MLPP Blog: Factually Speaking

Happy 50th anniversary Medicaid

Added July 30th, 2015 by Jan Hudson | Email This Entry Email This Entry
Jan Hudson

Today marks the 50th anniversary of the bill signing that created the Medicaid and Medicare programs. Michigan’s John Dingell was present at the signing in 1965, and in recent years continued to push for Medicaid expansion in Michigan that is helping so many more individuals today.

It is truly mind-boggling to think about the millions of individuals in Michigan the Medicaid program has served and saved since it was implemented in October 1966. Medicaid and Healthy Michigan Plan enrollment currently exceeds two million residents. The breadth of the program’s impacts as well as the vital supports and health and financial security the program provides is remarkable.

I think about the babies in the Neonatal Intensive Care Units who have survived and thrived because of Medicaid, or the elderly and those with disabilities who have been able to live independently and remain in their homes or communities because of the programs and services provided by Medicaid. From newborns to seniors and everyone in between, Medicaid continues to help Michigan citizens receive the care they need.

I’m sure all of us have a family member, friend or acquaintance who has benefitted from the Medicaid program. I am so grateful my mother-in-law was able to enroll in the MIChoice waiver program and receive services that allowed her to remain in her own home when she was no longer able to care for herself.

I applaud the governor and Legislature for expanding Medicaid and creating the Healthy Michigan Plan. This program is providing healthcare coverage and services to hundreds of thousands of residents who had previously been forced to go without coverage, and many had to forego needed medical treatment. They now have the opportunity to take control of their health and take care of themselves, and not just be fearful of what might be coming next. They are able to see a doctor when they need to, obtain needed medications and go to a dentist.

To continue the Medicaid tradition of “keeping us healthy,” it is essential that federal and state policymakers work together to enable the Healthy Michigan Plan to continue. State officials are currently in discussion with federal officials to try to work through policy changes required by the state law that may not conform with federal law or regulation. If agreement cannot be reached, state lawmakers may have to step in on behalf of their constituents to modify the law to continue this very successful program.

While some consider high enrollment in Medicaid an economic failure, an alternative to simply being uninsured is not clear. Some people will never be able to get enough hours (due to the nature of their jobs) to qualify for employer-sponsored coverage or their pay will remain too low to allow them to purchase coverage for themselves and their families. I’m thankful that Medicaid is there as a support system for those low-income individuals and families. In addition, there are many small employers who are not mandated to provide coverage and will never be able to afford to. I’m grateful Medicaid is there as a safety net for those small employers and their employees.

The success of our state’s insurance market should not just be measured by who is providing the coverage and whether it’s the public or private sector, but by whether or not we have a healthier population and workforce and improved quality of life for all Michigan residents. In that regard, Medicaid continues to have resounding results.

Let’s celebrate the Medicaid program for the good that it has done over the last 50 years, work with policymakers to continue the long history of innovation and improvement in the program, and commit to thwarting any efforts at the state or federal levels that would diminish this efficient, effective program.

Congratulations to all of those individuals who have made the Medicaid program what it is! Here’s to the next 50 years!

– Jan Hudson

 

Tipped wages transfer business risks to workers

Added July 29th, 2015 by Peter Ruark | Email This Entry Email This Entry
Peter Ruark

Do you tip your server generously when you dine out?

Hopefully you do, because your server may earn less than you think. Restaurants are only required to pay their servers $3.10 per hour in Michigan, which is 38% of the minimum wage for non-tipped professions. (This will rise concurrently with the regular minimum wage to $3.52 by 2018, remaining at 38% at each wage step.)

The tipped employee minimum wage enables restaurants to keep their menu prices low while allowing patrons to voluntarily subsidize their servers’ low wages, in effect passing the risk of slow business or stingy customers onto the workers.

With Michigan’s recent economic struggles, more people have turned to service industry jobs. In fact, tipped work is one of the fastest growing occupations and one of the lowest paid, and low tipped wages are inordinately hurting women and people of color.

