The Michigan no one is talking about

Data is everywhere. It informs our most basic practices, from what phone we use to what type of plastic makes our water bottles. When we are presented with numbers and minimal context it can feel overwhelming. But this is why we’re here at the League, to help capture the tangible implications of data to create a story.

When the national KIDS COUNT Data Book is released every year, we find out where Michigan stands among our peers. What is harder to see is how Michigan can improve. This is why we have compiled a new report, Enhancing Child Well-Being in Michigan: A Guide to Improving KIDS COUNT Outcomes and Rankings, that showcases not only where we need to improve, but more importantly how, and what that would look like. We delve deeper into the data, beyond rankings, to learn how many children need to be impacted in each Kids Count domain area for Michigan to improve, and what policies can help change that.

infographic 2.pub - PublisherMichigan ranks in the bottom 10 states for the number of children living in high-poverty areas. Almost one-fifth of our children live in a census tract with at least 30% of its residents living in poverty. Too many Michigan kids are experiencing poverty in their households as well as their neighborhoods. More than 1 in 5 kids in Michigan lives in poverty, ranking the state 34th in the nation and worst in the Midwest.

Poverty has far-reaching effects and impacts outcomes in each of the KIDS COUNT indicators. It has been directly tied to education outcomes, hindering the very thing children need to have upward mobility. With 71% of Michigan’s fourth-grade children not proficient in reading and 71% of eighth-grade children not proficient in math, we cannot afford to ignore an important means towards economic security of our children and their families. When children live in high-poverty areas, the impacts of poverty are effectively doubled. Concentrated poverty puts a burden on families, and isolates them from necessary resources like employment, food stores and government services that could help to lift them from poverty. Independent of families experiencing poverty, neighborhood characteristics have been linked to diminished health and education outcomes, delinquency, extended time in poverty and psychological distress. These effects start once a neighborhood reaches 20% of its residents in poverty.

This factor is increased tenfold for Michigan’s African-American children. Children of color are more likely to attend schools with higher rates of poverty. Over half of African-American children in Michigan are living in concentrated areas of poverty compared to 7% of their White peers. More than 9 out of 10 African-American children are not proficient in fourth-grade reading, compared to only half of their White peers. And 95% of African-American children in eighth grade aren’t proficient in Math, compared to 66% of their White peers. Socioeconomic disparities in schools is the largest predictor of racial gaps in educational success. Schools in high-poverty areas are underfunded, and have fewer resources.

Michigan is 41st in the country for children living in high-poverty areas. To become the best in the nation, we would need to have 350,704 fewer children living in high-poverty neighborhoods, a 92% drop. Michigan would need to reduce children in high-poverty areas by 3% to move up just one place in national rankings.

To improve Michigan’s ranking and reduce high-poverty areas, policymakers and stakeholders must address poverty. We can advocate to improve the standard of living for families by promoting policies that ensure access to services and stronger communities through fully funding revenue sharing. Michigan can better support parents experiencing poverty with improvements to our child care subsidy programs, and by restoring the state Earned Income Tax Credit (EITC) to pre-2012 levels.

Small children at a preschool center.

Small children at a preschool center.

Child care costs are higher than the average rent, and this expense relates directly to a parent’s ability to join the workforce and maintain employment. By increasing eligibility and reforming the reimbursement structure, more families will have access to this vital service. This helps families remain in and reenter the workforce, and will increase the number of income tax payers. Beyond child care, the EITC is the best way to aid families in getting out of poverty. In Michigan, the EITC used to be 20% of the federal credit, but in recent years has been reduced to 6%. By restoring the EITC to 20%, we can reduce the number of families and children living in poverty while also improving children’s health and education outcomes.

Whole communities are impacted when we leave families in poverty. To improve our communities we need to help individual families thrive.

These are not just numbers. This is not just data. Poverty is the greatest danger to our children and policymakers must act now address it.

