Making change: The state budget as a tool for racial and ethnic equity

—  SUMMARY—

The 2018 budget includes several investments that address pervasive, unacceptable and avoidable barriers to opportunity for many of the state’s children of color, but a much more intentional effort is needed to overcome long-standing inequities that can be traced to public policies in Lansing and nationwide. State budgets are not “colorblind”—even if their disproportionate impact is unintended.
Through its Kids Count program, the League documents the well-being of children in Michigan, and advocates for policies that can eliminate the indefensible outcomes experienced by children of color and their families. For every negative outcome there is a backstory—a history of inequities based on race, income and place. Michiganians share a value of opportunity for all children, but the data show us that good intentions have not always resulted in good outcomes.

ECONOMIC SECURITY

Differences in economic security and opportunity are at the core of racial and ethnic disparities in outcomes for families and their children. The systemic barriers to economic security include housing discrimination, the historical impact of redlining on homeownership, segregation in public schools, differences in educational quality and opportunity, racial discrimination in the workplace, and inequities in the ability to accumulate assets and wealth.
These systemic barriers have their roots in historical racism and discrimination, but persist today in part because of budgets and other public policies that do not recognize the extra resources required to overcome the cumulative effects of inequities based on race and ethnicity.

2018 BUDGET DECISIONS AFFECTING CHILDREN’S ECONOMIC SECURITY:

1. Expanded funding for food assistance, but more work needs to be done to ensure access to healthy food. In 2018, the state’s “heat and eat” policy will continue, providing more food assistance to nearly 340,000 Michigan residents, including thousands of children of color and their parents. Still lacking is enough support for access to healthy foods for the many children of color who live in “healthy food deserts.”
2. Continued to endorse policies that have led to the decline in funding for income and family support programs. The Legislature rejected a small increase in the clothing allowance for children receiving income assistance—all of whom are living in deep poverty. Funds were included to expand access to child care services so parents can work, as well as the Pathways to Potential program in schools around the state.

HEALTH

Michigan has a history of effectively covering children through the Medicaid and MIChild programs, and with the Affordable Care Act, the rate of uninsured children dropped even further. However, the state’s children of color still have less access to needed physical and mental healthcare, are more frequently born underweight and likely to die before their first birthdays, and face environmental injustices related to exposure to toxins in their homes and neighborhoods.

As a result of historical and current barriers to a high-quality education and career path for many African-American and Latino parents, their children have less access to private health insurance. Two of every 3 African-American children—and half of Latino children—in Michigan rely on public health insurance programs. Consequently, expansions in publicly funded healthcare coverage can significantly improve equity for children.
2018 BUDGET DECISIONS AFFECTING CHILDREN’S HEALTH:

1. Supported the Healthy Michigan Plan with both federal and state funding, providing healthcare coverage to 650,000 Michigan residents with low incomes.
2. Provided funding for Medicaid services for over 390,000 pregnant women and children.
3. Established pilot projects to integrate the administration of behavioral health services—a controversial move that will begin as a pilot project in Kent County.
4. Provided a small funding increase to address the need for transportation for families seeking nonemergency healthcare, a persistent barrier to access for many families with low incomes.
5. Continued to invest in efforts to address the Flint lead exposure crisis, approving a slight decrease in the state portion of the costs of services from $43.7 million this year to $41.5 million in 2018. Still at issue is the prevention of similar crises in other areas of the state, and the Legislature included $1.25 million to begin implementing the recommendations of the Child Lead Poisoning Elimination Board.
6. Approved $815,000 to prevent dangerous chemical vapor intrusions. The Legislature appropriated the funds to continue a new response program for the intrusion of volatile chemical vapors into homes and buildings.
7. Continued to underfund local public health services. Funding to local public health departments is approximately the same as it was in 2004.
8. Eliminated a health innovation mini-grant program. The Legislature eliminated the $1 million Health Innovation Program that provided mini-grants to a range of community agencies for efforts to address the needs of special populations, including families of color.

