The 2016 State Budget: Gains for some Children and Families but Deep Disparities Persist

The 2016 Michigan budget includes a number of important investments in children and families that should be celebrated, but there is still much work to be done. The state needs to address initiatives to ensure that children are lifted out of poverty and provided the level playing field needed to overcome persistently deep and discouraging disparities based on income, race and place.

The positive budget outcomes include an initiative to improve reading by third grade, increased funding for schools with high numbers of children from low-income families, and an expansion of dental care to children in three of the state’s most populous counties. Unfortunately, the budget falls short in key areas related to economic growth and opportunity, and many investments are not on a scale that will make Michigan a comeback state for all of its residents.

There are measurement tools in place to monitor the impact of budget decisions over time. The governor has established a set of performance measures through the MI Dashboard. The League, in conjunction with the Annie E. Casey and Skillman foundations, annually publishes KIDS COUNT data that can be used as a barometer of the state’s success in addressing the needs of children. Together, these performance measures give Michigan residents the opportunity to compare decisions by state lawmakers with outcomes for families, children, schools and communities.


Outcomes for Children and Families

Child poverty: Despite overall improvements in the state’s economy since the Great Recession, child poverty—a key indicator on the governor’s dashboard—remains high, especially for certain racial and ethnic groups. Nearly 1 of every 4 Michigan children—493,000 children statewide—lives in poverty, with child poverty rates increasing from 19% to 23% between 2007 and 2014.1

Child poverty rates vary dramatically based on race and ethnicity. In 2014, nearly half (47%) of all African-American children and one-third (32%) of Hispanic children lived in poverty (family income below $18,850 for a family of three), compared to 16% of non-Hispanic white children.2 Nearly 1 million (968,000) children lived in families with relatively low incomes of below 200% of poverty, or $37,700 for a family of three. Sadly, 230,000 Michigan children live in extreme poverty with family incomes of 50% of the federal poverty level or less—under $9,425 for a family of three.3

Very young children are even more likely to live in poverty. More than half (54%) of African-American children under the age of 6 and 34% of young Hispanic children live in poverty in 2013, compared to 18% of non-Hispanic white children.

Parents without secure employment: In 2013, 751,000 children, one-third of all Michigan children, lived in families where no parent had fulltime, year-round employment. African-American and Hispanic children are much more likely to have all parents unemployed or underemployed (at 57% and 42%, respectively).4

Inadequate food: In 2012, 370,000 children, or 16% of all Michigan children, lived in households facing the possibility of not having adequate food. And, despite overall economic growth since the recession, the percentage of children receiving free- and reduced-priced school meals has grown from 46% in 2009 to 49% in 2013.5

Lack of affordable housing: Housing costs consume a large proportion of family income for many families, but particularly for families from certain racial and ethnic groups. In 2013, nearly one-third of Michigan children lived in households where housing costs exceeded 30% of monthly pretax income. More than half (54%) of African-American children and 36% of Hispanic children lived in households with high housing costs.

Since 2000, rents have risen while the number of renters who need low-priced housing has increased. Nationwide, only 28 adequate and affordable units are available for every 100 renter households with incomes at or below 30% of the area median income.6 In Michigan’s 10 largest counties, the rates range from 22 units per 100 very low-income families in Macomb County to 31 per 100 in Kalamazoo County. Between 2000 and 2011-13, the number of rental units available per 100 very low-income households fell by over 50% in Wayne County, 45% in Macomb County and 30% in both Oakland and Saginaw counties.

Children living in areas of concentrated poverty: Statewide, in the period of 2009-2013, 393,000 Michigan children lived in areas with poverty rates of 30% or more. Children of color are much more likely to be concentrated in highpoverty neighborhoods, including 55% of African-American children and 30% of Hispanic children, compared to only 7% of non-Hispanic white children.

Budget and Policy Changes Affecting Income Security

Despite high child poverty rates, access to income assistance continues to be restricted. Changes in Family Independence Program (FIP) policies and eligibility over the last several years have resulted in thousands of very poor Michigan children losing basic income assistance. Restrictive policies include changes in lifetime limits for assistance, sanctions for families receiving FIP based on the truancy of a single child, and the strict enforcement of sanctions for failure to fully comply with work and training requirements.

Between 2007 and the current budget year, spending on income assistance declined by 66%, and the number of families receiving income assistance is now at its lowest level since the Kennedy administration. Approximately 7 of every 10 FIP recipients are children, and 60% of those children are under the age of 9. Of the adult grantees, over 90% are women and half are African-American.7

The 2016 budget continues this decline, with FIP funding reduced by over $25 million because fewer families are expected to be eligible. In addition, lifetime limits and sanction policies are continued in 2016, and current state policy regarding school truancy was recently codified into state law.

One positive change in the 2016 budget is the elimination of the Extended FIP. The program gives households that are no longer eligible for income assistance due to increased earnings a nominal $10 per month in assistance for six months. This minimal assistance has, however, counted against the state’s more stringent lifetime limits, hurting children in the long run.

Continued reductions in tax credits for low- or moderate-income working families have forced more children into poverty. In 2011, the Michigan Legislature adopted an unprecedented tax shift that reduced taxes on businesses by over 80% while increasing taxes on individuals by more than 20%. As part of that shift, Michigan’s Earned Income Tax Credit (EITC), an effective anti-poverty tool that helps hardworking families with incomes below or moderately above the federal poverty line, was cut by 70%.

Late last year, Michigan lawmakers agreed to restore the EITC from its current level of 6% of the federal credit to 20% as part of Proposal 1 that was also intended to increase the sales tax to pay for needed road repairs. With the rejection by voters of Proposal 1, the Michigan House of Representatives has voted to eliminate the state EITC entirely.


