total budget proposed by the governor is $53 billion, including all state and federal revenue. Over 40% of the budget is supported by federal funds. In addition, Michigan has two major State funds for services: the General Fund ($9.5 billion in the governor’s budget), and the School Aid Fund ($14.4 billion). The School Aid Fund can only be used to fund public education, including more recently postsecondary education.

The governor recommends a $95 million deposit to the state’s “rainy day fund,” bringing the balance to nearly $616 million by the end of the 2016 fiscal year.

Among the governor’s stated objectives for the 2016 budget are investments in: (1) education, with a focus on early learning 0–3; (2) skilled trades; (3) public safety; and (4) health and human services.

SCHOOL AID

The governor’s 2016 School Aid budget includes total state and local funding of $13.96 billion, an increase of $88.6 million over the current year or less than 1%. The governor recommends that in 2016, School Aid revenues be used to fund universities ($205 million) and community colleges ($256.7 million).

In the current fiscal year, approximately $2 of every $3 in the School Aid budget are used for the per-pupil foundation allowance, which is the bedrock of school operations. Other major expenditures include special education (10%), programs for children at-risk of educational failure (2%), and early childhood education programs (2%).

Per-Pupil Funding: Each year the Michigan Legislature determines the level of per-pupil payments school districts will receive. After reductions in the per-pupil payments of $470 between 2009 and 2012, in the current school year districts receiving the minimum payment are still receiving $65 less per pupil than they were in school year 2010-11, and those at the maximum payment level are receiving $390 less per-pupil.

The minimum per-pupil state payment to districts this year is $7,251, while the maximum is $8,099. One goal for school financing reforms adopted in 1994 in Michigan was to close the funding gap, and this year the gap between districts receiving the maximum and minimum payments was reduced to $848 per pupil.

For 2016, the governor recommends:

  • A $75 per pupil increase for all districts, bringing the minimum payment to $7,326 and the maximum to $8,174 ($108 million total investment).
  • A 60% cut in funding for school districts implementing best practices, from $75 million to $30 million. The best practices criteria are changed by the governor to focus on school district fiscal stability, as well as early reading and kindergarten entry assessments.
  • The elimination of funding for performance grants ($51 million).

Although the governor proposes an across-the-board increase of $75 per pupil, for some districts that will be offset by the loss of funding from best practices or performance grants. Some districts could actually lose per-pupil funding if they are currently receiving both best practices and performance grants.

Funding for School Districts in Fiscal Distress: The governor proposes a significant increase in funding for financially struggling school districts. The 2016 budget includes $75 million for districts with severe academic and fiscal stress, although details on how those funds would be allocated are still to be determined, based on recommendations from a coalition of business, academic and civic leaders.

At-Risk Programs: Michigan provides funds to school districts for a range of instructional and noninstructional services for at-risk students based on the number of children qualifying for free- and reduced-price meals. This year, budget language was adopted to focus those dollars on: (1) improving third-grade reading proficiency; and (2) graduating students who are career and college ready. Funding for at-risk students has not been increased in over a decade, remaining at $309 million.

For 2016, the governor recommends:

  • An additional $100 million for at-risk students, bringing total funding to $409 million.
  • A continuation of current year funding for adolescent health centers ($3.6 million) and hearing and vision screenings ($5.2 million).

Early Childhood Education and Care: Over the last two years, Gov. Snyder and the Legislature approved a $130 million increase in funding for the Great Start Readiness preschool program for low-income and at-risk 4-year-olds. For 2016, the governor proposes a budget that addresses school readiness and third-grade reading proficiency comprehensively, starting in the earliest years of life.

