Reports


Healthy Michigan Plan: A Great Deal for the State and Its Residents

 

The Healthy Michigan Plan, an expansion and modification of the Medicaid program, provides comprehensive healthcare coverage to Michigan’s low-income, uninsured residents. The program was implemented April 1, 2014, and by the end of the first year achieved an unprecedented enrollment of 600,000 residents, surpassing all projections.

For calendar years 2014, 2015 and 2016, the federal government pays 100% of the cost of the program. In calendar year 2017, the state must contribute 5% of the cost, still a great deal for the state.

The program is currently operating under a federal waiver, and state law specifies a second, more difficult waiver must be approved for the program to continue after April 2016.

 

WHO IS ELIGIBLE?

Individuals between the ages of 19 and 64, not currently eligible for Medicaid or Medicare, who:

  • Are citizens or lawfully admitted to the U.S.,
  • Are not pregnant at the time of application, and
  • Have incomes less than 133% of the federal poverty level (up to $15,521 for an individual or $31,721 for a family of four).

WHAT SERVICES ARE COVERED?

The comprehensive services required by the Affordable Care Act, including doctor visits, prescriptions, hospital services, lab services, X-rays and maternity services—plus additional key services such as dental, vision, hearing, and enhanced mental health and substance use disorder services are covered. Most people will select and be enrolled in the managed care plan of their choice.

WHAT DOES IT COST?

After the first six months, nearly everyone enrolled in the program will be responsible for copays, for certain services such as doctor visits ($2), prescriptions ($1 or $3) or dental services ($3). Copay amounts are the same as the current Medicaid program. There are no copay requirements for preventive services or emergency services. Copays can be waived for services that allow enrollees to better manage chronic diseases or prevent complications.

(Note: Calculation of the monthly copay amount starting in the seventh month of participation will be based on usage over the prior six months.)

Individuals with incomes between 100% ($11,770 for an individual, $24,250 for a family of four) and 133% of the federal poverty level are required to make an income-based contribution to a MI Health Account. This amount will be up to 2% of annual family income, and must be contributed on a monthly basis beginning the seventh month of enrollment. Contributions are not required during the first six months of enrollment. Contributions can be made by the enrollee, by an employer, charitable organization, family member or other entity on the enrollee’s behalf.

Both the copay amounts and the 2% contributions can be reduced with “healthy behaviors,” which include completing an annual health risk assessment and agreeing to address or maintain healthier behaviors, such as weight loss, smoking cessation, obtaining immunizations, follow-up and managing chronic diseases. Together the cost-sharing cannot exceed 5% of family income.

WHAT HAPPENS WHEN REQUIRED PAYMENTS ARE NOT MADE?

The plan approved by the federal government specifies that no enrollee will be terminated from the program for failure to pay copays or contributions into the MI Health Account. However, those who do not make required payments could lose their “healthy behavior” reductions, or be referred to the Michigan Department of Treasury for collection from tax refunds.

HOW WILL PAYMENTS BE MADE?

Required copays and contributions are detailed on the MI Health Account statement and can be paid by U.S. mail or through the online payment system. Copays will not be made at the time a service is provided; they will be paid monthly based on the prior six months’ service usage.

WHAT IS THE ENROLLMENT PROCESS?

A streamlined application and eligibility process, using the new tax-related income methodology and no asset test, is used. Applications are available online, by phone or in-person.

Healthy Michigan Plan second waiver

Background

To implement the Healthy Michigan Plan, the state’s expansion and modification of the Medicaid program under the Affordable Care Act, the state law required the Department of Health and Human Services (then the Department of Community Health) to obtain two waivers (permission to implement programs in new ways usually through the use of a new policy or procedure not currently permitted) from the federal government. The first waiver was approved on December 30, 2013, and continues through December 31, 2018. Provisions of the first waiver:

  • Changed the way copays were calculated and collected, but not the amounts that otherwise would have been collected;
  • Established protocols and procedures for healthy behavior activities and incentives;
  • Required beneficiaries with incomes between 100% and 133% of the federal poverty level (FPL) to contribute 2% of family income to help pay for services, with an opportunity to reduce the payment, based on “healthy behaviors”;
  • Guaranteed that no one would lose eligibility for failure to pay copays or the income-based payment but that consequences for nonpayment would be established.

Second Waiver Content

The second waiver is expected to be more difficult to obtain as it is not clear if there is a federal waiver option that meets the requirements of the state law and does not violate federal law or regulation. The state law specifies that enrollees who have been covered by the Healthy Michigan Plan for 48 cumulative months and have incomes between 100% and 133% FPL must choose to:

  • Remain in the Healthy Michigan Plan with higher cost-sharing—increased from the current 5% to 7% of family income (the current federal maximum is 5%)—with the income-based payment increasing from 2% to 3.5%, again with the opportunity to reduce through “healthy behaviors,” or
  • Enroll in coverage through the federal Health Insurance Marketplace and receive federal premium subsidies and cost-sharing reductions. These individuals may lose the additional services (e.g., dental, nonemergency transportation, enhanced mental health benefit) provided by the Healthy Michigan Plan that are not included in Marketplace insurance plans.

Potential Number of Beneficiaries Impacted by Second Waiver

  • The Healthy Michigan Plan law specifies individuals who have been covered by the plan for 48 cumulative months and have incomes between 100% and 133% FPL are impacted by the second waiver, but the law does not specify if the enrollee must have had income over 100% FPL for each of the 48 months.
  • On a monthly basis, about 15% to 18% of the enrollees have incomes over 100% FPL and could potentially be impacted by the second waiver. The remaining 82% to 85% of enrollees in the Healthy Michigan Plan would not be impacted but would lose their coverage if the second waiver is not approved and the Michigan Legislature does not act to continue the program.
  • With enrollment hovering around 600,000 individuals, just over 100,000 have incomes over 100% FPL, while just under 500,000 individuals have incomes at or below 100% FPL.

 Actions to Date

  • A concept paper was submitted to the federal government on May 27, 2015.
  • Discussions have occurred and continue between federal officials and state policymakers.
  • A public hearing was held in June with public comments due to the state by July 31, 2015.

Impacts of Waiver Inaction or Rejection

  • The current state law calls for the Healthy Michigan Plan to end on April 30, 2016, and about 600,000 Michigan residents would lose their healthcare coverage even though the waiver provisions apply only to those with incomes between 100% and 133% FPL.
    • Letters must be sent to ALL beneficiaries by January 31, 2016, notifying them the program will end on April 30, 2016.
  • The first beneficiary cannot reach 48 months of enrollment until April 2018, 48 months after the implementation of the Healthy Michigan Plan, but without approval of the second waiver, the program would have been terminated two full years before the first beneficiary could have met the criteria in the second waiver.

