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Clean Energy Brings Health, Savings and Jobs to Low-Income Michigan Communities

Full report | Executive Summary

On June 2, 2014, the U.S. Environmental Protection Agency proposed the Clean Power Plan, the first-ever limits on carbon pollution from existing power plants. Entrenched coal interests immediately seized on the proposal as one that would dramatically cut coal use, force the implementation of new and expensive technologies, and harm people with low incomes. These claims are disingenuous. In fact, the standards gradually will transform our electric system over the next 15 years. Each state will have a tailored carbon pollution reduction target and can decide how to best reach this goal through upgrades to power plants, renewable energy, and energy efficiency. This will save consumers money while providing reliable and cleaner electricity to meet our nation’s needs.

It is critical that low-income Michigan households share in these benefits. These households spend a higher percentage of their income on energy costs, which becomes more challenging when energy bills rise.1 Also, low-income communities are more likely to be near power plants, dramatically increasing the risk of more direct health impacts from the resulting pollution. Energy efficiency and renewable energy have the potential to help address these challenges.

The Real Reason Coal is Shrinking

Coal plants are being retired as cheaper power becomes available from natural gas, wind and solar resources, and as households and businesses increasingly save energy and money through investments in efficiency.

Since the mid-2000s, plans for 183 coal-fired power plants have been canceled and dozens of coal-fired power plants have been retired.2 Coal is becoming more expensive to produce, in part because it is harder to mine the remaining coal in many parts of the country, which makes the process more expensive. Moreover, because it is costly, dirty, and inconvenient, there is lowerthan-historic demand in the United States and in Europe, and an uptick in coal exports from other countries is crowding out U.S. coal.3

Michigan is currently home to five coal plants that received a failing Environmental Justice Performance grade, based on how they affect low-income communities and communities of color.4 The 75 coal plants nationwide that received a failing grade (including Michigan’s five coal plants) produce only 8% of the country’s total energy. However, those same 75 plants are responsible for 14% of sulfur dioxide and 13% of nitrogen oxide emissions. These coal plant emissions have a disproportionate effect on the surrounding communities.

Health Impacts

In the United States, approximately 6 million Americans live within three miles of a coal plant, and according to the NAACP, people of color and low-income households are more likely to live near these plants, with coal plants in urban areas overwhelmingly located in communities of color.5 The average per capita income in neighborhoods with coal plants is below the poverty threshold at $18,400, which is nearly 15% lower than the U.S. average income of $21,587. Furthermore, 39% of the people living in these neighborhoods are people of color, a higher percentage than the total percentage of people of color in the United States (36%).6 For example, 56% of white Americans live within 30 miles of a power plant compared to 68% of African Americans. Likely not coincidentally, African Americans frequent the emergency room for asthma attacks three times as often as white Americans,7 and roughly 30% of childhood asthma is due to environmental exposures, with average costs of $4,900 per patient—certainly a burden for any low-income household.8

The following examples speak volumes to the disproportionate effect carbon pollution has on low-income neighborhoods and communities of color.

The Michigan Department of Community Health has deemed the City of Detroit and its nearby downriver neighborhoods the “Epicenter of Asthma Burden.”9 According to a report released by the Sierra Club, Detroit ZIP codes in particular are three to six times more likely to have asthma-related hospital admissions than the rest of the state as a whole.10 In addition, in 2014 the American Lung Association ranked Wayne County—the home of the coal-burning River Rouge Plant—as the region with the highest number of pediatric asthma cases in Michigan. Wayne County also is home to more poor residents than any county in Michigan, with 465,744 of 1,792,365 residents (or 25% of the county population) below the poverty line.11

Wayne County’s River Rouge Plant is one of the dirtiest coal plants in the nation and sits in the middle of the River Rouge community, where people of color make up 65% of the population—this led to the seventh lowest EJP rank in the nation.12 ”Coal Blooded: Putting Profits Before People,” a report from the NAACP, quotes River Rouge resident Yvonne White:

The plant is located right in the middle of the community. About a block and a half down [from the plant], you can see actual homes where there’s a full community of people living in this environment. This is a park that we’re standing in. In the park you’ll see children playing and there’s actually the Rouge River, which comes through here and we have a number of people who are fishing in this area. This is a mixed community but mostly minorities; you’ll find a lot of Latinos, a lot of African Americans in this area. And I believe less than a block or so away is an elementary school. And so, this area is very critical when it comes to environmental issues.13

Benefits of Energy Efficiency

Medical costs in these communities tell only part of the story. Compounding health issues are the high costs of living in a home that is not energy efficient. A 2015 study by the Natural Resources Defense Council found that energy efficiency, achieved through improvements such as better insulation, lighting, and appliances, can significantly cut the amount of energy used and lower bills for homeowners.14 Because the Clean Power Plan allows states to be credited for energy efficiency improvements in all sectors of the economy, the EPA predicts that electricity bills will drop by 8% for an annual savings of about $100 for the average consumer.15