To narrow the wage gap for all workers, Michigan should eliminate the tipped employee wage, and require restaurants and other employers to pay tipped workers no less than the regular minimum wage. There are currently bills in the Michigan Legislature—House Bill 4720 and Senate Bill 373—that would do that. If more politically feasible, raising the tipped wage to a higher percentage of the regular minimum wage (i.e., 65% rather than the current 38%) would be a positive step. But in the current political climate, no help for low-paid tipped workers seems likely; the restaurant lobby will surely fight any proposal to raise or eliminate the tipped minimum wage.

In many countries, tipping is not expected. Some restaurants in the United States have already eliminated the tipping tradition and advertised themselves as tip-free restaurants, by either adding on a gratuity to the meal checks or by raising their menu prices. Diners pay roughly the same amount as they would if they were expected to tip, but the servers’ take-home pay is not put at risk by slow business days or customers not following the tipping protocol.

One thing concerned diners can do is find out which restaurants pay their servers a tipped wage higher than the minimum required, and which have eliminated the tipping system altogether. Those would be good restaurants to support next time you are hungry.

You can also contact your legislators and urge them to support one fair wage for all workers and end the tipped wage income gap.

 – Peter Ruark

Senator Nofs’ energy package leaves much to be desired

Added July 22nd, 2015 by Shannon Nobles | Email This Entry Email This Entry
Shannon Nobles

The two-bill energy package (Senate Bill 437 and Senate Bill 438) recently proposed by Senate Energy and Technology Committee Chair, Senator Mike Nofs, is bad policy because it not only reverses Michigan’s clean energy goals, which research shows are having a positive impact on the state, but changes the definition of clean energy to include burning tires.

The League’s concern with this package of bills is that, while we’d like to be optimistic that renewables and energy efficiency are included in the Integrated Resource Planning (IRP) –  essentially an energy planning tool which includes a statewide planning process filed by utilities and overseen by the Public Service Commission — without a mandate there is no guarantee. It is important that a higher mandate is set for renewable energy, as well as a structure of accountability to meet the standard being put in place.

Not only does this package repeal Michigan’s renewable energy standard, which will increase pollution, kill jobs and increase costs for families and businesses, it will also destroy Michigan’s highly successful energy efficiency programs. The destruction of these programs will lead to increased utility bills and more pollution, while simultaneously sending clean energy jobs to other states. Low-income families have a hard enough time making ends meet, so the cost savings from energy efficiency programs is crucial.

As noted by the League previously, increasing the renewable portfolio standard is vital to the health of our communities and positive economic effects in the state. Supporters of the Senate energy package are optimistic that the IRP portion of the bills will include renewable energy and energy efficiency programs, but it is not a guarantee. We need to be moving forward to maximize the state’s clean energy benefits with our policies, not taking dangerous steps backward.

Senator Nofs is holding hearings on this legislation throughout the summer and many groups are testifying in opposition. The League stands in opposition to these bills, because increasing the renewable energy standard and energy efficiency programs are the only way to see a decrease in harmful carbon pollutants that are negatively affecting our communities, and will ultimately achieve cost savings throughout the economy.

 – Shannon Nobles

Economic recovery leaves Michigan children behind

Added July 21st, 2015 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

Michigan is the “comeback state,” so we’ve heard. But, for whom? Michigan has more children living in poverty now than it did in the last full year of the Great Recession. Not only that, but since 2008, there are more children whose parents lack secure employment and more children living in concentrated poverty. Children and families in Michigan are being left behind in the economic recovery.

According to the new 2015 Kids Count Data Book from the Annie E. Casey Foundation, Michigan’s ranking in overall child well-being has fallen for the second straight year. The state now ranks 33rd in the country overall, while other states that have chosen to invest in programs that support economic growth and people are doing better, like Minnesota, which ranks first in the country for overall child well-being.

The report, which focuses on key trends in child well-being in the post-recession years, ranks Michigan in four domains:

  • Education: 37th
  • Economic well-being: 33rd
  • Family and community: 29th
  • Health: 23rd

It is clear that the strategy to reduce taxes and disinvest in programs that support families has not worked. Even after significant tax breaks for corporations, parents are still struggling to find good-paying and stable jobs to achieve financial security for themselves and their children. The data book reveals that the number of children with parents without secure employment increased to 33%. That is a rate increase of 6% since the last year of the Great Recession and ranks Michigan in the bottom third of states.

