While most people associate the Census Bureau only with the decennial census, it actually is responsible for dozens of surveys. In fact, the decennial census only gathers very basic information and primarily serves as a population count. (more…)
While most people associate the Census Bureau only with the decennial census, it actually is responsible for dozens of surveys. In fact, the decennial census only gathers very basic information and primarily serves as a population count. (more…)
An eye-opening map in the New York Times this week shows Michigan looking like a few Southern states when it comes to “income mobility’’ — a startling realization for the state that’s often credited with birthing the middle class.
If you are born in the Detroit or Kalamazoo area and your family income falls in the bottom fifth of income, your chances are very slim of moving to the top fifth, a new study concludes.
On the “heat map,” where red shows little mobility and blue shows the most mobility, Michigan and parts of Ohio and Indiana resemble Arkansas and Alabama. (more…)
The 2014 state budget, as passed recently by the Michigan Legislature, includes some positive investments in Michigan’s future, but also misses the opportunity to improve economic security and health for many Michigan residents. The Legislature completed its work on the $48.7 billion budget in record time, meeting a self-imposed deadline of early June.
The final budget consists of two omnibus budgets, including: (1) the Education Omnibus Budget ($15.4 billion), which funds School Aid ($13.4 billion), community colleges ($336 million), and higher education ($1.4 billion); and (2) the General Omnibus Budget ($33.3 billion), that funds all other state departments and services, including Community Health ($15.4 billion), Human Services ($6 billion), and Transportation ($3.6 billion). Both budgets have been presented to the governor for his signature. In Michigan, the governor also has the power to make line item vetoes.
Sadly, in formulating the state budget for next year, state lawmakers turned their backs on more than $1.5 billion in 100% federal funding available to expand Medicaid eligibility to very low-income parents and childless adults up to 133% of the federal poverty level.
This expansion would reduce the number of uninsured adults by 46%, and result in savings in the state’s General Fund of $206 million in Fiscal Year 2014 alone by allowing the state to use federal funds to provide comprehensive services to a population that is currently eligible for very limited state funded health benefits. Cumulative savings to the state’s General Fund would grow to $1.2 billion through 2020.
It is not too late, however, to accept the federal funds available to Michigan to expand Medicaid eligibility, and legislative discussions continue. House Republicans proposed legislation, H.B. 4714, that initially would have partially expanded Medicaid eligibility to nondisabled adults (ages 21-65) and imposed a 48-month time limit.
Now redrafted, the bill modifies the 48-month time limit, and instead requires those with incomes between 100% and 133% of poverty who are eligible under the expansion to purchase private insurance through the healthcare marketplace, or increase cost sharing or out-of-pocket expenses after 48 months. Some relief may be available if enrollees adopt healthy behaviors or assist the state in detecting medical fraud and abuse.
The final Fiscal Year 2014 budget also included unexpected funds based on more favorable revenue projections adopted at the May 15th Revenue Estimating Conference. The new revenue consensus by state fiscal experts assumes that Michigan will have an additional $702 million in fiscal years 2013 and 2014, including $579 million in state General Funds, and $123 million in the School Aid Fund.
With these unexpected revenues, along with the potential infusion of federal Medicaid funds, the Michigan Legislature had the opportunity to build a 2014 budget that begins to reverse some of the damaging policy decisions made during the worst of the Great Recession to balance the budget and provide business tax cuts. With this budget, lawmakers had the opportunity to reinvest in the educational and human services that have been shown to improve economic competitiveness.
While some progress was made, including a significant expansion in funding for Michigan’s state-funded preschool program, an expansion of dental care to low-income children, and a small restoration of K-12 per-pupil allocations, the opportunity was largely missed to reverse tax and policy changes that disproportionately hurt low- and moderate-income working families, children and seniors.
Michigan tax policies hurt working families and thwart economic growth: Because Michigan’s Constitution requires that the state budget be balanced each year, tax policy decisions drive budget decision-making. In the long run, Michigan will not be able to consistently make the types of investments needed to create a competitive workforce and build the community infrastructure, services and amenities needed to attract and retain businesses until it updates its outdated tax system to ensure sufficient revenues in good economic times and bad.