Options to Continue the Healthy Michigan Plan Without an Approved Second Waiver

  • The Legislature could modify the Healthy Michigan Plan law to meet the conditions required by federal law and regulation.
    • Amending the law would have to be completed quickly (in as short a time as one month, and prior to January 31, 2016) to ensure enrollees are not notified the program is ending and create chaos.
  • The Legislature could modify the Healthy Michigan Plan law and simply strike the requirement of the second waiver and all related provisions.

 

2016 Community Health Budget Continues Key Investments

 

The 2016 budget for the health programs within the Department of Health and Human Services continues key investments, and includes few of the program reductions and funding shifts recommended by the governor.

The vast majority of health funding, nearly 90%, is for the state’s Medicaid-funded programs, including the Healthy Michigan Plan and Medicaid-funded mental health and substance abuse services. In 2016, federal funds will make up over 70% of the health component of the budget.

Medicaid and Healthy Michigan Plan

Nearly one in every four Michigan residents is enrolled in Medicaid or the Healthy Michigan Plan for healthcare coverage. Implementation of the Healthy Michigan Plan together with enrollments through the Marketplace have dramatically reduced, from 14% to 7%, the number of uninsured adults in Michigan according to a survey by the Center for Healthcare Research and Transformation.

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 proposed budget for 2016 projected a very small increase in Medicaid enrollees (about 13,000) and continued growth in Healthy Michigan Plan enrollees (40,000), bringing total average enrollment for the Healthy Michigan Plan to 580,000.

Medicaid Caseloads

The governor recommended the 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.

  • The House and Senate concurred with the governor’s recommendation.
  • Final Budget: Based on the May Revenue Estimating Conference, the projected Medicaid caseload was increased for both the 2015 and 2016 budget years, and additional funding of $46.6 million in state funds, $190.2 million in total funds, was recommended for 2016. The Legislature adopted the consensus recommendations.

Healthy Michigan Plan Funding

The governor recommended $3.5 billion for the Healthy Michigan Plan (including behavioral health services), which is financed with all federal funds for the final year. For the program to continue after April 30, 2016, Michigan must submit a second waiver to the federal government by September 1, 2015, and it must be approved by the end of 2015. The second waiver requires increased cost-sharing for those with incomes between 100% and 133% of the federal poverty level who have been enrolled in the program for 48 months.

  • The House and Senate concurred with the governor’s recommendation.
  • Final Budget: Based on the May Revenue Estimating Conference, the Legislature increased Healthy Michigan Plan funding to $4.1 billion, all federal funds, as the caseload continues to increase.

Prescription Drugs

The governor recommended the removal of prescription drugs from Medicaid managed care contracts and the development of a separate pharmacy benefit contract. This proposal was expected to generate higher drug rebates based on higher purchasing volume, as well as administrative savings, for a total of $16.8 million in state funds.

  • House: The House rejected this proposal and retained the pharmacy benefit in the managed care contracts with changes, including the adoption of a single formulary (list of covered drugs) and shared pharmacy rebates with the state. The House assumed greater state savings of $2.0 million than did the Senate.
  • Senate: The Senate agreed with the House, but retained the Executive recommended savings.
  • Final Budget: The Legislature adopted the House recommendation.

Autism Services

The governor recommended $36.8 million for autism services, restoring the reduction made in 2015 due to the slow start of the program. The Executive Budget also recommended increasing coverage through 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.

  • House: The House concurred with expansion of services to Medicaid beneficiaries through age 21, but eliminated all but $100 of the university funding.
  • Senate: The Senate concurred with the governor.
  • Final Budget: The Legislature concurred with the Senate, but moved the university funding from one-time funding to ongoing funding to eliminate the uncertainty that one-time funding creates.

Increased Payments to Primary Care Providers

The governor recommended $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 implemented in 2013 to increase access. Full federal funding for this initiative ended in December 2014, so an additional state investment is required to continue this rate increase in 2016. This critical state investment is intended to encourage primary care doctors to serve the Medicaid population, particularly with the coverage expansion under the Healthy Michigan Plan.

  • The House and Senate concurred with the governor.
  • Final Budget: The Legislature adopted the governor’s recommendation.

Adult Dental Services

The governor recommended funding, effective July 1, 2015, to develop a statewide managed care contract for dental services for adult Medicaid enrollees to increase dental access for adults. Currently adult Medicaid beneficiaries experience great difficulty finding a dental provider who will accept Medicaid. An investment of $23 million, of which $7.9 million would have been state funds, was recommended and was financed from savings in other program areas. The total annual cost of the program would have been $92 million, of which $31.7 million would be state funds.

  • House: The House included only a $100 placeholder for this initiative to ensure discussions in the joint House/Senate conference committee.
  • Senate: The Senate supported the policy but delayed implementation to September 1, 2016, to reduce the cost in budget year 2016.
  • Final Budget: The Legislature did not include funding for this initiative, instead using the funding to increase the number of children covered by Healthy Kids Dental (see below).

Healthy Kids Dental Expansion

For 2016, the governor recommended 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 $21.8 million ($7.5 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 Kent, Oakland and Wayne counties.

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 2015, all counties are now covered except Kent, Oakland and Wayne.

  • House: The House concurred with the governor.
  • Senate: The Senate delayed coverage until July 1, 2016, but covered all children in Kent, Oakland and Wayne counties.
  • Final Budget: The Legislature expanded coverage to more than 290,000 children ages 0 through 12 in Kent, Oakland and Wayne counties, adding $37 million in total funds, of which $12.7 million are state funds. With the higher caseload projections, this still leaves about 130,000 children behind.

Hospital Obstetrical Services Payments

The governor recommended the 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. To stop the erosion of obstetrical services in Michigan hospitals, the Legislature created a special payment for qualifying rural hospitals in the current budget year. Over the last few years, a number of hospitals have closed their OB units and there are now 17 contiguous counties in northern and mid-Michigan with no hospital OB units. The special payment is to stop more closures, not reopen any units that have closed.

  • The House and Senate both rejected this recommendation and retained the funding.
  • Final Budget: The Legislature retained funding for this special payment to encourage rural hospitals to maintain their obstetrical units.