We also continue to have an unacceptable number of children living in poverty and a widening economic gap between white children and children of color. The data book reports that the child poverty rate in Michigan increased by 26% with nearly one in every four children living in poverty, including nearly one in every two African American children and almost one in every three Latino children. Also startling is the increasing number of children living in high-poverty neighborhoods. The rate increased by 21%.

Given the impact that poverty has on educational outcomes, it isn’t surprising that the state’s lowest ranking is in education. The number of students considered not proficient in math and reading stagnated over the period in the data book. These trends occurred at the same time that the state made cuts in education spending. Although, in the upcoming budget year, over $31 million has been dedicated to initiatives and programs to improve third-grade reading, including some funding for early childhood investments—critical to long-term outcomes.

The state has had some substantial wins in children’s health since the Great Recession, such as a continued reduction in the number of kids without insurance, the number of teen births, and the number of teens using alcohol and drugs. However, these gains are overshadowed by the large number of kids living in poverty and poor educational outcomes.

If we are really to help children in our state thrive, we need to understand the importance of providing parents with the tools and support they need. Taking a two-generation approach is a proven practice to improve outcomes for children by ensuring that parents have access to opportunities like adult education, higher-wage jobs with benefits, and quality affordable child care. We also need a fair tax system that includes the state Earned Income Tax Credit, a proven poverty reduction tool. And, we need to continue strong investments in early childhood programs to ensure that kids are ready to learn by the time they get to school.

 – Alicia Guevara Warren

A token tax cut — A bad deal for everyone

Added July 15th, 2015 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

When you think of road funding, your first thought is… a tax cut? Likely not, but earlier this month the Senate rolled out a road funding plan that included an income tax cut. This was an attempt to sweeten a gas tax increase. But as it turns out, it’s a bad deal for everyone.

This is a bad deal for you. It wouldn’t take effect until 2018 at the earliest. It’s not guaranteed – only when General Fund revenues grow faster than inflation. It likely amounts to token rate reduction in any given year. For example, if revenues rise 1% faster than inflation, you’re looking at a rate rollback of 0.04 percentage points – a family of four making $50,000 would see a tax cut of less than $15. And wealthier individuals will benefit the most from the across-the-board tax cuts.

But it’s a worse deal for Michigan.

That token tax cut means millions in state services. A 0.1% rate reduction costs the state roughly $230 million. It puts a stringent cap on Michigan General Fund revenues that doesn’t account for external forces, such as changes in federal tax policy. Michigan already has a revenue cap – 9.49% of personal income – and is currently $8-9 billion below that cap. Additionally, the rate would ratchet down when the economy is booming, but there would be no commensurate rebound should revenues fall. This cuts off the revenue stream that currently makes up nearly 65% of the total General Fund and around 20% of the School Aid Fund. And the unpredictability of the reduction would make budgeting difficult.

The cumulative effect would make providing state services unsustainable, likely resulting in cuts to many services that are important to our residents, such as education, aid to universities and community colleges, public safety, and even health and human services. And cuts in these areas would likely drive up their costs by way of larger class sizes, tuition increases, fewer police, or longer wait times for benefits.

Michigan needs to learn from the experiences of other states. Oregon’s “Kicker” tax credit, Colorado’s TABOR, and Massachusetts’ automatic rate reduction have all returned “excess” funds back to taxpayers. While it sounds great that taxpayers are getting money back when the economy improves, the fact is that services in these states are being squeezed. Colorado actually suspended its TABOR in 2005 for five years because of significant cuts in public services. Massachusetts has had to make deep cuts in services and its rate reduction prohibits future reinvestment. In fact, Massachusetts recently had to make midyear cuts partially due to this rollback.

Michigan residents are not fooled by gimmicks and schemes. A token tax cut should not be provided at the expense of providing essential services that our residents need and use regularly. This income tax cut is a bad deal for everyone involved and should not be included in a road funding plan.