The tax changes adopted in the last several years have unfortunately moved Michigan in the wrong direction by making the state’s tax system more regressive and creating additional barriers to employment for low-wage workers. More significantly, by relieving businesses of the obligation to pay their fair share for the community services they rely on, recent tax changes further jeopardized the basic public services needed to grow Michigan’s economy, including basic human services, K-12 education, access to higher education and vital community services.
Tax credits for many low- or moderate-income workers and families were cut or eliminated.
Tax credits for many charitable contributions were eliminated, including contributions to:
Taxes on pensioners were increased.
During the debates over the Fiscal Year 2014 budget, lawmakers had an opportunity to reverse some of the 2011 tax changes that hurt low- and moderate-income workers, seniors and charitable organizations. Despite unexpected revenues of more than $700 million, and a transfer of funds into the state’s “rainy day” fund, the Legislature failed to do so.
The Fiscal Year 2014 budget fails to compensate for years of disinvestment in basic public services. While the Fiscal Year 2014 budget includes some increases for state programs and services, it fails to compensate for more than a decade of cuts and the erosion of purchasing power. Michigan’s economic problems began before the national Great Recession, and deepened dramatically during that period. Recent projections show that Michigan’s economy is inching forward, but it would be an exaggeration to say it is rebounding, and many Michigan families are grappling with higher taxes, fewer services, and lower incomes.
The rationale for the Great Tax Shift of 2011 was that the combination of reducing business taxes and increasing individual income taxes—with a net loss of revenue—would improve the state’s economy and spur job growth. The evidence doesn’t support that policy goal. Research shows that corporate income tax cuts are unlikely to have a strong positive effect on a state’s rate of economic growth or create many new jobs.
In fact, raising taxes on the working poor creates a clear drag on the state’s economy, in part because lower-income people spend nearly all the money they make, mainly on necessities, so for every dollar they lose due to a tax increase, total spending drops by around a dollar. Further, tax changes and cuts in public services that reduce available income and supports for working families and increase poverty have a negative effect on children’s health, school achievement, and ultimately their success in the workforce.
Over the last decade, Michigan’s outdated tax structure failed to produce the revenues needed to maintain basic services and invest in the human and other capital needed to grow the state’s economy. While total state spending (state General Fund and state restricted funds) rose by 7% between 2003 and 2013, with the exception of the Departments of Community Health and Corrections, every other major state department and service suffered cuts—even before calculating the impact of a 21% increase in the Detroit Consumer Price Index over that decade.
Instead of fixing the state’s revenue problems, lawmakers chose to make deep cuts in programs for low-income and working families, public schools, institutions of higher learning, and vital community services. To ensure Michigan’s competitive advantage, it is critical that the state begin to reverse those failing policies and reinvest in its most precious resource, its human capital. While much has been said about Michigan as a “comeback” state, the truth is that tax and budget decisions have forced hard-working, low-income families in Michigan to make sacrifices, and closed them off from the benefits of the “comeback.”
Economic Security and Work:
More very poor children will be denied access to basic income assistance. The Fiscal Year 2014 budget reduces funding for Family Independence Program by $41 million to a total of $214.3 million to reflect continued reduction in caseloads—projecting caseloads will fall from 53,298 in the current year (appropriated) to 45,710 in Fiscal Year 2014—a 14% reduction.
Approximately 30,000 very poor children will have their fall clothing allowance restored. The Michigan Legislature included $2.9 million in the Fiscal Year 2014 budget to restore the clothing allowance provided to children in child-only FIP families in the 2013-14 school year. The Snyder Administration chose to eliminate the clothing allowance this fall—the only direct client benefit cut as a result of federal sequestration.
The number of Michigan residents with access to basic food assistance will continue to decline: The final budget reduces funding for the Food Assistance program (formerly called the Food Stamp program) by $683.7 million in recognition of the loss of temporary federal funds, as well as caseload reductions—largely based on changes in FAP eligibility, including the adoption of an asset test. The Legislature assumes that caseloads will fall from 1.1 million cases appropriated this year, to 876,650 in 2014—a 19.4% reduction. The actual average monthly FAP caseload through April of this year was much lower than appropriated at 912,339.