Outcomes for Children and Families

Reading by fourth grade: Early reading proficiency is a critical predictor of academic success and is a core indicator on the governor’s dashboard. Roughly 3 of every 4 third-graders without the requisite literacy skills will still have reading difficulties as high school students and are at higher risk of retention, behavioral problems and ultimately school dropout.

The percentage of students who are reading proficiently by the end of third grade, as measured by the Michigan Educational Assessment Program, has been increasing but there are unacceptable disparities based on race and ethnicity. While more than three-quarters of white fourth-graders read proficiently, less than half of African-American students are proficient.8

High school completion: Although fewer young people have been dropping out of high school, great disparities still exist based on race, ethnicity and economic status. Dropout rates range from 5% for Asian-American students in Michigan to 25% for children in migrant families. African-American students are 2 1/2 times more likely to leave school without a diploma, while Hispanic children are twice as likely to drop out.9

Disconnected youths and young adults: Disconnected youths are teenagers ages 16 to 19 who are not in school and not working. In Michigan, African-American teens are 2 1/2 times more likely to not be in school or working, while Hispanic teens are twice as likely to be disconnected.

The teen years are critical for young people—a time when they have the chance to gain the skills needed to move into higher education or training and ultimately succeed in the workforce. For Michigan’s economy, the risks associated with high numbers of disconnected youths are obvious, including a shortage of skilled workers to compete in today’s knowledge-based economy, greater dependence on public assistance, poorer physical and mental health, and potentially the cost of increased crime and incarceration.

A new national study that looked at teens and young adults (ages 16 to 24) who are neither working nor in school found that 1 of 7 are disconnected, with staggering variations in some cities based on race and ethnicity. Their conclusion was that both place and race matter, with continued residential segregation by race disproportionately harming African-American teenagers and young adults, and particularly boys and young men.10 In their study of the most populous U.S. metropolitan areas, Michigan had youth and young adult disconnection rates ranging from 11.3% in the Grand Rapids/Wyoming area to 17.7% in the Detroit/Warren/Dearborn area. In the Detroit metropolitan area, 1 of every 4 young African-American youths was disconnected, compared to 1 of 10 for white youths.11

College access and completion: African-American and Hispanic students in Michigan are less likely to enroll in college than their white peers and more likely to be required to take at least one remedial course. In 2012–13, only 42% of African-American high school graduates in Michigan enrolled in college, and more than half of those were taking at least one remedial course. By contrast, 51% of white students were enrolled in college, with 23% in remedial courses.

Taking remedial courses is a financial burden for students and slows down the time it takes to earn a degree. One study shows that the longer it takes for students to move through college—because they are attending part-time or because of remedial classes—the less likely they are to earn a degree. Referring to remediation as the “Bermuda Triangle” of higher education, the study finds that 35% of students who take remedial courses graduate with a four-year bachelor’s degree in six years compared to 56% of those without remediation.12

Of equal concern are disparities in college graduation. Nationwide, African-Americans are catching up in terms of college enrollments but are still less likely to finish with a degree. While Michigan’s overall six-year university graduation rates exceed the national average,13 there are wide graduation gaps based on race and ethnicity in many Michigan colleges, and some are growing.14

The result of inequalities in college graduation rates are differences in educational attainment, earnings and economic opportunity for parents, and greater hardship for families and their children. The overall impact for Michigan’s economy is the loss of potential for a more skilled workforce and greater economic growth.

Budget and Policy Changes Affecting Educational Outcomes

New funds provided to improve reading by the end of third grade. The 2016 budget includes $31.5 million for a new third-grade reading initiative, along with child care enhancements that ensure higher-quality early learning experiences for young children. A key change made by the Legislature to the governor’s original proposal was an increase in funding for additional instructional time for children needing special assistance from $10 million to $17.5 million. In addition, $2.5 million will be available through Intermediate School Districts for home visits to encourage early literacy, and funding for access to highquality child care was increased. Investments in the earliest years can improve reading by third grade, which is a key predictor of school success. Given the wide gap in fourth-grade reading proficiency based on race and ethnicity in Michigan, these early investments are a necessary step in creating equity and opportunity.

Increased funding for adult education. The 2016 budget includes a $3 million increase for adult education. While small in comparison to the cuts the state has made to adult education over the past 20 years (from a high of $185 million in 1996 to $22 million this year), it is a significant recognition of the importance of building the skills of Michigan workers to prepare them for the realities of the current economy. Given the high number of African-American and Hispanic youths who are not in school or working and racial and ethnic disparities in high school graduation rates and college attainment, additional investments in adult education are critical.

Increased funding for public schools of between $70 and $140 per pupil, offset by the loss of special grants for some districts. The 2016 budget provides a range of per-pupil funding increases for districts, using a funding formula that gives those receiving less from the state this year a larger increase in 2016. The Legislature also eliminated grants that are currently available to districts based on their adherence to educational best practices or their ability to meet performance outcomes. The loss of those grants will reduce the per-pupil increase to a minimum of $25 for some districts.

An increase in funding for districts with high numbers of students who are at risk of educational failure. After more than a decade of flat funding, the 2016 budget includes an additional $70 million for at-risk school programs, bringing total funding to $379 million. These funds are provided to school districts for a range of instructional and noninstructional services for at-risk students based on the number of children qualifying for free school meals. Funds are to be used to improve reading proficiency by the end of third grade, and to ensure that high school graduates are career- and college-ready. The 2016 budget requires districts to implement a multitiered system of supports, instruction and intervention at least for kindergarten through third grade, based on a model already adopted in some areas of the state.