Housing can be expensive, especially for households living on a low or fixed income. Programs such as low-income weatherization are helping to reduce costs of housing nationwide. Offered and implemented across the country, these programs specifically for low-income homeowners help buildings become more resilient and energy efficient in a variety of ways, including protecting against damage caused by precipitation and wind, sealing leaks, and optimizing and reducing energy use. These programs can help reduce the costs associated with owning a home, and are especially helpful in low-income areas. Multifamily housing accounts for 26% of all housing units in the United States and 17% in Michigan, and almost half of all very low-income renters live in these spaces.16 By increasing weatherization funds, energy efficiency improvements could save building owners and their tenants up to $3.4 billion every year nationwide.17

Energy Efficiency in Michigan

In Michigan, the first three years of energy efficiency programs cut energy use by more than 7.7 million megawatt-hours (MWh)—enough to power 900,000 Michigan homes for a year—and produced more than $800 million in net benefits for customers.18 In addition, the efficiency measures installed through the Energy Efficiency Resource Standard are expected to reduce annual carbon emissions by approximately 6.8 million tons in 2015 and up to 11.4 million tons in 2025.19 Furthermore, the state’s Renewable Portfolio Standard has spurred more than $2.3 billion in new investments and created new clean energy jobs in areas of efficiency and renewables since its enactment.20

In Michigan, the Weatherization Assistance Program is funded with federal dollars from the U.S. Department of Energy, with occasional supplements of Low Income Housing Energy Assistance Program dollars from the U.S. Department of Health and Human Services. While LIHEAP funds are not always allocated to weatherization, as they also fund the Michigan Energy Assistance Program and the State Emergency Relief program, there currently is funding available for 2015 and 2016 for the state.21 The Michigan Department of Human Services receives the federal funds and allocates the grant money to Community Action Agencies throughout the state and one limited-purpose agency to administer the program. These agencies let communities know about weatherization opportunities through news releases, web posts, and working with other community partners to spread information. The average family saves $300 alone by reducing heating costs 20-25%.22 While some of the funds are used for weatherization efforts, more is needed for low-income housing weatherization to protect the most vulnerable citizens from dangers of exposure to inclement weather, pollution from power plants, and high energy bills.

Benefits of Renewable Energy

Renewable energy provides another opportunity to cut energy costs. Renewable technology can be created on rooftops or in fields of corn. It uses no water and has little to no environmental side effects. For coal- and gas-burning plants, fuel may account for up to 90% of the wholesale price of electricity, but wind and solar energies have no associated fuel costs.23 However, equal access and benefits will not be automatic as costs decline; states and utilities must push to proactively address this issue so that as renewable energy comes online, low-income households accrue their share of the environmental, health, and economic benefits.

Renewable Energy in Michigan

In 2008, Michigan lawmakers passed the Clean, Renewable and Efficient Energy Act calling for renewable energy, such as wind and solar, to make up 10% of our state’s energy mix by 2015. Michigan is on track to reach this threshold by the end of the year. The Renewable Energy Standard created by this legislation is proving to be cost effective: a report by PJM Interconnection LLC, the largest grid operator in the nation, found that generating 30% of the electricity in its region with renewable energy would save consumers up to 30% on electric bills, even after factoring in the cost of additional transmission lines.24 Moreover, according to the DOE, costs for wind and solar energy are at an all-time low. This means that because renewable energy technologies are already competitive with conventional generation methods, and the prices are continuing to fall, transitioning away from some of the state’s failing coal plants to renewable energy sources makes sense. More recently, Michigan’s governor addressed the state in a special energy message, stating that by 2025 we should meet 30-40% of our energy needs through renewable energy and energy efficiency. Specifically, Gov. Snyder called for a 15% reduction in energy waste and 19-24% of the state’s energy coming from renewables.

Reliability

The coal industry often voices concern for the reliability of our electric grid, but these concerns are overstated. The Clean Power Plan would require only a modest shift in resources. Many plants currently slated to close ran only 38% of the time last year.25 U.S. electric grid operators have confirmed that nearly all the planned closures can occur without affecting electricity service reliability.

The reliability of fossil fuels has been exaggerated. In reality, the highly volatile nature of natural gas prices has contributed to volatile electricity rates—a major risk for low-income households. Figure 2 shows just how directly one region’s electricity prices depend on the price of natural gas. By diversifying our energy sources, we can reduce much of this risk.

Renewable energy’s intermittency has been exaggerated, too. Grid operators already have integrated more than 75,000 MW of wind and solar power into the grid and approved the retirement of tens of thousands of megawatts of old, expensive coal plants, all while preserving grid reliability.26 The output from renewable energy sources is increasingly predictable. And, through regional interconnections, wind from Arkansas can help power homes on a still night in Michigan.

