Child poverty in the 21st century

The number of Michigan children living in families with income below the poverty level drops by half when tax and non-cash benefits are included as income, according to the latest analysis from the national KIDS COUNT project at the Annie E. Casey Foundation.

The percentage of the state’s children who would be living in poverty if no government program benefits and tax credits were available, however, stood at 30 percent, as calculated by the Supplemental Poverty Measure.

This new measure, implemented in 2011 by the U.S. Census Bureau, was created after decades of research and recommendations from a National Academy of Sciences panel. The updated SPM not only adjusts for income but also for the variation in cost of living and work-related expenses, unlike the traditional poverty measure created over 50 years ago.

While 341,000 children in the state live in families lifted above the poverty level as calculated by the SPM, 339,000 remain in families with income inadequate to meet basic needs. Some may live in families ineligible for food assistance because of the state’s new asset test or those denied cash assistance due to redefined time limits that ignore the restrictive realities of low-wage work with unpredictable schedules and no benefits.

Child poverty undermines all aspects of child well-being, physical and mental health, safety and education.  Similar to the traditional poverty measure, the SPM shows that Latino and African-American children experience roughly triple the risk of poverty as their white counterparts.

Given the capacity of government interventions to lift families above poverty, state and federal policymakers who are concerned about improving educational achievement and workforce skills for the 21st century should be looking at ways to extend such benefits to more families and children, not reduce access.

In Michigan family savings must be depleted below $5,000 for family eligibility for food assistance, and the months that families receive as little as $10 cash assistance now count against the 48-month limit.  The eligibility level for the state child care subsidy and the hourly amount have not been adjusted for inflation in over two decades, severely limiting child care options for low-income families.

The SPM provides valuable information about the effectiveness and limitations of government investments in the next generation and its capacity to address the inequities of place and race.

 – Jane Zehnder-Merrell

Many kids stuck in poverty without solutions

Contact: Judy Putnam or Jane Zehnder-Merrell, 517.487.5436

Kids Count in Mich. ranks 82 counties on child well-being

LANSING, Mich. – Too many kids in Michigan remain mired in poverty at a time when policymakers have reduced help for struggling families, according to the Kids Count in Michigan Data Book 2015 released today.

Three measures of economic conditions worsened over the trend period with nearly one in every four children living in an impoverished household, a 35 percent increase in child poverty over six years. The trend period measured from 2006 to 2012 or 2013, depending on the availability of data.

“The unraveling of family’s economic security cries out to be addressed by state leaders but what’s happened is just the opposite of what is needed,’’ said Jane Zehnder-Merrell, Kids Count in Michigan Project director at the Michigan League for Public Policy.

The state Earned Income Tax Credit was cut 70 percent in 2011. It goes to working families earning the least. (Voting ‘yes’ on the May 5 road funding proposal will restore it to 20 percent.) Other barriers are hard caps on lifetime limits for cash assistance, fewer weeks of unemployment, an asset test that limits federally funded food assistance, and child care subsidies that haven’t kept up with inflation.

“These are the tools we have to make sure a family in a crisis doesn’t spiral downward and is able to survive. The shredding of these programs is bad policy when it comes to the well-being of Michigan’s children,’’ Zehnder-Merrell said. “It’s hoped that the merger of the state departments of Community Health and Human Services will offer improved services for children and families, though budget pressures could bring more cuts.’’

In addition, Michigan in recent years eliminated financial aid grants for adults attending public colleges and universities and slashed adult education to a fraction of where it was a decade ago.

The toxic effect of poverty on children cannot be overstated. Research shows that children growing up in poor homes are more likely to drop out of school and less likely to have stable employment as adults. Boosting income in those families through such strategies as tax credits pays off with children in those families earning more and working more hours when they grow up.

More than a half-million Michigan kids lived in poverty, defined as $23,600 or less a year for a two-parent family of four. Child poverty is particularly high in communities of color where a lack of jobs and transportation has deepened economic woes. Detroit, a majority African-American city, has the highest level of concentrated poverty of the 50 largest U.S. cities, a recent report from the Annie E. Casey Foundation found.

The Kids Count report also highlights the racial inequity in access to oral health that needs to be addressed in the 2016 budget. The Healthy Kids Dental program, which provides additional payments to dentists for children on Medicaid, is in 80 counties. The three remaining counties left out of the program, Wayne, Oakland and Kent, have large populations of children of color.

That means that only 28 percent of white children eligible for Medicaid are in counties without Healthy Kids Dental compared with 63 percent of African-American children eligible for Medicaid.

“Gov. Snyder has called for the Healthy Kids Dental to be available in all communities. That needs to happen this year. Using public dollars in a way that mainly benefits white children and leaves out African American children is simply unacceptable,’’ said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy.

Of the 15 trends in child well-being examined in the report, eight improved, five worsened, one stayed about the same and one could not be tracked over time. The report also ranks 82 of the 83 counties for overall child well-being with Livingston and Ottawa counties tied for the best rating of No. 1.

Statewide, all four education trends improved while fewer children remained in foster homes or relative care. Yet nearly 200,000 children live in families investigated for abuse or neglect, a 41 percent jump in the rate between 2006 and 2013, while nearly 34,000 were confirmed as victims of abuse or neglect.

A partner in the release of the Kids Count report, Matt Gillard, president and CEO of Michigan’sChildren, said p revention and early intervention are the keys to ensuring safety at home.

“It’s so very important that we focus on interventions that work – the earlier the better. This includes increasing evidence-based services for the most challenged families in local communities to prevent child abuse or neglect, and targeting services to vulnerable families with infants,’’ Gillard said. “A two-generation approach that helps parents get the resources and tools that they need, while at the same time supporting children, is critical.”

The Michigan Coalition for Children and Families, representing 20 child and family advocacy groups across the state, will use the report to focus on improvements to benefit children.

“This report offers communities and state level officials a treasure trove of information so they can know what’s working and what needs to be improved,’’ said Michele Strasz, chair of MCCF and the director of the Capital Area College Access Network.

More contact information: Matt Gillard, matt@michiganschildren.org, 517.488.9129 (c); Michele Strasz, programdirector@capitalareacan.org, 517.712.2014 (c).

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Kids Count in Michigan project is part of a broad national effort to improve conditions for children and their families. Funding for the project is provided by the Annie E. Casey Foundation, the Detroit-based Skillman Foundation, Steelcase Foundation, Blue Cross Blue Shield of Michigan Foundation, United Way for Southeastern Michigan, Battle Creek Community Foundation, Kalamazoo Community Foundation and John E. Fetzer Fund of the Kalamazoo Community Foundation.

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.

Last week, House Republicans released their action plan that included rolling back the state’s income tax rate from the current 4.25% to 3.9%. Reducing the state income tax “remains the House Republicans’ single most important tax-relief measure,” the House GOP said in releasing the plan. This priority would largely benefit the wealthy, who do not need additional tax relief, and it would not improve the economy.

According to analysis by the Institute on Taxation and Economic Policy, $3 of every $5 in tax cuts would flow to Michigan’s wealthiest 20% of taxpayers (annual incomes of $89,000 or more) with the top 1% of earners (annual incomes of $362,000 or more) taking home 17% of the tax cut benefits. Giving to those at the top contributes to income inequality and doesn’t put money in the pockets of those who need it to meet basic necessities.

Across-the-board tax cuts would not boost the economy. They put additional financial strain and pressure on the state budget. Reducing state funds through income tax reductions while revenues are already down would only drain the necessary resources to support education, communities, and infrastructure—all of the critical components to a thriving economy that includes an educated workforce and communities where people and businesses want to locate.

 – Alicia Guevara Warren

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.

Though it was a welcome tone from the governor, it contained a flawed analogy. The governor  said government is in the background of the lives of those already enjoying opportunity while it plays a prominent role for those in need. Yet, there is no ‘them and us’ when it comes to government services because we all benefit.

Let’s take public education for starters. Free education is not just for kids from families with low incomes. The support of public universities, including $300 million a year to the governor’s alma mater, the University of Michigan, helps many, many children of the affluent. Tax dollars create the public transportation to move the goods that supports the jobs, helping job providers and workers. In short, public dollars are used to keep that river flowing, and enjoyed by the citizens who are benefiting from opportunity.

The governor also called for revamping of services to help those in need. At the Capitol Tuesday, several reporters sought out League President & CEO Gilda Z. Jacobs for comment on the merger of the Departments of Human Services and Community Health into a new Department of Health and Human Services. Jacobs was positive about the potential to really lift barriers for people and also about the leadership of interim Director Nick Lyon. (See the League’s statement.)

What will be important is making sure that there are savings resulting from true efficiencies and that the merger’s goal isn’t just to save dollars. Simply cutting people from services while poverty and unemployment remain high is not the way to measure success.

With revenues coming in below expectations, the pressure will be on to make those cuts. More insight will be offered in the governor’s executive budget recommendation in February. So stay tuned!

 – Judy Putnam

Celebrating good public policy in Michigan

Restoring the Earned Income Tax Credit, part of the bipartisan compromise on road funding approved early today, will be a boost to struggling families across Michigan.

If voters agree to the package, it will put extra dollars into working households where families have the hardest time making ends meet. It’s designed to offset additional costs from an increase in the state sales tax and wholesale gas tax to pay to fix Michigan’s battered roads. (more…)

Taxing Internet sales as a matter of fairness

Nowadays, with a growing number of people shopping online, it makes sense to collect sales taxes on the items purchased – if the item was bought at a store nearby, we would have to pay the sales tax.

So, what’s the difference? The difference is that over the past year an estimated $482.4 million worth of sales and use taxes from remote sales will go uncollected by the state. The majority (60%) of that is due to e-commerce. (more…)

Moving from mass incarceration to mass education

Michigan needs to spend less on prisons and more on schools.

Between 1986 and 2013, Michigan’s spending on prisons jumped 147% when inflation is counted, according to research by the Center on Budget and Policy Priorities. Meanwhile, per-pupil foundation spending in Michigan remains lower than before the Great Recession began.

“Even as states spend more on corrections, they are underinvesting in educating children and young adults, especially those in high-poverty neighborhoods. At least 30 states (including Michigan) are providing less general funding per student this year for K-12 schools than before the recession, after adjusting for inflation…’’ a recent report by the Center on Budget and Policy Priorities concludes.

Dennis Schrantz of the Michigan Council on Crime and Delinquency and Shaka Senghor of the Atonement Project at the League's recent policy forum.

Just last month, the League sponsored a policy forum on reducing mass incarceration. The upshot of the forum is that Michigan’s unusually long prison sentences mean that more dollars than necessary are being spent on corrections without improving public safety. And students are not getting what they need to avoid the “school to prison” pipeline.

Laura Sager, executive director of the Citizens Alliance on Prisons and Public Spending, spoke about the need for a sentencing commission to examine Michigan’s sentencing structure with an eye on reducing the prison population.

Sager said that mandatory minimums and harsh penalties for drug offenses are not the cause of mass incarceration in Michigan. Unusually long prison sentences drive high costs without providing additional safety, she said. Judges set a minimum and maximum sentence but it is the state Parole Board has the ultimate decision on how much time a prisoner will serve after the minimum sentence is completed.Incarceration also costs $35,000 per inmate per year — more than a year of college at the University of Michigan.

A package of bills by Rep. Joe Haveman, R-Holland, that could see action in lame-duck session next month, is aimed at reducing the time offenders spend in prison and jail. It would require “presumptive parole” for inmates who have served their minimum sentence unless there were “substantial and compelling” reasons to deny parole. The language of the package is still being negotiated, according to CAPPS, but the introduction is a very hopeful step.

Michigan’s parole system has long been criticized for allowing parole board members to pile on additional punishment beyond the judges’ sentences rather than look at the inmate’s prison record.

“The economic health of many low-income neighborhoods, which face disproportionately high incarceration rates, could particularly improve if states reordered their spending in such a way. States could use the freed-up funds in a number of ways, such as expanding access to high-quality preschool, reducing class sizes in high-poverty schools, and revising state funding formulas to invest more in high-poverty neighborhoods,’’ the Center’s report suggests.

Michigan spends $1.2 billion more on corrections in 2013 than it did in 1986, the report found. That’s a lot of money that could be better invested in our students and in our future.

– Judy Putnam

High-quality, affordable child care elusive

Although Michigan has started to address its long-neglected child care system, the state has a long way to go to make high-quality child care affordable and easily accessible, especially for low- and moderate-income working parents.

That is the conclusion of a new report on child care assistance policies. (more…)

Ask Your Candidates

To address our crumbling roads, lawmakers are offering proposals ranging from increasing the sales tax, creating a wholesale tax on gas, raising vehicle registration fees, or diverting current sales tax revenue to road maintenance. Any type of tax increase, especially to the sales tax, will have a disproportionate effect on individuals earning low wages.

Do you support increased or new revenue to address Michigan’s crumbling road and infrastructure? Would you support increasing the Earned Income Tax Credit or other tax credit to help offset the burden on people earning low wages?

Since the 1970s, the federal Earned Income Tax Credit (EITC) has been considered a significant poverty reduction tool that encourages individuals to work. In 2006, Michigan created its own state-level EITC based on 20% of the federal tax credit. The governor and state lawmakers scaled back the EITC to 6% in 2011.

Would you support restoring the state-level EITC to 20% of the federal tax credit?

3 Michigan is one of only seven states that continue to rely on a flat income tax rather than a graduated income tax. States with graduated income tax structures tax at higher rates as income rises making it a more modern and equitable system.

Would you support reforming Michigan’s income tax structure from a flat income tax rate to a graduated one?

Sales taxes are typically considered to be the most regressive type of tax costing individuals earning low wages a larger proportion of their income compared to wealthier individuals. Expanding the sales tax to apply to services can serve to both increase revenue and make the sales tax less regressive. Even still, the sales tax will remain regressive, which is the reason some states offer sales tax credits to provide relief for individuals who earn the least.

Would you support extending the state’s sale tax to services with a sales tax credit for filers with low wages?

The Michigan Homestead Property Tax Credit (HPTC) is a refundable credit available to eligible Michigan residents who pay high property taxes or rent in relation to their income. In 2011, it was eliminated for many middle-class families, veterans, and seniors whose total household resources were over $50,000 or the taxable value on their homes was over $135,000.

Would you support restoring the HPTC to provide relief to moderate-income taxpayers?

6 Out of 16 states offering families additional heating assistance to qualify for additional food benefits, Michigan was one of four that declined to add dollars to keep the program going when the rules changed. That means an average loss of $76 a month in food benefits for 150,000 families. It will take only $3.1 million to pull down $137 million in extra federal food assistance for these Michigan families.

Do you favor spending $3 million in the ‘heat and eat’ option to draw additional food assistance?

Michigan hasn’t adjusted its child care subsidy eligibility since 2003 even though spending has fallen dramatically. As a result, only working families in poverty or living just above poverty qualify.

Should Michigan expand its child care program back to 150 percent (just under $30,000 for a family of three) of poverty?

8 Two recent federal audits found that Michigan child care centers and homes visited without prior notification were not complying with all state licensing requirements related to the health and safety of children, including required criminal record and protective services checks of caregivers. The auditors concluded that the state has too few child care inspectors (known as child care licensing consultants) to ensure adequate oversight of child care homes and centers, with caseload ratios more than three times the recommended ratio of 1:50.

Would you support the appropriation of state funds to increase the number of child care inspectors and improve the state’s ability to oversee compliance with basic health and safety requirements in state law and policy?

9 Children living in families that must rely temporarily on state income assistance live in increasingly deep poverty as a result of the very low payments provided by the state (a maximum of $492 per month for a family of three through the Family Independence Program). Michigan used to provide a one-time payment to all school-age children from families receiving FIP to ensure that children could at least start the school year with a decent set of clothes. Since 2011, the school clothing allowance has been restricted to only those children living with grandparents or other caretakers who do not receive cash assistance.

Would you support the restoration of a school clothing allowance for all school-age children living in families receiving FIP benefits?

10 Over one-third or 35,000 Michigan third- graders did not demonstrate proficiency in reading in 2013. A House bill would require that third-graders who are not proficient in reading as measured by the state test would be required to repeat the grade at least once and no more than twice. Alternate tests and portfolios may be used to document reading skills but the school superintendent would make the final decision. Critics contend research on retention documents a higher likelihood of drop-out for retained students while supporters of retention decry the negative impact of social promotion.

Would you support the retention of Michigan third-graders who are not reading at grade level?

11 Child poverty in Michigan has escalated by almost 40% over the last 25 years. Almost one of every four children in the state lives in a family with income below the poverty level: $19,000 for a family of three and $24,000 for a family of four. Several policy initiatives to alleviate child poverty have been suggested, such as raising the minimum wage to $10.10—closer to its value in the 1960s and indexing it to inflation, reinstating the state Earned Income Tax Credit to 20% of the federal EITC and raising the child care subsidy and eligibility so parents earning low wages can have access to child care.

Would you support any of these initiatives?

12 Dental cavities remain the No.1 chronic disease in children, despite being preventable with proper dental care. In Michigan, 27% of third-graders have untreated disease; in the Detroit area, the percentage increases to 42%. The Healthy Kids Dental program, a partnership between Delta Dental and the state for Medicaid-eligible children, has greatly increased access to dental care for those covered. The program is available in all counties except Kent, Oakland and Wayne.  All Michigan children should have access to this program. The estimated state investment required is about $22 million.

Would you support statewide expansion of Healthy Kids Dental as a priority?

13 Michigan has been a leader in investments in preschool programs for 4-year-olds, but funding for families with infants and toddlers living in poverty or near poverty has declined—despite scientific evidence that the first three years of life are when children’s brains are growing most rapidly, affecting their lifelong development, learning and achievement.

Would you support additional state funds for proven programs for parents of very young children, including home visiting and parenting programs?

14 Michigan currently has nine coal-fired electricity generating units, with health-related costs associated with emissions from these facilities totaling $1.5 billion annually. These health issues range from asthma to cancer, and heart and lung disease, with people of color and those who are economically vulnerable being the most likely to suffer from these health complications.

Would you support transitioning from coal to clean energy sources, such as wind and solar power to reduce pollution and improve the health of Michiganians?

15 Workers who are laid off, or who work in low-paying jobs, can often improve their financial situation by building skills at a community college or university. However, Michigan’s financial aid grants are not available to workers who have been out of high school more than 10 years. There is discussion in the Legislature of reinstating two financial aid grants that were discontinued several years ago that would help older workers go back to school and get a degree (the Adult Part Time Grant and the Educational Opportunity Grant).

Would you support the reinstatement of the Adult Part Time Grant and the Educational Opportunity Grant to help older workers get the skills they need for jobs that will support their families?

 

 

 

 

 

 

 

Small problems get big with misplaced priorities

In kindergarten classrooms in one Michigan school district, work tables are now cleaned only weekly instead of daily due to severe budget cuts that have reduced cleaning staff and supplies. Teachers must buy their own cleaners and wash the tables to maintain sanitary conditions for the youngest students

The dirty tables was one of the anecdotes offered about Michigan’s misguided spending priorities during a news conference held at the Capitol this morning by Priorities Michigan. (more…)

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