 – Rachel Richards

 

Michigan Time to Care Coalition Announces Earned Sick Leave Ballot Proposal

Added July 14th, 2015 by Seema Singh | Email This Entry Email This Entry
Seema Singh

In Michigan 1.6 million workers in the state, or 46%, do not have access to paid sick days. This means there are times when these workers go to work sick for fear of losing their wages or even their job. On Monday, the Time to Care Coalition announced an earned sick leave ballot proposal that will fulfill this need. The ballot proposal would allow employees of businesses with 10 or more employees to earn one hour of paid leave for every 30 hours worked, with up to nine days of paid sick leave. For employers with fewer than 10 employees, employees could earn up to five days of paid leave and four days of unpaid leave. If voters pass the measure, Michigan will be the fifth state in the country to pass an earned sick leave bill.

When workers from food, healthcare and other industries work while sick, some of our most vulnerable populations like the elderly and children suffer. Almost 90% of fast food workers nationally do not have paid leave. Compare this gap in benefits with professional careers: Among the top 25% of income earners only 16% do not have paid leave.

Lack of earned sick leave can also mean that workers send their children to school or child care when they are ill. When children or a loved one are sick and a worker needs to take time off to care for them, they should not have to lose their pay or potentially their job.

Stacy Lowry, a Detroit resident, shared her story of caring for her 4–year-old daughter as a full time worker. Her daughter unexpectedly suffered a stroke and was left unable to walk: “Thankfully, with the help of intense therapy she’s learning to walk again. Unfortunately, my daughter’s therapy has been so demanding on my schedule that I was laid off from my job. No parent should have to choose between caring for their sick child or their job.”

In addition to the state laws that exist, several cities have also already enacted similar laws. In cities where paid leave has been implemented there has been either no effect or improved economic outcomes. In fact, it has been found that earned leave is good for business because it has been shown to decrease turnover and attract qualified workers. No one should have to choose between a job and a loved one. Enacting earned sick leave would move Michigan towards a more stable, resilient workforce along with healthier families and communities.

To learn more about the earned sick leave campaign, please visit the Time to Care Coalition website.

– Seema Singh

 

 

 

Young but not invincible: Young adults rely on credits too

Added July 9th, 2015 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

When I graduated law school in 2008, I got rejection letter after rejection letter. I applied for every job you could imagine – part time, full time, hourly, salaried – the jobs just weren’t there. I eventually landed in a great office, but many millennials–those born between 1981 and 1997—who were just graduating high school, college, or from graduate programs, weren’t so lucky.

The job market was the worst in decades – record high unemployment rates, collapse of the Big Three, and the bursting of the housing bubble made jobs scarce. Census comparisons released at the end of last year showed that millennials have lower median earnings and are living in poverty at a higher percentage than their parents were at the same age, despite having a higher percentage of the population with postsecondary education. Additionally, millennials are more burdened with student debt than previous generations. The economic downturn resulted in a record high percentage of young adults moving back in with their parents.

This is precisely why young people should care about the Earned Income Tax Credit and the Child Tax Credit. The EITC is a refundable tax credit intended to at least partially offset federal payroll taxes of low- to moderate-income working taxpayers. The credit amount varies depending on marital status, number of dependent children, and annual income. The Child Tax Credit, which intends to reduce the cost of child rearing, provides a $1,000 credit per eligible child and may be partially refundable. According to the latest data, more than 800,000 taxpayers in Michigan received the EITC and more than 525,000 received the refundable portion of the CTC in 2013. These tax credits encourage work, help lift families out of poverty, and improve the lives of children.

According to a recent report from the Center on Budget and Policy Priorities, 13.9 million millennials nationwide received the EITC, refundable part of the CTC, or both in 2012. The credits averaged $2,200 and $1,300, respectively. Michigan had the 10th highest number of recipients among all states and Washington DC at 393,000. Nationwide, the EITC and CTC together helped keep 1.8 million millennials, and their 1.9 million children, out of poverty.

Expansions enacted in 2009 and later extended, boosted both the EITC and CTC, allowing more individuals to qualify and providing for greater tax relief. However, these expansions are set to expire at the end of 2017. If we allow these to lapse, 6.3 million young people, including 195,000 in Michigan, will lose all or part of their EITC or CTC, pushing about two-thirds of them into or deeper into poverty.

The good news is that many proposals recommend keeping the EITC and CTC as they are currently structured and some recommend expanding the EITC. Interestingly, President Obama and Congressman Ryan have similar proposals to expand the EITC for more childless workers. This would disproportionately benefit young workers, who are waiting longer to get married or have kids than previous generations.

The Great Recession was hard on a lot of people, and while we are recovering, we haven’t fully recovered. Extending and expanding the EITC and the CTC is just good policy. Congress should move sooner on these provisions, to provide certainty and stability, instead of waiting until the last minute.

– Rachel Richards

 

Save the EITC!

Added July 8th, 2015 by Gilda Z. Jacobs | Email This Entry Email This Entry
Gilda Z. Jacobs

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One of the state’s most effective tools for reducing poverty and building economic security is in jeopardy. House Republicans, led by Speaker Cotter, want to eliminate the Michigan Earned Income Tax Credit, effectively raising taxes on 780,500 low-income working families raising 1 million children.

The House in June voted to eliminate it as part of the House GOP plan to fix Michigan’s roads. The $117 million saved from ending the state EITC is a drop in the bucket of a $1.2 billion roads plan. We are grateful to the Democrats and these five Republicans who voted against the bill: Reps. John Bizon of Battle Creek, Thomas Hooker of Byron Center, Martin Howrylak of Troy, Holly Hughes of Montague, and Brandt Iden of Kalamazoo.

Fortunately, the Senate roads plan passed last week did not include elimination of the EITC. A new poll of Michigan voters shows strong support for the EITC, with two-thirds opposed to eliminating it. However, it remains in play and a real possibility that we must fight against.

Many of the families who receive the EITC are on the brink of poverty and removing this credit will push them over the edge. In fact, the average EITC user has a median income of $17,725 a year, but average basic expenses of $24,434.

The average credit of $140 can go a long way toward helping ends meet and helping people continue to work. According to our friends at the Community Economic Development Association of Michigan, the average credit can buy 14 hours of child care, 52 gallons of gas or make a car payment.

Ending the state EITC makes no sense for anyone – not the families scraping to get by on low wages, not the state, which benefits from having fewer people in poverty, and not local businesses that benefit from the economic stimulus of recipients spending the credit in their communities.

From a tax fairness standpoint, households eligible for the tax credit already pay a greater share of their income in state and local taxes than wealthy people. Eliminating the EITC will raise recipients’ tax liability to double that of the top 1% and among the highest of any tax bracket. Those making less than $17,000 and those between $17,000 and $34,000 will be paying almost 10% of their incomes in total state and local taxes. The top 1% pays 5%.

Some critics have mistakenly labeled the EITC as a subsidy. The funny thing about income tax credits is that you must have income to receive them. It’s pretty simple: If you don’t work, you don’t have income and cannot get an income tax credit.

Another point they make is that the credit allows some people to avoid paying any taxes. They fail to mention that those people are living in extreme poverty. For tax year 2013, approximately 25% of EITC recipients had no Michigan liability (around 194,000 returns). But, their gross income was below $11,850 for a family of three and the average adjusted gross income was about $9,800. Are we really going to take more money from people who are among the poorest in our state?

We sometimes forget that the economic recovery clearly has not spread to everyone yet. One in four Michigan children lives in poverty. Too many families continue to struggle to make ends meet, and now is not the time to pull the rug out from them and make life harder.

Ending the state tax credit undermines our ability to keep families and children out of poverty, costing us all more in the long run with greater reliance on public assistance, poorer academic performance, higher rates of child abuse and neglect, and increased odds of incarceration and poor health. It’s just bad policy all around.

Please help us fight against the threat and save the EITC. Call, email or write to your senator or representative and tell them you support the EITC.

– Gilda Z. Jacobs

 

Overtime rules just got better

Added July 1st, 2015 by Peter Ruark | Email This Entry Email This Entry
Peter Ruark

President Obama announced on Monday that the U.S. Department of Labor is making a rule change that will enable approximately 100,000 more workers in Michigan to get overtime pay when they work more than 40 hours in a week.

Presently, employers are required to pay overtime only to workers earning below approximately $23,700 per year. To put that in perspective, the poverty level is $19,073 for a single parent with two children and $24,008 for a two-parent family with two children. That means workers with children currently must have wages close to the poverty level in order to get overtime!

Many modestly-paid workers, such as retail and fast food workers classified as managers or assistant managers, regularly work more than 40 hours a week without overtime. This flies in the face of one of the central aims of the Fair Labor Standards Act of 1938: preventing workers from being required to put in overly long work weeks without additional compensation.

The rule change will raise the salary threshold for overtime to $50,400 beginning in 2016. Any worker earning under that amount will be required to get time and a half for every hour worked over 40 per week. (Certain occupations will be exempt from this rule.)

This will be only the second time since 1975 that the salary threshold has been raised; its failure to keep up with wages or inflation caused it to atrophy to the point where it covered only very low-paid workers. To prevent similar erosion in the future, the rule change requires the threshold to be updated each year to keep up with wage levels.

Since the change was done through executive order, a future president can reverse or modify it. However, one opinion writer has argued that future presidents will be hesitant to take away overtime rights for so many workers.

This is a victory for workers and a huge step for economic justice!

The Department of Labor will be taking comment for 60 days before the rule takes effect. You can express your support for the rule change and find out how it will affect you by going to this website.

– Peter Ruark

 

Schools out! Why some kids aren’t as excited for summer

Added June 29th, 2015 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

As we counted down the last days of the school year, most of us were excited planning our summer vacations and camps. At the same time, too many kids were wondering how they were going to eat over the summer – something most of us take for granted.

During 2013, more than 737,000 students were eligible for free or reduced price meals at school but only a small portion of these students are fed through Summer Nutrition Programs, leaving them at risk of going hungry.

According to the most recent Food Research & Action Center report, “Hunger Doesn’t Take a Vacation: Summer Nutrition Status Report,” the number of children getting meals over the summer has increased, yet only 16 of every 100 low-income children in the country was served.

 The federal Summer Nutrition Programs help ensure that children who rely on school breakfast and lunch during the school year continue to have access to meals over the summer. These meal programs, including the Summer Food Service Program and National School Lunch Program, are housed at schools and nonprofits, such as food banks and community action agencies, and are often coupled with recreation activities for students during the day while parents are working.

Like 42 other states, Michigan saw an increase of nearly 12% from 2013 to 2014 in the number of children receiving meals through the Summer Nutrition Programs. However, the state continues to rank in the bottom half of states at 31st. Last July, in Michigan about 13 of every 100 low-income children were served through a summer meal program. FRAC suggests that every state should aim to have about 40 children participating for every 100 receiving free or reduced-price lunch during the school year. Based on that goal it is estimated that Michigan forgoes about $11.5 million in federal reimbursement for Summer Nutrition Programs.

Congress is scheduled to reauthorize child nutrition programs in the fall, and the report offers several recommendations to ensure that more children are returning to school in the fall healthy and ready to learn:

  • Lowering the eligibility test to increase the number of participating sites. Currently, most participating sites qualify by demonstrating that they are located in an area where 50% of the kids are eligible for free or reduced-price school meals. The report advocates for lowering the threshold to 40% to capture more rural areas.
  • Streamlining administrative requirements to allow nonprofit and local government agencies to provide meals year-round rather than having to operate two child nutrition programs, which have duplicative requirements. Schools already are allowed to do this through the National School Lunch Program Seamless Summer Option.
  • Allowing agencies to provide three meals a day instead of two to help serve children who are provided full-day care while their parents work and for teenagers who participate in evening activities.
  • Providing grants for transportation—one of the most significant barriers to participation, especially in rural areas.
  • Expanding access through the use of the Summer Electronic Benefits Transfer (EBT) cards, a concept that was tested through the USDA Summer Demonstration Projects. Michigan was fortunate to receive a grant for $5.5 million for this program, which is expected to serve 40,599 children this summer.

 –Alicia Guevara Warren

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