Jobs

It is clear that switching from dependence on coal plants to renewable sources can cut energy bills, and can help boost the state’s economy with additional job creation. According to Environmental Entrepreneurs, a national community of business leaders who promote sound environmental policy that builds economic prosperity, more than 18,000 new jobs were announced in the clean energy field in the third quarter of 2014 alone.27 The NRDC found that if the nation shifted to clean energy under a scenario similar to the EPA’s Clean Power Plan, $37.4 billion would be saved in electric bills in 2020 across the United States, and more than 274,000 efficiency-related jobs would be created across the country.28 That could mean up to 6,900 efficiency-related jobs in Michigan in 2020.29 Not only does the creation of new jobs in renewable and energy efficiency mean a boost for the overall state’s economy, but the average wage for someone employed in the clean energy industry is $44,000.30 This is higher than the average wage in the United States. More money in people’s pockets means more money available to spend within the local economy, giving the state an overall boost.

Conclusion

Carbon pollution is a dirty problem for the United States, with Michigan ranking as one of the top offenders.31 Home to five of the nation’s most offensive coal power plants, Michigan clearly contributes significantly to the country’s carbon pollution. These coal plants are driving up energy costs for some of our most vulnerable populations, and disproportionately contribute to negative health effects for low-income neighborhoods and communities of color. On an economic front, Michigan is importing 100% of its coal from other states to meet its energy needs. With the dependency on other states’ coal, almost half of our energy is produced with these imports. Of the more than 20 coal plants active in Michigan, with a total of 40 operating coal generators, nine are ripe for retirement.32 This means that due to outdated pollution controls, among other things, they have reached the end of their useful life and make no economic sense to keep running.

We know that the only way to completely stop the harmful effects of a coal plant is to close it, and fortunately with the innovative progress being made in renewable energy sources, we have an alternative. If Michigan can increase the state’s Renewable Energy Standard past the 10% goal mandated through the Clean, Renewable and Efficient Energy Act, as well as increase incentives for multi-housing unit and low-income housing weatherization, families could benefit with cost savings on energy bills as well as healthcare. It is important to preserve and strengthen the EPA regulations, such as the Clean Power Plan, to maintain the cornerstone of our state’s measures and regulate the pollution affecting the health and well-being of residents.

