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.

While there have been economic improvements nationally and in Michigan since the Great Recession, the data don’t support the claim that this is a comeback state, at least not for all Michiganians. Here are the discouraging facts:

    • Despite slight improvements in overall child poverty, nearly half of all African-American children and 1/3 of Hispanic children live in poverty.
    • The percentage of students who are reading proficiently by the end of third grade has been increasing, but there are unacceptable disparities based on race and ethnicity.
    • African-American and Hispanic students are 2 to 2 1/2 times more likely to leave school without a diploma.
    • African-American and Hispanic young adults are less likely to be enrolled in college, more likely to require remedial courses, and less likely to graduate within six years.

Among the positive budget decisions addressing these disparities are new initiatives 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.

The budget falls short in key areas related to economic growth and opportunity, including woefully inadequate investments in the youngest learners ages 0 to 3, restrictions in state income assistance programs that have thrown more children into deep poverty, and limited investments in financial aid for students from low-income families.

The League has an agenda for building a stronger Michigan that lays out what is needed to create equity and opportunity for all of the state’s children and families. There are some obvious places to start including the protection and expansion of the state’s Earned Income Tax Credit—a proven anti-poverty tool, investments in child care and other supports parents need to work, the elimination of an asset test for federally-funded food assistance and the adoption of new policies that allow families to retain and build the assets they need to weather temporary economic downturns or family crises.

In the next budget and beyond, the League will be working with the governor and the Legislature to make sure that all children and families in Michigan can benefit from the state’s economic recovery and contribute to its growth. It is critical that we use the state’s resources to address the issues of equity because it is the right thing to do, and because it is the foundation for a competitive and strong economy.

– Pat Sorenson


A two-generation strategy to reduce poverty and increase school success

The message was loud and clear at the State Board of Education meeting last week: family income and school success are inextricably linked, and Michigan’s school reform efforts will not succeed if the state doesn’t address that reality.

League President and CEO Gilda Z. Jacobs was invited by the State Board and new Superintendent Brian Whiston to address what it would take to make Michigan a top ten state for education. The Board is seeking input from education and business groups, advocacy organizations, teachers and parents—with the goal of developing a much-needed plan for action.

As the recent Kids Count Data Book revealed, child poverty is increasing in Michigan despite overall economic recovery, with 28% of all young children living in poverty, and rates much higher for children of color. The sad reality is that public policy decisions have made the problem worse, including reductions in the state Earned Income Tax Credit and punitive school truancy policies.

The impact of childhood poverty on education and the economy is clear:

  • The number of school children eligible for free- or reduced-price lunches continues to be the most reliable predictor of standardized test scores, and little has changed despite years of reform efforts.
  • Children in low-income families are more than twice as likely to repeat a grade, a strong predictor of school dropout. One of four adults who spend more than three years in poverty fails to receive a high school diploma.
  • Only one-quarter of women who spend half of their childhood in poverty are consistently employed as adults.

The League supports a two-generation solution to poverty and education that ensures that all children are ready for school and can succeed once they enter the school house doors, and simultaneously helps parents get the education and training they need to increase family income.

Our top three priorities include:

1. Reduce disparities based on income, race and place by targeting resources to high poverty districts and communities of color, beginning with full funding of the At-Risk program. The At-Risk program allocates funds to school districts based on the number of low-income children. With the governor’s leadership there will be a much-needed increase in the 2016 budget year—the first in more than a decade—but the program is not fully funded and needs to be.

2. Invest in early care and education with a stronger focus on child care and services for families with infants and toddlers. With the governor and Legislature’s leadership, Michigan has made great strides in enrolling low-income 4-year-olds in high quality preschool programs. Yet to be addressed are the woefully inadequate investments in children from birth through age 3—the time of greatest brain growth and learning. Among the early priorities are increased access to proven home-visiting programs and state funds for infants and toddlers who have been identified by the Early On program as having developmental delays.

From a two-generation perspective, greater investments in child care are especially critical. Without subsidies, high quality child care is unaffordable for most low-wage parents, and children placed in unsafe or low quality care can miss a critical window for early learning, with lifelong repercussions. Unfortunately, Michigan has some of the lowest eligibility and payment rates in the country, and the number of families helped by Michigan’s child care subsidy has plummeted.