— Harriet McTigue

Facing the realities of child care and work

Twenty-plus years ago when I was the mother of three young children, I worried—like most parents do—about finding child care that I trusted on my budget, as well as how to juggle my job with the inevitable childhood colds, ear infections and bouts of pink eye.

Both seemed like mountains to climb. My first two children were born 14 months apart, so for a period I needed to find infant care for two. High-quality infant care was not only in short supply, but it came at a higher cost. My third child suffered from asthma, so he was frequently sick, changing my work availability without notice.

I was lucky. I had a job that provided me flexibility to deal with child care changes and sick days. My work was largely during standard working hours when there was a greater supply of care options, and I didn’t have children with special needs. I also had the resources to pay for higher-quality child care, which cost more than my mortgage at the time.

But, the reality is that I didn’t know what high-quality child care was at the time. I tried to rely on my uninformed instincts and word of mouth, but I didn’t feel confident that I was doing what was best for my children.

Today, thanks to the work of the Office of Great Start and the Early Childhood Investment Corporation, parents have some tools to evaluate quality in child care settings, including a five-star rating system for child care providers.

MI child care challenges opportunities graph 1Unfortunately, many parents still can’t afford higher-quality child care, and have to rely on informal relationships with neighbors and relatives—many of whom are juggling work, health, financial and other struggles of their own. The cost of child care for two children in a Michigan center exceeds $18,000 per year, consuming over 60% of the wages of a family with income at 150% of poverty ($36,900 annually for a family of four).

The Michigan Legislature recently approved some long-needed increases in child care spending, including funds to boost payments to child care providers—many of whom have such low incomes that they are themselves eligible for some forms of public assistance. Also approved was a small bump in the income eligibility cut-off for child care subsidies (from 125% of poverty to 130%).

This is good news for Michigan families but we have a long way to go. The number of families receiving child care assistance has fallen dramatically, in part because of the state’s stringent income eligibility guidelines and disincentives for providers.

The need for affordable child care remains high. Unemployment has dropped in Michigan and nationwide since the Great Recession, but many of the new jobs come with very low wages. Between June of 2016 and 2017, Michigan was one of only 10 states with declining average weekly wages—adjusted for inflation—for workers in private sector jobs.

In a new Budget Brief, the League outlines needed child care reforms including a further expansion of eligibility and child care practices that provide incentives for providers to care for children who receive a state subsidy.

We can and must invest in child care as a two-generational strategy to ensure that parents can work to support their children, and children have the benefit of a high-quality early learning experiences. Both are critical investments in the state’s future economy and workforce.

— Pat Sorenson

Lack of support with child care costs leaves families struggling

Mallory Boyce

Mallory Boyce

Ever since my junior year of high school, I’ve worked at a child care center in the Grand Rapids area, my hometown. This means that for the past four summers, I’ve spent up to 40 hours a week surrounded by 60 to 75 mostly happy school-age kids. My daily tasks include playing all types of tag games, braiding hair, teaching conflict resolution, and insisting that Band-Aids are of no use unless one is actually bleeding. All of that, plus two free snacks a day? Not a bad gig.

In the noise, fun and controlled chaos of the day-to-day work, it’s easy to forget what my job means for my kids and their families. As a recent report by the League discusses, child care is important as a tool for both educating young children and allowing parents to contribute to economic development.

I am most often reminded of this significance during small talk with people I have only just met, like the woman cutting my hair, a coworker at a second job, or anyone else who might ask what I do for a living. If whoever is doing the asking happens to be the parent of young children, more often than not they wonder about the weekly price for a child of whatever age at the center where I work. I’ll give them a quick estimate, which has always been met with a sigh and a brief lament on the high cost of child care, the stress of trying to balance work with family life and general frustration with the system as a whole.

Kids at play snipTheir frustration is legitimate. While child care is essential for most working families, its cost can often be debilitating. Child Care Aware’s 2016 report on the price of child care in each state found that the price of center-based child care for two children in a family with married parents was 22% of Michigan’s median income for that family type. Lower that family’s income to the poverty line and the same care takes up 91% of their income. Infant care eats up nearly 50% of the median income for single parents, with care for two children coming in at 86%.