 Endnotes

  1. For the purposes of this fact sheet, “low income” refers generally to households that fall at or below about 200% of federal poverty guidelines. According to the U.S. Department of Health and Human Services, in 2014 a family of four living on $23,850 was considered poor, so a family of four living on $47,700 would be considered low-income. U.S. Department of Health and Human Services, “2014 Poverty Guidelines,” January 24, 2013, aspe.hhs.gov/poverty/14poverty.cfm.
  2. Sierra Club, “Proposed Coal Plant Tracker,” content.sierraclub.org/coal/environmentallaw/plant-tracker (accessed December 1, 2014).
  3. Energy Information Administration, “U.S. Coal Exports Fall on Lower European Demand, Increased Global Supply,” October 3, 2014, www.eia.gov/todayinenergy/detail.cfm?id=18251.
  4. Adrian Wilson, “Coal Blooded: Putting Profits Before People,” National Association for the Advancement of Colored People (NAACP), Indigenous Environmental Network, and Little Village Environmental Justice Organization, 2011, naacp.3cdn.net/afe739fe212e246f76_i8m6yek0x.pdf.
  5. Ibid.
  6. Ibid.
  7. Martha Keating and Felicia Davis, “Air of Injustice,” Clear the Air and the Georgia Coalition for the Peoples’ Agenda, October 2002, www.energyjustice.net/files/coal/Air_of_Injustice.pdf.
  8. Miriam Cisternas et al., “A Comprehensive Study of the Direct and Indirect Costs of Adult Asthma,” Journal of Allergy and Clinical Immunology 111, no. 6 (2003): 1212, www.jacionline.org/article/S0091-6749(03)01071-6/pdf.
  9. Michigan Department of Community Health, “Chapter 12: Detroit – The Epicenter of Asthma Burden,” Epidemiology of Asthma in Michigan, 2010, michigan.gov/documents/mdch/14_Ch12_Detroit_Epicenter_of_Asthma_276687_7.pdf (Accessed March 23, 2015).
  10. Sierra Club, “Wayne County’s Mounting Pollution Problem: Michigan Must Act on Federal Mandate to Reduce Harmful Sulfur Dioxide Emissions, Report, https://content.sierraclub.org/coal/sites/content.sierraclub.org.coal/files/docs/0778%20SO2%20Michigan%20Fact%20Sheet%2003_x1a%20%282%29.pdf
  11. American Lung Association, State of the Air 2014, Report, www.stateoftheair.org/2014/assets/ALA-SOTA-2014-Full.pdf.
  12. Wilson, “Coal Blooded”
  13. Ibid.
  14. Natural Resources Defense Council (hereinafter NRDC), “Michigan’s Clean Energy Future,” Issue Brief, March 2015, www.nrdc.org/globalwarming/files/clean-power-plan-state-options-MI.pdf.
  15. U.S. Environmental Protection Agency, “By the Numbers: Cutting Carbon Pollution from Power Plants,” June 2014, www2.epa.gov/sites/production/files/2014-06/documents/20140602fs-important-numbers-clean-power-plan.pdf.
  16. The federal government defines “very low income” as households that earn less than half the national median income. U.S. Census Bureau, “Population and Housing Narrative Profile: 2011,” factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_11_1YR_NP01&prodType=narrative_profile (accessed March 23, 2015). Gary Pivo, “Energy Efficiency and Its Relationship to Household Income in Multifamily Rental Housing,” Fannie Mae, September 12, 2012, www.fanniemae.com/content/fact_sheet/energy-efficiency-rental-housing.pdf. Michigan numbers: The American Community Survey 5 year estimates, 2009-2013
  17. Anne McKibben et al., “Engaging as Partners in Energy Efficiency: Multifamily Housing and Utilities,” American Council for an Energy Efficient Economy (ACEEE) and CNT Energy (now Elevate Energy), January 2012, www.elevateenergy.org/wp-content/uploads/2014/01/Engaging_as_Partners_in_Energy_Efficiency_Multifamily_Housing_and_Utilities.pdf.
  18. NRDC with Energy Futures Group, Building on Michigan’s Energy Efficiency Accomplishments, April 25, 2013, http://switchboard.nrdc.org/blogs/rstanfield/NRDC,%20Building%20on%20Michigan’s%20Energy%20Efficiency%20Accomplishments.pdf.
  19. Jim Grevatt and Chris Neme, Projections for Power Sector Carbon Emissions Reductions: Illinois, Michigan, Iowa, Wisconsin, and Minnesota, Energy Futures Group, memo, April 17, 2014.
  20. American Wind Energy Association, Michigan Wind Energy, August 2014, http://awea.files.cms-plus.com/FileDownloads/pdfs/Michigan.pdf.
  21. U.S. Department of Energy grant dollars for Michigan have been pretty consistent with only small differences in increases or decreases over the years.
  22. Benefits.gov, “Michigan Weatherization Assistance Program,” www.benefits.gov/benefits/benefit-details/1861 (Accessed March 23, 2015).
  23. Mark Bolinger and Ryan Wiser, “The Value of Renewable Energy as a Hedge Against Fuel Price Risk: Analytic Contributions from Economic and Finance Theory,” LBNL, August 17, 2009, escholarship.org/uc/item/65g8f2t4.
  24. General Electric International, Inc., “PJM Renewable Integration Study,” prepared for PJM Interconnection LLC, March 31, 2014, /www.pjm.com/~/media/committees-groups/committees/mic/20140303/20140303-pris-executive-summary.ashx.
  25. Moore, J., “Environmental Standards Will Help Reduce Consumer Electricity Bills,” NRDC Switchboard, November 4, 2014, switchboard.nrdc.org/blogs/jmoore/environmental_standards_will_h.html.
  26. There were 61,327 MW of wind installed capacity and 15,900 MW of solar by mid-2014. American Wind Energy Association, “Wind Energy Facts at a Glance,” www.awea.org/Resources/Content.aspx?ItemNumber=5059&navItemNumber=742 (accessed November 25, 2014). SEIA, “Solar Energy Facts: Q3 2014,” September 22, 2014, www.seia.org/sites/default/files/Q3%202014%20SMI%20Fact%20Sheet.pdf (accessed November 25, 2014).
  27. Environmental Entrepreneurs, “Q3 2014 Jobs Report,” November 2014, cleanenergyworksforus.org/wp-content/uploads/2014/11/2014_Q3_Report_final.pdf.
  28. NRDC, “America Can Create 274,000 Efficiency-Related Jobs, Cut Electric Bills by Billions, and Curb Carbon Pollution,” May 2014, www.nrdc.org/air/pollution-standards/files/national-cps-bills-jobs-FS.pdf.
  29. NRDC, “Michigan Can Create 6,900 Efficiency-Related Jobs, Cut Electricity Bills, and Curb Carbon Pollution,” Fact Sheet, May 2014, http://www.nrdc.org/air/pollution-standards/files/cps-state-benefits-mi.pdf.
  30. Mark Muro, Jonathan Rothwell, and Devashree Saha, “Sizing the Clean Economy: A National and Regional Green Jobs Assessment,” Brookings Institution and Battelle Technology Partnership Practice, 2011, www.brookings.edu/~/media/series/resources/0713_clean_economy.pdf.
  31. Union of Concerned Scientists, “Michigan’s Dependence on Imported Coal,” Burning Coal, Burning Cash: 2014 Update, www.ucsusa.org/sites/default/files/legacy/assets/documents/clean_energy/Michigan-Coal-Imports-BCBC-Update-2014.pdf.
  32. Union of Concerned Scientists, “Ripe for Retirement: The Case for Closing Michigan’s Costliest Coal Plants,” November 2012 http://www.ucsusa.org/sites/default/files/legacy/assets/documents/clean_energy/Ripe-for-Retirement-Michigan-Report.pdf