Low-income working families will continue to struggle after losing significant income with the 70% cut in the state’s Earned Income Tax Credit: In 2011,the Michigan Legislature slashed the state Earned Income Tax Credit from 20% of the federal EITC to just 6%. The state EITC is a refundable tax credit for working families, designed to promote and reward work and offset other taxes paid by low wage workers that consume a higher percentage of their total income. Despite unexpected new state revenues, the Legislature did not recommend EITC restorations.
Healthy Workers, Families and Children:
Thousands of currently uninsured Michigan residents may not have access to healthcare that is fully federally funded: The Legislature rejected, as part of the budget process, the governor’s recommendation to accept Michigan’s share of federal funds to expand healthcare coverage to 320,000 low-income parents and individuals through the Medicaid programs. A separate bill to expand eligibility for Medicaid is currently under discussion.
Approximately 70,500 more low-income Michigan children will have access to dental care: The Legislature ultimately approved the governor’s proposal to add $11.6 million to expand the Healthy Kids Dental program to cover an additional 70,500 children in three Michigan counties—part of a multi-year plan to cover all children in the state.
Michigan infants, and particularly infants of color, will continue to die unnecessarily: While the Michigan Legislature adopted—at a reduced level of $2 million—the governor’s recommendation for new funding to begin to implement Michigan’s infant mortality reduction plan, this increase is more than offset by lawmakers’ current decision to reject Medicaid expansion to uninsured Michigan residents, including women whose infants would be born healthier if adequate preconception care was available.
Additional funding will be available to prevent toxic lead poisoning: The final budget includes $1.25 million in state General Funds to remove lead hazards from homes in areas with high incidences of lead-poisoned children—funding that was not included in the governor’s budget. Last year, the Michigan Legislature approved an additional $2 million for Michigan’s lead abatement program, known as Healthy Homes, for total funding of $4.9 million. The governor vetoed the expansion, and the program is funded at $2.9 million this year.
A Top-Notch Cradle to Career Education:
More low-income 4-year-olds will benefit from early childhood education: The final Fiscal Year 2014 budget includes the governor’s proposal to increase funding for Michigan’s Great Start Readiness Program by $65 million, but reserved $25 million of the increase in a newly created GSRP reserve fund which could only be tapped through legislative action if there is sufficient need for the preschool slots. Total funding for the state-funded preschool program is increased from $109.3 million in the current year to $174.3 million in Fiscal Year 2014, opening up approximately 16,000 new half-day slots for 4-year-olds.
The Legislature made several changes to GSRP policy, including: (1) raising the payment for a half-day slot from $3,400 to $3,625; (2) eliminating the current competitive GSRP program that provides funds to private sector providers, instead requiring Intermediate School Districts to establish a local process to contract out at least 30% of their slots to public or nonprofit community organizations or for profit businesses; (3) targeting GSRP funds to the lowest income children by lowering the income cap, requiring that at least 90% of children served are from families with incomes below 250% of poverty and the lowest income children are served first; (4) requiring GSRP providers to have quality ratings of at least three out of five start through Great Start to Quality, Michigan’s quality rating system; and (5) requiring GSRP providers to use a sliding fee tuition scale for children who do not meet the income eligibility requirements.
Michigan public schools will continue to struggle to balance their budgets: Although the Legislature, in contrast to the governor, included a partial restoration of the per-pupil foundation allowance for public schools, the increase was not enough to make up for the cuts already suffered by school districts. The Legislature increased the maximum (basic) foundation allowance by $30 to $8,049, and the minimum foundation by $60 to $7,026. The final budget also includes $6 million to ensure that all districts receive a minimum increase of $5 per pupil.
The Legislature also approved $36 million (up from the governor’s recommendation of $24 million) for equity payments to districts with foundation allowances of less than $7,076. The payment would be the lesser of $50 per pupil or the difference between the district’s Fiscal Year 2014 foundation allowance and $7,076.
The final budget retains funding for best practices grants at the current year level of $80 million, with districts eligible for $52 per pupil if they meet seven out of eight best practices. The governor recommended that best practices grants be reduced by 70% to $25 million. Lawmakers also increased performance funding for districts from $30 million to $46.4 million, to reflect the number of districts that are expected to be eligible next year.
Many low-income youths and adults will not be able to afford a college education—the ticket to long-term economic security: Lawmakers included an increase of 7% (from $43.8 million to $47 million) in the Fiscal Year 2014 budget for the state’s Tuition Incentive Program, which provides financial aid to students who are Medicaid-eligible. While sorely needed, this relatively small increase is unlikely to substantially change Michigan’s ranking of 40th in the country in needs-based grants, or its placement last in the Midwest.