For 2016, the governor recommends:

  • Continued funding for the Great Start Readiness program ($239.6 million).
  • A new third-grade reading initiative with total funding of $48.6 million ($25 million state funds) that includes:
    • An expansion of home visits to at-risk families to encourage early literacy activities and identify children with disabilities and developmental delays, with funds going to Intermediate School Districts ($5 million).
    • New funds for parent education pilot programs for families with children under age 4. The programs would be open to families regardless of income, with fees on a sliding scale ($1 million).
    • Funding to test new elementary teachers on reading instruction capabilities prior to their certification to teach, as well as professional development for current teachers ($1.45 million).
    • Funds to train teachers and administrators in the use of literacy diagnostic tools ($1.45 million).
    • Funding for additional instruction time for students who need extra assistance with reading, including assistance before, during and after school, as well as summer school programs ($10 million).
    • New literacy coaches for K-3 teachers, coordinated through Intermediate School Districts ($3 million).
    • Funds to implement the Kindergarten Entry Assessment ($2.6 million).
  • A new oversight commission outside of state government to monitor progress toward improving third-grade reading proficiency. The governor’s proposal is based on a model in Kentucky where the commission has business and philanthropic support and leadership.

Career and College Readiness:

For 2016, the governor recommends:

  • Continuation funding of $22 million for adult education. Michigan has cut state funding for adult education drastically in the past 20 years, from $185 million in 1996 to $22 million this year. The state is currently in the process of changing how it allocates those funds statewide, focusing on the percentage of people in a region who are not high school graduates or lack basic English proficiency.
  • An expansion of career and technical education through early/middle college programs in the 10 prosperity regions ($17.8 million) as part of a total $36 million investment in the governor’s new talent initiative.
  • Funds to expand the level of awareness of available college and career choices and increase the number of college advisors in schools ($2.2 million).

EDUCATION

The budget for the Michigan Department of Education grew significantly in 2012 with the launching of the Office of Great Start and the transfer of the state’s subsidized child care program from the Department of Human Services. Two of every $3 spent by the Department are from federal sources, with the Child Development and Care program accounting for $110 million (38%) of the total $287 million budget.

Overall funding for child care, as well as the number of families served by the child care program, fell steeply in recent years, in part because of changes in state policy and reimbursement rates that fall far below market rates. The governor’s budget begins to address those problems by providing funds to increase rates slightly and by allowing families to remain eligible for child care even, if their incomes rise in some circumstances.

For 2016, the governor recommends:

  • A new policy that would allow families to remain eligible for child care for up to one year, even if their incomes rises. The goal is to provide greater work and child care stability ($16 million).
  • In addition, once families are eligible for care under Michigan’s current low-income guidelines (121% of poverty), they could remain eligible until household income exceeds 250% of poverty ($1.5 million).
  • A rate increase for higher quality child care providers of approximately 25 cents per hour. This year, small rate increases were given to providers who received three, four or five stars on the state’s quality rating system. For 2016, the governor proposes to also provide increases for providers earning two stars ($6.1 million).
  • A 50% expansion in the number of child care licensing inspectors needed to ensure basic health and safety in child care settings. The governor includes $5.7 million to reduce the number of providers each child care licensing inspector is responsible for from approximately 150 to 98. Michigan has come under federal scrutiny for its failure to ensure compliance with child care licensing rules, and recent federal law changes require states to do both prelicensure and annual inspections.

HUMAN SERVICES

The governor’s fiscal year 2016 budget includes $5.73 billion in total funding for the Department of Human Services (DHS), including $978.9 million in state dollars, a reduction of 0.4% from initial current year funding of $5.75 billion.

The single largest program in the human services budget is the federally funded Food Assistance Program, which accounts for 45% of total departmental spending. Federal funds account for nearly 80% of the DHS budget, up from 70% in 2004. Other major programs include children’s services (20%), administration and field operations (18%) and other public assistance programs (8%).

Income Assistance: The Family Independence Program (FIP) provides minimal income assistance to low-income households with dependent children. To be eligible for FIP, an average family of three must have income below $9,780 annually and financial assets of less than $3,000. The maximum benefit for a family of three is $492 per month.