 

 

House Subcommittee Rejects Governor’s Third Grade Reading Initiative

 

The Senate subcommittee developing next year’s education budget endorsed Gov. Snyder’s forward-thinking initiative to ensure that children can read proficiently by third grade. Only the day before, the House Appropriations Subcommittee on Education had rejected most of the governor’s recommendations and left children without early interventions needed to meet that critical educational milestone.

The next step is for the subcommittee bills to be acted on by the House and Senate Appropriations Committees. Their versions of the bills will be sent to the floors of the House and Senate for debate and approval. Any differences between the final House and Senate versions will be worked out in joint House/Senate conference committees. Legislative leaders have said they would like to complete action on the budgets by the end of May.

A recent League report shows that the ability to read by the end of third grade is central to a child’s success in school, life-long earning potential, and ability to contribute to the state’s economy. But almost two of every five Michigan third-graders do not demonstrate reading proficiency on the MEAP, with one in four scoring at the lowest level.

The research is clear: Learning begins in infancy, with the most rapid and critical brain development occurring during the first three years of life. States that have seen the most dramatic improvements in early literacy have made substantial investments in early interventions. The governor’s 2016 initiative recognizes the importance of the early years and deserves support.

Governor’s Reading Initiative and Legislative Actions to Date

There are three basic components to the governor’s third grade reading initiative. Below are the governor’s recommendations and actions taken by the House and Senate subcommittees:

(1) Investment of $23.6 million in federal funds for improvements in child care quality and access, funded through the Department of Education budget.

Governor’s Proposal:

  • $6.1 million for provider payment increases for licensed child care centers and homes that accept children with a state subsidy, and that have at least two stars on Michigan’s five-star quality rating system.
  • $16 million to allow families to remain eligible for the child care subsidy for up to one year, even if their incomes rise.
  • $1.5 million to allow families to earn up to 250% of poverty without losing child care subsidies—but only if families initially qualified at the current eligibility threshold of 121% of poverty.
  • $5.7 million to hire more child care inspectors needed to ensure that state-licensed child care centers and homes are meeting basic health and safety requirements.

The number of low-wage working families able to receive a child care subsidy has dropped by nearly 70% since 2003, in part because of the state’s low eligibility rates and provider payments. As a result, Michigan has unspent federal child care funds that the governor proposes to use to enhance quality and expand access. While this is a small step forward in a grossly underfunded system, it moves the state in the right direction after years of neglect for the well-being of thousands of vulnerable infants and toddlers whose parents must work to support their basic needs.

Legislative Actions to Date: The Senate subcommittee approved all of the governor’s recommended changes for child care. The House subcommittee rejected the expansion of child care licensing consultants, but approved the other child care enhancements. The increases in child care rates and eligibility were included in a supplemental budget bill recently signed by the governor, so will be implemented in the current budget year. Funds to expand child care licensing staff were not part of the supplemental budget bill.

(2) The dedication of $25 million in School Aid funds for services to support families and encourage early literacy, as well as improve reading instruction in grades K-3.

Governor’s Proposal:

  • $5 million for home visiting programs for at-risk families to encourage early literacy activities.
  • $1 million for parent education pilot programs.
  • $5.9 million for testing and professional development for elementary teachers and administrators to ensure they have the best tools to diagnose and improve reading difficulties in children, along with literacy coaches for K-3 teachers.
  • $10 million for additional instruction time (before, during or after school, or in the summer) for children who need extra assistance.
  • $2.6 million for continued implementation of the Kindergarten Entry Assessment.

Legislative Actions to Date: The Senate subcommittee approved the governor’s recommended third grade reading initiative, and added an extra $10 million for additional instruction time for students who are not on track with reading skills. The House subcommittee rejected the governor’s third grade reading initiative.

(3) An additional $100 million for children at risk of falling behind their peers academically, with funds to be used in part to ensure that children are reading at grade level by the end of third grade.

Governor’s Proposal:

  • An increase of $100 million in At Risk School Aid funding—the first significant increase since 2001—bringing total funding to $409 million.
  • Funds would continue to be allocated to districts based on the number of students eligible for free meals, giving additional resources to districts educating a high number of low-income children.
  • At Risk funds are to continue to be used to improve third grade reading, as well as ensure that youths are career and college ready when they graduate from high school.

Legislative Actions to Date: The Senate Subcommittee approved the additional $100 million for At Risk services, and added language that requires that at least 50% of the increase be spent on third grade reading—in addition to existing spending. The House Subcommittee rejected the increase in At Risk funds.

Early Intervention Can Improve Reading Skills

High-quality child care allows parents to work to support their children, and prepares children to succeed in school.

  • Child care is both a support for working parents and employers, and an environment where children learn. More than half of children under age 5 are in child care at least part of the week, and while high-quality child care can help them succeed in school, low-quality care can threaten their health, safety and development.
  • Increases in child care payment rates and eligibility proposed by the governor and endorsed by the House and Senate appropriations subcommittees on School Aid/Education help to improve child care quality and allow parents to keep care longer even if their income rises. State policies, including low provider payments and income eligibility thresholds have contributed to a 70% drop in the number of families provided subsidies, and this trend needs to be reversed if Michigan is going to be a “comeback state for all.” A lack of access to affordable child care has made it impossible for many parents to work to support their children, and the economy has suffered. For example, a single mother with two children in care earning $11 an hour who gets a 50-cent raise (bringing income to $23,880 for a family of three) would lose her state child care subsidy, and child care costs would jump from about $3,000 per year to $18,000—a complete barrier to work. The quality and stability of a child’s relationships, including with child care providers, are critical to healthy development and future school success.
  • Although not part of the governor’s budget or the subcommittee budgets, an increase in the initial entry-level eligibility rate for child care, which has been at 121% of poverty since 2003, is needed to help low-wage parents enter the workforce. While it is helpful that parents may be able to keep their child care longer, even with small wage increases, Michigan still will have the second lowest initial income eligibility thresholds for child care in the country. An increase in the entry eligibility level from 121% to 150% of poverty would be a good start.
  • At a minimum, the state must ensure that all children in licensed child care are in settings that comply with basic state health and safety requirements. The House Appropriations Subcommittee on Education rejected the governor’s proposal to increase the number of child care inspectors charged with ensuring that licensed child care centers and homes meet basic state health and safety regulations. Recent federal audits have found serious problems in Michigan’s oversight of child care safety, including the failure to do all required criminal record and protective services background checks for people coming in contact with young children, as well as hazardous conditions such as blocked fire exits, unsupervised toddlers, and chemicals within reach of children. The governor and Senate subcommittee have supported funding for additional child care inspectors, bringing Michigan from one of the highest ratios of inspectors to child care providers (1:153) to the national average (1:98).

The governor’s recommendation to invest in early intervention services is an important step in improving children’s ability to read by third grade.

  • Efforts to help children read must begin long before they reach third grade or even kindergarten. Because the most rapid and critical brain development occurs in the first three years of life, programs that foster maternal and infant mental and physical health are critical. Examples include prenatal care, childhood lead poisoning prevention, home visiting programs that help parents with early literacy activities, and better efforts to identify infants and toddlers with disabilities and developmental delays through the state’s Early On program.
  • Family income is the most reliable indicator of academic success, and Michigan must more aggressively address poverty and economic opportunity, including the restoration of the Earned Income Tax Credit (included in Proposal 1), and income assistance policies that provide families with some stability as they get additional education and training and enter the workforce. National tests show that four of every five Michigan fourth-graders from families with incomes below or marginally above the poverty level ($24,000 for a family of four in 2013) did not demonstrate proficiency in reading in 2013 compared with roughly one of every two higher-income students. Students from low-income families are more likely to face barriers such as illness, transportation problems, no access to high-quality child care, unhealthy housing, mobility, homelessness and unsafe neighborhoods.

 

Investments Needed in a Critical but Sometimes Overlooked Component of Healthcare – Oral Health

 

The governor’s budget for the year starting Oct. 1, 2015 includes significant investments for both children and adults in a critical, but sometimes considered optional, component of healthcare – oral health.

The Problem

Oral health impacts every aspect of an individual’s life, from the young to the elderly, from how one feels, to how one looks, to how one is able to eat or not, to how one is able to concentrate at school or at work. Oral health disease is very costly when it forces individuals to hospital emergency rooms where the only treatment is for the pain and not the problem. Even more tragic are hospital admissions to intensive care units when untreated dental infections travel to other parts of the body, such as the heart. Dental disease has been linked to chronic diseases such diabetes, stroke and heart disease. In addition, research is linking poor maternal oral health to preterm and low-birthweight babies.

Tooth decay remains the No. 1 chronic disease in children, but it is preventable with access to good dental care. Like potholes, cavities just grow larger, more expensive to repair and more painful. All children need to be able to learn and progress in school, but toothaches and other dental problems cause them to lose concentration or miss school.

It is critical that all Medicaid-eligible children in Michigan have access to the Healthy Kids Dental program and to good oral health opportunities.

A Partial Solution for Children and Adults

The governor recommends continuing expansion of the Healthy Kids Dental program but not to all Medicaid-eligible children. His recommendation is to expand the program into the three remaining counties without the program (Kent, Oakland and Wayne) but only to children under age 9. While continued expansion is very good, it does leave more than 170,000 low-income children without coverage, many of whom are children of color. The recommendation calls for investing $22 million, including $7.5 million in state funds. These children and their families have waited a long time for this coverage – essential for children to be healthy and able to learn. Tooth decay has been shown to impede academic progress as well as social progress.

Another key investment in the governor’s budget is $12 million, including $8 million in state funds, to expand access for adult dental services for Medicaid enrollees by implementing a statewide dental managed care contract and eliminating the current ineffective fee-for-service system. This proposal, if adopted, will be implemented in the last quarter (July – September) of budget year 2016. While Medicaid currently covers dental services for adults, few dentists participate due to the extremely low reimbursement rates. Poor access can result in escalated health conditions for adult Medicaid enrollees that drive individuals to seek care in hospital emergency rooms and sometimes inpatient stays if the dental infection travels to other parts of the body (i.e., the heart). In addition, treatment in the emergency room does not treat the underlying dental condition. Rather, individuals are simply given pain medication, perhaps antibiotics, are told to follow-up with a dentist, and are sent home.

Legislative Action to Date on the Governor’s Proposal

The House subcommittee concurred with the governor’s recommendation to expand Healthy Kids Dental to children 0-8 in Kent, Oakland and Wayne Counties. The subcommittee did not concur with the recommendation to expand access to adult dental services indicating further discussion is needed.

The Senate subcommittee concurred with expanding Healthy Kids Dental to the three remaining counties, but delayed implementation until July 1, 2016 in order to cover all eligible children in those counties, not just children under age 9. The subcommittee concurred with the governor’s recommended managed care contract for Medicaid adult dental services but recommended implementation be delayed from the governor’s recommended July 1, 2016 until September 1, 2016.

Comprehensive Solution for Children and Adults

To fully address the oral health needs of Medicaid enrollees, both children and adults, expanded access to preventive and treatment services is needed. Full expansion of Healthy Kids Dental to all Medicaid-eligible children in all counties is essential. Expanded access for adult Medicaid enrollees also is imperative to allow routine, preventive services as well as treatment to be provided at the right time, by the right provider and in the right setting. Most dental conditions can and should be treated in dental offices, not in hospital emergency rooms.

 

Annual Report 2014

2014 Highlights: Progress despite challenges

Despite continuing economic challenges in Michigan in 2014, notable progress was made on policies to improve the lives of the state’s low- and modest-income families.

The Michigan League for Public Policy played a key role in a positioning the Michigan Earned Income Tax Credit for an increase, which will help more than 1 million children in Michigan and boost incomes of 800,000 families earning the least.

At the end of 2014, lawmakers and the administration reached a compromise on a road funding plan. If voters approve a sales tax increase with revenue earmarked for road repairs, the Michigan Earned Income Tax Credit will rise to 20% of the federal credit. The tax credit was included to offset the sales tax increase impact on those working families earning the least.

The League has been the chief advocate for the tax credit and worked with candidates in the fall election to highlight the impact in each legislative district resulting from the 2011 decision to cut the credit to 6% of the federal credit. The League supported the credit with strategic information to policymakers, policy briefs, interactive graphics as well as the legislative district fact sheets.

Among other accomplishments, the League:

  • Supported the push for a higher minimum wage with high-quality analysis and infographics. Lawmakers increased the wage to $8.15 in 2014, rising to $9.25 by 2018.
  • Successfully held an income tax rollback at bay.
  • Embedded race equity broadly in the League’s work.
  • Worked with Priorities Michigan to promote better budget priorities in the state.
  • Highlighted the lack of child care inspectors in Michigan and the inadequate child care subsidies. The governor’s 2016 budget reflects $6 million for more inspectors.
  • Created a popular online calculator, Making Ends Meet in Michigan, which shows how much you need to earn to cover basic needs.
  • Inspired introduction of legislation to fix the gap in financial aid grants for adults wishing to attend public colleges and universities. The executive budget for 2016 restores $6 million in such grants.
  • Convened a work group on mass incarceration and held a well-attended forum on solutions to reducing prison sentences.
  • Highlighted gains in the state budget with the widely used Budget Briefs project, including funding for 10,000 additional children in preschool.
  • Illuminated shortfalls in education funding, and drew widespread attention to a plan, later scuttled, that would have diverted revenue from classrooms to pay for roads.
  • Weighed in on mandatory retention for third-graders not proficient in reading. Through testimony, meetings with lawmakers and a policy brief, the League promoted strategic interventions. The governor’s budget includes $49 million for such efforts.
  • Advocated for clean energy to improve health of residents of lower-income neighborhoods.

Message from the President & CEO, Gilda Z. Jacobs

Thanks to you — donors, funders, members and friends – the League’s advocacy, outreach and communications have grown stronger and more strategically targeted than ever. The League continues to play a very effective role in improving public policy in Michigan, and our reputation for accurate, accessible and timely Information remains very strong.

Our commitment to improving the lives of economically vulnerable people in our state is unwavering.

In 2014, we saw years of advocacy for the Michigan Earned Income Tax Credit pay off with the inclusion of the credit as part of a package on the road funding that will go before voters in May 2015. This has been a hard-fought victory.

In 2014, our outreach connected with faith leaders, nonprofits and workers in every corner of the state and our advocacy work around the state budget has been strengthened with our popular Budget Briefs series that provides budget information as it happens, allowing testimony in time to make a difference.

The year 2014 was also a year of milestones.

The League’s Kids Count in Michigan project helped celebrate the 25th anniversary of KIDS COUNT. The League is proud to part of this national network that works to improve the lives of all children.

And the League was part of the 20 year celebration of the State Priorities Partnership, a national network of network of more than 40 independent, nonprofit research and policy organizations. And the League’s partnerships with Economic Analysis Research Network, Working Poor Families Project and with Families USA means Michigan benefits from broad national expertise on key issues.

In addition to the strength gained from our national leaders, the League has exceptional leadership and expertise on the state level.

Our board of directors includes two former budget directors, four former lawmakers, a former state Treasurer, and nonprofit leaders from across the state. Robert Swanson, our current board president, retired in 2007 as director of the Department of Labor and Economic Growth and he serves as a member of the Civil Service Commission.

Our year-end fundraising exceeded the target of $20,000 for a Rapid Response Fund. In all, we raised $80,000! Many of our grants do not allow lobbying so it’s critical to our advocacy work that we raise these dollars from individual donors. Thanks to the many of you who contributed.

As you look over this report, I hope you’ll spend some time reviewing our policy agenda, Building a Stronger Michigan, which was completed at the end of 2014. We plan to use this document going forward to target our efforts to make Michigan a place of economic opportunity for all.

Thanks to you, all of this is possible.

Board of Directors

EXECUTIVE COMMITTEE

Robert W. Swanson, BOARD CHAIR
Retired Director, Michigan Department of Labor & Economic Growth

H. Lynn Jondahl, IMMEDIATE PAST BOARD CHAIR
Former State Legislator

Charles L. Ballard, Ph.D., VICE-CHAIR
Department of Economics, Michigan State University

Don Gilmer, TREASURER
Former State Budget Director

Delois Whitaker Caldwell, MEMBER-AT-LARGE
Retired President & CEO
Goodwill Industries of Greater Detroit

Bob Emerson, MEMBER-AT-LARGE
Former State Budget Director

_____________________________________

Ann Andrews, Vice President
Disability Claims Specialists
L & S Associates, Inc.

Richard Ball, O.D., Ph.D.
Former State Legislator

Georgi-Ann Bargamian, Educational Director
International Union – UAW

Sheilah P. Clay, President & CEO
Neighborhood Service Organization

Robert Cohen, Executive Director
Jewish Community Relations Council & Michigan Jewish Conference

Lee Gaddies, Legislative Chair
12th Precinct Neighborhood Coalition

Sonia Harb, Director
Technical Assistance Center
University of Michigan—School of Social Work

David Hecker, President
AFT Michigan

B. Daniel Inquilla, Attorney
Farmworker Legal Services of Michigan

Robert Kleine
Former State Treasurer

Eric T. Mayes, Ph.D., Ed.M.
Assistant Professor
Johns Hopkins University

Jennifer R. Poteat
Harry A. & Margaret D. Towsley Foundation

Charles Pryde, Regional Director
Government Affairs
Ford Motor Company

Sarida Scott, Executive Director
Community Development Advocates of Detroit

Kevin L. Seitz, Retired, Executive Vice President
Health Care Value Enhancement
Blue Cross Blue Shield of Michigan

Mary Alice Williams, Former President & CEO
Nokomis Foundation

League Staff

Gilda Z. Jacobs, President and CEO

Jackie Benson, Receptionist/Membership Associate
Paul Diefenbach, Data Analyst
Karen Holcomb-Merrill, Vice President
Jan Hudson, Senior Policy Analyst
Phyllis Killips, Assistant to the President
Tillie Kucharek, Graphic Designer
Yannet Lathrop, Policy Analyst
Mary Logan, Administrative Support Staff
Shannon Nobles, Outreach Specialist
Judy Putnam, Communications Director
Peter Ruark, Senior Policy Analyst
Danielle Smith, Prosperity Coalition Coordinator
Pat Sorenson, Senior Policy Analyst
Alicia Guevara Warren, Tax Policy Analyst
Renell Weathers, Outreach Director
Ben Wells, Insurance Associate
Lawrence Wells, Chief Operating Officer
Jane Zehnder-Merrell, Kids Count Project Director

Contributors list is included in the PDF

 

 

 

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)

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