Given the relationship between poverty and educational outcomes, as well as disproportionately high poverty rates for children of color, the targeting of state funds to districts with high numbers of low-income children is a good approach to addressing inequities in education. In 2016, a significant percentage of the expected increase in per-pupil funding for many urban districts will be from expanded at-risk program dollars.

A small increase in funding for Michigan universities and community colleges. While universities and community colleges in Michigan will receive small increases in state funding in 2016, postsecondary education is becoming increasingly unaffordable for many residents. At most Michigan public universities, tuition more than doubled in the past 10 years, and in 2013-14, the state had the sixth highest university tuition in the country.15 Tuition has also increased at the state’s more affordable two-year colleges but not as dramatically.16

The governor’s dashboard includes college affordability as a core indicator of Michigan’s progress. Unfortunately, the cost of a postsecondary education, as measured by tuition and fees as a percent of median family income, is becoming more unaffordable. In Michigan, community college tuition rose from 3.5% of median income in 2006-07 to 4.7% in 201314, and university tuition climbed from 12.5% of median income to 18.1%. While the cost of Michigan community colleges is comparable to the national average, university costs, as a percent of median income, substantially exceed the national average.17

The 2016 budget includes $20 million for a 1.5% increase for university operations and $4.3 million for a 1.4% increase for Michigan’s 28 community colleges. University funding comes as performance funding based on undergraduate completions in critical skills areas, research expenditures, six-year graduation rates, total completions, administrative costs as a percentage of core expenditures, and the percentage of students receiving Pell Grants. Universities are also required to limit tuition increases to 2.8% in order to receive performance funding, and one Michigan university has already declined the additional funding in favor of a larger increase in tuition.

No new funds for needs-based scholarships for low-income students interested in a postsecondary education. For the first time in many years, there was no increase in funding for the Tuition Incentive Program or the other major financial aid and grant programs for postsecondary students. The governor had recommended $6 million for Part-Time Independent Student Grants that help older students—the first time the grants would have been funded since 2009. Grants would only be available at community colleges, and priority was to be given to former postsecondary students who left prior to completing a degree or certificate.

Unfortunately, the Legislature did not include funding for the Part-Time Independent Student Grants program in the final 2016 state budget. Given the importance of a postsecondary degree in today’s economy and the lower rates of college graduation for some racial and ethnic groups, investments in financial aid for older students are critical in creating opportunity for all residents, and this decision moves Michigan in the wrong direction.


Outcomes for Children and Families

Health insurance coverage for children and families: Michigan has a history of effectively covering children through the Medicaid and MIChild programs, with the percentage of children uninsured consistently below the national average. The percentage of children uninsured still varies by race and ethnicity, with higher rates for American Indian and Hispanic children.

The Healthy Michigan Plan, which was implemented in 2014, has changed the health insurance landscape. In the first year of the expansion, the number of Michigan residents reporting they were uninsured, struggling to pay medical bills or delaying needed medical care dropped significantly. The percentage of adults reporting they were uninsured was cut in half (from 14% in 2012 to 7% in 2014) and half as many said that cost was the reason for not seeking needed medical care (dropping from 42% in 2012 to 21% in 2014). Access to specialty care remains a problem, with one-third of Medicaid recipients indicating that they had difficulties accessing such care, and shortages of care reported in many rural areas.18

Enrollments in the Healthy Michigan Plan have exceeded expectations. The first-year projection of 320,000 participants was surpassed within four months, and nearly 600,000 Michigan residents are now enrolled. Michigan’s program was enacted with a federal waiver and a second, more complicated waiver must be approved yet this year for the program to continue. If the waiver is denied, these newly insured residents will lose their coverage.19

Mental health and substance abuse services: With the launching of the Healthy Michigan Plan, dramatic reductions were made in state funding for mental health and substance abuse services. The assumption was that the vast majority of individuals who were not eligible for Medicaid but were receiving state-supported mental health and substance abuse services would be eligible for the new Healthy Michigan Plan, which is currently 100% federally funded. The transition has not been smooth, and concerns have been raised that state funding reductions were too large and too fast, resulting in reduced access to needed services.

In 2013, over 248,000 consumers were served by Michigan’s community mental health system. Of those, 52,000 were children and youths under the age of 19.20

Infant mortality: Michigan’s infant mortality rate has consistently hovered above the national average, which is substantially higher than other developed nations, but the state is making progress. Michigan’s infant mortality rate dropped from 7.6 to 6.9 per 1,000 births between 2006 and 2012, with almost 200 fewer infants dying before their first birthday in 2012 as a result. Nonetheless, the gap between the state’s two largest racial groups persists, with current rates of 11.9 per 1,000 for African-American infants compared to 5.6 per 1,000 for white newborns.21

Access to hospital obstetrical services: Over the last several years, a number of Michigan hospitals have closed their obstetrical (OB) units due to low Medicaid reimbursements. There are currently 18 contiguous counties in northern and mid-Michigan with no hospital OB units. To prevent further closures, the Michigan Legislature approved a special hospital OB payment for the first time this budget year.22

The need for access to delivery and emergency OB services for pregnant women and their babies is critical. More than 4 of every 10 births in Michigan was paid for by the state’s Medicaid program in 2013, and the percentage has been rising. In 2012, some Michigan cities had more than half of all births paid by Medicaid including Battle Creek (66%), Bay City (59%), Burton (61%), Dearborn (57%), Flint (86%), Grand Rapids (55%), Inkster (74%), Kalamazoo (64%), Lansing (58%), Lincoln Park (65%), Muskegon (79%), Pontiac (81%), Port Huron (68%), Saginaw (85%) and Taylor (63%).23