For 2016, the governor recommends:

  • A 6% cut from current year FIP spending (from $146.6 to $138 million), partly due to a reduction in the number eligible, which the governor projects will be 31,400 families next year. Policy changes made in 2011 resulted in dramatic decreases in FIP cases, despite continued high poverty rates, particularly among children. Between 2007 and the current budget year, spending on income assistance declined by 66%.
  • An expansion of the Pathways to Potential program with $20.6 million in private contributions and federal funding. In addition to schools, staff will be located in health clinics, hospitals and with private employers to determine eligibility and assistance obtaining services.
  • Elimination of Extended-FIP that gives households who are no longer eligible for income assistance due to increased earnings a nominal $10 per month in assistance for six months after they leave the program, ostensibly to help them access other state services as well as allowing the state to continue counting the households in its federally mandated work participation rate. This minimal assistance does, however, count against the state’s more stringent lifetime limits and could hurt children in the long run.
  • Continued funding of $2.88 million for the annual children’s school clothing allowance. The assistance is available only for children who are living with grandparents and others who are not eligible for assistance.

Food Assistance: The Food Assistance Program (formerly the Food Stamp Program) is completely federally funded, with an average monthly benefit for a two-person household of $245. More than 70% of FAP recipients receive no other cash assistance from the state. The number receiving food assistance began to fall in Michigan in 2011, the same year that the state imposed a new asset limit. Between fiscal years 2011 and 2015, cases dropped by 13%.

Beginning Oct. 1, 2014, food assistance recipients no longer receive $1 in federal energy assistance (LIHEAP) that previously helped recipients claim the maximum utility deduction, which subsequently increased their food assistance. The 2014 federal Farm Bill increased the required amount of LIHEAP funding for eligibility purposes from $1 to $20, which essentially left states with the option of increasing the minimum energy assistance benefit to $20, or accepting food assistance cuts for many Michigan residents, along with the associated loss of federal funds. Michigan chose the latter.

For 2016, the governor recommends:

  • Continuation funding of $2.56 billion for food assistance.
  • No change in the policy that rejects additional federally funded food assistance because of a needed increase in the minimum energy assistance benefit.
  • No change in the asset test that was imposed on individuals applying for federal food assistance, and which is a state option.

State Disability Assistance: The State Disability Assistance program, a completely state-funded program, provides cash assistance to adults with disabilities who are permanently or temporarily unable to work and who have annual incomes of less than $5,400 and under $3,000 in assets. The average monthly payment for a single person is $225 per month, and the average length of time on SDA is approximately one year.

Between 2011 and 2012, the number of people receiving state disability assistance fell by 14% and has steadily declined since. There was a 35% drop in the number receiving assistance between fiscal years 2011 and 2015.

For 2016, the governor recommends:

  • A small increase in funding for the State Disability Assistance program – up from $14.4 million this year to $14.89 million in 2016.

Energy Assistance: Michigan uses federal Low-Income Home Energy Assistance Program (LIHEAP) block grant funding for four programs: the Home Heating Credit, State Emergency Relief, the new Michigan Energy Assistance Program, and weatherization.

For 2016, the governor recommends:

  • Continuation of current year spending of $175 million in federal funds for energy assistance.
  • Continuation funding of $50 million for the Michigan Energy Assistance Program, which was created in response to a state law (P.A. 615 of 2012) requiring DHS to establish a new consolidated program with a single, simplified application.

Child Welfare Services: Michigan’s child welfare system includes protective services, foster care, adoption, and family preservation and prevention services. To comply with requirements related to a lawsuit against the state for its failure to protect children, the state has been required to increase child welfare funding for staffing, training and other programs.

