MLPP Blog: Factually Speaking

High poverty, unemployment harm economic growth

Added December 22nd, 2014 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

Often touted as the “Comeback State,” Michigan’s economic recovery has not included everyone as reflected in the state’s high poverty and unemployment rates. Leaving people behind will only hinder Michigan’s potential economic growth, which has already showed signs of slowing.

A recent report ranking states based on multiple indicators of economic security and opportunity reveals the state’s major lack of investment in its people. On almost every factor from poverty to education to affordable housing, Michigan is ranked worst or second-worst among the Midwest states.

Let’s start with the state’s poverty rate, which is startling. With over 17% of people in Michigan, including 23% of children, living in poverty, our state ranks the worst in the Midwest at No. 37 in the country. The report cites a decline in support of assistance programs that has left children and families without needed help.

While other states have increased public assistance benefits to help them weather recent economic turmoil, Michigan sought to limit access by creating barriers. The state also cut back an important anti-poverty tool, the state Earned Income Tax Credit, (though there is now a welcome opportunity to fully restore the credit as part of the road funding package). When people cannot afford to meet their basic needs, they certainly are not supporting local businesses and boosting economic growth.

Similarly, while we should celebrate recent declines in the state’s unemployment rate, Michigan continues to have one of the highest rates in the country and in the Midwest. The state has work to do to ensure that we have a skilled and educated workforce to fill jobs as they are created. Michigan ranks 35th, 32nd, 31st, and 41st in high school graduation rates, higher education attainment, youth disconnected from school or the workforce, and the gender wage gap, respectively.

Even with a significant influx of jobs, if people are not trained, they will not be able to obtain higher paid jobs to support their families. Investment and support of the public school system and a lifelong learning from cradle to career model are necessary commitments.

Other states are doing better partly because they have chosen to increase investments in public assistance, EITC, education, and other proven policies that lift people out of poverty. Bottom line: Michigan must make people a priority to boost economic growth. Supporting the ballot proposal in May that increases funding for education and restores the state EITC as a part of the road funding solution is a step in the right direction.

– Alicia Guevara Warren

Celebrating good public policy in Michigan

Added December 19th, 2014 by Gilda Z. Jacobs | Email This Entry Email This Entry
Gilda Z. Jacobs

Restoring the Earned Income Tax Credit, part of the bipartisan compromise on road funding approved early today, will be a boost to struggling families across Michigan.

If voters agree to the package, it will put extra dollars into working households where families have the hardest time making ends meet. It’s designed to offset additional costs from an increase in the state sales tax and wholesale gas tax to pay to fix Michigan’s battered roads.

Senate Minority Leader Gretchen Whitmer speaks at the Thursday news conference.

In 2011, the average family received $446 in a state EITC when the credit was 20% of the federal credit. After the EITC was cut to 6%, the average refund plummeted to $138 per family. That’s more than $300 — a big loss to hardworking families.

Gilda Z. Jacobs talks to a reporter at the news conference.

A strong state EITC is key to helping workers pay for transportation and other supports to keep them on the job. It’s a win-win for workers and the state’s economy.

Still it’s not a perfect package, but that is what compromise is all about. It’s unclear what will happen to higher education to fill a $200 million hole if the School Aid Fund can no longer support higher education as part of the ballot proposal.

And sales tax is a regressive tax, meaning that it takes a bigger share of the income of families earning the least than it does of wealthier households. Increasing it to 7 cents puts Michigan about in the middle of the pack of the 50 states when local sales tax (not allowed in Michigan) is factored in. It would match Indiana’s. But the restoration of the EITC helps to soften the regressivity for those earning the least in Michigan.

There’s no doubt in anybody’s mind that Michigan’s roads need repair. An earlier plan approved by the House would have been devastating to school districts and communities by diverting sales tax dollars designated for them.

This is a far, far better option, and a big reason to celebrate good public policy in Michigan.