The League’s Making Ends Meet in Michigan report shows the cost of child care for every county, and it is a significant expense for families in every corner of the state. Such a large portion of a family’s monthly budget going toward child care leaves little left over for other essentials like housing, food and transportation.

Even with the eligibility threshold for receiving subsidized child care being raised from 125% to 130% of the federal poverty level in Michigan’s 2018 budget, Michigan’s threshold is still among the lowest in the nation. As of 2015, the Child Care Development Fund’s Policies Database Book of Tables showed only three other states with eligibility thresholds below 130% of the federal poverty line, with the majority of states’ thresholds ranging from 150% in South Carolina to 315% in North Dakota. With 22% of the state’s children living in poverty, Michigan can’t afford to be trailing the rest of the nation when it comes to providing affordable child care to families with low incomes.

There is much to strive for when it comes to ensuring that Michigan’s working families have access to affordable, quality care for their children. Further increasing the eligibility thresholds for receiving help with child care expenses and otherwise working to ensure that Michigan’s children are well taken care of will help craft both strong families and a strong workforce, bringing us one step closer to a Michigan where all children thrive.

— Mallory Boyce

Michigan continues to lag behind nationally in outcomes for kids

Data point after data point seems to demonstrate clearly that we are failing to educate our children in Michigan. We know the importance that education has to achieving long-term economic security. Education levels also impact health and other outcomes over time. And poverty, health and communities have an effect on how well kids are able to learn. This means that our policies should recognize that our educators alone cannot improve the system or outcomes, and that policies need to support our teachers and schools along with their partners in helping kids to reach their potential.

infographic 2.pub - PublisherKids living in poverty or with low incomes also face a number of challenges. Of fourth-grade students whose families have low incomes, 84% were not proficient in reading compared to around 60% of students whose families were not low income. Where children live and attend school can also impact their outcomes. Albeit reading proficiency is not much better, but fourth-graders attending schools in suburban areas tend to have better rates of proficiency compared to students in city, town and rural communities.

Also impacting child development and outcomes, like education, are the notably high rates of children living in high-poverty neighborhoods. Michigan ranked 41st in the 2017 KIDS COUNT Data Book with 17% of kids living in areas with concentrated povertya worsening trend from 2008-2012. Even more disturbing are the racial disparities in the data: Michigan has the highest rate of concentrated poverty in the country for African-American children and top five highest for Latino kids. Children living in high-poverty communities and attend schools located in these areas are likely to have limited access to resources or parks and recreation and be exposed to more crime and violence. These adverse childhood experiences are not only traumatic to child well-being, but carry into adulthood. Michigan must invest in communities.

What does this mean for our kids who are growing up in an evolving and competitive global economy?

Schools with larger numbers of students with low incomes struggle to help their students overcome many of the barriers their students face and experience every day—and they cannot be expected to improve educational outcomes alone. Recent investments in the At-Risk program—an equitable approach to target resources in high-poverty schools—and in child care are moves in the right direction. Programs like Communities in Schools, Pathways to Potential and before- and after-school programs are great examples of addressing the whole child and family to help kids thrive and need to be expanded. And, using a cradle to career strategy through the use of programs like home visitation and adult education are critical.

Our educators, however, are the foundation for our kids’ learning and they must be supported. Recent moves by the Legislature to “reform” the teacher retirement system will do nothing to retain and attract some of our most important figures for our kids. This is a move backwards and will do nothing to improve the quality of education. The League will continue to support students, families, schools and communities as we work to get Michigan heading in the right direction on education.

— Alicia Guevara Warren

CREC yourself before you wreck yourself

“CREC yourself before you wreck yourself.” For the last 11 years, I have been trying to slip that joke into my work in the Legislature and now the League. And I had an epiphany yesterday that I might finally be able to do it…as long as I put my own name on it.

