Governor proposes needed increases in still woefully underfunded human services budget

pdficonMarch 2017
Pat Sorenson, Senior Policy Analyst

Budget Brief JPG USE THIS ONEThe governor has proposed several increases in the 2018 state budget that would benefit Michigan children and families with low incomes, including funds to retain food assistance benefit increases approved this year and additional support for clothing for children in families receiving income assistance.

BB League recommendations graph 1These increases, while welcome, do not overcome years of disinvestment in basic subsistence programs for families living in deep poverty. Since 2007, state lawmakers have restricted eligibility for public assistance through more stringent lifetime limits, toughened sanctions—including the potential elimination of benefits for an entire family because of the truancy of one child—and imposed an asset test for food assistance benefits.

Childhood Poverty Matters

Partly as a result of these policy changes, the number of Michigan children eligible for the state’s primary income assistance program, the Family Independence Program (FIP), dwindled from over 150,000 in December of 2009 to under 40,000 in 2016—a reduction of nearly 75%. The FIP caseload is now at its lowest point since 1957.1

In the face of this decline, child poverty remained stubbornly high, rising from roughly 19% in 2009 to 23% in 2015—an increase of 19%. Poverty rates for children of color are even higher, with nearly half of all African-American children living below the poverty line, as well as 1 in 3 Latino children.

While often thought of as a program for adults, the reality is that nearly 8 in 10 FIP recipients are children and especially young children.2 The well-being of these children is of critical importance as research shows that exposure to chronic stress or adversity in the earliest years of life can BB League recommendations graph 2affect children’s emotional and cognitive development in ways that can be longlasting.

  • Healthy Births: Children of women living in poverty are more likely to be born too small and too early—putting them at an immediate disadvantage developmentally.
  • Health and Mental Health: Children from families with low incomes are more likely to suffer from asthma and be hospitalized unnecessarily, as well as be exposed to environmental toxins. Some of these health problems persist into adulthood. Adults who were exposed to more stress early in life are more likely to have a range of health problems, including alcoholism, depression, heart disease and diabetes.3
  • Academic Achievement: Poverty has long been connected to poorer performance in school, with more recent research suggesting that the conditions of poverty might actually disturb brain development.4 By the end of four years of high school, economically disadvantaged students are more likely to have dropped out without a diploma (15% vs. 9% for all students).5

BB League recommendations graph 3With poverty comes substandard housing, exposure to environmental threats like lead, less access to healthy food, unsafe neighborhoods, and inadequate healthcare and child care. To be successful, strategies to address childhood poverty must be two-generational, recognizing the impact of family economic stress on parental health, parenting, and access to work-related supports like child care and transportation.

FIP Helps Stabilize Families and Provides for Children’s Basic Needs

Children’s Clothing Allowance: Children in families receiving FIP live in very deep poverty. The FIP payment represents less than one-third of the federal poverty line ($18,871 for a family of three in 2015) and only 63% of poverty when the family receives federally funded food assistance.

With fewer children being served by FIP and benefit levels basically stalled (maximum of $492 per month for a family of three, with average monthly payments of $366 in 2016), it has become more difficult to juggle housing, transportation and other necessary costs, as well as provide children with decent clothing for school or other personal needs. The governor’s recommendation to expand the clothing allowance for children in families receiving FIP is a small way to recognize those costs.

Pathways to Potential: The governor has also recommended an increase in funding for the Pathways to Potential program that places “success coaches” in schools to identify barriers faced by students and their families and make appropriate referrals to services in both the public and private sector. This model has promise for meaningful school/community partnerships and a two-generational approach to school success for all children. Currently in 259 schools in 34 counties, the funding increase would allow the program to expand to more schools with low student achievement, as well as additional rural areas.

Access to Adequate Healthy Food Matters

The Supplemental Nutrition Assistance Program (SNAP) is the primary federal program to curb hunger and funds Michigan’s Food Assistance Program (FAP). The beneficiaries include children, working parents, seniors and people with disabilities.