3. Strengthen adult education and training. Adult education is a transition into the postsecondary education or training needed to create a competitive workforce in Michigan. Over 222,000 Michigan adults lack a high school diploma or GED, but fewer than 7% are enrolled in adult education and funding for adult education has dropped an astonishing 90% since 1996.

While alleviating poverty cannot be the primary focus of public schools, we also cannot continue to proceed with reform efforts with our heads in the sand, denying the indisputable impact of income, race and place on school success. We applaud the initiative taken by the Superintendent and the State Board and appreciate the opportunity to be involved. We hope their work will lead to policies and investments that can help move the dial on education.

– Pat Sorenson


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.

The job market was the worst in decades – record high unemployment rates, collapse of the Big Three, and the bursting of the housing bubble made jobs scarce. Census comparisons released at the end of last year showed that millennials have lower median earnings and are living in poverty at a higher percentage than their parents were at the same age, despite having a higher percentage of the population with postsecondary education. Additionally, millennials are more burdened with student debt than previous generations. The economic downturn resulted in a record high percentage of young adults moving back in with their parents.

This is precisely why young people should care about the Earned Income Tax Credit and the Child Tax Credit. The EITC is a refundable tax credit intended to at least partially offset federal payroll taxes of low- to moderate-income working taxpayers. The credit amount varies depending on marital status, number of dependent children, and annual income. The Child Tax Credit, which intends to reduce the cost of child rearing, provides a $1,000 credit per eligible child and may be partially refundable. According to the latest data, more than 800,000 taxpayers in Michigan received the EITC and more than 525,000 received the refundable portion of the CTC in 2013. These tax credits encourage work, help lift families out of poverty, and improve the lives of children.

According to a recent report from the Center on Budget and Policy Priorities, 13.9 million millennials nationwide received the EITC, refundable part of the CTC, or both in 2012. The credits averaged $2,200 and $1,300, respectively. Michigan had the 10th highest number of recipients among all states and Washington DC at 393,000. Nationwide, the EITC and CTC together helped keep 1.8 million millennials, and their 1.9 million children, out of poverty.

Expansions enacted in 2009 and later extended, boosted both the EITC and CTC, allowing more individuals to qualify and providing for greater tax relief. However, these expansions are set to expire at the end of 2017. If we allow these to lapse, 6.3 million young people, including 195,000 in Michigan, will lose all or part of their EITC or CTC, pushing about two-thirds of them into or deeper into poverty.

The good news is that many proposals recommend keeping the EITC and CTC as they are currently structured and some recommend expanding the EITC. Interestingly, President Obama and Congressman Ryan have similar proposals to expand the EITC for more childless workers. This would disproportionately benefit young workers, who are waiting longer to get married or have kids than previous generations.

The Great Recession was hard on a lot of people, and while we are recovering, we haven’t fully recovered. Extending and expanding the EITC and the CTC is just good policy. Congress should move sooner on these provisions, to provide certainty and stability, instead of waiting until the last minute.

– Rachel Richards


Healthy Michigan plan surpasses all expectations by first anniversary

The Healthy Michigan Plan, Michigan’s Medicaid expansion program, celebrates its first anniversary today. What an amazing year it has been for the program – with enrollment currently just over 600,000! The governor’s budget for 2015 estimated enrollment at 400,000 and 450,000 for budget year 2016. The budget released in February 2015 revised those estimates upward to 540,000 for 2015 and 580,000 for 2016. Those forecasts already have been surpassed – and it’s only April. (more…)

Cutting off Assistance to Families Won’t Improve School Attendance, Will Drive Up Poverty

Pushing families further into poverty will not increase school attendance rates. The Michigan Legislature is considering House Bill 4041 that would codify current Department of Human Services policy that terminates Family Independence Program, or cash assistance, for an entire family if a child between the ages of 6 and 15 is considered to be truant by their local school district. An entire family is punished for the actions of one child. If the student is 16 or older, only the truant child is removed from the case. The bill will not boost school attendance rates, but it will increase the number of children and families living in extreme poverty.