Access to dental care: Michigan currently provides preventive dental services to more than 600,000 children in 80 counties through the Healthy Kids Dental program. Access to dental services is essential to prevent tooth decay, the No. 1 chronic disease in children. Children with dental disease are more likely to suffer from infections, miss school, have difficulty concentrating in school because of dental pain, and ultimately suffer poorer health as adults, including an increased risk of heart disease. Untreated dental problems are more significant in children growing up in low-income families and in communities of color. Children living in deep poverty (family incomes less than $10,000 per year) were found to have missed 12 times the number of school days compared with wealthier children due to dental problems.24

Healthy Kids Dental improves access to care through a partnership with Delta Dental of Michigan that includes increased provider reimbursement rates. Although further expansions of the Healthy Kids Dental program have been approved for the 2016 budget year, in the current year Wayne, Kent and Oakland counties are not yet covered. Together, these counties are the homes of large numbers of children of color as well as Medicaid-eligible children. As of October 2014, just over one-quarter (28%) of white children eligible for Medicaid lived in a county without the Healthy Kids Dental plan, compared with almost two-thirds (63%) of Medicaid-eligible African-American children.25

Childhood immunization: Childhood vaccines are the safest and most effective way to protect children from preventable diseases, yet during the 2013-14 school year, Michigan had the 4th highest vaccine waiver rate for kindergartners in the country.26 The governor has made immunization rates part of his performance scorecard, and the most recent data show that Michigan has missed its targets for pediatric and adolescent immunizations. In April 2015, 74% of 19-36-month-old children had complete vaccinations, along with 67% of adolescents.27

New rules adopted by the state in December 2014 tighten procedures for parents seeking immunization waivers, and many public schools are working to reduce elevated vaccine waiver rates. In 2014, 71% of waivers were for medical reasons, with the remainder based on religious and philosophical preferences.28

Budget and Policy Changes Affecting Health Outcomes

Additional funding for Medicaid and the Healthy Michigan Plan. The Legislature included over $190 million ($47 million in state funds) in additional funding for the Medicaid program for the 2016 budget year, based on current projections of the number of persons who will be enrolled. In addition, $4.1 billion was appropriated for the Healthy Michigan Plan (including behavioral health services), which is financed with all federal funds for the final year. Beginning in the 2017 budget year, the state will be responsible for 5% of Healthy Michigan Plan spending, phasing up to 10% by 2020.

Included in the budget for next year is $24.2 million ($8.3 million in state funds) for full-year funding to continue approximately half of the rate increase previously provided to primary care providers to encourage them to serve persons insured by Medicaid. Access to a primary care physician is critical to ensuring continuous and high-quality medical care, as well as a gateway to specialty care.

Michigan’s supply of primary care providers only meets twothirds (66.3%) of the need for primary care services, and demand is expected to rise based on the state’s aging population and insurance expansion through the Affordable Care Act. Lower compensation for primary care providers who treat Medicaid patients is a significant factor, as a higher proportion of Medicaid patients typically results in lower overall compensation.29

The Healthy Michigan Plan covers individuals between the ages of 19 and 64 who are not currently eligible for Medicaid or Medicare. To be eligible, incomes must be less than 133% of the federal poverty level (up to $15,654 for an individual or $32,253 for a family of four). Enrollment in the Healthy Michigan Plan began in April of 2014. As of July 2015, nearly half of all enrollees are between the ages of 19 and 34.

Nearly 1.8 million Michigan residents are insured by traditional Medicaid, including more than 900,000 children. Children account for 55% of all Medicaid enrollees, but only 24% of total Medicaid costs.

In the current budget year, nearly $14 billion is allocated for medical services, including the Healthy Michigan Plan, representing over three-quarters of all spending in the former Department of Community Health budget. Other major expenditures are for behavioral health ($3.4 billion or 18.7%), and public health/maternal and child health ($618 million or 3.4%).30

Continued funding to prevent the closure of more hospital OB units in rural areas. The Legislature approved $11 million ($3.8 million in state funds) for rural hospitals for the special payments begun this year to help stop the ongoing closure of hospital OB units in rural areas. The governor had recommended that the special payments be eliminated.

Continued partial restoration of funding for mental health services for persons not eligible for Medicaid or the Healthy Michigan Plan. The Legislature approved a $20 million increase in state funds in the current budget year to help cover services for persons not eligible for Medicaid or the Healthy Michigan Plan. The budget for next year continues that small restoration of $20 million.

Funding to continue to follow through with the recommendations of the Mental Health and Wellness Commission. The final budget includes $12.7 million in state funds to implement recommendations of the governor’s commission. Of that total, $1.5 million in one-time funding is available in the last quarter of budget year 2016 to establish a transition program for children who have had multiple hospitalizations at Hawthorn Center, the state’s mental health facility for children.

Restoration of funding for autism services. For budget year 2016, the Legislature approved $36.8 million for autism services, restoring a cut made in 2015 because of the slow start-up of the program. Children and young adults through age 21 will be covered in 2016. Currently, children up to age 6 are covered. In addition, funding for a number of Michigan universities to train autism service providers is reduced from $7 million to $2.5 million.

Continued expansion of the Healthy Kids Dental program. For the 2016 budget year, the Legislature included $37 million ($12.7 million in state funds) to expand the Healthy Kids Dental program to 290,000 children ages 0 through 12 in Kent, Oakland and Wayne counties. With this expansion, approximately 130,000 children and youths ages 13-20 in these three large urban counties will still be left without care. It is estimated that a modest investment of $8.8 million in state funds would cover the remaining Medicaid-eligible children in Michigan, bringing in nearly $17 million in federal funds.

