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

‘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…)

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…)

An unexpected gift: 4-star charity rating

From the First Tuesday newsletter
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After all the hubbub over Black Friday and Cyber Monday, Tuesday was #GivingTuesday, a day that’s been set aside to promote charitable giving and celebrate generosity.

So it’s appropriate to announce that Charity Navigator, America’s largest independent charity evaluator, has awarded the League 4 stars – the highest rating possible – as a charitable organization. The nonprofit, independent group rates charities based on financial performance, accountability and transparency.

“Michigan League for Public Policy’s coveted 4-star rating puts it in a very select group of high-performing charities,’’ according to Ken Berger, president and CEO, Charity Navigator. “Out of the thousands of nonprofits Charity Navigator evaluates, only one out of four earns 4 stars – a rating that, now, with our new Accountability and Transparency metrics, demands even greater rigor, responsibility and commitment to openness.’’ (more…)

Maintaining cultural ties and family stability for American Indian Children

American Indian children in Michigan are the most likely to be removed from their homes due to abuse and/or neglect: 1.5 times the rate of white children and the highest of all children of color in the state, according to the Michigan Race Equity Coalition. They are also more likely to age out of the foster care system. It is disturbing, however, that the rate of investigation for abuse and/or neglect is lower compared with white children. (more…)

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