For 2016, the governor recommends:

  • FOSTER CARE: A reduction in foster care payments attributed to a decline in number of children under state supervision. The governor’s budget recommends a change in the foster care payment system to focus on actuarially sound rates and performance-based outcomes.
  • CHILD CARE FUND: A decrease of nearly 3% for the Child Care Fund (from $182.2 to $177.3 million). The Child Care Fund reimburses counties for 50% of their costs related to the care and treatment of children who are wards of the court, including out-of-home and in-home services. In the current fiscal year, several foster care rate increases were implemented that deviate from the 50/50 cost-sharing arrangement. The governor’s budget reduces the private agency administrative rate from $40 to $37 per day, and returns to a 50/50 state and county cost-sharing model to save $10.4 million ($8.7 million state funds).
  • ADOPTION: A 3% decrease from the initial current year funding for adoption subsidies (from $247.7 to $239.9 million). Subsidies are provided to families who are adopting children with special needs and include both cash and medical assistance. The number of families receiving adoption subsidies has been relatively stable since fiscal year 2011, between 26,000 and 27,000. The governor’s budget includes savings of $6.9 million ($6.5 million state funds) by restricting eligibility for a supplemental payment now available to parents whose children display additional medical needs after adoptions are completed.
  • YOUTH IN TRANSITION: $15 million for Youth in Transition programs, a slight decrease from initial current year funding. The Youth in Transition program assists 14- to 20-year-olds who are currently or were previously in foster care. Funds are used to provide independent living services, housing assistance, education or employment support, mentoring and other assistance to meet basic needs. Youth in Transition dollars also fund intervention programs for runaway or homeless youths. The governor’s budget continues the practice of setting aside $750,000 for Fostering Futures Scholarships for youths attending college in the state.
  • PREVENTION SERVICES: The governor’s budget provides continuation funding for Strong Families/Safe Children ($12.35 million), as well as $38.86 million for family preservation programs, including Families First ($16.98 million), Child Protection and Permanency ($12.89 million) and Family Reunification ($6.49 million).

Juvenile Justice Services: The governor recommends slightly decreased funding for the state’s three DHS-operated juvenile justice facilities: W.J. Maxey Training School, Bay Pines Center and Shawono Center. Funding previously provided to expand in-home community care programs to rural areas is reduced by 60%, from $1 million to $400,000.

COMMUNITY HEALTH

The governor’s budget recommends a mixture of initiatives, funding and program reductions, and significant funding shifts. Total recommended funding for the Department of Community Health is $19 billion, including $3 billion in state funds, which is lower than the initial appropriation for the current budget year. The bulk of DCH’s funding is for the state’s Medicaid and Healthy Michigan Plan programs (78%), followed by mental health and substance abuse services (16%). In 2016, federal funds will make up over 70% of the DCH budget.

Medicaid and Healthy Michigan Plan: Nearly one in every four Michigan residents relies on Medicaid or the Healthy Michigan Plan for healthcare coverage. In the current budget year, the governor projects that 1.7 million Michigan residents will be covered by Medicaid, with an additional 540,000 recipients enrolled in the Healthy Michigan Plan. The governor’s budget for 2016 projects a very small increase in Medicaid enrollees (about 13,000) and continued growth in Healthy Michigan Plan (40,000) enrollees (40,000), bringing total enrollment for the Healthy Michigan Plan to 580,000.

For 2016, the governor recommends:

  • Continuation of $100 million savings in state funds for Medicaid based on lower projections of the number of persons who will be enrolled in the current year.
  • $3.5 billion for the Healthy Michigan Plan, which is financed with all federal funds for the final year. For the program to continue, Michigan must submit a second waiver to the federal government and it must be approved by the end of 2015.
  • Removal of prescription drugs from the Medicaid managed care contracts and development of a separate pharmacy benefit contract. This proposal is expected to generate higher drug rebates, as well as administrative savings for a total of $22.1 million in state funds.
  • $36.8 million for autism services, restoring the reduction made in 2015 due to the slow start of the program. The budget also recommends increasing coverage to age 21 from the current age 6. One-time funding is continued to train autism services providers through Michigan State University, Western Michigan University, Central Michigan University, Oakland University and Eastern Michigan University. Total funding for training is reduced from $7 million to $2.5 million, with $500,000 allocated to each university.
  • Funding of $8.3 million in state funds ($24.2 million in total) to provide full-year funding to continue approximately half of the rate increase for primary care providers. This critical state investment is intended to encourage primary care doctors to serve the Medicaid population.
  • Funding is recommended starting July 1, 2015, to develop a statewide managed care contract for dental services for adult Medicaid enrollees to increase dental access for adults. An investment of $23 million, of which $7.9 million is state funds, is recommended and is financed from savings in other program areas.
  • Elimination of $11 million in total payments, $3.8 million from state funds, to rural hospitals for the special payment implemented in the 2015 budget year for obstetrical services.

Healthy Kids Dental: Michigan currently provides enhanced dental services to more than 600,000 children in 80 counties. Access to dental services is essential to prevent tooth decay, the No. 1 chronic disease in children. Healthy Kids Dental improves access to care by partnering with Delta Dental of Michigan to increase provider reimbursement rates and simplify administration. With the expansion in in 2015, all counties are now covered except Wayne, Kent and Oakland.

For 2016, the governor recommends:

  • Expansion of the Healthy Kids Dental program to an additional 210,000 children ages 0 through 8 in Kent, Oakland and Wayne counties with an investment of $15.7 million ($5.4 million in state funds). With this expansion, the program would cover over 800,000 children, but not all eligible children in the state. Yet to be covered would be more than 170,000 older children in Wayne, Oakland and Kent counties.

Mental Health and Substance Abuse Services: Implementation of the Healthy Michigan Plan resulted in dramatic reductions in the state funds needed to serve those not eligible for Medicaid, as the vast majority of individuals were expected to transition from state-funded services to Healthy Michigan Plan services, which are 100% federally funded. The transition has not been smooth, and concerns have been raised that state funding reductions were too large and too fast.

For 2016, the governor recommends:

  • Restoration of $20 million in state funds to cover services provided to those not eligible for Medicaid or the Healthy Michigan Plan.
  • Funding to continue to implement the recommendations of the Mental Health and Wellness Commission ($12.7 million in state funds of which $1.5 million continues to be one-time funding).

Public Health and Children’s Services: Two of every $3 spent on public health services is federal. Over the last decade, nearly all increases in total public health funding have been from federal grants or other sources, while state investments have not been made.

For 2016, the governor recommends:

  • Restoration of the $1.5 million increase provided in the 2015 budget to local public health departments for essential services, which was subsequently eliminated in Executive Order reductions. The governor’s recommendation brings funding for local public health essential services to the level it was 10 years ago.
  • Continuation funding for a pilot program begun in 2015 to improve child and adolescent health services by working with existing school-based clinics to develop satellite locations that will provide nursing and behavioral health services ($2 million in one-time funding).

Services for the Aging: The governor’s budget continues funding of $84 million for senior in-home and nutrition services. The state is working to become a “no wait” state for services.

For 2016, the governor recommends:

  • Expansion of PACE (Programs for All-Inclusive Care for the Elderly) to more areas, funded through corresponding savings in nursing home costs.

POSTSECONDARY EDUCATION

Because Michigan does not have a state agency that exercises financing or policy authority over its universities and community colleges, the Legislature funds those institutions through the Higher Education and Community Colleges budgets.

Michigan’s three existing financial aid grant programs (the Tuition Incentive Program, the Competitive Scholarship and the Tuition Grant) are funded through the Higher Education budget, even though community college students may also apply for and receive those grants. The reinstatement of a grant for adult learners has been proposed in the community college budget.