Without incentives for universities and community colleges to focus on the success of low-income and nontraditional students, many will continue to find barriers to the completion of postsecondary education: For Fiscal Year 2014, the Michigan Legislature again failed to incorporate performance standards that reward universities and community colleges for helping at-risk students. The final budget includes a 2% increase for both universities ($24.9 million) and community colleges ($5.8 million), with funding allocated based on performance metrics. In the current year budget, lawmakers included additional funding for universities and community colleges that meet specific performance standards, however only one of those performance standards—tuition restraint—addresses the unique needs of low-income and nontraditional students, including those needing remediation.
For Fiscal Year 2014, the performance measures for universities will remain largely the same, including tuition restraint; degree completions overall, as well as in key areas such as science, technology, engineering, mathematics and health; six-year graduation rates; research and development expenditures; and institutional support as a percentage of core expenditures. In the final budget however, the Legislature strengthened incentives for tuition restraint by making it a condition for receiving any performance funding and by lowering the tuition increase limit from 4% to 3.75%.
For community colleges, the metrics are also largely unchanged, and include degree completions, student contact hours, and administrative costs as a portion of total spending. For Fiscal Year 2014, lawmakers rejected a new metric proposed by the governor for job placements in the skilled trades.
Low-income students or those needing remediation face more barriers to educational access and success, are more expensive to serve, and more likely to drop out. If there are no financial incentives for institutions to devote additional resources to this population, they could be viewed as a liability in terms of the other standards, including graduation rates.
The House of Representatives has passed all of its budgets for Fiscal Year 2014 through two omnibus budgets, including: (1) the Education Omnibus Budget ($15 billion), which funds School Aid ($13.2 billion), community colleges ($334.9 million), and higher education ($1.4 billion); and (2) the General Omnibus Budget ($33.9 billion), that funds all other state departments and services, including community health ($15.3 billion), human services ($5.9 billion), and transportation ($3.4 billion).
The Senate has also approved most of its budget bills in preparation for the joint House/Senate conference committees that will iron out differences between the two versions–utilizing the budget targets adopted based on projected revenues from the May Revenue Estimating Conference.
This aggressive timetable is being challenged by a number of major budget issues driving the debate, including:
Medicaid Expansion: The governor’s budget included 100% federal funds—available through the Affordable Care Act–to support the expansion of Medicaid coverage to very low-income parents and childless adults up to 133% of the federal poverty level. This expansion would increase the number of Michigan residents covered by Medicaid from approximately 1.8 million to 2.2 million, reducing the number of uninsured adults by 46%.
Medicaid expansion would result in savings in the state’s General Fund of $206 million in Fiscal Year 2014 alone by allowing the state to use federal funds to provide comprehensive services to a population that is currently eligible for very limited state-funded health benefits. Savings to the state’s General Fund would grow to $1.2 billion through 2020.
The governor recommended that half of the savings in state funding be deposited in a newly created healthcare savings fund to offset any future costs related to Medicaid expansion. The remaining funds were to be used to fund vital services, or expansions, including the Healthy Kids Dental program.
To date, the Legislature has not endorsed the expansion of Medicaid, resulting in pressures throughout the state budget, and threatening the opportunity for healthcare coverage for hundreds of thousands of very low-income Michigan residents. House Republicans recently released HB 4714, a bill to expand Medicaid to 133% of poverty, but under onerous conditions, most notably a 48-month limit on Medicaid benefits for nondisabled adults (ages 21-65), as well as a requirement that recipients contribute up to 5% of annual income on copays, premiums and deductibles. The bill could not be implemented without a federal waiver that provides 100% federal funding for current and newly eligible nondisabled adults, as well as administrative costs. The bill also ends the Medicaid expansion when it is no longer 100% covered by federal dollars, which under the Affordable Care Act is scheduled to occur in 2017.
Transportation Funding: The Fiscal Year 2014 budget debates are also being shaped by the governor’s proposal to increase funding for Michigan roads and transportation infrastructure by $1.2 billion. The governor proposed to fund the road improvements by taxing gasoline at the wholesale level, increasing vehicle registration fees, and local taxing options.