Hospice Room and Board Payments

The governor recommended no change in funding for hospice room and board payments, which were discontinued in budget year 2014 when federal funds were no longer available to cover a portion of the cost.

  • House: The House included a $100 placeholder to continue consideration.
  • Senate: The Senate restored funding of $3.4 million, all state funds.
  • Final Budget: The Legislature included $2.5 million, all state funds, but specified the funding is “one-time.”

Mental Health and Substance Abuse Services

The governor recommended continued restoration of $20 million, all state funds, as included in the current budget year supplemental to cover community mental health and substance abuse services for persons not eligible for Medicaid or the Healthy Michigan Plan.

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 continue that state funding reductions were too large and too fast. An increase of $20 million was included in the current year supplemental appropriation in recognition of the significant funding shortfalls to provide needed services to those not eligible for Medicaid or the Healthy Michigan Plan.

  • The House and Senate concurred with the governor.
  • Final Budget: The Legislature adopted the governor’s recommendation.

Mental Health and Wellness Commission

The governor included funding to continue implementation of 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). The governor’s budget for 2016 eliminated all but $1.5 million of the one-time funding included in the 2015 budget. This one-time funding would be used to fund programs in the current year that were delayed by a budget-cutting Executive Order, and to establish a transition program for children who have had multiple hospitalizations at Hawthorn Center, the state’s mental health facility for children.

  • House: The House concurred with the reduction in one-time funding and also delayed the children’s transition program by six months and reduced funding correspondingly.
  • Senate: The Senate included a placeholder of $100 for one-time funding, proposed a further delay of nine months for the children’s transition program, and recommended about half of the ongoing funding for Commission recommendations be replaced by Michigan Health Endowment funding, which is controlled by the Board of the Michigan Health Endowment Fund.
  • Final Budget: The Legislature concurred with the Executive recommendation, but delayed the children’s transition program until the last quarter of budget year 2016.

Public Health and Child and Adolescent Health Services

For 2016, the governor’s proposed budget restored a $1.5 million increase that was originally provided in the 2015 budget to local public health departments for essential services, but was subsequently eliminated in Executive Order reductions. The governor’s recommendation brought funding for local public health essential services to the level it was ten years ago.

The governor’s proposed budget also eliminated funding for a pilot program that began 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).

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 despite numerous emergency and ongoing needs.

  • The House and Senate concurred with the governor on funding for local public health departments, and put a $100 placeholder in the budget to continue discussions of the child and adolescent health services pilot program.
  • Final Budget: The Legislature adopted the governor’s recommendation for local public health department funding. It also removed the funding from the Department of Health and Human Services budget for the child and adolescent health services pilot program, but funding is included in the School Aid budget.

Vaccine and Immunization Education and Promotion

The governor included no new funding for immunization education and promotion.

  • House: The House also made no recommendation.
  • Senate: The Senate provided $500,000 in state funds for immunization education and promotion. Expenditure of these funds would be dependent on receiving private donations with a match rate of $1 of state funds for every $4 of private funds received.
  • Final Budget: The Legislature concurred with the Senate, added authority to spend the private funds, and designated that the project focus on vaccinations for infants and toddlers.

Services for the Aging

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

The governor also recommended expansion of PACE (Programs for All-Inclusive Care for the Elderly) to Jackson County and Traverse City, funded through corresponding savings in nursing home costs.

  • The House and Senate concurred with the expansion of PACE.
  • Final Budget: The Legislature concurred with the PACE expansion but transferred the funding from Medicaid to the Aging and Adult Services Unit within the Department of Health and Human Services.

 

Save Our Michigan Earned Income Tax Credit

 

The Michigan Earned Income Tax Credit lets working families who earn low wages or who have fallen on hard times keep more of what they earn to afford the basics. But House Republicans are proposing to cut the EITC for the second time in five years – this time completely – effectively raising taxes on about 800,000 low-income working families raising 1 million kids.

It is a proven effective anti-poverty tool that reduces the number of children living in poverty. At its current rate, it lifts about 7,000 working families above poverty. The EITC has long-lasting, positive effects on children, improving infant health, helping students do better and go farther in school, and increasing work and earnings in future generations.

Michigan policymakers cut the EITC in 2011, when it was reduced from 20% to 6% of the federal credit. The average credit dropped 70%.

At a time when no other state is looking at cutting their state EITC and recent polling shows that two-thirds of Michigan residents oppose its elimination, we should work to restore the EITC rather than eliminate it.

 

 

Time to Care: Earned Sick Leave

 

In Michigan, more than 1.6 million workers and 46% of private sector workers do not get earned sick leave from their employers. Seventy- percent of workers in the lowest paying jobs (those in the bottom 25% of average wages) do not have earned sick leave. Everyone deserves time to get better, without risking their economic security and being forced to choose between their health and their job.
•  90% of employees in the food service industry do not have paid sick days. Over two-thirds of workers in the restaurant industry report cooking, preparing, or serving food while sick.

•  Women are less likely than men to have paid sick days. Many of the workers least likely to have earned sick leave are those who care for our families and loved ones in schools or elder care facilities.

Final Push Needed to Expand Healthy Kids Dental Statewide

 

Michigan needs to expand Healthy Kids Dental to all eligible children. This is a public-private partnership between the Department of Health and Human Services and Delta Dental of Michigan. The program is available to all 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. More than 290,000 children ages 0-12 in Kent, Oakland and Wayne counties will be added effective Oct. 1, 2015, bringing the total number of children covered to 901,000. That leaves behind more than 130,000 lowincome kids in Kent, Oakland and Wayne counties who are ages 13-20.

Seema Singh

Seema Singh

 

Seema Singh,  joined the Michigan League for Public Policy in July 2015 as the Policy Fellow. She is a recent graduate of the Ford School of Public Policy at the University of Michigan. Seema works on issues including workplace policy, mass incarceration, and mental health policy. Seema also previously worked as a community organizer in Milwaukee, Wisconsin, working on issues including inequality, workplace policies related to women and families, and youth advocacy. She most recently worked as a shelter advocate at Women’s Aid Service, Inc. in Mt. Pleasant, Michigan. Seema holds a bachelor’s degree in Economics from the University of Michigan.

Contact: ssingh@mlpp.org

Valuing Families, Valuing Work: Four Ways Policymakers Can Help Low-Paid Workers and Their Children

 

Sick children are sent to schools. Sick workers handle food and money. New moms go back to work before they are ready. Children are sent to unlicensed child care of unknown or low quality. Workers show up for shifts and are told to go home unpaid. Workers are fired for taking time off to care for seriously-ill loved ones or for their own medical needs.

