A banner year for better policy

It is 2016. A new year with new hopes, and a new set of challenges.

But before we look ahead, I want to take a moment to reflect on 2015 and what you have helped us accomplish. (From here on out, when I say “we” or “our,” know that I am including you, because the League’s work is all thanks to you.) When fighting the good fight, the victories can sometimes be few and far between, so it’s important to celebrate the ones we get, big or small.

brushing teeth 2We helped secure several key investments in the 2016 state budget for important programs, including more than $100 million to improve third-grade reading and help low-income children who are struggling in school, $20 million for mental health services for those not eligible for Medicaid/Healthy Michigan Plan, and a 13% increase in funding for adult education. We also encouraged the expansion of Healthy Kids Dental, which provides accessible dental care for Medicaid-eligible children, to include 290,000 more children, ages 0-12 in Kent, Oakland and Wayne counties.

The League’s advocacy and budget recommendations begin in February with the announcement of the Governor’s budget and continue throughout the legislative process in the House and Senate until a final budget is signed in the summer. It requires patience, diligence and a steady drumbeat from organizations and individuals alike to make things happen.

rough roadsSome achievements in the advocacy world, especially when fighting for low-income families, are simply dodging defeat. Over the course of road funding negotiations last year, elimination of the state Earned Income Tax Credit (EITC) that helps 780,500 low-income working families raising 1 million children make ends meet was proposed to help pay for roads. We successfully kept the Michigan EITC off the chopping block, and while the final roads plan leaves much to be desired, this was both a significant win and a battle that will continue in the months and years ahead.

But while the League has been working hard all year for the people of Michigan, and for 103 years before that, our two biggest accomplishments came in the last two weeks of the year.

After months of uncertainty, the federal government approved the second waiver for the Healthy Michigan Plan on December 17th. This decision will allow the program to continue, upholding affordable healthcare for more than 600,000 people in Michigan who would otherwise lose coverage in April 2016. While this waiver includes changes to the Healthy Michigan Plan, it will still protect healthcare options and keep costs down for low-income residents. The League was instrumental in the passage of the Healthy Michigan Plan and worked hard to make sure the waiver passed and the program continued.EITC groceries

Perhaps the greatest accomplishment for 2015, both in its impact and its longevity, is Congress’ permanent—yes, permanent—extension of important provisions of the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Without this bill’s passage, 16 million Americans would have been pushed into, or deeper into, poverty, including 357,000 in Michigan—nearly half of them children. While the League had been working on this for the last year, it was considered a longshot the whole way, making this achievement all the more significant. Because of the impact poverty has on children and their own future success, this historic public policy improvement will benefit generations to come.

It’s been quite a year. And you helped make all of this possible. There will always be more work ahead, but with it comes more opportunities for change, and we are confident that we can continue to accomplish great things together. On behalf of the people of Michigan, thank you for continuing to support our work, and here’s to another great year.

— Gilda Z. Jacobs

The 2015 roads plan: Helps wealthy and hampers budget

It seems like all we’ve talked about in Michigan for the last four or more years are roads. Despite the annual construction work on seemingly every road we’re taking in the summer, our roads were getting worse. Hitting a pothole had become an understandable excuse for running late to work, a date or family dinner. And we have all heard the one about the pothole so large you could probably swim in it.

The road funding plan enacted last month should not silence the constant hum about roads. The main components of the plan, as outlined in a recent League fact sheet, include raising taxes and registration fees on the people who use Michigan’s roads, some tax relief for low- to moderate-income families, and increased reliance on our already-strained General Fund. While it’s been called the best we can get, it’s not good enough for our roads, our future or our taxpayers.

For starters, the plan doesn’t get us anywhere close to what we need for roads for several years. It’s been reported that the minimum that we need to fix and maintain our roads is $1.2 billion a year, and this plan does not provide that amount until budget year 2021, five years from now. Over the next five years, our roads will continue to deteriorate to the point where $1.2 billion a year might not be enough, and we will still endure season after season of orange barrels.

At the same time, the increasing diversion of General Fund (GF) revenues to roads will require the state to make some very hard decisions about its budget. Programs that help our most vulnerable, including Medicaid and human services, account for the largest portion of the state’s GF; additionally, some of these programs have federal matches which would be at risk if the state lacked sufficient revenues to fund them. In the past, both the School Aid Fund and statutory revenue sharing have been raided to help balance the budget. And if lawmakers look for revenue enhancements to help relieve the tightening squeeze, the Earned Income Tax Credit, one of the state’s most effective tools for promoting work and reducing poverty, could be on the chopping block, as it was in the House road funding plan.

Finally, the income tax rollback that was thrown in as a sweetener has implications on the budget as well as tax fairness. Under the plan, if General Fund revenues grow by more than the rate of inflation, the rate of the income tax would be reduced. According to the House Fiscal Agency analysis, if these provisions had been in place, the income tax rate for 2016 would drop from 4.25% to about 3.96%, which would reduce revenue by $593 million. Additionally, this allows Michigan’s wealthiest to receive the biggest benefit. Modeling by the Institute on Taxation and Economic Policy shows that without the income tax rollback, Michigan’s lowest income taxpayers receive the best tax benefit under the plan; however, once the income tax rate reductions occur, the plan provides the biggest tax benefit to the top 1% in income.