– Gilda Z. Jacobs

 

Another milestone for the Healthy Michigan Plan

Added December 12th, 2014 by Jan Hudson | Email This Entry Email This Entry
Jan Hudson

The Healthy Michigan Plan reached another milestone this week with enrollment topping 481,000. That number exceeds the original enrollment projection of 477,000 for the entire program. It was expected to take two years to achieve full enrollment.

What an accomplishment in nine months!

The best part is that enrollees are actually receiving healthcare services. According to the Department of Community Health, more than 315,000 primary care and preventive care visits have occurred since the program was implemented. Enrollees are clearly engaged in improving their health and taking advantage of the services now available to them to do so.

Under the program, they can also receive incentives for tackling health issues or maintaining healthy behaviors. Those with chronic conditions such as high blood pressure, diabetes, or depression, will be better able to manage their conditions since they will have no copays for either services or medications related to the condition.

Source: Michigan Department of Community Health

The Healthy Michigan Plan is Michigan’s unique Medicaid expansion plan. It provides comprehensive healthcare coverage to Michigan’s low-income uninsured residents. To be eligible for the program, an individual must be between the ages of 19 and 64, not currently eligible for Medicaid or Medicare, a citizen or lawfully admitted to the U.S., and have income less than 133% of the federal poverty level (up to $15,521 for an individual or $31,721 for a family of four).

Application for the program can be made by phone (1-855-789-5610), online at www.michigan.gov/mibridges, or in person at a local Department of Human Services office. Applications made through the online system can have eligibility determined in a matter of minutes and sometimes even seconds.

The first Healthy Michigan Plan Progress Report, published on the Department of Community Health website in December, provides additional information on the program. The report depicts enrollees by age, sex and income level.

What could enhance the joy of the holiday season more than knowing nearly 500,000 previously uninsured or under insured Michiganians are now enjoying comprehensive healthcare coverage and gaining healthier lives?

– Jan Hudson

Taxing Internet sales as a matter of fairness

Added December 11th, 2014 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

Nowadays, with a growing number of people shopping online, it makes sense to collect sales taxes on the items purchased – if the item was bought at a store nearby, we would have to pay the sales tax.

So, what’s the difference? The difference is that over the past year an estimated $482.4 million worth of sales and use taxes from remote sales will go uncollected by the state. The majority (60%) of that is due to e-commerce.

After stalling on the House floor over a year ago, there appears to be support for moving forward with a package of bills (HB 4202-4303), commonly referred to as the “Michigan Main Street Fairness Act,” which would require the collection of the sales and use tax on Internet sales. The bills would not only bring fairness between brick-and-mortar businesses and Internet retailers, but the move modernizes the state’s tax structure to reflect current consumer trends. The Senate on Thursday passed similar bills, SB 658 and 659, on a 21-16 vote, keeping the issue alive in the lame duck session.

Currently, Internet retailers, such as Amazon, have an unfair advantage because consumers can avoid paying the sales tax and end up paying less for goods than they would have in a store. The Michigan Main Street Fairness Act would level the playing field for the state’s brick-and-mortar businesses and improve competition.

Another added benefit the package brings is tax fairness for low-income people in the state. Those who shop online tend to be more affluent  and are not in need of a tax break. Requiring a sales tax to be collected on Internet sales reduces the inherent regressive nature of the sales tax.

Finally, the Michigan Main Street Fairness Act provides much needed revenue in a way that updates the state’s tax structure. Although, it is estimated that the bills will only bring in $50 million – the state could actually collect more if Congress acted on federal legislation – something is better than nothing when it comes to funding already underfunded schools and communities that have undergone a decade of cuts.

In these last days of the legislative session, we urge House lawmakers to support the passage of the Michigan Main Street Fairness Act to provide a level playing field and modernize the state’s tax structure, but not as a way to provide cover for a road funding shell game.

– Alicia Guevara Warren

Lame duck: Burning tires are ‘renewable’ energy

Added December 10th, 2014 by Shannon Nobles | Email This Entry Email This Entry
Shannon Nobles

While it may seem hard to believe, burning tires really is considered a source of renewable energy in the state of Michigan, at least, according to legislation passed by the House.