I also need to give it a proper explanation, as there’s probably a small sliver of people who know what CREC is AND get 90s Ice Cube lyrics. CREC stands for Consensus Revenue Estimating Conference. Held in January and May of every year, CREC is comprised of the directors of the House and Senate Fiscal Agencies and the state treasurer or budget director.

These fiscal experts analyze and report on economic indicators and state revenue projections. The consensus that is reached during the January conference becomes the revenue basis for the governor’s budget proposal, and the consensus reached during the May conference become the revenue basis for the budget bills passed by the Legislature.

The May Consensus Revenue Estimating Conference was earlier this week, and the news on state revenues is not great. But there is a silver lining, at least to me—it makes “wreck yourself” particularly relevant.

Since January, some Michigan legislators have been really hot on cutting the state income tax. This is a bad idea on its face, but especially in this current context. As League CEO Gilda Z. Jacobs said, “Given the fluctuations in state revenues, it was and continues to be foolhardy to consider tax cuts that would further jeopardize state services.”

if-only-i-had-checked-myselfSee! “CREC yourself before you wreck yourself” is not just a (bad) pun—it’s a valid point. The very intent of the Consensus Revenue Estimating Conference is for lawmakers to check themselves and incorporate these estimates into their state spending and budgets. And if they don’t take these forecasts seriously and make poor fiscal decisions, they stand to wreck our state budget, our state services and ultimately our state.

The Legislature needs to let talk of an income tax cut die. And when the House and Senate budget committees begin meeting soon, lawmakers should be sensible and strategic with our state dollars, investing in the programs and services that support our workers and families and get the most bang for our state bucks. For example, increasing state funding for child care and heating assistance can leverage hundreds of millions of dollars in federal funding.

The next few weeks are critical to the state budget and the priorities you and I value. To help you get involved, the League has put together a timeline and advocacy tips on the state budget. We also continue to produce budget briefs on some of the issues that are most important to us and to you: supporting education, including child care, K-12 schools and colleges and universities, protecting healthcare and the Healthy Michigan Plan, and reducing incarceration and providing adequate support for prisoners.

Whether you can work a rap reference in or not, I hope you will join the League in standing up for these budget priorities and urging lawmakers to make smart investments in our state’s future.

Alex Rossman

Lawmakers should abandon tax cut, uphold strategic investments in light of downward revenue estimates

For Immediate Release
May 17, 2017

Contact:
Alex Rossman
arossman@mlpp.org
517.487.5436

State budget funding for child care and heating assistance will bring in vital federal dollars

LANSING—The Michigan League for Public Policy issued the following statement on the revenue projections being announced at today’s Consensus Revenue Estimating Conference. It can be attributed to Michigan League for Public Policy President & CEO Gilda Z. Jacobs.

“Today’s downward revenue estimates should tell Michigan lawmakers two things. One, given the fluctuations in state revenues, it was and continues to be foolhardy to consider tax cuts that would further jeopardize state services. The state’s General Fund has not kept pace with inflation, and Michigan now has the second highest reliance in the nation on federal funds for basic services. Deep cuts sure to come in the federal budget—along with existing demands on state general funds—could put Michigan in a very precarious fiscal position and threaten the state’s ability to support the services and infrastructure needed to keep the economy growing. Lawmakers should be focused on creating a tax system that is fair and able to withstand economic downturns or swings in federal policy. We simply can’t afford to cut taxes in a time of unpredictable revenues.

“Two, in the context of lower than expected revenues, legislators must be very strategic when allocating state revenues to make sure that state spending priorities match the needs of Michigan’s residents. This includes investing funds in the current state budget in child care and heating assistance to leverage hundreds of millions in federal dollars to support working parents and put food on the tables of kids, seniors and people with disabilities through ‘heat and eat.’”

For more information, see the League’s budget briefs on child care and education and “heat and eat” and human services.

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

League advocates for improvements in education from cradle to career

pdficon May 2017
Pat Sorenson, Senior Policy Analyst

Budget Brief JPG USE THIS ONEAs Michigan legislators continue to debate state spending for the upcoming budget year, the Michigan League for Public Policy is advocating for improvements in education for all children in Michigan, including full funding for the services to children at risk of educational failure, expansions in access to high-quality child care, and additional funding for early literacy programs. The League is also calling for increased funding for adult education programs.

BB League advocates for improving education graphic 1The Michigan Senate and House of Representatives have approved separate versions of the 2018 state budgets for School Aid and the Department of Education. Differences between the two will now be worked out in joint House/Senate conference committees, which will convene after a May 17th gathering of economists and budget experts to determine expected revenues for the upcoming year.

While there are a number of budget enhancements in the current House and Senate budget bills that the League supports, both the House and Senate recommended funding levels below the governor’s budget proposal, including reductions in key programs that assist children in high-poverty schools.

House and Senate leaders have said that they plan to cut between $200 million and $500 million in state General Funds from the governor’s overall budget—in part to show that a state income tax cut is affordable. Other potential uses of the funds that have been discussed include debt reduction, more money in the state’s rainy day fund, or investments in state priorities other than those outlined by the governor.

The League opposes tax cuts that further reduce the state’s General Fund or School Aid Fund because they could derail the state’s long-term economic vitality. The evidence is clear that investments in education and infrastructure are directly connected to economic growth. Yet, when adjusted for inflation, ongoing General Fund revenues in the current year are lower than they were 50 years ago—increasing the state’s reliance on uncertain federal funds.

K-12 EDUCATION

Per-Pupil Spending: Two of every $3 in the School Aid budget are used to support per-pupil payments, which are the primary source of funding for school operations. For 2018, the governor recommended an additional $128 million to raise per-pupil spending by between $50 and $100, with districts currently receiving the lowest payments per pupil receiving the largest increase. The goal is to further reduce the gap in state funding between the lowest-funded districts and the highest.

The governor also proposed higher per-pupil payments for high school students, reduced payments to cyber schools, and a cap on funding for instruction programs for nonpublic and home-schooled students (cutting total funding by $55 million).

  • The Senate increased per-pupil payments to between $88 and $176—using $100 million currently provided to districts to offset teacher retirement costs under the Michigan Public School Employees Retirement System (MPSERS). The impact on individual districts varies, ranging from Public School Academies that are not part of MPSERS and lose no offset funding to some traditional districts that lose more in MPSERS offset dollars than they gain in a per pupil increase. The Senate Fiscal Agency has calculated the likely impact for all districts in the state.

The Senate rejected the governor’s proposal for higher per-pupil payments for high school students, as well as the cuts in payments to cyber schools. The Senate cut programs for nonpublic/home-schooled pupils by only $2 million.

  • The House provided an across-the-board increase for all districts in the state of $100 per pupil—rejecting the use of the formula that provides higher payments for the districts that currently receive lower per-pupil foundation allowances.

The House rejected the governor’s proposals to increase payments for high school students, as well as cuts for cyber schools and nonpublic/home-schooled student programs.

The League supports increases in school funding that help raise the quality of education and mitigate the impact of inflation and fixed costs on school operating funds. In the last decade, the minimum K-12 per-pupil foundation allowance rose 5.7%—less than half the rise in inflation at 15.1%.1

Declining Student Enrollment: Since Proposal A, the reliance on a per-pupil foundation allowance for school operations has meant that schools with rapidly declining enrollments can face at least short-term difficulties in adjusting to large funding losses. In recognition of the impact on local schools and students, the governor included $7 million for two years of supplementary funding for districts that have experienced large enrollment declines (more than 5% over two years).

  • Both the Senate and the House rejected the governor’s proposal for supplementary funding for schools with declining enrollments.

The League supports funding to ameliorate the impact of declining enrollments on local schools and their students.

Funding for Students Academically at Risk: The At-Risk School Aid program is the state’s best vehicle for addressing the educational challenges children who are exposed to the stresses of poverty bring through the schoolhouse doors. The governor recognized the need to focus on high-poverty schools by recommending an additional $150 million in At-Risk funding for 2018 and by expanding eligibility.