This plan is not enough. It was more focused on fixing the roads debate than fixing the roads. It doesn’t get us to where we need to be on roads for at least five years, it squeezes our already strained General Fund and endangers vital programs, and it caps revenue growth through the income tax rollback at times in which program costs are increasing. At the same time, it provides the biggest benefit to those who need it least and offers little relief to those who are already struggling. We need to continue talking about roads until a truly comprehensive, fair plan is reached.

— Rachel Richards


The time is now to protect federal working family credits

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I hope you all had a wonderful Thanksgiving, surrounded by family and friends and all the food and fixings you could hope for. But many Michigan families are still struggling and could soon be making due with close to $1,000 less in their family budgets if Congress doesn’t translate the rhetorical goodwill of the holiday season into actual action to help those in need.

I know I’ve been talking about this issue for several months, and I hope you are all already aware of why the federal Earned Income Tax Credit (EITC) and low-income portion of the Child Tax Credit (CTC) are so important and why the expiring provisions of these credits should be made permanent. But the need is extremely urgent now.

Members of Congress have just returned to Washington, D.C. to wrap up the last few legislative items of 2015 before turning out the lights. We need to make sure that one of the things they take care of before they leave is making the EITC and CTC improvements permanent.

Congress is already looking to extend tax credits for businesses, and several congressional leaders want to make those credits permanent. If we want to have a lasting impact on the fate of the EITC and CTC, we have to include them as part of the same conversation.

Negotiations about the tax credits are happening NOW, and the clock is ticking to save the EITC and CTC provisions. They should get treated the same as tax credits for businesses, and this is the final message we must send to Washington.

Similarly, this is likely the best—and perhaps last—chance to expand the EITC for childless workers. Fixing this glaring hole in the EITC will help young workers and those without kids, including half a million veterans and military families. These childless taxpayers are currently the only group of people our country taxes into, or deeper into, poverty. Helping these workers has been a priority of both President Barack Obama and newly-elected House Speaker Paul Ryan, and hopefully this bipartisan interest will resonate throughout the Capitol.

From soldiers to farmers to single parents, the EITC and CTC are key tools to keeping Michigan residents working and helping them provide for themselves and their families. These credits have had strong bipartisan support in the past, and Congress should not squander this opportunity to permanently protect them. Please join me in thanking Senator Debbie Stabenow and Senator Gary Peters for their support of these credits and ask them to continue that fight over these next few weeks. You can also contact your Congressman or Congresswoman in Washington and ask them to stand up for the people of Michigan and make the EITC and CTC provisions permanent.

— Gilda Z. Jacobs


Veterans Day: You’ve sacrificed enough

Every year on November 11th, we as a nation thank those who served for the sacrifices they made in protecting our freedom. We honor a great uncle who served during World War II, a parent who fought in Vietnam, or a cousin who just returned from a final tour in Afghanistan. While it is important that we take a day to remember our veterans, it’s equally important to make sure veterans have the resources to return to their lives and provide for their families.

One of the best ways we can do this is to ask Congress to save key provisions of two tax credits that help veterans and military families make ends meet. These credits, the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), only go to people who work, and they encourage employment and self-sufficiency. The benefits of the EITC and CTC are undisputed. These tax credits encourage work, help lift families out of poverty, and improve the lives of children. Additionally, research shows children in families that benefit from the EITC and CTC are healthier, do better in school, are more likely to go to college, and earn more as adults.

Millions of Americans, including two million active service members, veterans, and their families, receive these credits to provide for their families. In Michigan alone, about 62,000 veteran and military families benefit from the EITC, the low-income component of the CTC, or both. However, if key provisions expire, half of these families, including 32,000 in Michigan, could lose all or part of their credits. What this means is that a single veteran with two children making Michigan minimum wage—$18,500—would lose $1,415 of his or her $2,000 child tax credit.

Michigan’s veterans were hit hard by the recent recession. In every year of the past decade, Michigan’s average annual unemployment rate for veterans has been higher than the national average, and in half of the past ten years, Michigan veterans have had a higher unemployment rate than Michigan’s average unemployment rate. In general, veterans from the post-9/11 era have been disproportionately affected. And while things seem to be improving, we must continue to support our active service members and veteran families.

Right now, Congress is starting to debate the extension of a number of business tax credits that expire this year. Both Senate Finance Chairman Orrin Hatch and House Ways and Means Chairman Kevin Brady have expressed an eagerness to either extend or make permanent these business tax cuts by the end of the year. And should any of these credits be made permanent, these key EITC and CTC provisions should be treated the same.

Military men and women put their lives on the line to ensure our safety and to protect our freedom. And they shouldn’t have to strain to provide for themselves and their families once they return home. This Veterans Day, Congress should honor the men and women who served our country by protecting these credits that help so many when they return.