While there is general agreement that Michigan’s roads and bridges are in serious disrepair and new investments are needed, consensus on how to pay the bill has yet to be achieved. Legislative options have included increases in the general sales tax—an option that could affect other vital state services, including human services and schools.
Michigan Tax Changes and Expected Revenues: In 2011, the Michigan Legislature adopted a major “tax shift” that reduced taxes on businesses by 83%, while increasing taxes on individuals by 23%. As part of that shift, Michigan’s Earned Income Tax Credit, an effective anti-poverty tool that helps hardworking families whose incomes put them and their children below or moderately above the federal poverty line, was cut by 70%. EITC payments in 2011 statewide were $353.5 million; for the 2012 tax year, they are expected to fall to $106 million.
The new revenue consensus by state fiscal experts is that Michigan will have an additional $702 million in combined revenues above earlier estimates for fiscal years 2013 and 2014—including a total of $579 million in state General Funds, and $123 million in the School Aid Fund. While encouraging, these increases follow years of steep revenue declines and related budget cuts, many of which disproportionately hurt low- and moderate-income working families, children and seniors.
In Fiscal Year 2014, the Legislature has an opportunity to use the potential infusion of federal Medicaid funds and unexpected state revenues to begin to reverse some of the policy decisions made to balance the budget and provide business tax cuts, as well as to invest in the educational and human services that have been shown to improve economic competitiveness.
FISCAL YEAR 2014 BUDGET ISSUES AFFECTING LOW-INCOME RESIDENTS
Among the major issues affecting low-income Michigan residents in the proposed Fiscal Year 2014 budgets being considered by the Legislature are the following:
Access to health and mental health care: As a result of the failure to date to expand Medicaid, both the House and Senate budgets restrict access to vital health and mental health services.
Hundreds of thousands of currently uninsured Michigan residents will not have access to medical and mental healthcare that is fully federally funded. In addition to the budget hole of more than $200 million created by the Legislature’s failure to accept federal funds to expand Medicaid, the decision affects the state’s residents and communities in a number of ways:
More than 70,500 children will not have access to dental care. The governor proposed to add $11.6 million in state General Funds to expand the Healthy Kids Dental program to cover an additional 70,500 children in three Michigan counties—part of a multi-year plan to cover all children in the state. The House rejected the governor’s plan. The Senate agreed with the governor, but did not specify which counties would become part of the program in the upcoming fiscal year. A failure to move forward with the governor’s plan to expand the Healthy Kids Dental program statewide could have the following consequences:
Michigan infants, and particularly infants of color, will continue to die unnecessarily. For Fiscal Year 2014, the governor recommended $2.5 million to begin to implement Michigan’s infant mortality reduction plan. The House rejected the governor’s proposal, while the Senate included a placeholder for further discussion in conference committee. Without additional funding:
Many children will continue to be exposed to toxic lead poisoning. Last year, the Michigan Legislature approved an additional $2 million for Michigan’s lead abatement program, known as Healthy Homes, for total funding of $4.9 million. The governor vetoed the expansion, and the program is funded at $2.9 million this year. For Fiscal Year 2014, the governor maintains funding at $2.9 million. The House added $1 million for total funding of $3.9 million next year, while the Senate included a placeholder to ensure discussion at the joint House/Senate Conference Committee.
Public assistance for low-income families, children and adults: The governor, House and Senate have recommended cuts in funding for the Department of Social Services of approximately 10-11% in Fiscal Year 2014, with most of the decline coming from continued steep drops in caseloads for basic assistance programs such as the Family Independence Program, FIP, and the Food Assistance Program , known as FAP. These caseload declines reflect policy changes over the last several years that have restricted eligibility for basic assistance programs.
More very poor children will be denied access to basic income assistance. The governor reduced funding for FIP by $15.8 million to a total of $239.4 million to reflect continued reduction in caseloads—projecting caseloads will fall from 53,298 in the current year to 49,226 in Fiscal Year 2014—a 7.6% reduction. Both the House and the Senate agreed with the governor’s caseload projections.