Currently, the program provides state funds to schools based on the number of children receiving free school meals (130% of poverty). Under the governor’s proposal, districts could receive funding for children up to 185% of poverty. In addition, the governor would provide funding to “out-of-formula” or “hold-harmless” districts that are currently not eligible. These are districts that have combined state and local per-pupil foundation allowances that are higher than the basic amount, even though they may have a high number of children living in poverty. The governor projects that with these changes an additional 130,000 children could be served.

  • The Senate increased At-Risk spending by $100 million and agreed with the governor on changes in student eligibility. The Senate altered the allocation formula as follows: 1) $5 million of the new funding would be earmarked for English language learners; and 2) districts that are currently eligible for At-Risk funding would be guaranteed at least as much per pupil as they are receiving in the current school year (applied to the broader base of economically disadvantaged students), with the remaining new funds (estimated to be approximately $41 million) awarded to all districts, including those currently not eligible.
  • The House increased At-Risk funding by $150 million and agreed with the governor on changes in student eligibility. The House also adopted the governor’s proposal to expand eligibility to “hold-harmless” and “out-of-formula” districts but capped the per-pupil At-Risk payment to those districts at 50%. The House added budget language indicating an intent to use a portion of 2019 At-Risk funds to reimburse school districts that provide transportation to pupils enrolled in schools of choice or charters.

The League supports full funding of the At-Risk program, as well as expansion of eligibility to all children who are economically disadvantaged or at risk of educational failure.

Reading by Third Grade: Michigan law now allows for grade retention if children are not reading proficiently by third grade, making the need for early literacy programs even more critical. The governor proposed doubling funding for early literacy coaches at Intermediate School Districts (ISDs) from $3 million to $6 million. The largest component of the state reading initiative—funding for additional instructional time for children who are behind in reading—was retained at $17.5 million by the governor.

  • The Senate agreed with the governor and increased funding for ISD early literacy coaches by $3 million.
  • The House slightly reduced total funding for early literacy and allocated remaining funds ($25.4 million) through grants to districts, with an estimated $245 per first-grade pupil.

The League supports increased investments in early literacy, including programs that address learning in the earliest years of life such as early intervention through the Early On program, expanded home visitation programs, and a state-funded preschool option for 3-year-olds in high-risk schools and communities.

Adult Education: Despite a high level of need, state funding for adult education has dropped 70% since the 1997-2001 budget years. The governor recommended flat funding of $25 million for adult education programs in 2018.

  • The Senate agreed with the governor on flat funding for adult education and provided $2.5 million for Career and Technical Education pilot projects in the state’s five prosperity regions.
  • The House agreed with the governor on flat funding for adult education.

The League supports an increase in funding for adult education of at least $10 million for $35 million total, which would help nearly 8,000 additional students and serve as an important tool for improving educational achievement and adult literacy—part of a two-generational approach to improving the state’s economy.

CHILD CARE AND EARLY EDUCATION

Child Care Subsidies: The number of Michigan parents with low wages who received assistance with their child care costs fell by over 70% between 2003 and 2016—in part because of the state’s stringent income eligibility standards and low child care payments. In addition to forcing parents to either stay out of the workforce or find care that isn’t suitable for their children, the state’s child care policies made Michigan one of only a handful of states that had to turn away federal child care funds because of a lack of state matching dollars. In recognition of the need for high-quality child care, the governor included an increase of $6.8 million in the current budget year (2017), as well as $27.2 million ($8.4 million in state funds) in the 2018 budget to increase rates paid to child care providers.

  • The Senate provided $23.8 million ($7.1 million in state funds) for increased child care provider rates, as well as $5.8 million to increase the income eligibility threshold from 125% to 130% of poverty. Rate increases would be based on the number of stars a provider has in the state’s quality rating system, ranging from a maximum increase of 50 cents per hour for providers with no stars to $1.50 per hour for child care centers with a five-star rating. Unlicensed providers (family, friends and neighbors) who care for infants or toddlers could receive an increase of 25 cents per hour.
  • The House agreed with the governor to include $27.2 million for rate increases for child care providers.

The League supports payment increases for child care providers, as well as a boost in income eligibility levels—both needed to ensure that parents can secure and keep their jobs while children are in safe and supportive settings that encourage optimal learning. In addition, the League supports efforts to bolster the supply of high-quality child care businesses, including the movement away from hourly billing to biweekly or monthly payments, which make it easier for providers to care for children from families with low wages.

Great Start Readiness Preschool Program: The governor recommended level funding for the Great Start Readiness program ($243.6 million) which provides a high-quality preschool education for 4-year-olds from families with low incomes. Currently, the program is for children from families with incomes below 250% of poverty, but districts can expand it to children with incomes of up to 300% of poverty if they can demonstrate that all children with lower incomes who want to participate have had the opportunity to do so. For 2018, the governor restricted eligibility to children in families with incomes of 250% of poverty or less, and required that 100% of children meet that income eligibility level, rather than 90% as currently required. In addition, the governor changed the allocation formula to ISDs.

  • The Senate agreed with the governor on spending levels and on the new allocation formula, but retained the option of serving children in families with incomes of up to 300% of poverty.
  • The House adopted the governor’s recommendations for the Great Start Readiness Program funding and allocations.

ENDNOTE

  1. K-12 Schools Minimum Foundation Allowance History, Senate Fiscal Agency (October 1, 2016).

 

Child care for working families–A foundation for growing the state’s economy

pdficonMarch 2017
Pat Sorenson, Senior Policy Analyst

BB Child Care March_17_2017 chart 1Access to child care is a necessity for working parents and a foundation for Michigan’s economic growth and vitality. Sadly, Budget Brief JPG USE THIS ONEMichigan ranks among the lowest states in the country in its investments in child care for families with low and moderate incomes—even turning back federal child care funds because of restrictive state policies that prevented families from getting the care they needed to work and support their families.

High-quality child care moves Michigan forward in two ways:

  1. Child care is an engine for economic development because it helps parents work or participate in the training and education they need to move forward. For employers, it increases the pool of workers and can reduce absenteeism and turnover—a threat to their bottom line.
  2. High-quality child care provides the learning environment very young children need to be prepared for preschool and ultimately success in kindergarten and beyond—including the critical benchmark of reading by third grade.

BB Child Care BibsMarch_17_2017 chart 2The High Cost of Child Care

The cost of placing one infant in a child care center in Michigan ($10,178 in 2015) is nearly as much as the annual cost of tuition at a public four-year college ($11,994) and exceeds the median annual cost of rent ($9,168).1 For parents with two children in a child care center, annual child care costs are nearly $18,500.2 Child care expenses are a heavy financial lift for many of the state’s working parents but are particularly burdensome for families with low wages.

For families living at or near the federal poverty level, child care costs can be an absolute barrier to employment, often forcing parents to rely on a patchwork of relatives, neighbors and friends who may be unable to make long-term commitments. The predictable results are frequent work disruptions that can jeopardize their jobs, or the tough decision to leave their children in care they don’t believe is safe or adequate.

BB Child Care March_17_2017 chart 3The Low Wages of Child Care Workers

Child care providers are some of the lowest-paid workers in the state. Despite the incontrovertible scientific evidence that the first three years of life are when children’s brains grow most quickly, setting the stage for lifelong learning and success, the annual median wages provided to people caring for young children fall below those of veterinary assistants, animal control workers, manicurists and telemarketers.

Michigan’s Child Care Subsidy Program

Michigan’s Child Development and Care (CDC) program helps families with low wages who are working, completing high school/GED courses, participating in job training programs or engaging in family preservation activities. Parents can choose care in a range of settings if providers are available locally and affordable, including licensed child care centers, child care group/family homes or with unlicensed family, friends and neighbors.

Michigan has very restrictive child care policies and, as a result, the number of families receiving assistance has dropped dramatically, along with child care expenditures.