Earned sick leave, paid family and medical leave, predictable work schedules, and adequate child care assistance are some of the top workplace issues facing low-income families in Michigan and keeping many from achieving financial self-sufficiency.

The  best way to leave poverty, support a family and move toward economic security is through work, yet not all jobs have the reliability and flexibility that workers need  in order to stay employed and contribute to the economy. Most middle- and upper-income workers take for granted a predictable work schedule and the ability to take time off for sickness or family needs, but for many low-paid workers, sickness, last minute schedule changes or lack of child care result in loss of money and difficulty doing what is best for themselves and their families.

Michigan legislators can improve the workplace to help low-paid employees better meet the needs of their families:

    • Require all employers to provide earned sick leave.
    • Urge Congress to establish a national paid family and medical leave insurance program.
    • Require employers to create predictable schedules.
    • Update and strengthen the state child care subsidy to reflect reality.

Earned Sick Leave

In Michigan, more than 1.6 million workers and 46.6% of private sector workers do not get earned sick leave from their employers.1 Seventy percent of workers in the lowest paying jobs (those in the bottom 25% of average wages) do not have earned sick leave, compared to 16% of workers in the highest paying jobs (those in the top 25% of average wages).2

Race and ethnicity also can affect paid leave, with less than half of Hispanic workers having sick leave compared to more than 60% of African American, Asian American and white workers.3

Without earned sick leave, an ill worker must either stay home and lose wages, or go to work and risk becoming sicker, working less productively, and exposing co-workers and, in some cases the public, to illness. If the worker’s child becomes sick, the parent may feel pressure to send the child to school anyway or to leave the child at home unattended if the family cannot afford the lost wages. This choice is not good for workers, their families, or the public.

Staying home sick causes not only a loss of wages for many low-paid workers, but also can lead to a loss of employment. Working mothers are especially at risk. In a 2013 survey commissioned by Oxfam America, one out of seven low-wage workers and one out of five low-wage mothers reported losing a job in the past four years because they were sick or needed to care for a family member.4 Such job instability and its resulting stress can harm the social and intellectual development of children who already are at risk due to poverty.5

Family Values at Work, a national nonprofit organization, has compiled stories showing the circumstances leading to the need for sick leave and the consequences of not having it.6 Included are accounts of working while in immense pain and delaying treatment, leaving sick children alone at home or in the hospital, spreading germs in the workplace and among the public, and threats of retaliation for prioritizing caring for a sick family member over going in to work. While the compendium features stories from workers around the country, they likely reflect what many Michigan workers face.

The United States is one of only three out of 22 high-income countries studied by the Center for Economic and Policy Research that does not require earned sick leave that would cover a five day illness. Most of the countries require employers to provide at least five days of sick leave per year, while a few have social insurance programs to cover both short-term and long-term leave.7

Three states, along with a handful of localities across the country, have sick leave laws. San Francisco was the first municipality to enact a sick leave policy in 2006, followed in 2008 by Washington DC. In 2011, Connecticut became the first state to enact such a law, and California and Massachusetts followed suit with laws that will take effect in July 2015. In Connecticut and California, the Legislature passed the sick leave law, while Massachusetts’ law was enacted through a ballot initiative.8

In Michigan, both legislative chambers have bills pending that would require all employers to provide earned sick leave at a rate of one hour for every 30 hours worked, up to 40 hours per year for employees of a small business (ten employees or less) and up to 70 hours for all other workers. The bills have strong public support: A recent poll shows 86% of Michigan voters agree that every worker should be able to earn paid sick days in order to take time off without losing pay, and 83% would be supportive of the Legislature passing a bill that would allow workers to earn one hour of paid sick time for every 30 hours worked.9

At the Congressional level, the Healthy Families Act would require employers with 15 or more workers to provide at least seven days per year of paid sick time and those with fewer than 15 employees to provide at least seven days per year of unpaid sick time. Workers would earn a minimum of one hour of paid sick time for every 30 hours worked, up to 56 hours (seven days) per year.10 The bill was introduced by Senator Murray (D-WA) and Rep. DeLauro (D-CT).

Paid Family and Medical Leave

Maternal leave enables mothers to recover from childbirth and to bond with their newborn child without serious financial disruption. The United States is one of only eight countries in the world (and the only high-income country) that does not require paid leave for mothers of newborns. Of the 178 countries that require it, 81 also provide some level of leave to new fathers as well.11

Paid medical leave to cover long-term illnesses, injury recovery or other medical challenges is important as well. Medical leave helps prevent families from falling into poverty, foreclosure and bankruptcy, and helps to keep finances stable during medically challenging times. Medical leave differs from sick leave in that sick leave is short-term (often a day or two taken at a time) and pays full wages, while medical leave is longer term (generally up to three or four months) for serious medical conditions or illnesses, and usually replaces wages only partially.

The Family and Medical Leave Act of 1993 guarantees eligible employees up to 12 weeks of unpaid leave each year to care for a newborn, a newly adopted child or a seriously ill family member, or to recover from serious health conditions or pregnancy. While the FMLA was an improvement over not having any guaranteed leave at all, it does not cover employees of a company or organization with fewer than 50 employees, and it does not meet the needs of workers who cannot afford to forgo up to 12 weeks of wages.12

Currently there are no paid family and medical leave bills under consideration in Michigan. Nationally, the Family and Medical Insurance Leave (FAMILY ) Act, sponsored by Rep. DeLauro (D-CT) and Sen. Gillibrand (D-NY), would provide workers with 66% of their income for up to 12 weeks if they take a leave of absence due to serious illness or pregnancy. It would cover all workers in all companies no matter the size. The program would be funded through small employer and employee contributions (similar to how Social Security and Medicare are funded) and administered by the Social Security Administration.13

Predictable Schedules

Late-notice scheduling and sudden schedule changes can cause workers to lose anticipated wages and make taking care of children extremely difficult. Many low-paid workers have experienced going in to work for an eight-hour shift only to be told to leave after two or three hours, or being called at the last minute and told not to come in at all. Some employers will post weekly job schedules one or two days before the new work week begins. Such unpredictable scheduling leaves workers scrambling to schedule (or cancel) child care, transportation and other family needs, and sometimes requires them to spend money to accommodate the unexpected change.