For 2016, the governor recommends:

  • No funding increases for the three major financial aid grant programs – the first time in many years that the Tuition Incentive Program has received no increase. However, the community college budget funds, for the first time since 2009, the Part-Time Independent Student Grant, which helps older students. None of the grants currently funded through the higher education budget are available to students who have been out of high school for more than 10 years. Of the total funding for the higher education budget grant programs, $98.3 million comes from the federal Temporary Assistance for Needy Families allocation, while $7.8 million comes from the state’s General Fund.
  • A 1.4% increase ($4.3 million) in total operational funding for Michigan’s 28 community colleges, half of which is distributed as performance funding for weighted degree and certificate completions, enrollment and administrative costs as a percentage of core expenditures. This is a smaller increase than in 2015, which was a 3% increase of $8.9 million, or 3%. As in previous recent years, the majority of overall funding for community colleges (which includes not only operational and financial aid funding, but retirement funding, etc.) comes from the School Aid Fund, and only 35% ($137.1 million) is from the General Fund.
  • A total increase in funding for university operations of $28 million (2%) over the current fiscal year. As in previous recent years, this increase is in the form of performance funding using the following metrics: weighted undergraduate completions in critical skills areas, research expenditures, six-year graduation rates, total completions, administrative costs as a percentage of core expenditures, and the percentage of students receiving Pell Grants. The budget continues the practice of requiring universities to limit tuition increases in order to receive any performance funding, but has lowered the limit from 3.2% to 2.8%. This “tuition restraint” prerequisite for receiving performance funding helps to keep post-secondary education affordable for low-income students.

CORRECTIONS

The governor reduces funding for the Department of Corrections by 3%, from $2.04 billion this year to $1.98 billion in 2016. The majority of the funding is for prison operations (76%), followed by parole, probation and community services (16%) and administration (6%). In the current fiscal year, more than 97% of the MDOC budget comes from state funds.

The corrections budget is the state’s second largest in terms of its share of state General Fund dollars. After about two decades of strong growth, corrections funding has grown modestly as the prisoner population has stabilized. Increased spending is mostly driven by increased costs in prisoner health and mental health care.

Prisoner Healthcare: Most prisoner inpatient hospitalizations, certain services for mentally ill and medically fragile inmates, and some re-entry services are now covered by Medicaid, which when expanded allowed an estimated 80% of inmates and parolees to obtain Medicaid for covered services outside of secure facilities.

For 2016, the governor recommends:

  • $309.4 million for prisoner health care services, the vaccination program, substance abuse testing and treatment, and clinical and mental health services and support.
  • $1.08 million for administrative costs related to eligibility determination and enrollment in the Healthy Michigan Plan.

Prisoner Education: State prisoner re-entry programs include education services to facilitate reintegration into the community. Prisoner education programs aim to provide marketable skills to offenders through academic, workplace and social competency training. In 2014, the governor signed legislation to allow qualifying parolees who complete a career or technical education course to receive a certificate of employability to help the parolee obtain a job upon re-entry to the community (PA 359).

For 2016, the governor recommends:

  • A total of $35.9 million for prisoner education programs, which is an increase of $500,000 due to additional federal funds.

Parole, Probation and Community Programs: MDOC currently supervises about 47,000 offenders on felony probation and more than 14,000 offenders on parole.

For 2016, the governor recommends:

  • $323 million in total funding ($304 million General Fund) for parole, probation, and community programs, down approximately 7% from initial current year. Changes include the elimination of the Goodwill Flip the Script program ($2.5 million), the transfer of the jail mental health diversion project to the Department of Community Health ($1 million) and other reductions in re-entry services.

Mental Health Diversion Council: The governor created the Mental Health Diversion Council in 2013, tasking the council with developing methods to divert individuals with mental illnesses or substance abuse problems from the criminal justice system and into appropriate treatment.

For 2016, the governor recommends:

  • Transfers funding ($1 million) to the Department of Community Health to streamline mental health diversion programs and services. The current year budget funded a pilot project to connect inmates with appropriate mental health treatment as they are released into the community.

 

 

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