The number of Michigan residents with access to basic food assistance will continue to decline. The governor reduced funding for the Food Assistance program (formerly called the Food Stamp program) by $683.7 million in recognition of the loss of temporary federal funds, as well as caseload reductions—largely based on changes in FAP eligibility, including the adoption of an asset test. The governor assumes that caseloads will fall from 1.1 million cases appropriated this year, to 876,650 in 2014—a 19.4% reduction. The actual average monthly FAP caseload through March of this year was much lower than appropriated at 912,755. The House and Senate agreed with the governor’s caseload recommendations.
Low-income working families will continue to struggle after losing significant income with the 70% cut in the state’s Earned Income Tax Credit. In 2011, the Michigan Legislature slashed the state Earned Income Tax Credit from 20% of the federal EITC to just 6%. The state EITC is a refundable tax credit for working families, designed to promote and reward work and offset other taxes paid by low wage workers that consume a higher percentage of their total income. The governor, House and Senate have not recommended EITC restorations.
Adequate funding for a top-notch cradle to career educational system:
More low-income 4-year-olds will benefit from early childhood education. The governor increased funding for the Great Start Readiness Program by $65 million, from $109.3 million in the current year to $174.3 million in Fiscal Year 2014, while indicating his intention to expand the program by another $65 million in Fiscal Year 2015. The governor’s proposal would open up approximately 16,000 new half-day slots for 4-year-olds, requiring that at least 90% of the children live in families with incomes below 300% of poverty (up from 75% this year). The governor also increased the preschool slot payment from $3,400 to $3,624.
The House provided only $38 million for the GSRP, increasing the per-slot amount to $3,500. The House requires that at least 80% of children served by GSRP live in families with incomes at 200% of poverty or less. The Senate agreed with the governor on the funding increase ($65 million), but maintained the per-slot amount at $3,400. The Senate would require that all children served live in families with incomes at or below 300% of poverty, with the poorest children being enrolled first.
Michigan public schools will continue to struggle to balance their budgets. The governor’s budget did not include an across-the-board increase in the per-pupil allowance received by public schools. The governor instead recommended $24 million for equity payments of up to $34 per pupil to further close the foundation funding gap between districts by raising the per-pupil payments for the lowest funded districts receiving the minimum grant from $6,966 to $7,000 per-pupil. However, the governor reduced funding for “best practices” grants by 70% (from $80 million to $25 million), and kept performance funding for districts at the current year level of $30 million.
The House also did not fund an across-the-board increase in the per-pupil allotment for schools, but provided total funding of $36 million to bring the equity payment up to $50 per pupil for districts with foundation allowances below $7,016. The House did not fund best practices grants, but included a placeholder to further discuss them in conference committee.
The Senate included $24 million for a $9 increase in the basic foundation allowance for schools, as well as an $18 per pupil in the minimum foundation allowance. The Senate did not include the equity payments, and eliminated funding ($80 million) for `best practices payments.
As tuition skyrockets at public four-year universities, fewer people will be able to afford a college education. The governor’s budget provided $1.24 billion for university operations, including $24.9 million in new funding (a 2% increase) that would be allocated based on six performance metrics: undergraduate completions in critical skills (science, technology, engineering, mathematics and health); research expenditures; six-year graduation rates; total completions; administrative costs as a percentage of core expenditures; and tuition restraint.
The House and Senate appropriated the same level of overall funding as the governor, but the House made tuition restraint a prerequisite for receiving performance funding, lowering the tuition threshold from 4% to 3%. The Senate also made tuition restraint a prerequisite for receiving performance funding, but retained the governor’s 4% tuition restraint threshold.
Low-income adults will struggle most, as needs-based financial aid becomes more scarce. In 2009, the Michigan Legislature eliminated five needs-based grants for students, and the governor, House and Senate again failed to restore those grants in their Fiscal Year 2014 budgets. The governor provided continuation funding for two of the remaining grant programs, including: (1) $31.7 million in federal TANF funding for the Michigan Tuition Grant, a needs-based grant; and (2) $18.4 million in TANF for the Michigan Competitive Scholarship, a merit-based scholarship with eligibility based on ACT scores. Under the governor’s budget, private colleges with students receiving Michigan Tuition grants would be required to participate in the state’s P-20 longitudinal data system, and report on the number of Tuition and Pell Grant students graduating, as well as the number taking remedial education classes.