Research has shown that the program has been highly effective.

  • Access to food assistance reduces both poverty and food insecurity, especially among children.6
  • Maternal receipt of food assistance during pregnancy reduces the incidence of low birthweight.
  • Young children with access to food assistance and better diets are healthier, less likely to be obese as adults and more likely to complete high school.
  • Diminished food budgets at the end of the month—when food assistance benefits have run out—have been linked to serious health problems related to chronic conditions such as diabetes, as well as increased disciplinary events among school-aged children.7

State Policies to Ensure Access to Nutritious Foods Are Critical

Benefits for Michigan’s FAP are entirely federally funded. To be eligible for assistance, families must have incomes below approximately 200% of poverty or $40,840 for a family of three in 2017. Approximately 1.4 million Michigan residents currently receive food assistance through FAP, with children representing 4 of every 10 beneficiaries. The average family of two receives only $228 monthly.8

“Heat and Eat” Policy: This year, the Michigan Legislature approved $6.7 million in state funding to reinstate the “heat and eat” policy that allows Michigan to leverage additional federal SNAP funds and increase food assistance benefits for more than 350,000 Michigan families, seniors and people with disabilities. For 2018, the governor recommends $6.8 million to continue the program as a smart way to leverage more than $300 million in federal funding to prevent hunger.

Asset Test for FAP: In 2002, the federal government gave states the option to decide if and how they would include a family’s assets when determining eligibility for benefits. Since that time, approximately 35 states have eliminated their asset tests. Michigan was one of the first states to eliminate the asset test but reinstated it in 2012. To receive FAP benefits, applicants must now have less than $5,000 in assets—including the value of vehicles after certain exemptions.

Limits on assets increase state administrative costs—which are funded by the state at 50% of total costs—by requiring state workers to verify additional information, and could discourage families with low incomes from saving a portion of their wages to create the small cushion required to meet crises like a car repair needed to keep their jobs.

The Governor’s 2018 State Budget

Continue federal funding for “heat and eat” food assistance benefits. The governor includes $6.8 million in state funds to allow this program to continue, drawing down more than $300 million in federal funding and increasing food assistance to over 350,000 working parents, children, seniors and persons with disabilities in the state.

Increase the clothing allowance for children in families receiving income assistance. The governor provides a total of $9 million (up from $6.3 million this year) for the clothing allowance for children receiving FIP, with new funds dedicated to increasing the allowance from $140 per child each year to $200.

Expand Pathways to Potential. The governor includes $5.6 million, including $3.3 million in state funds, to expand the Pathways to Potential program that places staff in schools to help connect families to needed community services. New funds in 2018 would be used to lower caseloads in some areas of the state as well as expand into new schools. Priority for expansion would be given to schools with low achievement or those in rural communities that have been targeted for economic development.

Endnotes

  1. Field Operations Administration Overview: Fiscal Year 2018, Michigan Department of Health and Human Services
  2. Family Independence Program: Total Recipients, Adults and Children, Michigan Department of Health and Human Services (January 2017).
  3. In Brief: The Impact of Early Adversity on Children’s Development, Center on the Developing Child, Harvard University; National Conference of State Legislatures, and the NGA Center for Best Practices.
  4. Kwon, D., Poverty Disturbs Children’s Brain Development and Academic Performance, Scientific American (July 22, 2015).
  5. 2014-15 Graduation Dropout Snapshot, Statewide 4-Year (2015 Graduation Cohort), MI School Data, Center for Educational Performance and Information.
  6. Food insecurity is defined as lacking the resources necessary for consistent and dependable access to food.
  7. Long-Term Benefits of the Supplemental Nutrition Assistance Program, White House Council of Economic Advisers (December 2015).
  8. Trend Report of Key Program Statistics through January 2017, Michigan Department of Health and Human Services.