— Rachel Richards


Two generation policies offer support for parents and kids

On Monday, October 26th, the Michigan League for Public Policy held our annual meeting and public policy forum, “Secure Parents and Successful Kids.” We were joined by more than 250 people from around the state and a host of national and state experts and innovators in the fields of education, economic security and child well-being to discuss a two-generation approach to tackling poverty.

Our keynote speaker was Anne Mosle, who directs Ascend at the Aspen Institute in Washington, D.C. Ascend is a national hub for breakthrough ideas and collaborations that move children and their parents towards educational success and economic security—the very definition of a two generation approach.

Anne began her presentation with a short video on the Jeremiah Program. Jeremiah provides single mothers and their children with a safe, affordable place to live, quality early childhood education, life skills training and support for career-track education. The video summarizes the dilemma many low-income families face, and how two generation strategies can help. Oftentimes these families are so focused on surviving and getting by that they are unable to succeed and move up. But if they have support in the moment, they can start planning for and building toward the future.

As Anne stated, we have to meet people where they are and develop a plan for where they want to go. Equity doesn’t just happen. It has to be an intentional commitment instead. For example, $3,000 in extra family income can increase a child’s economic trajectory by over 20%.

Anne and her colleagues at Ascend have put together a booklet, Top Ten for 2Gen, that includes policy ideas and principles to advance two-generation efforts. It outlines the keys to success and stability that all families need, and they are the same areas where the League is working in Michigan: early education, postsecondary education and employment pathways, health and well-being, social capital and economic assets.

Anne’s presentation was followed by a panel discussion on two-generation policies and approaches in Michigan with Tim Becker, chief deputy director, Michigan Department of Health and Human Services; Carol Goss, former CEO of the Skillman Foundation; Dr. Ali Webb, director of Michigan programs, W.K. Kellogg Foundation; and Mindy Ysasi, executive director, The SOURCE.

Tim Becker shared a presentation on the “River of Opportunity” and noted that it is in his department and the state’s best interest to try a two generation approach to better help children and families together. Having worked in human resources for some of the state’s leading organizations, Mindy Ysasi said that workplace policy is a key area where a two generation approach is needed and that “the people who need the most flexibility have the least flexibility.”

The panel also delved into Michigan’s political climate and racial inequity. The League also recently examined the racial disparities in the state budget that are perpetuating poverty for people of color in Michigan.

A large focus of the discussion was that everyone’s work on poverty and two generation policies is still largely dependent on the Legislature and the budget. Dr. Ali Webb and Carol Goss talked about the efforts of foundations like theirs, but that it is not enough without policy changes at the state level. Michigan’s state budget of a couple hundred billion can have way more of an impact than any one foundation.

Research shows that two-generation programs and policies are a win-win for children, their families and the state, and should have universal appeal to nonprofit and service organizations and elected officials. The League’s public policy forum was a good start, but there is much work ahead to truly start implementing two generation policies in Michigan.

 — Gilda Z. Jacobs

More needs to be done to address economic disparities for kids and families

As we approach the beginning of the state’s 2016 budget year, the League’s latest report weighs in on whether or not lawmakers have made the investments needed to give all Michigan residents a chance to succeed. It concludes that more needs to be done to ensure that children get a healthy start in life and a high-quality education, and their parents have the skills and resources required to succeed in the workplace.

The report outlines both wins and losses for Michigan children and their families in the 2016 budget, but the greatest concern raised is the ongoing failure to invest in programs that can lift children out of poverty and create the economic security needed to overcome deep and discouraging disparities based on income, race and place. (more…)

Hard work, the American dream and tax credits

On Monday, we as a nation celebrated Labor Day. While—unfortunately—many people see it only as a day off of work, a day full of sales at the mall, and the last big grill out of the summer, Labor Day was actually established to pay tribute to the contributions and achievements of American workers. On a day that celebrates the value of work, it’s also a good time to reflect on two of our nation’s best pro-work tools and the workers they help. The federal Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) keep millions of working families out of poverty and support a diverse array of professionals across the country and around Michigan. (more…)

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…)

Young but not invincible: Young adults rely on credits too

When I graduated law school in 2008, I got rejection letter after rejection letter. I applied for every job you could imagine – part time, full time, hourly, salaried – the jobs just weren’t there. I eventually landed in a great office, but many millennials–those born between 1981 and 1997—who were just graduating high school, college, or from graduate programs, weren’t so lucky. (more…)

Graduated Income Tax: Making our system fairer while raising needed funds

As the issue of “tax fairness” continues to arise and the state faces a significant budget shortfall, perhaps it’s time to seriously consider changing Michigan’s income tax structure. Michigan is one of only eight states with a flat income tax rate, and, because of this structure, low-income taxpayers pay the 9th highest personal income taxes for their group in the country, while the top 1% actually pay at a slightly lower rate than their counterparts in other states. A graduated income tax structure, where those who earn more would pay more, makes the income tax system fairer and generates new funds. (more…)

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