DHS policy should have the goal of helping families, not driving them deeper into economic crisis. The cash assistance program helps families living in extreme poverty (income under half of the poverty level, or $9,385 for a family of three). Families receiving FIP have very few resources and already face a number of challenges, including inconsistent work schedules; lack of access to quality, affordable child care; and reliable transportation. Eliminating their cash assistance will do nothing to address these challenges and will make life more difficult for their children. The League has the following concerns with HB 4041:

Codifying current DHS policy ties the hands of the department. It becomes much more difficult to change policy after it is made into law. The department would lose any flexibility to adapt its policy to better serve the needs of the people.

Barriers to attending school are not addressed. Four of the top 10 reasons for missing school, as identified by the Michigan School-Justice Partnership, deal with transportation, child care, and lack of appropriate clothing for the weather. Eliminating a family’s cash assistance will only make these issues worse. Working oneon-one with families to identify and resolve the underlying issues—without reducing their resources—is a much better route to ensure that a child is ready and able to learn at school. HB 4041 does not include any type of required intervention.

Lack of due process to appeal a decision. At times, an illness or other situation results in a high number of absences. These could be excused absences depending on the school attendance policy. Individual situations should be recognized, and families should have a clear process for appealing a decision that terminates their assistance. While DHS policy does include an appeals process, this proposed law does not.

Full-family sanction for families with children between 6 and 15 years old is severe. There may be cases in which a parent is doing everything in their power to get their 14year-old to school, but the child—for whatever reason—does not arrive or stay in school. Terminating assistance for the entire family for the actions of one child could make it more difficult for other children in the family to get to school.

Unclear definition of truancy or attendance policy. Without a statewide definition of truancy and the variances across school districts in how truancy is defined, there will be inequitable impact on children and families.

Child poverty remains unacceptably high. From 2006 to 2012, the rate of children living in poverty in Michigan grew by 35%. The economic recovery has not touched everyone. More than 70% of program participants are children with an average age of 7. Cutting off assistance will undoubtedly harm children in these families the most at a time when the governor’s dashboard calls for reducing childhood poverty.

House Bill 4041, and the related DHS policy, is not the way to improve attendance rates or the lives of these families in either the short or long run. Codifying this DHS policy will only contribute to increasing child poverty and the number of families living in extreme poverty.


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…)

Lopsided income growth hurts Michigan

The top 1% in Michigan earned 25 times the income of the bottom 99%, a new report from Economic Policy Institute concludes.

The report ranks Michigan as the 15th most unequal state in the country and offers new evidence on why Michigan policymakers should refuse more tax cuts so that they can invest in building the skills of a 21st century workforce.

In Michigan, inequality looks like this:

•    $942,993 a year on average for the top 1% of taxpayers.
•    $37,324 average annual income for the rest. (more…)

If there’s a will, there’s a way

A new video and visually engaging report out today strongly makes the case for rebuilding the state’s education system, protecting Michigan’s abundant natural resources and investing in roads and our communities.

The project is called The Michigan Dream at Risk, from the Michigan Economic Center, an affiliate of Prima Civitas, a nonprofit organization that works to create resilient, adaptable communities in Michigan.

Gilda Z. Jacobs, the League’s president and CEO, and board members Charley Ballard and Bob Kleine were interviewed for the project. (more…)

We’re 115 days late

Today is Michigan’s Equal Pay Day, marking how far into the 2014 calendar Michigan women must work in order to earn what men earned in 2013. (The National Equal Pay Day was April 8.)

States observe their own Equal Pay Day relative to the federal day based on how much their pay equity gap diverges from the gap nationwide. Michigan observes the day more than a week later because our state’s wage gap is the 7th widest in the nation. Michigan women earn 73.7 cents for every dollar that men earn, compared with 90.3 cents in the District of Columbia (and at the lowest end, 63.8 cents in Wyoming). (more…)

Rebuilding the Homestead Property Tax Credit

Gov. Rick Snyder wants to use some of the state’s budget “surplus” (higher-than-anticipated revenues) to restore a portion of the Homestead Property Tax Credit that was cut in 2011.

The governor reduced the HPTC starting in Tax Year 2012, eliminating the credit for 362,000 Michigan families. He now wants to restore the credit to about 100,000 of those families. (more…)

Next Page »