Rejection of the governor’s proposal to expand dental services for adult Medicaid enrollees. The Legislature rejected the governor’s recommendation to invest $23 million ($7.9 million in state funds) to develop a statewide managed care contract for dental services for adult Medicaid enrollees, an approach that would have increased dental care access for underserved adults. The total annual cost of the program was projected to be $92 million ($31.7 million in state funds).

Local public health services remain underfunded. The 2016 budget restores $1.5 million in funding for local public health departments for essential services which was eliminated by a budget-cutting Executive Order this year. This restoration brings funding for local public health services to the level it was 10 years ago.

Incentives for vaccine and immunization education and promotion were approved. For 2016, the Legislature approved $500,000 in state funds as a match for private donations for vaccine and immunization promotion for infants and toddlers. State funds could be spent only if private donations are received, with a match rate of $1 of state funds for every $4 of private funds.


Outcomes for Children and Families

Suspected and confirmed child abuse and neglect: The number of children who are in families suspected of child abuse and neglect, as well as the number of confirmed victims, has been rising in Michigan. In 2013, nearly 1 of every 10 children in Michigan lived in a family investigated for suspected child abuse or neglect—a total of almost 200,000 children. Between 2006 and 2013, the rate of children in investigated families in the state rose by 41%.31

In 2013, almost 34,000 children ages 0-17 in Michigan were confirmed victims of abuse or neglect, an increase of almost one-third since 2006. The majority of the cases involved neglect, often a byproduct of poverty, which escalated throughout Michigan during that same period. Sadly, national data show that 1 of every 8 children in the U.S. will experience confirmed maltreatment by age 18, with the risk of maltreatment highest in the first few years of life and elevated rates for African-American and American Indian children.32

Studies have documented that poverty and unemployment, problems more prevalent in communities of color, increase the risk of child maltreatment and particularly neglect. While most parents with incomes below the poverty level do not maltreat their children, poverty, especially when compounded by parental depression, untreated substance abuse and social isolation, can increase the risk of child abuse and neglect.33

Children in out-of-home care: Despite increases in suspected and confirmed child abuse and neglect, the rate of out-of-home placements with relatives or foster parents dropped by one-third between 2006 and 2013. Almost 10,000 children were placed outside their home at the end of the 2013 budget year, down from 16,700 in 2006. Infants are three times more likely to be removed compared to young children ages 1-5.

After an extensive review of child welfare data and policies in Michigan, the Michigan Race Equity Coalition confirmed in its 2014 report that children of color in the state are more likely to live in families investigated for abuse/neglect, and to be removed from their homes. In addition, African-American youths in Michigan are twice as likely as their white counterparts to age out of foster care, and less likely to be reunited with their families.34

Access to prevention services: One of the key findings of the Michigan Race Equity Coalition is that to reduce child welfare disparities, Michigan needs to place a greater emphasis on child abuse and neglect prevention and early intervention, as well as expansions of community-based services. While a national lawsuit against the state for its failure to protect children resulted in increased funding for staffing, training and other child welfare improvements, the litigation did not mandate improvements in efforts to prevent child abuse and neglect.

Juvenile justice services: African-American juveniles in Michigan are more likely to enter the juvenile justice system and are overrepresented at most stages, including arrests, detentions and waivers to the adult court. Between 2003 and 2013, over 20,000 Michigan youths were placed on adult probation, detained in jail or imprisoned for crimes committed before they were 18 years old, and the majority of the crimes were nonviolent offenses.35

The Department of Health and Human Services (DHHS) provides for the care and supervision of state wards ages 12 to 21 who are referred by the courts due to delinquency. The DHHS currently operates three residential facilities: W.J. Maxey Training School in Whitmore Lake, the Shawono Center in Grayling and the Bay Pines Center in Escanaba.

Budget and Policy Changes Affecting Child Safety

Funding for a performance-based contracting model for public and private child welfare services was continued. In the 2016 budget, the Michigan Legislature continued to provide funding for the Department of Health and Human Services to develop a performance-based model for funding child welfare services, with an analysis of the unit costs for out-of-home services expected by September 30, 2015. The model is being tested in Kent County, with all child welfare services delivered by private agencies.36

A special payment for parents who adopt a child who is later determined to have special needs was eliminated. For 2016, the Legislature eliminated a supplemental payment to parents whose children had medical needs that existed before an adoption, but were not identified until after the adoption was completed. The payment was cut in the current budget year through an Executive Order, and was not restored for next year. Adoption subsidies are provided to families who are adopting children with special needs, and include both cash and medical assistance. The supplemental payment had been an effort to address the concerns of adoptive parents dealing with health and mental health needs that were more serious than they anticipated during the adoption process.

Prevention and family support services continue to be underfunded. Funding for services to strengthen and reunify families continues to be woefully inadequate, with serious repercussions for the low-income families that are more likely to be identified as needing support. The Legislature provided continuation funding for prevention services for 2016, including $12.4 million for Strong Families/Safe Children, $17 million for Families First, $12.9 million for Child Protection and Permanency and $6.5 million for Family Reunification programs.

The W.J. Maxey Training School will be closed. The Legislature elected to close the W.J. Maxey Training School for a savings of $7.5 million ($2.5 million in state funds) in 2016. The budget includes $1 million for closing costs for the facility, and $1.8 million to transfer the approximately 40 youths currently housed there to new facilities.