Along with minimum wage and paid leave, predictable scheduling is becoming increasingly recognized as a necessary policy change to protect workers and restore the integrity of work. While some mostly higher-paying professions (i.e. police and fire protection, journalism and some medical professions) have inherent unpredictability due to the need to respond to circumstances and events, such unpredictability for lower-paying occupations is usually practiced only to save the employer money. Call centers, retail stores and restaurants are increasingly using computerized “workforce optimization systems” that use sales trends, expected customer volume, weather and traffic patterns and other variables to create “just in time” scheduling that puts employees to work exactly when they are most needed—at the expense of worker well-being.

As with the absence of sick and family leave, the lowest income workers are more likely than other workers to have the most irregular work schedules. Approximately 17%  of the total workforce and 83% of hourly part-time workers have jobs with unstable work schedules, and as many as 26% of such workers report experiencing work-family conflict as a result.14 Between 19% and 31% of low-wage workers are often asked to work extra hours with little or no notice, and 40-60% percent of such workers say they comply with the request to avoid negative consequences.15

A related problem is “clopening,” requiring an employee to work a closing shift late at night and then an opening shift early the next morning. Along with not being able to get adequate sleep between shifts, employees subjected to this practice often have difficulty tending to their families’ needs. Losing sleep regularly due to such work shifts also can jeopardize health.

In 2014, bills were proposed both in the Michigan Legislature and in Congress to address schedule unpredictability. The federal Schedules That Work Act would have granted an employee the right to request changes regarding the number of hours or times the employee is required to work or be on call, the location of work, the amount of advance notice received of work schedule assignments, and the fluctuations in the number of hours scheduled to work on a daily, weekly, or monthly basis  – and to do so without fear of retaliation.

The federal bill also would have added protections for workers specifically in retail, food preparation/service and building cleaning requiring employers to give employees their schedules two weeks in advance. It also would have required an extra hour of pay to the employee if there is a change to a scheduled shift less than 24 hours before the shift is to begin. If a worker is sent home before the end of the shift, that worker would receive a minimum of four hours of pay (or pay for the entire shift if the shift was less than four hours).16 This bill has not been re-introduced in the new congressional session.

The Michigan proposal contained many of the same provisions as the Congressional bill. At this time, no state has a law as wide-ranging as the Schedules That Work Act, but Vermont has a law that provides one narrow but important piece of it: giving an employee the right to request a schedule change and requiring the employer to consider it and provide a response, and prohibiting retaliation against an employee for making such a request.17 San Francisco has a similar right-to-request law that applies only to requests pertaining to an employee’s caregiving of his or her child.18 Neither law gives the employee a right to receive a schedule accommodation, only to request it and have it considered.

Child Care Assistance

Child care is one of the biggest expenses for many working families. The average monthly cost of full-time child care in Michigan for children younger than school age is $555 per month (though in some counties it is more than $700 per month), which is approximately 30% of a single parent’s monthly basic expenses and 25% of a two-parent family’s basic expenses.19  If the single parent is working full time at Michigan’s minimum wage, he or she will not be able to afford child care, as that will consume 40% of his or her earnings.

To help with child care expenses for low-paid workers, Michigan has the largely federally-funded Child Development and Care subsidy that covers a portion of the costs. The CDC provides child care subsidies to: (1) public assistance recipients; (2) families with incomes below 121% of poverty ($22,048 for a family of three); (3) licensed foster parents caring for foster children; and (4) families with open child protective services or preventive services cases. Recipients must be working, attending school or attending approved services or trainings. The  subsidies are available for eligible children under the age of 13, as well as children between the ages of 13 and 18 in cases with health or disability reasons or a court order.

Michigan must update and strengthen the child care subsidy to help working parents keep their jobs, meet family needs and move ahead.

The CDC subsidies do not meet the needs of low-income working parents in several ways:

    • The subsidy rates are well below the federally recommended level—the 75th percentile of current market rates, which is the level designed to give families access to 75% of local providers. Michigan’s rates are below half that amount, limiting access to licensed or higher quality child care.20 To begin to respond to the problem of low rates, the Michigan Legislature recently approved another small rate increase for child care providers with higher quality ratings. Currently, the subsidy pays $1.68-$4.50 an hour and depends on the type of child care program (center, group or family home), age of child and whether the family receives 70%, 80%, 90%, 95% or 100% of the subsidy . However, 75% of parents receive the lowest baseline rate of $1.68-$3.75 an hour.
    • Michigan, unlike most states, reimburses child care providers on an hourly basis, depending on a child’s actual attendance, despite the fact that most providers bill on a daily, weekly or monthly basis. This makes it difficult for providers to run their businesses and project income, and the hourly reimbursements discourage many providers from participating in the CDC program.
    • Michigan’s child care program has one of the lowest eligibility levels in the country, limiting low-income parents’ access to the child care assistance they need to work and support their children. The state’s child care income eligibility threshold (39% of state median income) has not been changed since 2003, and without adjustments for inflation has fallen from 155% of poverty to 121%, or gross monthly income of under $1,990. In response, the Michigan Legislature recently approved a new policy that allows parents who are eligible for the CDC at 121% of poverty to remain eligible until their incomes reach 250% of poverty, or $47,682 a year for a single parent with two children.
    • Michigan covers only 90 hours of care in a two-week period—down from a peak of 140 hours. Although the number of covered hours was increased from 80 hours last year, it is not enough for parents who must spend a lot of time driving to and from work. If a shift is 8 ½ hours and the commute is one hour each way, a full-time worker will need 105 hours of child care in a two-week period. Thirty-two states do not impose caps on the hours of care. Of the states that do, the average cap is 120 hours biweekly, and at 90 hours Michigan is the lowest.

Inadequate child care subsidy rates in Michigan have forced many low-income families to seek out lower cost unlicensed care of unknown or poor quality. In response, state policymakers have sought to encourage greater parental reliance on licensed care, as well as improve the quality of unlicensed care. They first reduced payment rates for unlicensed child care providers and then, beginning in 2009, required all unlicensed home providers to participate in a seven-hour orientation training before being able to receive a subsidy. When the training requirement was adopted, 65% of subsidized children were in the care of unlicensed providers; by 2012, only 38% were placed in unlicensed care.21

No data exists showing whether the parents of children no longer in unsubsidized care were able to find higher-quality child care in licensed homes or centers. And it is possible that grandparents or other relatives caring for young children simply dropped out of the subsidy program because they were unable to participate in the training, or chose not to because they anticipated only caring for children for a short period of time to help out a family member.

