The fiscal year 2011 budget finalized by the Michigan Legislature avoids more cuts to doctors and other providers serving Medicaid patients, restores dental and podiatric services to adults on Medicaid, adds new child welfare workers and restores per-pupil cuts to students, all laudable achievements.

 The bright spots in the state budget, which starts Friday, were largely supported by federal fiscal relief in the form of $650 million in federal funds for Medicaid and education.

Despite that help, the budget still contains painful cuts to vulnerable people. Some 930 parents who have worked their way off cash assistance will lose a year of transitional Medicaid coverage. Mental health services are cut an additional $5 million. Universities were cut by an additional 2.8 percent, putting new pressure on universities to raise tuition, making it harder to attain degrees. Programs for seniors and substance abuse also were cut.

Also troubling is the fact that the budget was based on some assumptions that are untested, such as the tax amnesty plan. In addition, an early retirement plan will drain expertise from state departments, further straining the ability of the state to deliver services.

The one-time dollars used to help cover programs in the new fiscal year will not be there next year. With a projected $1.6 billion deficit for the budget year that starts Oct. 1, 2011, Michigan must get serious about addressing its structural deficit by modernizing its tax structure.

The U.S. Census Bureau Tuesday released the results of its annual American Community Survey, which surveys approximately 3 million households across the United States. This data reveals a lot about the economic conditions Michigan residents are facing and particularly how these challenges are hitting people of color the hardest.

According to this new data, which is much more comprehensive than the Current Population Survey released on September 16, not only did Michigan’s median household income continue to fall, but our poverty rate also increased.

Overall, Michigan’s inflation-adjusted median household income declined 6.2 percent between 2008 and 2009 and the poverty rate increased from 14.5 percent in 2008 to 16.2 percent in 2009. Child poverty jumped from 19.4 percent to 22.1 percent in just one year. This means more than 1 in 5 children under 18 are living in families where the total income is at or below $17,285 for a family of three. 

While things got worse for many Michigan residents in 2009, communities of color were harder hit. The median household income fell for all racial groups, but the drop was highest for African Americans  (7.5 percent) and Hispanics (6.6 percent). For white, non-Hispanics, it fell 5.6 percent, less than the overall decline of 6.2 percent.

Just as concerning is the poverty rate for communities of color. Over a third of African Americans (34.6 percent) and 29 percent of Hispanics lived below the poverty line in 2009. In 2008 the poverty rate was 30.3 percent for African Americans and 26 percent for Hispanics. The poverty rate was significantly lower for whites — 12 percent in 2009, up from 10.8 percent in 2008. 

With people of color experiencing higher rates of unemployment, thus lower income and higher rates of poverty, it is clear disparities between races still exist and that communities of color have been hit harder by this recession than whites.  But overall, more people, regardless of race, are turning to safety net programs just to make ends meet and are looking to job training programs such as No Worker Left Behind and adult education programs to increase their skills to be prepared for the knowledge-based jobs of the future.

However, cuts to job training programs, as well as safety net programs, will do nothing to help any Michigan resident, regardless of race, prepare for potential employment opportunities. And in an economy such as this, and in the state that has been hardest hit by this recession, we should be giving all people who want to increase their skills the opportunity to do so to help erase the disparities that clearly still exist.

Nonprofits already facing historical levels of demand aren’t seeing any slackening–requests for cash and food assistance from the state rose again during the second quarter. (Crain’s Sherri Welch blogs about the League’s Economic Security Bulletin) Sept. 15, 2010. Click here to read the blog.

With Michigan’s public school students back in classes, healthier school meals could be in the making. (Port Huron Times Herald) Sept. 21, 2010. Click here to read the article.

Six months after federal health-care reform became law, some of its more popular benefits become available Thursday. (Jackson Citizen Patriot interview with Sharon Parks) Sept. 25, 2010. Click here to read the article.

TRAVERSE CITY — It all started when Trish Osper and her husband divorced. She found herself alone with two children and little income to pay the bills. (Traverse City Record-Eagle uses the League’s Economic Security Bulletin to look at hunger in Northwest Michigan) Sept. 26, 2010. Click here to read the article.

The recession has been tough on Michigan families. According to the U.S. Census data released today, Michigan led the nation in income loss. (Sharon Parks tells Mlive.com that we need a balanced approach.) Sept. 28, 2010. Click here to read the article.

Poverty rose in Michigan as incomes dropped during the past decade that saw a massive decline in the auto industry. (Michigan Public Radio interview with Sharon Parks) Sept. 28, 2010 Click here to read the article.

Contact: Judy Putnam at (517) 487-5436

September 28, 2010

The number of children living in poverty in Michigan swelled to more than a half-million children in 2009, according to new data released by the U.S. Census Bureau today.

Child poverty jumped to 22.1 percent in 2009, up from 19.4 percent in 2008. It was higher than the national average of 19.7 percent.

“Kids who are born into poverty tend to stay in poverty. New research shows that one-half of children born in poverty will spend at least half of their childhood in persistent poverty,’’ said Jane Zehnder-Merrell, a senior research associate at the Michigan League for Human Services and director of the Kids Count in Michigan project.

“This does not bode well for the coming years as we try to ensure children are ready for school and on their way to be productive citizens,’’ she added.

The poverty rate for Michigan single mothers with young children was particularly troubling. The Census reported that nearly 30,000 single-mother households with children under age 5 in 2009 lived in poverty – income of about $17,000 a year or less for a family of three.

The rate of 53.6 percent of single mothers with young children in poverty was an increase from 47.6 percent in 2008. The national average was 45.6 percent.

Young child poverty (ages 4 and younger) rose to 26.9 percent in 2009, up from 22.4 percent in 2008. That means more than 160,000 young children in Michigan lived in poverty.

Overall, state poverty hit 16.2 percent, representing nearly 1.6 million people in Michigan, up from 14.4 percent in 2008. The national average in 2009 was 14.3 percent.
“The national recession and loss of jobs have pushed many in Michigan into poverty. We know the situation will only get worse without a strong effort to meet the needs of struggling families. This means a balanced approach that includes revenues instead of cuts to vital services at the time when Michigan families need them most,’’ said Sharon Parks, president and CEO of the Michigan League for Human Services.

The release of the American Community Survey data provides the most comprehensive information to date about the effects of the Great Recession.

Median Michigan household income in 2009 was $45,255, down more than 16 percent since the start of the decade. Michigan’s median income was 10 percent below the national median of $50,221.

The jump in poverty comes during a recession that has dramatically shrunk Michigan’s state revenues, threatening public services that Michigan’s struggling families count on. Michigan policymakers have made deep cuts in health care, public safety, education and other key services.

“These numbers should be a wake-up call for policymakers in Michigan. It’s time to wage a new war on poverty,’’ Parks said. “We can’t do business as usual with the needs of a growing number of people in Michigan. The incoming governor and his administration should make this a top priority.’’

The Michigan League for Human Services is a nonprofit, nonpartisan statewide policy and advocacy group for low-income citizens. It has a network of 1,500 individuals and organizations from business, labor, human service professions, faith-based organizations as well as concerned citizens.

Legislation to create an Arizona-style immigration law here in Michigan was introduced earlier this year. The Immigration Law Enforcement Act, Senate Bill 1388 and House Bill 6256, would require all police to enforce federal immigration laws and require them to request immigration papers from anyone they suspect of being in the county illegally.

Recent polls show that two-thirds of likely voters in Michigan support the controversial Arizona-style law to control illegal immigration. With such a large majority in support of this, it’s important to clear up some of the misinformation being spread about the impact of immigrants in the state.

First off, deportation of undocumented immigrants from the state would be very costly. A study by the Perryman Group found that Michigan could stand to lose over $3.8 billion in economic activity by removing undocumented workers from the labor force.

In contrast, the personal income of all undocumented workers in Michigan accounts for over $1 billion, taxable income the state desperately needs.

Second, undocumented immigrants make up only 1.7 percent of the labor force, compared to 7.5 percent of Arizona’s labor force, yet Michigan has an unemployment rate of 13.9 percent, and Arizona at 9.6 percent. Looks like a correlation between high rates of undocumented immigrants and unemployment is unfounded.

As the League’s fact sheet on immigration shows, arguments for increasing control over illegal immigration include increased crime, a drain on social services, and illegal entry by immigrants. These arguments are faulty.  Consider:

• Native-born males are five times more likely to commit crime.
• Health care costs for the average immigrant are 55 percent less than the average native-born citizen.
• Over half of illegal immigrants entered the states legally, but their visas have expired.

Arguments against increased control reflect the fiscal benefits of legalizing all immigrants. For example:

• Nationally, undocumented immigrants contribute $8.5 billion in Social Security and Medicare funds annually.
• Michigan’s largest city, Detroit, has a 9 percent foreign-born population who contributes 11 percent to the city’s economic output.
• Asian and Latino-owned businesses in Michigan produced over $8.3 billion in annual business income and employed over 60,000 people in 2002.
• According to Global Detroit, one in three tech start-ups in the last decade in Michigan were started by an immigrant.

Being a daughter of immigrant parents, my family moved to the states to have more opportunity and create opportunity. My parents currently reside in Dearborn, home to the largest Arab American population in the U.S. This population alone generated $7.7 billion in total earnings in 2005 and account for $544 million in state tax revenue annually for the state of Michigan.

Our immigration policy makes it very difficult for immigrants to become and remain legal citizens. Barriers to legalization allow employers to exploit undocumented workers, a very vulnerable population, and keep immigrants from their families and investing in their community. Perhaps now, with the facts laid out, Michigan will see how much immigrants benefit our communities, by contributing to the local economy, creating jobs, and bringing diversity to our state.

– Anika Fassia

September 23rd, 2010 Posted to Blog: Factually Speaking,Tax Policy,Workforce Development | Comments (1)