Funding for juvenile justice facilities operated by the Department of Health and Human Services dropped from $58 million in 2006 to $19 million in 2014, largely the result of the closure of training schools and community juvenile justice centers, as well as declining numbers of youths.37 Between the 2003 and 2013 budget years, the caseload dropped by two-thirds, with declines attributed to additional community-based diversion programs in Wayne and other counties.38



  1. Kids Count Data Center at, Annie E. Casey Foundation.
  2. Ibid.
  3. Ibid.
  4. Ibid.
  5. Ibid.
  6. Leopold, J., Getsinger, L., Blumenthal, P., Abazajian, K., and Jordan, R., The Housing Affordability Gap for Extremely Low-Income Renters in 2013, Urban Institute (June 2015).
  7. Michigan Department of Human Services Information Packet (May 2012).
  8. 2013-14 MEAP Snapshot, MI School Data, Center for Education Performance and Information.
  9. 2013-14 Graduation Dropout Snapshot, MI School Data, Center for Educational Performance and Information.
  10. Lewis, K. and S. Burd-Sharp, S., Zeroing in on Place and Race: Youth Disconnection in America’s Cities, Measure of America (June 2015) at
  11. Ibid.
  12. Time is the Enemy, Complete College America (2011) at Data is based on a survey of 33 participating states (not including Michigan) using the Complete College America/National Governors Association Common Completion Metrics.
  13. Michigan Dashboard at
  14. College Results Online at
  15. The College Board, Annual Survey of Colleges (October 2013) at
  16. Ruark, P., Keeping It Affordable in Michigan: Disinvestment in Financial Aid Grants Hurts Students and Their Families, Michigan League for Public Policy (November 2012).
  17. Michigan Dashboard, op. cit.
  18. Smiley, M.L., Riba, M., Ndukwe, E.G., and Udow-Phillips, M., Cover Michigan Survey: Coverage and Health Care Access, Center for Healthcare Research and Transformation (March 2015).
  19. Ibid.
  20. FY 2002-FY 2013 Quality Improvement and Encounter Data, Michigan Department of Health and Human Services (September 4, 2014).
  21. Kids Count in Michigan Data Book 2015: Child and Family Well-Being in Michigan, Its Counties and Detroit, Michigan League for Public Policy.
  22. Hudson, J., The House and Senate Appropriations Committees Retain Special Rural Hospital Obstetrical Payment, Michigan League for Public Policy (May 2015).
  23. Data currently not available for Detroit.
  24. Fox, J., The Epidemic of Children’s Dental Diseases: Putting Teeth into the Law, Yale Journal of Health Policy, Law, and Ethics, Vol. 11 (March 3, 2013).
  25. Kids Count in Michigan Data Book 2015, op. cit.
  26. Immunization Status of School Children in Michigan, 2014, Michigan Department of Health and Human Services (March 6, 2015).
  27. MiScorecard Performance Summary, Michigan Department of Health and Human Services (April 2015).
  28. Immunization Status of School Children in Michigan, op. cit.
  29. Where Are the Primary Care Doctors: A look at Michigan’s Primary Care Physician Shortage, Citizens Research Council (June 2015).
  30. Frey, S., Koorstra, K., Stauff, S. and Jen, K., Community Health Background Briefing, House Fiscal Agency (December 2014).
  31. Kids Count in Michigan Data Book 2015, op. cit.
  32. Wildeman, C., Emanuel, N., Leventhal, J., Putnam-Hornstein, E., Waldfogel, J., and Lee, H. “The Prevalence of Confirmed Maltreatment Among US Children, 2004-2011,” Journal of the American Medical Association Pediatrics (June 2, 2014).
  33. Kids Count in Michigan Data Book 2015, op. cit.
  34. Zehnder-Merrell, J., Michigan League for Public Policy, Coalition for Race Equity in Child Welfare and Juvenile Justice Data Group Chair, Key Data Findings (May 21, 2014).
  35. Weemhoff, M., and Staley, K., Youth Behind Bars, Michigan Council on Crime and Delinquency (May 2014).
  36. Letter from Susan Kangas, Chief Financial Officer, Michigan Department of Health and Human Services, to the Senate and House Appropriations Subcommittees on DHHS (April 21, 2015).
  37. Wild, V. Department of Human Services Background Briefing, House Fiscal Agency (December 2014).
  38. Michigan Department of Human Services Information Packet (May 2014).


Michigan families need federal action on EITC, CTC

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While much attention has been focused recently on protecting the Michigan Earned Income Tax Credit (EITC), there is equally urgent action needed in Washington to save critical pieces of the federal EITC and Child Tax Credit (CTC). The federal and Michigan EITCs combine to provide much-needed support to help working families rise out of poverty, and we have to fight this battle on multiple fronts in order to protect these valuable tools.

The three provisions of the federal EITC and CTC that are set to expire are: a larger EITC for families raising three or more children; a reduction in the EITC “marriage penalty” that some two-earner families face; and a lower CTC earnings exclusion that expands the credit to very low-income working families. These stipulations are critical to helping millions of Americans and hundreds of thousands of Michigan residents make ends meet and afford the very things that keep them working, such as child care and transportation. (more…)

Support family homes to get kids out of shelters and group settings

An alarming number of foster kids in Michigan live in group homes and emergency shelters. Nearly half of whom have no clinical need to be there, and far too many are staying well beyond what is legally acceptable, according to today’s Kids Count policy report Every Kid Needs a Family: Giving Children in the Child Welfare System the Best Chance for Success, from the Annie E. Casey Foundation

The reasons? A lack of community services to allow children to stay safely in their homes and an inadequate supply of kin or foster homes. Agencies should be encouraged to provide more services in home and community settings. Family supports shield children from the further trauma of being placed in out-of-home care. (more…)

Governor’s 2016 Budget: Impact on Children and Families


Governor Proposes Positive Investments Despite Threats to Revenues

While the governor has proposed a balanced budget for 2016 that includes important investments for children and families, there are many threats to the state’s fiscal health on the horizon. Top among them is the potential loss to the state and its economy if voters do not approve the bipartisan compromise transportation package, leaving few other options to fix the roads without further depleting scarce state funds needed for services for children and their families.