Burning tires, along with other types of hazardous waste, would be considered a source of renewable energy under a bill approved 63-46  by the House Thursday.

House Bill 5205, introduced by Rep. Aric Nesbitt, R-Lawton, and approved last week by the House Energy and Technology Committee he chairs, would amend the 2008 Clean, Renewable and Efficient Energy Act that requires utilities to generate 10% of their electricity from renewable sources by 2015.

The amendment would put scrap tires, plastics and hazardous materials in the same category as legitimate clean-energy technologies, such as wind and solar power.

The intent behind the 2008 bill, which was supported by many environmental groups across the state, was to clear the air and reduce amounts of air pollutants harming residents across the state.

With Michigan’s asthma rate 10% higher than the national average, and a recent report ranking Detroit the 10th worst city in the nation in terms of asthma-related problems, this goal seems more necessary than ever. However, adding dirty fuels that create serious public health risks when burned is counterproductive to this goal.

Michigan utility companies are on track to meet this standard, which is set to expire next year. Recently, a bipartisan group of legislators submitted a package of bills (HBs 5967, 5968 and 5969) that updates Michigan’s clean energy policy and addresses Gov. Rick Snyder’s energy goals.

The goals reflected in this package include improving adaptability, increasing reliability, focusing on affordability and protecting Michigan’s environment. These bills truly protect the health and environment of Michigan by supporting clean energy.

We cannot let HB 5202 pass the Senate, and instead need to encourage our legislators to adopt environmentally friendly legislation, such as the recently introduced package of bipartisan bills, HB 5967, 5968 and 5969.

Contact your senators today and tell them to keep Michigan’s air clear by voting NO on HB 5205!

 – Shannon Nobles

 

Patchwork? Bring it on!

Added December 5th, 2014 by Peter Ruark | Email This Entry Email This Entry
Peter Ruark

A proposal that would prevent local governments from enacting their own minimum wage, paid leave or unpaid leave ordinances was debated by the House Michigan Competitive Committee Thursday and is expected to be voted on next week. The League supports policies such as paid sick and family leave to help low-wage workers balance family and work.

The word patchwork was bandied about at the hearing on the bill. That word reminds most people of quilts made by their grandmothers, but for some legislators and business group leaders, it apparently brings nightmarish visions of some local areas having ordinances that help workers while others do not.

The cliché we did not hear Thursday was “one size fits all,” which has good connotations when buying baby clothes, but in a legislative committee room means the state tying the hands of local governments. Some believe that is a good thing in this case, as it prevents a “patchwork” of minimum wage and paid leave laws around the state.

Others believe local elected officials should be free to decide what is right for the workers in their communities, with penalty of being defeated in the next election if their constituents disagree.

The useful thing about a patchwork (are we tired of that word yet?) is that communities can be working labs for policies that can eventually be taken to the state level. If several cities and counties in Michigan adopt paid family and sick leave laws and the sky doesn’t fall, voters will be more likely to support taking those worker-friendly policies statewide.

Of course, that may be what those who support the local pre-emption bill are afraid of.

The Michigan League for Public Policy supports the enactment of state laws requiring all workers to have paid family and sick leave. We are probably a long way from seeing such bills signed, but it will be easier if there are similar policies already in place on the local level to show the benefits of these requirements work

So next time you hear someone complain about a patchwork of workplace regulations, just remember that it just might be a stepping stone for some of the good local policies to go statewide.

– Peter Ruark

High cost of low pay for child care providers

Added December 4th, 2014 by Pat Sorenson | Email This Entry Email This Entry
Pat Sorenson

The failure of the state and federal governments to address low wages for child care providers comes at a high price for the economy, the state budget, and ultimately for children and their families.

Nearly half of all child care workers in Michigan have incomes so low that they are eligible for and receive public supports, including Medicaid, MIChild, food assistance, or Earned Income Tax Credit benefits – at a cost exceeding $80 million annually according to a new study of the early childhood workforce.