  • Between 2009 and 2016, the number of families receiving child care subsidies fell by nearly 70%, from 74,557 to 23,411 (monthly averages).
  • The dollars flowing to communities to help support working parents, employers and the local economy fell by over 70%, from $30.2 million monthly to only $8.4 million.

Payments to Providers Are Too Low to Ensure Access and Quality

The rates paid to child care providers depend on the age of the child and the type of setting, including the number of stars a provider has in the state’s five-star quality rating system. Payments range from $1.35 per hour for unlicensed providers to a maximum of $4.75 per hour for infants and toddlers in a five-star child care center. While tiered reimbursements can create good incentives for quality improvements, the reality is that in Michigan’s grossly underfunded child care system, most child care providers are not receiving the higher payment rates. In February of this year, 60% of the 8,434 child care programs in Michigan received the base child care rate because they had 0 or 1 star in the quality rating system.3

In addition to low rates, the complexity of the provider payment process threatens the supply of high-quality care for children. Michigan is one of only a handful of states that pay child care providers on an hourly basis. Without predictable income, it is even more difficult for providers to maintain their businesses and accept children with subsidies.

Child Care Eligibility Levels Are Among the Lowest in the Country

In 2016, Michigan had the lowest income eligibility levels in the country for child care assistance and second lowest as a percentage of state median income. Even with the increase to 125% of poverty in 2017 ($25,525 for a family of three), Michigan’s eligibility cutoff remains at the bottom. Without an expansion of eligibility, many families will struggle to enter the job market, and the long-term prospects for their children are bleak. Research has consistently shown that growing up under the stresses of poverty can affect children’s ability to learn and succeed later in life.

The Governor’s 2018 State Budget

  • Increase child care payments: The governor includes $6.8 million in the current budget year (2017), along with $27.2 million in the 2018 budget, to increase rates paid to child care providers by approximately 20%, effective in July of this year.
  • Increase oversight of child care providers: The governor recommends $2.2 million for annual on-site visits to unlicensed child care providers, as well as expanded fingerprinting and background checks. These changes are mandated as part of the federal reauthorization of the Child Care Development Block Grant.

Endnotes

1. Parents and the High Cost of Child Care, 2016 Report, Child Care Aware.
2. Ibid.
3. Great Start to Quality Participation Data (February 1, 2017).

Many bright spots in governor’s budget, but cloud of tax cut still looms

For Immediate Release
February 8, 2017

Contact:
Alex Rossman
arossman@mlpp.org
517-487-5436

Governor’s budget includes funding for many League priorities that support kids, workers and families

LANSING—The Michigan League for Public Policy issued the following statement on Governor Rick Snyder’s 2018 budget presented this morning. This statement can be attributed to Michigan League for Public Policy President & CEO Gilda Z. Jacobs.

“The governor’s budget today is very positive and includes money for many of the programs and services that help struggling workers and families. The League has been a champion for leveraging federal funds to support important state services, and the budget includes $6.8 million to draw down the federal money needed to keep the Heat and Eat program going and $8.4 million in state funds for child care to secure much-needed federal funding. The budget upholds continued funding for the Healthy Michigan Plan, which provides healthcare for more than 600,000 Michiganians with low incomes under the Affordable Care Act, and we appreciate Governor Snyder’s continued commitment to protecting that successful program in Michigan. (more…)

From first-generation college student to social justice warrior

Janice Mendoza

Janice Mendoza

As a child, my mother always motivated my brother and I to achieve through public education. In her heart, she knew that being educated would be the only route that we would have out of poverty.

As a kid in elementary school, I faced two main challenges: 1) English was not my first language, and 2) my mother’s lack of education prevented her from being able to help me with my academics. Living in a predominantly Mexican American community in San Bernardino, California, my teachers faced extra pressures in aiding my development. I found myself falling behind due to my inability to complete homework assignments. For a while, my brother who is one year ahead of me held the responsibility of trying to teach me various subjects. Finally, I received an invitation to participate in an after-school program to address my needs. (more…)

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