Also acting as an anchor dragging on the state budget are deep business tax cuts adopted in 2011, along with the expected costs of outstanding business tax credits, which are now projected to be up to $600 million a year through 2030, at a total state cost of $9.4 billion. Without replacing revenues, cuts of this magnitude could so weaken basic public services in Michigan, such as public safety, transportation, education and public health, that the state’s economy could be crippled for years to come.

Finally, significant cuts in the federal budget could have a disastrous effect on many health and human services in Michigan. Over 40% of the governor’s $53 billion budget for 2016 is supported by federal funds, and the state’s reliance on federal funds has been growing.


Important Steps Forward for Children and Their Families

Gov. Rick Snyder’s budget for 2016 includes many important investments in families and children, despite lower than expected revenues, including:

Continued funding for Michigan’s preschool program for low-income children. The governor maintains funding for Michigan’s successful Great Start Readiness preschool program for low-income 4-year-olds. Over the last two years, funding for the preschool program more than doubled, with the number of half-day slots increasing from 32,140 in 2013 to 63,250 in 2015.

A new initiative to improve reading by third grade. The governor proposes nearly $49 million for a new initiative to raise third-grade reading scores, including $23.6 million for childcare quality improvements. Included are:

  • Home visits for at-risk families to encourage early literacy activities and identify children with disabilities and developmental delays ($5 million).
  • Parent education pilot programs for families with children under age 4 ($1 million).
  • Testing of new elementary teachers on reading instruction capabilities prior to their certification to teach, as well as professional development for current teachers ($1.45 million).
  • Training of teachers and administrators in the use of literacy diagnostic tools ($1.45 million).
  • Additional instruction time for students who need extra assistance with reading, including after school, as well as summer school programs ($10 million).
  • New literacy coaches for K-3 teachers ($3 million).
  • Continued implementation of the Kindergarten Entry Assessment ($2.6 million).
  • A new oversight commission, with business and philanthropic leadership, to monitor progress toward improving third-grade reading proficiency.

More funding for children at risk of falling behind their peers academically. The governor recommends an additional $100 million for children at risk of falling behind their peers academically, bringing total funding to $409 million. Funds are to be used to ensure that children are reading at grade level by the end of third grade and are career and college ready when they graduate from high school. Funds are allocated based on the number of students eligible for free meals, giving districts that are educating a high number of low-income children additional resources.

An increase in the number of child care licensing inspectors the state needs to keep children safe. The governor recommends a 50% expansion in the number of child care licensing inspectors to ensure basic health and safety in child care settings. With one inspector for every 153 licensed child care centers and homes, Michigan has come under federal scrutiny for its failure to ensure compliance with child care licensing rules, including required criminal record and protective services background checks for teachers and caregivers. The governor includes $5.7 million to reduce the ratio to the national average of one inspector for every 98 child care settings.

Investments in child care quality through increases in payments to providers, and policy changes that allow families to keep their child care even if their incomes increase. The inability of parents to find reliable, high- quality child care affects businesses’ bottom lines because of employee absenteeism and turnover. In recent years, state funding for child care has dropped dramatically, along with the number of families who can receive help with high child care costs. The decline is partly due to changes in state policy, reimbursement rates that fall far below market rates, and income eligibility guidelines that create a “cliff” that results in families losing child care assistance if they receive a raise or new job at a higher wage—even though they cannot afford child care with their earnings alone. The governor’s budget begins to address those problems by:

  • Providing a rate increase for higher-quality child care providers of approximately 25 cents per hour. This year, small rate increases were given to providers who received three, four or five stars on the state’s quality rating system. For 2016, the governor proposes to also provide increases for providers earning two stars ($6.1 million).
  • Allowing families to remain eligible for child care for up to one year, even if their incomes rise ($16 million).
  • Permitting families that are eligible for care under Michigan’s current guidelines (121% of poverty) to continue to receive child care subsidies until household income exceeds 250% of poverty ($1.5 million).

An expansion of dental care to children ages 0-8 receiving Medicaid in the state’s most populous counties of Wayne, Oakland and Kent. The governor proposes to expand the Healthy Kids Dental program to an additional 210,000 children ages 0 through 8 in the three counties with an investment of $15.7 million ($5.4 million in state funds). With this expansion, 800,000 children statewide can access dental care, but more than 170,000 older children in Wayne, Oakland and Kent counties would still not be covered. Access to dental services is essential to prevent tooth decay, the No. 1 chronic disease in children.

What’s Missing From the Governor’s Budget?

Children are more likely to thrive when their parents are able to meet their basic needs, yet many critical state services that promote economic security continue to be underfunded.

Fewer families are receiving the income supports needed to ensure that they can provide adequate housing and meet their children’s other basic needs. The long-term effects of homelessness and extreme poverty on children are well documented, but policy changes over the last five years have reduced eligibility for income assistance programs, in part through stringent lifetime limits on assistance and the ending of income assistance for an entire family due to the truancy of a single child. Between 2007 and the current budget year, spending on income assistance in Michigan declined by 66%, despite continuing high child poverty rates.

The failure to increase income assistance payments has also pushed more children into extreme poverty. To be eligible for assistance, an average family of three must have an income below $9,780 annually and financial assets of less than $3,000. The maximum benefit for a family of three is $492 per month. Over 70% of those who benefit are children.

Between Oct. 1 and Dec. 31, 2014, nearly 2,400 children under the age of 6 were living in households that were sanctioned for failure to complete all steps required to retain full eligibility for income assistance. Approximately 85 families lost assistance because of lifetime limits during that quarter and 68 were affected by the state’s truancy policy.

More families are unable to adequately feed their children because of changes in food assistance policies and benefits. Fewer families can receive food assistance, and benefits have been reduced, in part the result of a state asset test. The Food Assistance Program (formerly the Food Stamp Program) is completely federally funded, with an average monthly benefit for a two-person household of $245. More than 70% of the families and individuals who get assistance with food receive no other cash assistance from the state. The number receiving food assistance began to fall in 2011, the same year that the state imposed a new asset limit. Between fiscal years 2011 and 2015, cases dropped by 13%. Over 40% of all food assistance recipients are children.

Michigan will continue to do too little to prevent child abuse and neglect. Almost one in every 10 children in Michigan lived in a family investigated for abuse or neglect in 2013, and almost 34,000 children ages 0 through 17 were confirmed victims. And, the numbers are growing—the rate of confirmed victims escalated by almost one-third between 2006 and 2013. Sadly, funding for the major programs to prevent child maltreatment has been reduced from $65.4 million in 2006 to $48.7 million in the governor’s budget proposal.

State investments in public health and children’s health services continue to lag. Two of every $3 spent on public health services is federal money. Over the last decade, nearly all increases in total public health funding have been from federal grants or other sources, while state investments have not been made. For 2016, the governor restores $1.5 million in funds to local public health departments, bringing funding to the level it was 10 years ago. Funding to expand home visiting services to at-risk families with young children in rural areas of the Upper Peninsula and Northern Lower Peninsula ($2.5 million in state funds) was kept at current year levels. A pilot program to improve child and adolescent health services and projects to test innovations in addressing a range of health issues, including health disparities in children, were also retained ($1.5 million).

Many public schools are struggling financially. The governor recommends a $75 per pupil increase for all districts. In addition, he proposes a 60% cut in funding currently available for school districts implementing best practices and the elimination of funding for performance grants ($51 million). Some districts that have been receiving best practice and performance grants will see a drop in per pupil funding under the governor’s plan, while others will benefit.

There have been needed increases recently in support for public schools, but they have not fully restored cuts taken during the Great Recession—even without factoring in the pressures created by inflation. In the current school year, districts receiving the minimum payment are still receiving $65 less per pupil than they were in 2011, and those at the maximum payment level are receiving $390 less per pupil.




Why kids count

Recent news reports celebrate the decline in the unemployment rate and the quickened tempo of the recovery. But four years into the recovery, Michigan’s child poverty rates remain consistently high.

In 2013, one of every four children in Michigan lived in a family with income below the federal poverty level (roughly $18,800 for a single-parent family of three and $23,600 for a two-parent family of four), according to the latest Kids Count in Michigan Data Book, released today. (more…)

An income tax cut won’t boost the economy

Cutting taxes won’t create jobs or grow the economy. Michigan is already facing budget cuts because there is not enough money to fund schools, public safety and other important services that we value. Reducing the income tax would create an even bigger hole in the budget, leading to more cuts and making it harder to create a strong workforce ready for the 21st century, according to a new fact sheet from the League. (more…)

‘Yes’ on road funding is right direction

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It’s a pivotal time for Michigan public policy. Decisions made in the next few months will determine the path Michigan takes into the future.

In three short months, voters on May 5 will decide Proposal 1, the road funding package. There’s no doubt that this is Michigan’s single best chance to raise sorely needed money to pay for road repairs and put new dollars into school classrooms all while protecting families earning the least. (more…)

Happy 40th Birthday, EITC!

Today is EITC Awareness Day, and this year marks the 40th anniversary of the widely recognized tool that lifts millions of working families and children out of poverty each year. States have the opportunity to build on the federal credit, which Michigan does. However, in 2011 the state’s Earned Income Tax Credit was cut leaving behind over 15,000 families in poverty in 2012. On May 5, the voters will have the opportunity to restore the credit by supporting an increase in the sales tax by one penny.

The Michigan EITC is only available to families who have earned income from working. The credit ensures that working families are better able to make ends meet. When combined with the federal EITC, working families are lifted out of poverty and children experience better outcomes, such as improved infant and maternal health; better school performance; greater college enrollment; increased work and earnings in the next generation; and Social Security retirement benefits. All of which also benefit Michigan’s economy. (more…)

Diving deeper into the river of opportunity

At the League, economic opportunity is our mission so it was heartening to hear Gov. Rick Snyder talk about the ‘river of opportunity’ in his fifth State of the State address Tuesday. There is an assumption in that analogy, however, that deserves a closer look.

The governor spoke about his background growing up in a 900-square-foot home in Battle Creek in a supportive family. He said despite his family’s modest income, he was still able to be part of the river of opportunity. He spoke of the Michiganians who are not part – separated by poverty, absent parents or other barriers — and he talked about his desire to move them into that river of opportunity. (more…)

More child care oversight needed

Every day in Michigan, parents head out to work with their young children in tow, dropping them off at local child care centers or homes. Child care is a necessity for many working families because they rely on two incomes to make ends meet or because they are raising children as single parents.

Yet oversight of health and safety requirements is stretched far too thin in Michigan, a new policy brief from the League concludes. (more…)

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