FAMILY AND COMMUNITY

A long history of racial and economic inequality, along with racial segregation, have led to gross differences in the resources available in the neighborhoods many Michigan children of color grow up in. Too frequently children of color are living in high-poverty areas where safety is a concern, and access to parks, fresh food, and after-school and other enrichment activities is limited. African-American children in Michigan are eight times more likely to live in high-poverty communities than White children.
In addition, the barriers and economic stresses facing parents in lower-income communities of color often affect their ability to provide the support and care their children need. As a result, children of color are overrepresented in Michigan’s child welfare system.
2018 BUDGET DECISIONS AFFECTING FAMILIES AND COMMUNITIES:

1. Failed to adequately fund revenue sharing payments to cities, villages and townships. The 2018 budget includes $6.2 million in one-time funding for cities, villages and townships, which is not enough to overcome years of lagging funding, resulting in current payments at only 30% of the statutory level.
2. Provided funding for child protective services and foster care, but continued to underfund services that could prevent child abuse and neglect. Funding is available for child welfare staffing and services needed to move children out of the foster care system and into permanent homes—as required by a settlement agreement stemming from a lawsuit against the state for failures in its child welfare system. However, the lawsuit does not specifically address the disproportionate representation of children of color in the state’s child welfare system or require additional efforts to prevent child abuse and neglect. In fact, the 2018 budget reduces funding for family preservation by $6.1 million.

EDUCATION

A high-quality education is a vital path to equity for children in Michigan, yet the data show that Michigan has a long way to go. Children of color have less access to highquality early learning experiences and face barriers throughout the educational system. Three of every 4 African-American students and two-thirds of Latino students in the state are considered economically disadvantaged, a stark reminder of broader social issues that result in inequities in educational achievement, high school completion and college readiness.
Of great concern are disparities in third-grade reading given Michigan’s new retention law. More than half (56%) of African-American third-graders would have been subject to retention if the policy had been implemented in 2015-16, compared to only 21% of White students. For the retention law to be successful and avoid contributing to racial and ethnic inequities, it is critical that there be sufficient funding for the services needed to address the cumulative impact of inadequate early learning opportunities for children of color, including the early identification and treatment of developmental delays and high-quality child care and preschool.
Further, despite evidence that having at least one teacher of the same race increases the likelihood of school success for children of color, Michigan teachers do not reflect the demographics of their students. In the 2015-16 school year, 67% of Michigan students and 91% of the state’s teachers were White—making Michigan’s teaching workforce less diverse than the national average.
Finally, reflecting diminished opportunities beginning early in life and accelerating during the school years, only 10% of African-American students and 19% of Latino students met or exceeded the SAT benchmark for college readiness in 2015-16. As a result, African-American and Latino youths are less likely to pursue postsecondary education within six months of graduating and are much more likely to require remedial coursework once in college.
2018 BUDGET DECISIONS AFFECTING EDUCATIONAL SUCCESS:

1. Increased per-pupil spending with larger increases for districts currently receiving the lowest payments. The Legislature approved an increase of between $60 and $120 per pupil, using a formula that benefits districts with lower payments. In the 10 years between 2007 and 2017, the minimum per-pupil payment increased 6%, while the cost of living increased 12.6%.
2. Increased payments for high school students. The final budget includes $11 million to provide a bonus payment of $25 per pupil in grades nine through 12—recognizing the costs associated with the high school curriculum.
3. Increased funding for students at risk of educational failure. The Legislature approved an increase of $120 million for the At-Risk School Aid program—bringing total funding to $499 million—and expanded eligibility to an estimated 131,000 students. The At-Risk School Aid program is the state’s best vehicle for addressing the educational challenges faced by children who are exposed to the stresses of poverty and has the potential to help improve equity for children of color.
4. Failed to provide sufficient funding to address racial and ethnic disparities in early literacy. For 2018, the Legislature approved $3 million in new funds to double the amount available for early literacy coaches to $6 million statewide. Other early literacy funds ($20.9 million) were consolidated to be distributed to districts.
5. Failed to invest in adult education. Despite a high level of need, state funding for adult education has dropped by 70% since the 2001 budget year. For 2018, the Legislature provided continuation funding of $25 million for adult education programs, along with $2 million for pilot programs focused on career and technical education.
6. Providing too little financial aid for students with low incomes. Average tuition in Michigan was the sixth highest in the nation during the 2015-16 school year and the state currently spends less than half the national average on needs-based tuition grants. Michigan has also completely eliminated state financial aid for students who have been out of high school for more than 10 years. For 2016, the Legislature: (1) tightened the tuition cap for universities; (2) slightly increased funding for financial aid programs; and (3) failed to reinstate the Part-Time Independent Student Grant for older students.