One-two punch: Budgets knock people out of the ring

When I heard that Congressional republicans are working on a budget that cuts vital services that our most vulnerable residents rely on—like Medicare, nutritional programs, and other anti-poverty programs—not to mention other programs all Americans use, I didn’t have to think long before I remembered my warnings from the end of last year.

The significant, deficit-increasing tax cuts for profitable corporations and wealthy individuals will ultimately harm services we all rely on.

Turns out, I’ve actually had a lot of experience predicting this. Michigan’s recent history of favoring tax cuts over investment has resulted in a state with underfunded K-12 education, unskilled and untrained workers, decaying roads, water that is unsafe to drink, lead in our homes and a widening gap between the “haves” and the “have nots.”

man with boxing glovesGovernor Snyder recently signed into law the budget for the next year. To be honest, it was at best “meh.” Yes, there were a number of good investments: continuation of the “heat and eat policy”, an increase to the school clothing allowance for children receiving cash assistance (which the League has long advocated for), a fairly significant increase in the per-pupil payment, and a bit more money for adult education (again, a League priority). However, there were a lot of missed opportunities—notably an increase to the already paltry cash assistance grant and increased access to child care assistance. In addition, in 2020 the state will likely start taking away healthcare from Healthy Michigan recipients who are unable to find work.

Again—and sadly—this is nothing new. Over the years, we have seen the state’s increasing reliance on federal funds, the shifting of School Aid Funds away from K-12 public schools to cover the costs of the state’s universities and colleges, and policy decisions that have resulted in a very huge drop in the number of very poor children who can receive any state assistance.

Instead, the state has prioritized cutting taxes instead of investing in Michigan’s people.

From the 2011 tax shift, to budget-busting legacy business tax credits that will cost our state around $600 million per year for the next decade or more, to the repeal of the personal property tax, to triggered income tax rate cuts, to small property or sales tax exemptions, to the increase in the personal exemption (which the League opposed), the Legislature nicked and slashed away at our state coffers. At the same time, the state has shifted money around–$600 million general fund for roads and $900 million from K-12 to higher education, among other shifts—in order to avoid raising taxes.

Unfortunately, in order to become an attractive state to businesses and residents alike, we need to start making investments. The state has offered significant tax cuts to help encourage out-of-state businesses to come to Michigan, and some haven’t come because we lacked the infrastructure and the people power to make it work. Low taxes clearly aren’t the key motivating factor (in fact, Michigan’s not even a high-tax state already). Investment is the key—and to do that, Michigan needs to look at some revenue-raising, progressive tax changes.

People have been left out of the ring for far too long, and it’s time to change that.

— Rachel Richards

What to watch for in 2019 state budget

The state budget is a big focus of the League’s work each year, and often our most viable opportunity for victories for the people and kids of Michigan. And while we were disappointed that lawmakers passed a personal exemption increase, it should not affect this year’s budget as much as earlier proposals (the bigger cuts will be left to future legislators instead).

budgetandmagnifier175-by-116Here are the main things good and bad in—or absent from—Governor Rick Snyder’s 2019 budget that the League is keeping an eye on as the legislative process gets underway. You can learn more about these issues in our “First Look” at the governor’s budget and we will continue to provide updates on our budget page.

thumbs up The Good
  • Continues funding for the “heat and eat” policy that provides increased food assistance to families with low incomes, people with disabilities and seniors.
  • Supports the Healthy Michigan Plan that has provided health insurance for over 675,000 Michigan residents.
  • Provides $5 million for Michigan’s Early On program that identifies and serves infants and toddlers with developmental delays—the first investment of state funds in Michigan’s grossly underfunded early intervention program.
  • Provides a small increase in monthly Family Independence Program income support provided to children in deep poverty after decades of flat funding that pushed families to less than 30% of the federal poverty line.
  • Provides increases of between $120 and $240 per-pupil for the state’s public schools—with additional funding for students in high school or career and technical education.
  • Expands funding for partnerships with school districts that are needing academic supports from $6 million to $8 million.
thumbs down The Bad
  • Continues funding for Michigan’s successful preschool program for at-risk four-year-olds, but does not expand services to three-year-olds from families with low incomes.
  • Fails to expand funding for At-Risk School Aid and the school-based literacy programs needed to prevent the retention of children in third grade, including a disproportionate number of children of color.
  • Does not increase funding for adult education after deep cuts over the last two decades.
  • Leaves in place Michigan’s child care assistance eligibility cutoff, which is one of the lowest in the nation.
  • Diverts School Aid money intended for K-12 public schools to fund the state’s community colleges—rather than securing adequate General Fund revenues for post-secondary education.
  • Does not restore financial aid for an increasing number of college students who are older and supporting families.
  • Reduces cities, villages and townships (CVT) and county revenue sharing payments, neither of which have received full statutory funding in nearly two decades, so that many communities would either receive decreased CVT and county revenue sharing payments or no payment at all.
question mark The Absent

The League will keep pushing for these and other budget priorities in the coming months, and advocate for racial, ethnic and social justice in all state budget decisions this year and every year. We also encourage you to use our advocacy tips and budget timeline to get involved and speak up for the priorities you believe in.

— Alex Rossman

New League report and online tool calculate how much it really costs to make ends meet in each county

For Immediate Release
May 3, 2017

Contact:
Alex Rossman
arossman@milhs.org
517-487-5436

For 20 years, League has been publishing report to help policymakers understand true economic struggles of Michigan families

LANSING—It costs a Michigan family between $2,580 and $4,722 a month to pay for necessities and provide for themselves and their family according to Making Ends Meet in Michigan, a new report released by the Michigan League for Public Policy today. The monthly income necessary to make ends meet for a single parent with two kids is $3,943, and it costs a single worker $1,923 a month to get by.

The report analyzes and compiles state and county data on the costs of housing, food, child care, healthcare, transportation, and clothing and other household necessities along with likely taxes owed, to identify the Basic Needs Income Level. The Basic Needs Income Level is the amount of household income a family or individual must have to have in order to meet basic needs without public or private assistance. It’s what it really costs to live in a county.

An online calculator available at www.milhs.org/calculator can be used to calculate the cost of living by county and family size. This report uniquely analyzes four different household sizes in each county—single, single parent, two parents/both working and two parents/one working. All families assume two children under age 5.

“For too long, policymakers have only used the poverty level and unemployment to assess how people in Michigan are doing, but there’s so much more to every Michigan family’s story and struggles than that,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “This report seeks to draw attention to how much it really costs for families to make ends meet both statewide and in each county, and how our state’s current wages and services are not cutting it.”

The federal poverty threshold determines who is counted as officially poor but tells us little about whether a person or family is living in economic security. It does not reflect regional and local differences in the cost of living and is based on a model that, while adequate when first devised in 1965, is less reflective of today’s economic realities.

The Basic Needs Income Level calculated in this report is intended to help lawmakers and residents easily understand how much income a family needs in order to pay for all of its basic expenses. The Basic Needs Income Level can be used to measure the economic security of Michigan’s working families, assess the adequacy of worker wages and benefits, promote programs and policies that assist families in need, and as a benchmark by which to assess the quality of jobs being created in the state.

With this localized data on how much it really costs for families to make ends meet, the Michigan League for Public Policy’s report reframes the discussions around need, wage standards, public assistance and what it means to live in economic security. The League is focused on ensuring all Michigan residents have economic security because simply lifting people out of poverty is not enough. In addition to showing that the poverty level alone is not an adequate measure of stability, this data also shows that the state’s unemployment rate is not the only—or an adequate—benchmark for economic recovery.

“This data backs up what we’ve been saying the last few years as Michigan has ‘recovered’: the recovery is still not reaching everyone, many people are working in low-wage jobs and barely getting by, and the high costs of child care and healthcare are breaking people at all income levels,” Jacobs said. “There are a variety of policy changes lawmakers can make to help address this, including increasing the minimum wage, upholding healthcare and strengthening child care supports, passing a statewide earned sick leave law, and creating a fairer tax system that helps struggling workers as much as it does the wealthy.”

The League continues to connect the challenges facing Michigan kids and residents with the policy solutions to help them. To that end, Making Ends Meet outlines the following policy recommendations for lawmakers to better support their constituents:

  • Protect Michigan’s expansion of Medicaid and the federal Affordable Care Act as a whole;
  • Restore and strengthen the Michigan Earned Income Tax Credit;
  • Update Michigan’s child care subsidy;
  • Raise the minimum wage;
  • Invest in skills training and adult education.
  • Enact workplace protections such as earned sick leave and predictable scheduling; and
  • Create a more adequate tax system, including a graduated income tax.

In this report, housing costs are based on the Fair Market Rent (the 40th percentile of rents in each county) provided by the United States Department of Housing and Urban Development (HUD). Food expenses are from the United States Department of Agriculture’s Low-Cost Food Plan. Child care costs are based on the 2015 Cost of Care Report from the Early Childhood Investment Corporation and healthcare expenses are calculated using the federal healthcare marketplace exchange. Finally, costs for clothing, household necessities, personal care and telephone come from the Bureau of Labor Statistics Consumer Expenditure Survey and may vary depending on the family’s circumstances. Taxes are based on income and family size. For additional information, including data appendices and more details on how each of these expenses was calculated, go to www.milhs.org/resources/making-ends-meet-in-michigan.

###

The Michigan League for Public Policy, www.milhs.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

Many bright spots in governor’s budget, but cloud of tax cut still looms

For Immediate Release
February 8, 2017

Contact:
Alex Rossman
arossman@milhs.org
517-487-5436

Governor’s budget includes funding for many League priorities that support kids, workers and families

LANSING—The Michigan League for Public Policy issued the following statement on Governor Rick Snyder’s 2018 budget presented this morning. This statement can be attributed to Michigan League for Public Policy President & CEO Gilda Z. Jacobs.

“The governor’s budget today is very positive and includes money for many of the programs and services that help struggling workers and families. The League has been a champion for leveraging federal funds to support important state services, and the budget includes $6.8 million to draw down the federal money needed to keep the Heat and Eat program going and $8.4 million in state funds for child care to secure much-needed federal funding. The budget upholds continued funding for the Healthy Michigan Plan, which provides healthcare for more than 600,000 Michiganians with low incomes under the Affordable Care Act, and we appreciate Governor Snyder’s continued commitment to protecting that successful program in Michigan. (more…)

Michigan continues to underfund adult education, hamper workers and economy

pdficonBB-MI continues to underfund adult eduction _graphic 1Michigan continues to underfund adult education even though changes in the state’s economy make it impossible for workers to succeed without basic skills and a high school diploma. With the reduction in manufacturing jobs in Michigan, workers can no longer expect to get a well-paying manufacturing job with only a high school diploma. Laid-off workers and those trying to succeed in the job market often seek out postsecondary occupational training, as employers are increasingly requiring a postsecondary credential such as a degree or certificate. However, many workers lack certain basic skills in reading, writing or mathematics that are needed in order to participate in occupational training, leaving them in limbo. Adult education is an important transition program that addresses the need for basic skills and links workers to training, credentials and ultimately to skilled jobs.

The Need for Adult Education Is Not Being Met

The State of Michigan is not reaching nearly enough of the working-age adults who need adult education:

  • Over 221,500 Michigan adults age 25-44 lack a high school diploma or GED, yet fewer than 7% are enrolled in adult education.
  • More than 225,000 Michigan adults speak English less than “very well,” yet fewer than 5% enroll in English as a Second Language adult education programs.
  • At least 60% of Michigan community college students per year need to take developmental (remedial) education classes at an additional cost due to not having mastered one or more skill areas needed for postsecondary education or training.

BB-MI continues to underfund adult eduction _graphic 2State and Federal Funding for Adult Education Has Been Cut

Michigan has greatly reduced its funding for adult education over the past 15 years. During budget years 1997 to 2001, state funding for adult education was at $80 million a year, but the Legislature cut funding drastically after that, to as low as $20 million annually. Adult education was funded at $22 million/year for several years, and last year the Legislature bumped up the funding to $25 million. However, the amount is actually $23.8 million because the money is given to Prosperity Regions rather than to providers directly, as has been done in the past. Each designated Prosperity Region deducts 5% as an administrative fee for allocating the money to providers within its jurisdiction.

BB-MI continues to underfund adult eduction _graphic 3As federal funding has also been reduced, total funding for adult education in Michigan has dropped from $96.3 million in 2001 to only $37.3 million in 2016. This has resulted in fewer people enrolling in and complet­ing adult education programs. The decrease in total funding since 2001 has been accompanied by a 51% decline in enrollment, a 36% decrease in students completing a grade level and a 64% decrease in students completing and then advancing a grade level.

The 2017 State budget

Adult Education Eligibility: Currently, adult education is available to adults age 20 and over. The governor has proposed boilerplate language expanding adult education eligibility to high school students and out-of-school youth under age 18, which would intensify the need for more funding. If the language expanding the eligibility is included in the final budget signed by the governor, it is likely many adult education programs would be strapped for money to the degree that they cannot serve their priority population (individuals over 20 years of age) effectively. The Legislature should not expand eligibility until after further discussion with service providers and not without sufficient funding in place.

Adult Education Funding: The governor’s proposed budget funds adult education at $25 million ($23.8 million after set-aside is deducted) for budget year 2017—the same amount as last year. The Michigan League for Public Policy recommends that the Legislature increase the adult education appropriation by a minimum of $10 million for budget year 2017. At an estimated cost of $1,240 per student, this would enable 8,000 more students to be served, and would enable adult education to serve the equivalent of 10% of students age 25-44 without a high school diploma.

You are most important part of budget process

From the First Tuesday newsletter
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I hope you are all experiencing some type of spring “break,” whether it’s a full family vacation or just getting outside and enjoying the warmer weather. But the onset of spring means another season is upon us—budget season. That means that we have to get our rest and relaxation in now so that we’re energized and ready to get to work when legislators return to the Capitol on April 12th.

(more…)

A banner year for better policy

From the First Tuesday newsletter
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It is 2016. A new year with new hopes, and a new set of challenges.

But before we look ahead, I want to take a moment to reflect on 2015 and what you have helped us accomplish. (From here on out, when I say “we” or “our,” know that I am including you, because the League’s work is all thanks to you.) When fighting the good fight, the victories can sometimes be few and far between, so it’s important to celebrate the ones we get, big or small. (more…)

Adult education at community colleges is a win-win-win

One of the biggest obstacles to student success in community college is the need to relearn basic skills through developmental education. Fully 61% of community college students in Michigan need to take at least one developmental education class because they have not mastered an academic skill at the level necessary for college-level classes. (more…)

Two generation policies offer support for parents and kids

On Monday, October 26th, the Michigan League for Public Policy held our annual meeting and public policy forum, “Secure Parents and Successful Kids.” We were joined by more than 250 people from around the state and a host of national and state experts and innovators in the fields of education, economic security and child well-being to discuss a two-generation approach to tackling poverty. (more…)

It’s Tax Day! Paying taxes is about building strong communities

To build a strong economy and create jobs, we must invest in what we know works. Everyone wants to live in a great community with good schools, safe roads, quality parks—and more. Not only that, but businesses want to locate and expand in areas where there is an educated and trained workforce—and in a place where people want to live. None of this would be possible if we didn’t pay taxes.

The Upside of Taxes

In order to grow the state’s economy, policymakers need to recognize that families need access to high-quality early childhood programs and schools, affordable colleges and universities, and job training to ensure that the state’s workforce can succeed in today’s global economy. Many of the jobs being created in Michigan require education and training beyond a high school diploma. Investing in education and workforce development will help businesses thrive while helping hard-working people climb into the middle class. (more…)

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