In his Fiscal Year 2014 budget proposal, the governor increased funding for the Tuition Incentive Program by $3.2 million (7%) in state General Funds, adding to current spending of $43.8 million in federal TANF to bring total funding to $47 million. The TIP is available to students who are eligible for Medicaid, and the governor’s budget limits reimbursements to universities under the TIP to 300% of the average community college tuition rate.
The House agreed with the governor on funding levels, as well as the governor’s TIP policy changes, but did not require private colleges to participate in the P-20 data system.
The Senate also agreed with the governor on funding levels, but did not include the governor’s TIP policy changes or the Michigan Tuition Grant language requiring P-20 data system participation for private colleges.
Michigan League for Public Policy is happy to announce the release of the 2013 edition of Money Back in Michigan.
This packet describes seven state and federal tax credits that are available to lower-income individuals and families, and is used by several hundred agencies and individuals around the state that serve these populations.
We are not happy to announce that this year these individuals and families will be paying higher taxes. This is due to the Michigan Legislature cutting the state Earned Income Tax Credit from 20% of the federal credit to 6%, eliminating the child tax exemption (this will affect all families with children), and restricting the eligibility for claiming the Homestead Property Tax Credit to households with income under $50,000. (more…)
Today is the seventh annual EITC Awareness Day.
The EITC – Earned Income Tax Credit — is a refundable tax credit available to low- and middle-income families who work and pay other taxes. The EITC helps offset regressive taxes that hit poor families the hardest – such as federal payroll, sales, property, and excise taxes – and provides much needed relief to low-income families (those earning under 200% of the federal poverty line).
Michigan working families can currently claim two Earned Income Tax Credits: a federal EITC and a state EITC, which is designed to supplement the federal credit. In Michigan, according to the latest available data, one-third of all working families are considered low-income and one in every four children live in poverty (a higher childhood poverty rate than the national average). (more…)
Pulling Apart: A State-by-State Analysis of Income Trends, by the Center on Budget and Policy Priorities and the Economic Policy Institute, finds that Michigan’s income gap is growing between the state’s poorest and wealthiest households.
This interactive graphic tells the story.
– Melissa K. Smith
If tax cuts and privatization were the great elixir for economic recovery that some would like us to think, lots of job providers would be packing up and heading to Alabama to provide high-paying, secure jobs to the populace there.
Or, we could go only as far south as Indiana to witness the Great Lakes version of that model of government. Some have held up Indiana as the state Michigan should emulate.
The fifth edition of the Michigan Future annual report, Michigan’s Transition to a Knowledge-Based Economy, says that when we look at per capita income, the unemployment rate and the percent of residents with incomes below 150% of the poverty level, Minnesota is clearly the Midwest state we want to be more like, not Indiana. (more…)
The political world is abuzz today in the wake of GOP presidential candidate Mitt Romney’s remarks about the 47% who pay no federal income tax.
Just last week, the League released a paper that’s relevant to this topic – Got Skin in the Game? It shows that we all pay taxes.
What’s important to keep in mind is that those who pay no federal income taxes – the 47% – still pay sales taxes and property taxes (often called rent). In fact, when you look at state and local taxes, low-income families pay as big a share of their income or bigger than higher income groups. (more…)
The U.S. Census Bureau’s annual Current Population Survey Report contains the good, the fair and the bad. The report, released Wednesday, has a sample size of 100,000 households and provides the official numbers on poverty, income and health insurance coverage for the United States. Here are some of the key findings:
The Ugly – Income: There was a 1.2% decline in median household income and a 1.6% growth in income inequality in 2011. The number of middle-income households is decreasing while the number of households in extreme poverty has grown by almost 50%. Also, 6.6% of all Americans lived in households with income at or below 50% of the federal poverty level ($11,406 for a family of four) in 2011.
The Fair – Poverty: After three consecutive years of increases, the poverty rate seems to be flattening out. The 46.2 million Americans (15% of the population) who lived in poverty in 2011 was not significantly different than 2010. This may be due to an increase in the number of people working full-time, year round. The number of year-round, full-time workers in the bottom income quintile of households increased 17.3% between 2010 and 2011, indicating that many of the new jobs that are being created are low-wage jobs.
The Good – Health Insurance: The number of Americans without health insurance decreased from 16.3% in 2010 to 15.7% in 2011, a 3.8% drop. The increase in health care coverage is likely attributable to two things: