‘Yes’ on road funding is right direction

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

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

A ‘yes’ vote on May 5 would end the era of delaying needed road repairs or paying for them with borrowed dollars. All with a penny sales tax increase. The sales tax increase to 7 cents will put Michigan in the middle of the pack of states — the same as Indiana’s.

For working families earning the least in Michigan, the penny tax will be offset by a full restoration of the state Earned Income Tax Credit to 20% of the federal credit.

The EITC is the best tool we have to reward work and lift families from poverty. More than 1 million Michigan children will benefit. What a win-win!

Also, this month, on Feb. 11, Gov. Snyder will unveil his executive budget, offering both challenges and opportunities.

The governor, in his State of the State address, announced the merger of the Department of Community Health and the Department of Human Services to a new Department of Health and Human Services under the leadership of Nick Lyon, the director of DCH and interim director of DHS.

At DCH, Lyon continued impressive strides in implementing the Healthy Michigan Plan so that a half-million previously uninsured or underinsured adults in Michigan get wellness care and care when they are sick.

Lyon has kept the League and other advocates informed about the merger and he seems sincere in efforts to help Michigan families and children. I pledge to work with him to find solutions that will make a positive difference in the lives of Michigan’s economically vulnerable kids and adults.

As the new department works to streamline programs with a “people first” rather than a “programs first” approach, we’ll monitor with this principle in mind: True efficiency must be found in making sure services match the needs of families rather than measuring success by the number of kids and adults dropped from programs.

In addition, there will be strong pressure to cut programs as the deep business tax cuts from 2011 resulted in revenue shortfalls that are now apparent.

Next year, business tax revenue is projected to contribute a small share (8.3%) of Michigan’s General Fund — the state’s main checking account that covers public safety, higher education, healthcare and other needed services.

That’s a far, far cry from two decades ago when business revenue contributed nearly a third (29%) of the General Fund. To succeed, businesses need those public services, and it’s a reminder, once again, that business tax cuts do not grow the economy.

So buckle your seat belts as we head into 2015 public policy debates! It’s going to be a bumpy ride. The League will keep you informed of developments, and we hope you will be engaged in these important decisions ahead.

– Gilda Z. Jacobs

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

More child care oversight needed

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

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

Child care centers and homes are required to be licensed or registered with the state to ensure that basic requirements are met. Two federal audits and national studies have found that Michigan falls short in its efforts to inspect child care settings. The unacceptable reality is that parents cannot rest assured that their children are spending their days in care that consistently meets state licensing standards.

The risk to children is greatest in families earning low wages, including parents who are required to work 40 hours a week as a condition of receiving public assistance. Low-wage families have fewer options and face difficult choices because they cannot afford higher quality child care that comes at a higher cost.

These are the facts:

  • Michigan cannot provide adequate oversight of child care because the state’s child care inspectors have caseloads that are more than three times the national standard. Child care inspectors in Michigan have average caseloads of 153, with a nationally recommended ratio of 1 worker for every 50 child care programs.
  • In unannounced visits, federal auditors found that child care providers failed to comply with one or more state health and safety requirements. Most disturbing was the fact that half of the family and group child care providers had not done required criminal and protective services background checks, and none of the child care centers had completed those checks on their employees.
  • A national report gave Michigan a “D” grade for its child care centers regulations and oversight, citing ineffective monitoring.
  • Michigan was one of eight states that received a score of 0 out of a possible 150 points for its licensing of child care homes, primarily because of a failure to inspect homes before they are registered and children are placed into care.

The state inspects a range of services in order to protect the public including restaurants, roads and bridges, and grocery stores. Certainly the state’s youngest children, who are in child care so their parents can work to support them, deserve to be at the top of the list.

– Pat Sorenson

High poverty, unemployment harm economic growth

Often touted as the “Comeback State,” Michigan’s economic recovery has not included everyone as reflected in the state’s high poverty and unemployment rates. Leaving people behind will only hinder Michigan’s potential economic growth, which has already showed signs of slowing.

A recent report ranking states based on multiple indicators of economic security and opportunity reveals the state’s major lack of investment in its people. On almost every factor from poverty to education to affordable housing, Michigan is ranked worst or second-worst among the Midwest states. (more…)

Census numbers tell of stagnancy and slow recovery

Today is the big day that comes each year: the release of American Community Survey figures on income and poverty.

Ready for some numbers?

Michigan’s household median income in 2013 ($48,273) was a bit higher than in 2012, but is nearly $1,000 lower than in 2009. The income bracket that grew the largest from 2009 to 2013 was the share of Michigan households who make under $10,000 a year. The only other income bracket with a significant share increase was households making more than $200,000 a year. These numbers taken together suggest that the slow economic recovery in Michigan is primarily benefiting those at higher incomes. (more…)

Holy smoke Batman! We can reduce poverty

Like Batman and Robin, raising the state Earned Income Tax Credit and minimum wage are best when working together, a new report concludes.

The two strategies are better than one, according to State Income Taxes and Minimum Wages Work Best Together, by the Center on Budget and Policy Priorities. (more…)

Shooting ourselves in the foot

Michigan and the seven other states that cut unemployment benefits in the wake of the Great Recession caused financial hardship for unemployed workers and failed to boost the overall economic outlooks of the states, a new report from the Economic Policy Institute concludes.

Problems with the unemployment system actually stemmed from underfunding the state trust funds in good times, rather than paying out benefits too generously, the report concludes. And cutting benefits not only shortchanged jobless workers and their families, it undermined the countercyclical role of the unemployment system that is designed to kick in when times are tough. (more…)

Healthy Michigan Plan gets healthy start!

The Healthy Michigan Plan, Michigan’s Medicaid expansion, opened for enrollment on April 1, and within the first 72 hours, 36,329 applications were submitted through the MIBridges website and 20,995 were approved for coverage. By Tuesday, the number of enrolled shot up to 59,280 — an amazing number for a two-week period.  That means that more than 109,000 people are now covered, including those who were transferred over to the plan from the Adult Benefits Waiver program.

The program is off to a great start — great news for Michigan’s low-income uninsured. The online enrollment system is working well with the majority of applications being processed in a matter of minutes or even seconds. (more…)

Healthy Michigan Plan enrollment opens April 1

The Department of Community Health has announced open enrollment will begin for the Healthy Michigan Plan on April 1. This long-awaited announcement is great news for Michigan’s low-income uninsured residents.

Starting next week, adults (ages 19-64) in families with incomes below 133% of the federal poverty level (up to $15,521 for an individual or $31,721 for a family of four) who are not currently eligible for Medicaid or Medicare, and not pregnant, will be able to apply for the comprehensive coverage offered by the Healthy Michigan Plan. Citizenship, or lawful admittance to the U.S., is also required. (more…)

Constitutional amendment: misguided and reckless

A resolution passed by the Michigan House on Thursday calling for a federal balanced budget amendment is misguided and reckless. While a balanced budget amendment may seem appealing on the surface, it would create serious challenges for our economy while threatening the U.S. Constitution.

Requiring a balanced federal budget would threaten critical services such as schools, highways, public safety and more in our state. Michigan has already experienced a decade of cuts in education, local communities and roads. We cannot afford to lose federal dollars that are helping us invest in the important engines of our economy. (more…)

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