The child care subsidy is a way to support working parents and help them thrive in the job market, while at the same time helping to ensure that children are safe and in a constructive environment that encourages development. Michigan must increase its investments in child care and make sure that its subsidy policies address the challenges faced by low-income working parents.

 Endnotes

  1. Institute for Women’s Policy Research and National Partnership for Women & Families, Worker’s Access to Paid Sick Days in the States, May 2015. http://www.iwpr.org/publications/pubs/workers-access-to-paid-sick-days-in-the-states
  2. United States Department of Labor, Bureau of Labor Statistics, “Table 32. Leave benefits: Access, private industry workers,” National Compensation Survey, March 2014, http://www.bls.gov/ncs/ebs/benefits/2014/ownership/private/table32a.htm
  3. Williams, Claudia and Barbara Gault, Paid Sick Days Access in the U.S.: Differences by Race/Ethnicity, Occupation, Earnings, and Work Schedule, Institute for Women’s Policy Research, March 2014. http://www.iwpr.org/publications/pubs/paid-sick-days-access-in-the-united-states-differences-by-race-ethnicity-occupation-earnings-and-work-schedule
  4. Oxfam America, Hard Work, Hard Lives: Survey Exposes Harsh Reality Faced by Low-Wage Workers in the US, 2013, as referenced in Ben-Ishai, Liz, Access to Paid Leave: An Overlooked Aspect of Economic & Social Inequality, Center for Law and Social Policy, April 14, 2014. http://www.clasp.org/resources-and-publications/publication-1/2014-04-09-Inequities-and-Paid-Leave-Brief_FINAL.pdf
  5. For more on this topic, see Babcock, Elizabeth, Using Brain Science to Design New Pathways Out of Poverty, Crittenton Women’s Union, 2014. http://www.liveworkthrive.org/research_and_tools/reports_and_publications/EF_Report
  6. Family Values at Work website (http://famil yvaluesatwork.org/media-center/voices-front-lines)
  7. Heymann, Jody and Hye Jin Rho, John Schmitt, and Alison Earle, Contagion Nation: A Comparison of Paid Sick Day Policies in 22 Countries, Center for Economic Policy Research, May 2009. http://www.cepr.net/documents/publications/paid-sick-days-2009-05.pdf
  8. National Partnership for Women and Families, State and Local Action on Paid Sick Days, November 2014. http://www.nationalpartnership.org/research-library/campaigns/psd/state-and-local-action-paid-sick-days.pdf
  9. Denno-Research LLC, Executive Analysis of Voters in Michigan, Monday, February 2nd through Wednesday, February 4th, 2015. http://www.eclectablog.com/wp-content/uploads/2015/02/Paid-Sick-Days-2015-Analysis-Denno-Research.pdf
  10. National Partnership for Women and Families, Fact Sheet: The Healthy Families Act, February 2015. http://www.nationalpartnership.org/research-library/work-family/psd/the-healthy-families-act-fact-sheet.pdf
  11. Gault, Barbara and Heidi Hartmann, Ariane Hegewisch, Jessica Milli, Lindsey Reichlin, Paid Parental Leave in the United States, Institute for Women’s Policy Research, March 2014. http://www.iwpr.org/publications/pubs/paid-parental-leave-in-the-united-states-what-the-data-tell-us-about-access-usage-and-economic-and-health-benefits
  12. Gault, ibid.
  13. National Partnership for Women and Families, Fact Sheet: The Family And Medical Insurance Leave Act (The FAMILY Act), March 2015. http://www.nationalpartnership.org/research-library/work-family/paid-leave/family-act-fact-sheet.pdf
  14. Economic Policy Institute, Irregular Work Scheduling and its Consequences, Briefing Paper #394, April 9, 2014. http://www.epi.org/publication/irregular-work-scheduling-and-its-consequences/
  15. Watson, Liz, Lauren Frohlich and Elizabeth Johnston, Collateral Damage: Scheduling Challenges for Workers in Low-Wage Jobs and Their Consequences, National Women’s Law Center, April 2014. http://www.nwlc.org/sites/default/files/pdfs/collateral_damage_scheduling_fact_sheet.pdf
  16. Ben-Ishai, Liz, The Schedules That Work Act, Center for Law and Social Policy, July 22, 2014. http://www.clasp.org/resources-and-publications/publication-1/schedules-that-work-act-CLASP-3.pdf
  17. The Vermont law can be found at: http://www.leg.state.vt.us/docs/2014/Acts/ACT031.pdf
  18. City and County of San Francisco, San Francisco Family Friendly Workplace Ordinance: Legislative Fact Sheet. http://www.sfbos.org/Modules/ShowDocument.aspx?documentid=45824
  19. Michigan League for Public Policy, Making Ends Meet: A Basic Needs Income Level for Family Well-Being, March 2014.
  20. Karen Schulman and Helen Blank, Downward Slide: State Child Care Assistance Policies 2012, National Women’s Law Center.
  21. Michigan Race to the Top – Early Learning Challenge Application for Initial Funding, op. cit

 

Higher Ed Gets Small Bump in 2016 but Adult Financial Aid Rejected

 

Universities and community colleges in Michigan will receive small increases in state funding next fiscal year, but students will get no additional relief with lawmakers rejecting boosts to financial aid programs.

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 had been proposed by the governor in the community college budget for 2016, but was not included in the final agreement between the House and Senate.

For 2016, the governor recommended:

