The 2016 State Budget: Gains for Some Children and Families but Deep Disparities Persist — Executive Summary

 

The 2016 Michigan budget includes many important investments in children and families, but left undone are focused efforts to lift children out of poverty and reverse deep and discouraging disparities based on income, race and place.

With nearly half of all African-American children and onethird of Hispanic children living in poverty, the state has a long way to go in ensuring economic opportunity for all Michiganians.

2016 Budget Wins

    • More than $30 million in new funding to improve reading by third grade. More than threequarters of white fourth-graders read proficiently, compared to less than half of African-American children. New funds for third-grade reading are a good step forward, but do not adequately address the earliest years of life (ages 0 to 3) when brain growth and learning are at their peak and the foundation for reading is built.
    • A $70 million increase in funding for districts serving high numbers of low-income children who are struggling in school. At-risk program funds are allocated based on the number of children receiving free lunches, and are used to improve third-grade reading and help high school students become career and college-ready. The evidence is clear: the number of children eligible for free- and reducedpriced meals in schools is the most reliable predictor of outcomes on achievement tests, yet education reform efforts have largely left poverty out of the equation. While this increase is sorely needed, it is the first in more than a decade and the program is still not fully funded.
    • Changes in child care eligibility and payments. At 121% of poverty, Michigan’s eligibility level for subsidized child care is one of the most restrictive in the country. The 2016 budget does not increase the eligibility level, but does allow families who are eligible to keep their child care until their incomes reach 250% of poverty—a major step forward in making sure children have stable care and parents can keep working. Also included in the budget are small increases for providers based on the state’s quality rating system. Unfortunately, more than three-quarters of the state’s child care providers do not meet the quality standards and receive the very lowest rates, placing higher-quality child care out of the reach of many low-wage families. In Michigan, more than half of the children in care using a state subsidy are African-American, and low state provider rates limit their options for the type of care that could help children’s emotional and intellectual development.
    • A small expansion in funding for adult education. The 2016 budget includes a $3 million increase for adult education. While the increase is needed, it falls short. Overall funding for adult education was cut from $185 million in 1996 to $22 million this year.
    • An expansion of the Healthy Kids Dental program. The 2016 budget expands the Healthy Kids Dental program to 290,000 more children ages 0 through 12 in Kent, Oakland and Wayne counties. With this expansion, 130,000 children and youths ages 13-20 are still uncovered, disproportionately affecting children of color.

Budget Losses

    • State investments in its youngest learners (ages 0 to 3) remain woefully inadequate. Michigan became a national leader by doubling its investment in preschool for at-risk 4-year-olds over the last two years. However, given the unassailable scientific evidence that it is during the first three years of life that the very architecture of the brain is developed, it is time to invest in the earliest years. Early interventions are the best tools we have to reduce lifelong disparities in health, achievement and opportunity.
    • Targeted efforts to ensure low-income children and children of color get a high school diploma are insufficient. African-American and Hispanic teens are more than twice as likely to be out of school and not working, and dropout rates are extremely high for very low-income students and youths of color.
    • Postsecondary education is becoming increasingly unaffordable for many students. While Michigan’s public university tuition is the sixth highest in the nation, funding for scholarships and grants for low-income students has not kept pace. For 2016, the governor recommended the restoration of grants for older students—the first time they would have been funded since 2009—but the Legislature rejected his proposal. African-American and Hispanic students in Michigan are less likely to enroll in or graduate from college and cost is likely a significant factor.
    • Reduced tax credits for low- and moderate-income workers have forced more children into poverty. In 2011, the Michigan Legislature reduced the state’s Earned Income Tax Credit—a proven anti-poverty tool—by 70%. Restoring the EITC would lift an estimated 15,000 families above poverty and lessen the impact of poverty on 800,000 families, including more than 1 million children.
    • Fewer children have access to the income assistance needed to avoid deep poverty and homelessness. Since 2007, income assistance caseloads in Michigan have dropped by two-thirds, and the number of families receiving assistance is now at its lowest level since the Kennedy administration. Changes in Family Independence Program policies—including restrictive lifetime limits for assistance and sanctions for families based on the truancy of a single child—have resulted in deeper child poverty.

For more information on the 2016 state budget and disparities in outcomes for Michigan children and families, see our Budget Briefs.