The Legislature moved forward on the state budget Tuesday, with the Senate approving a plan to limit welfare to 48 months and the House Appropriations Committee deciding to close Detroit’s Mound Road prison. April 27, 2011 – The Detroit News
Today’s vote by the House of Representatives to dramatically reduce a crucial tax credit for working poor families in Michigan would result in thousands more children in poverty and contradicts Gov. Rick Snyder’s stated goals of reducing child poverty and increasing young children’s readiness for school.
The plan would all but eliminate the Michigan Earned Income Tax Credit – enacted on a nearly unanimous bipartisan vote in 2006 – and the $600 per child income tax deduction, replacing them with a $25 per child credit that does virtually nothing to protect low-earning families from poverty. It shifts responsibility for millions of dollars in taxes to the working poor. The plan would raise the income tax payment for a single parent earning $25,000 with two children by 89 percent.
The Michigan League for Human Services and other supporters of the EITC urged the Senate to restore the credit.
“We cannot allow political ideologies to harm the people who most need a compassionate Legislature,’’ said League President & CEO Gilda Z. Jacobs. “The EITC is a time-tested, bipartisan policy, and its elimination will raise taxes on the poorest working families and drive thousands of kids into poverty.”
The League is offering a plan to preserve the EITC at a lower level than current policy with no additional dollars by redirecting a portion of the funds for the Homestead Property Tax Credit designated for low-income families and the $25 per child credit.
“These meager tax credits don’t really help the poorest of the working poor and the children that we are trying to help. Our alternative is a fairer, less harmful approach,’’ Jacobs said.
The vote also contradicts the Wednesday call from Gov. Rick Snyder for a P-20 (prenatal care through college) education system.
“We know that many children are not ready for kindergarten because of the byproducts of poverty, including inadequate medical care, improper nourishment, stress, and limited access to high quality child care and early learning programs that help to counteract poverty’s negative effects. We also know that those children who spend more than two years below the poverty line are far more likely to fail to get even a high school diploma. These cuts to the state EITC will compromise the Governor’s efforts to dramatically improve our children’s readiness for school and later academic success,” said Jack Kresnak, president and CEO of Michigan’s Children.
Jane Zehnder-Merrell, director of the Kids Count in Michigan project at the League, noted:
“Gov. Snyder’s education address notes that, ‘on average, only 65 percent of children entered kindergarten classrooms this year ready to learn the curriculum.’ Yet, one of his first acts has been to eliminate the state EITC and push 14,000 children into poverty – where their chances of being ready for school are greatly diminished.”
A package of proposals under consideration by the Michigan House of Representatives would make it more difficult for people to receive cash assistance when they need it, and would result in more than 12,000 needy families losing their assistance.
The tightening of the 48-month limit has received considerable attention, but there are some lesser-known proposals that are also cause for concern.
One proposal being considered by the Families, Children and Seniors Committee would result in some families being punished for noncompliance with work requirements, even if the noncompliance occurred for good reason or was beyond the family’s control.
Under current law, if a family receiving cash assistance does not meet its work requirements, it gets sanctioned. It is barred from receiving assistance three months for the first instance, three months for the second, and 12 months for the third. The proposal would sanction the family six months for the second instance, and for the third instance the recipient would be barred from assistance for life.
Readers may be thinking “no problem.” After all, we all need to follow rules or expect consequences, right?
The problem is that there might be a good reason why a recipient misses work, leaves a job, reduces hours at a job, or turns down an offer for increased hours—all of which are considered to be instances of noncompliance.
Currently, a recipient who receives notice of a sanction for one of these instances has the right to schedule a meeting with the caseworker within 10 business days to explain the noncompliance and to prove that there was good cause. If the recipient requests the meeting, the sanction cannot be applied until after the meeting has taken place and the caseworker judges that there was not good cause for the noncompliance. This proposal takes away the right to have that meeting.
The Department of Human Services has said the change is necessary because caseworkers are so overloaded that they don’t have time for the meetings, causing a lot of sanctions to be put on hold. The proposal would still allow the recipient to call to contest the sanction. Getting through isn’t easy though because caseworkers often have more than 1,000 cases and their lines are often busy.
The problem is obvious: Caseworkers have far too many cases to be able to give each case the attention that it needs. The solution is not to take away the right of recourse for families that are notified of a pending sanction. The solution is to hire more caseworkers, and the Legislature ought to be focused on making that possible.
None of us want people to receive cash assistance if they are able but unwilling to work. But do we really want to take it away from those who want to work but find themselves unable to do so through no fault of their own?
Members of the House Standing Committee on Families, Children and Seniors need to hear from you on this. Please call them and ask them to oppose these changes contained in the substitutes for House Bills 4409-4410.
House Standing Committee on Families, Children and Seniors:
– Peter Ruark
Gilda Z. Jacobs, president and CEO of Michigan League for Human Services. April 20, 2011 — WILS
A spike in March income tax collections, lower-than-expected tax refund payouts and a generally improving revenue picture mean Gov. Rick Snyder and the Legislature may have as much as $500 million extra to work with in finalizing the state budget for 2012. April 23, 2011 — The Detroit News
Two themes have dominated political discourse in Michigan for what seems like forever: The economy is going down and state government has fewer and fewer dollars to buy goods and services. April 21, 2011 — The Center for Michigan
Let’s be clear about what the budget proposals in Lansing really mean for Michigan citizens: The plan by Gov. Rick Snyder and legislative leaders offers an 86% cut in business taxes at the expense of people who can least afford to sacrifice. April 21, 2011 — Detroit Free Press
Thousands of Jackson County’s working poor could get a smaller refund than before if the state decides to preserve a small portion of a tax credit. April 21, 2011 — mlive.com
Governor Rick Snyder’s administration would like to offer low-income families an annual tax credit worth 25 dollars per child. The credit would be for working-poor families who would lose the state’s Earned Income Tax Credit under Snyder’s budget plan. April 20, 2011 — Interlochen Public Radio
A proposal to make up some of the money low-income workers would lose if Michigan’s Earned Income Tax Credit is eliminated isn’t getting many cheers from groups who say the credit should be saved. April 20, 2011 — Forbes.com
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