  • A total increase in funding for university operations of $26.8 million (2%) over the current fiscal year. As in previous recent years, this increase was in the form of performance funding using the following metrics: weighted undergraduate completions in critical skills areas, research expenditures, 6-year graduation rates, total completions, administrative costs as a percentage of core expenditures, and the percentage of students receiving Pell Grants. The governor’s budget continued the practice of requiring universities to limit tuition increases in order to receive any performance funding, but lowered the limit from 3.2% to 2.8%. This “tuition restraint” prerequisite for receiving performance funding helps keep postsecondary education affordable for low-income students.
    • Senate: The Senate concurred with the governor’s operational funding level.
    • House: The House increased university operations by only $13.1 million (1%) and allowed tuition increases up to 4% — essentially shifting more of the cost of operational spending increases to students.
    • Final Budget: The Legislature increased university operations funding by $20 million or 1.5%.
  • A 1.4% increase ($4.3 million) in total operational funding for Michigan’s 28 community colleges, half of which was to be distributed as performance funding for weighted degree and certificate completions, enrollment, and administrative costs as a percentage of core expenditures. This proposed increase was less than half of that for FY 2015 (3% increase or $8.9 million). 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.) was from the School Aid Fund, and only 35% ($137.1 million) was from the General Fund.
    • Senate: The Senate concurred with the governor’s funding levels.
    • House: The House increased operational funding by 2% ($6.1 million).
    • Final Budget: The Legislature concurred with the governor and Senate with an increase of 1.4%.
  • 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. 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 ten years. Of the total funding for the higher education budget grant programs, $98.3 million is from the federal Temporary Assistance for Needy Families allocation while $7.8 million is from the state’s General Fund. The governor also added a requirement to the Tuition Grant that in order for private college students to receive the grant, the college must submit annual data to the state P-20 longitudinal data system.
    • Senate: The Senate concurred with the governor’s funding levels for each grant program but does not include the P-20 data submission requirement.
    • House: The House added $327,500 for the Tuition Grant and does not include the P-20 data submission requirement.
    • Final Budget: The Legislature agreed with the governor in keeping financial aid grants at 2015 levels and did not include the P-20 reporting requirement.
  • An appropriation of $6 million to the community college budget for the Part-Time Independent Student Grant, which helps older students—the first time this grant would have been funded since 2009. Unlike previous years, the grant could only be used at community colleges and priority was to be given to former postsecondary students who left prior to completing a degree or certificate.
    • Senate: The Senate concurred with the governor’s funding levels and new conditions for receiving the grant.
    • House: The House funded the grant at $2.9 million and kept the new requirements.
    • Final Budget: The Legislature did not include funding for the Part-Time Independent Student Grant program.

 

Gains for Low-Income and Early Learners in 2016 School Aid/Education Budgets

 

The final 2016 budgets for School Aid and the Department of Education include some important new investments in child care safety and quality, a new initiative to improve reading by 3rd grade, an increase in funding for school districts with high numbers of low-income children at risk of school failure, and a much needed expansion in funding for adult education.

School Aid Budget

The governor’s 2016 School Aid budget totaled $13.96 billion, an increase of approximately 2% over current-year spending. The governor recommended that in 2016, School Aid revenues would again be used to fund universities ($205 million) and community colleges ($256.7 million).

Approximately $2 of every $3 in the School Aid budget is 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%).

Each year the Michigan Legislature determines the level of per-pupil payments schools districts will receive. After reductions in the per-pupil payments of $470 between 2009 and 2012, school districts receiving the minimum payment this year still are 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.

One goal of the 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.

Third Grade Reading Initiative

The governor recommended a new third-grade reading initiative with total funding of $48.6 million ($25 million state funds). The governor’s initiative recognizes the importance of investments in the earliest years to ensure reading by third grade—a key predictor of school success. The data are discouraging. Currently, almost one of every three Michigan fourth-graders does not reach proficiency on state reading tests.

To improve reading by third grade, the governor recommended expansions in child care eligibility and rates, along with funds to increase the number of child care licensing consultants (see child care section below). The governor’s initiative also includes:

  • An expansion of ome 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 targeting families with children under age 4. The programs would be open to families regardless of income, on a sliding fee scale ($1 million).
  • Funding for teacher professional development and to test new elementary teachers on reading instruction capabilities prior to receiving their teacher certification ($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 kindergarten entry assessments ($2.6 million).
  • A new oversight commission outside of state government to monitor progress toward improving third-grade reading proficiency. The governor’s proposal was based on a model in Kentucky where the commission has business and philanthropic support and leadership.
  • Funding for a best practices clearinghouse on early literacy within the Department of Education ($500,000)
    • House: The House rejected the governor’s third-grade reading initiative (with the exception of several child care changes addressed below).
    • Senate: The Senate included most of the provisions of the governor’s third-grade reading initiative with the exception of funding for teacher certification tests and a research clearinghouse. The Senate included an additional $10 million for instructional time for children who are behind in reading, bringing total spending for instruction to $20 million.
    • Final Budget: The Legislature included $31.5 million for the third-grade reading initiative, along with the child care enhancements recommended by the governor (described below). The Legislature agreed with the governor on his recommended initiative with the following major changes:
      • The Legislature increased funding for additional instructional time for students needing help with reading from the governor’s recommendation of $10 million to $17.5 million.
      • The Legislature included $1 million for the Michigan Education Corps.
      • The Legislature rejected funding for the best practices clearinghouse.
      • The Legislature provided $2.5 million for an expansion of home visits to encourage early literacy activities and identify children with disabilities and developmental delays, with funds going to Intermediate School Districts—down from the governor’s recommendation of $5 million.

Per-Pupil Funding

For 2016, the governor recommended: (1) a $75 perpupil increase for all districts, bringing the minimum payment to $7,326 and the maximum to $8,174; (2) a 60% cut in funding for implementing best practices, from $75 million to $30 million; (3) a change in the criteria for qualifying for best practices funds, including a focus on school district fiscal stability, as well as early reading and kindergarten entry assessments; and (4) the elimination of funding for performance grants ($51 million). Although the governor proposed an across-the-board increase of $75 per pupil, for some districts that would be offset by the loss of funding from best practices or performance grants. Some districts could lose per-pupil funding if they are currently receiving both best practices and performance grants.

  • House: The House budget eliminated or reduced funding for a range of programs that are not part of the per-pupil formula—but are often intended to address the specific needs of low-income students and struggling districts—rolling those funds into the per-pupil allotment. Among the programs eliminated were best practices and performance grants to schools.

The House also relied on a formula that has been used in recent years to close school funding gaps by providing districts with the lowest funding with twice as much in increases as those at the top. Under the House budget, districts would receive increases ranging from $137 to $274 per pupil plus an equity payment of up to $25 per pupil for districts at the minimum level. This would increase the minimum per-pupil payment to $7,550, and the maximum to $8,236. How districts fare overall would depend on the dollars lost through cuts to other state programs that are not part of the per-pupil allotment.

  • Senate: The Senate also used the formula that provides twice as much to districts with the lowest funding, with increases ranging from $50 to $100 per pupil. Under the Senate proposal, the minimum state per-pupil payment would be $7,351, and the maximum $8,149. The Senate agrees with the governor’s proposal to reduce funding for best practices grants from $75 million to $30 million, and eliminates performance grants.
  • Final Budget: The Legislature recommended: (1) per-pupil increases ranging from $70 to $140, based on a formula that provides districts with the lowest funding increases that are two times greater than those at the top, and raising the minimum foundation allowance to $7,391 and the maximum to $8,169; (2) the elimination of funding ($75 million) for best practices grants to districts; (3) the elimination of district performance grants ($51.1 million); and (4) an increase in funding needed to ensure that all districts get a per-pupil increase of at least $25—after the loss of any best practices and performance grants ($12 million expansion).

At Risk Programs

For 2016, the governor recommended an additional $100 million for the At Risk program, bringing total funding to $409 million. 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 school 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 more than a decade, remaining at $309 million.

  • House: The House rejected the governor’s proposed increase and added budget language requiring districts to use current funding to implement a school-wide, multi-tiered system of supports, instruction and intervention—a model already adopted in some areas of the state.
  • Senate: The Senate approved a $98 million increase for At Risk programs, requiring that 50% of the increase be used by districts to improve reading by the end of third grade.
  • Final Budget: The Legislature included an increase of $70 million for the At Risk program, bringing total funding to $379 million. Legislators agreed to include the Senate definitions for children who are at risk and eligible for services, as well as House language requiring the use of the multi-tiered system of supports, instruction and intervention model at least in grades K-3.

Adolescent Health Centers

The governor recommended continuation of current-year funding for adolescent health centers ($3.6 million).

  • House: The House agreed with the governor.
  • Senate: The Senate increased funding by $2 million to a total of $5.6 million, with funds to be used to expand mobile teams to provide nursing and behavioral health services in underserved schools.
  • Final Budget: The Legislature adopted the Senate recommendation, increasing funding for child and adolescent health centers by $2 million to a total of $5.6 million, with funds used to allow three existing centers to act as hubs with mobile teams serving satellite schools.

Early Childhood Education and Care

The governor recommended continuation funding for the Great Start Readiness program ($239.6 million). The per-pupil allocation for a half-day slot would remain at $3,625. Over the past 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.

  • House: The House agreed with the governor.
  • Senate: The Senate agreed with the governor on funding, and added language allowing districts that are having difficulty filling preschool classes for fouryear-olds to also enroll 3-year-olds.
  • Final Budget: The Legislature included continuation funding of $239.6 million for the Great Start Readiness preschool program, and deleted Senate language that would have allowed some districts to serve 3year-olds.

Funding for School Districts in Fiscal Distress

The governor proposed a $75 million increase in funding for school districts facing academic and fiscal problems. A new distressed district emergency grant fund was established this year with a state investment of $4 million.

  • House: The House rejected the $75 million increase, and eliminated the programs, including current-year funding of $4 million.
  • Senate: The Senate increased total funding from the current level of $4 million to $8.9 million.
  • Final Budget: The Legislature agreed with the House and eliminated all funding for grants to school districts facing academic and fiscal problems.

Adult Education

The governor recommended 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.

  • House: The House eliminated all funding for adult education, but included a placeholder in the budget indicating openness to additional discussions in the conference committee.
  • Senate: The Senate increased funding for adult education by $7 million to a total of $29 million.
  • Final Budget: The Legislature included an increase of $3 million for adult education, for total funding of $25 million.

Career/Technical Education and College Readiness

For 2016, the governor recommended: (1) continued funding of $26.6 million for reimbursements to local districts and vocational/technical centers; (2) an expansion of career and technical education through early/middle college programs in the 10 prosperity regions ($17.8 million); (3) continuation funding ($1.75 million) for grants to encourage dual enrollments; and (4) expanded funding ($1.6 million) for the Michigan College Access Network to assist students in making college and career decisions, bringing total funding to $3.6 million.

  • House: The House increased funding for career and technical education reimbursements to schools and centers by $16 million over current-year spending, rejected the governor’s new investment in early/middle college programs through the prosperity regions, eliminated funding for dual enrollment incentive grants, and maintained current-year funding ($2 million) for the Michigan College Access Network.
  • Senate: The Senate increased funding for career and technical education reimbursements by $12.4 million over current year, and agreed with the governor on the early/middle college programs, dual enrollment incentive grants and the Michigan College Access Network.
  • Final Budget: The Legislature increased funding for career and technical education reimbursements by $10 million, provided $10 million for an expansion of career and technical education through early/middle college programs in the 10 prosperity regions and sub-regions (down from the governor’s recommendation of $17.8 million), maintained current-year funding for dual enrollment incentive grants, and agreed with the governor and Senate on expanded funding for the Michigan College Access Network.

Bilingual Education

The governor includes continuation funding of $1.2 million for bilingual education grants.

  • House: The House eliminates bilingual education grants.
  • Senate: The Senate agrees with the governor.
  • Final Budget: The Legislature agreed with the governor and the Senate and provided continuation funding of $1.2 million for bilingual education.

Department of Education Budget

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 is 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.

Child Care Services

The governor’s budget addressed problems faced by working low-income families trying to find safe, reliable and high-quality child care 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. Included in the governor’s budget were:

  • A new policy that would allow families to remain eligible for child care for up to one year, even if their incomes rise. The goal is to provide greater work and child care stability ($16 million, including funding for current-year implementation).
  • A new policy allowing families that are eligible for care under Michigan’s current low-income guidelines (121% of poverty) to remain eligible until household income exceeds 250% of poverty ($1.5 million).
  • A rate increase for higher quality child care providers. This year, small rate increases were given to providers who received three, four or five stars on the state’s quality rating system—Great Start to Quality. For 2016, the governor proposes to also provide increases for providers earning two stars. In April, more than three of every four providers were not eligible for higher rates because they had not received higher ratings.
    • The House and Senate both agreed with the governor on these child care improvements, and included them in legislation that makes them effective during the current budget year.
    • Final Budget: The Legislature approved the expansions in child care eligibility and payments for the 2016 budget year.

Child Care Safety and Oversight

The governor recommended $5.7 million in federal funding for a 50% expansion in the number of child care licensing inspectors needed to ensure basic health and safety in child care settings. This expansion would reduce the number of child care facilities/homes that inspectors are responsible for from approximately 150 to 98—the national average. 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 pre-licensure and annual inspections.

  • House: The House rejected the proposed expansion of child care inspectors.
  • Senate: The Senate agreed with the governor.
  • Final Budget: The Legislature agreed with the governor and the Senate and increased funding by $5.7 million to expand child care licensing staff. Funds will be transferred to the Department of Licensing and Regulatory Affairs, where the program now will be administered.

 

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