Sadly, the adults who are charged with caring for our youngest children – our future workforce – are also struggling to make ends meets and facing the stresses of caring for their own children and families. The study finds that child care workers earned less in 2013 than animal caretakers, placing them near the bottom in Bureau of Labor Statistics rankings of occupations by mean annual salary along with food preparation workers, parking lot attendants, bartenders, hotel desk clerks, and laundry and dry-cleaning workers.

In both 1997 – when the first workforce study was done – and 2013, child care workers earned about two-thirds of preschool teachers’ pay, placing them barely above the poverty level for a family of three. And, preschool teachers were not faring much better. Even with a bachelor’s degree or higher, a typical preschool teacher earned substantially less than a kindergarten teacher. 

In 2013, the mean hourly wage of child care center workers in Michigan was $10.33.

The national study found that of early childhood workers earning less than $12.50 per hour:

  • 78% worried about having enough money to pay monthly bills; 
  • 74% worried about paying for routine health care; and 
  • over 60% struggled to pay their housing and transportation costs, and more than half worried about having enough food for their families. 

The results of such low pay are predictable. Fewer highly educated and skilled workers are attracted to the field, turnover rates are high, and parents have a hard time finding high quality, reliable care so they can work to support their families. Less easy to measure is the impact of the economic struggles of child care providers on the quality of care they can provide, and ultimately the cost to children.

The devaluing of child care as a profession is unacceptable given the now-clear evidence of the importance of the earliest years of life. The research is clear: As much as 90% of the architecture of the brain is developed in the first three years of life, and the effects can be long-lasting.

High-quality child care and early learning programs can help children gain the skills needed to achieve in school, with associated reductions in costs related to grade retention and special education. The long-term benefits include an increased likelihood of high school and college completion, higher adult earnings, lower incarceration rates, and reductions in the need for public assistance.

In addition, child care is a lynchpin in economic growth, with numerous studies showing that businesses benefit when their employees have reliable care with cost savings related to lower rates of absenteeism, turnover and tardiness, as well as increased employee productivity.

Given what we know about the long-term consequences for our children and the state’s economy, we can and must do better.

– Pat Sorenson

An unexpected gift: 4-star charity rating

Added December 3rd, 2014 by Gilda Z. Jacobs | Email This Entry Email This Entry
Gilda Z. Jacobs
From the First Tuesday newsletter
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After all the hubbub over Black Friday and Cyber Monday, Tuesday was #GivingTuesday, a day that’s been set aside to promote charitable giving and celebrate generosity.

So it’s appropriate to announce that Charity Navigator, America’s largest independent charity evaluator, has awarded the League 4 stars – the highest rating possible – as a charitable organization. The nonprofit, independent group rates charities based on financial performance, accountability and transparency.

“Michigan League for Public Policy’s coveted 4-star rating puts it in a very select group of high-performing charities,’’ according to Ken Berger, president and CEO, Charity Navigator. “Out of the thousands of nonprofits Charity Navigator evaluates, only one out of four earns 4 stars – a rating that, now, with our new Accountability and Transparency metrics, demands even greater rigor, responsibility and commitment to openness.’’

The League fell short in one area – telling donors that their names will not be used to solicit for other organizations. While our policy has always been not to share or sell our donors’ or email list names, now we’re making it clear on our website.

The unexpected vote of confidence from Charity Navigator comes as the League begins its important end-of-year donation campaign. This season, we’re looking to increase donations by 16% to build a $20,000 Rapid Response Fund and to find 103 new donors to mark our 103rd anniversary.

Our Rapid Response Fund allows us to do the advocacy to react quickly to a bill or suggest a solution to state and federal policymakers. It’s needed because a large share of the League’s grants is tied to research and education and does not allow advocacy or lobbying.

Because of the support of individual donors like you, the League makes a difference in the lives of families, children and vulnerable adults. This year, more than 460,000 previously uninsured or underinsured adults in Michigan are able to see doctors when they need to thanks to the Healthy Michigan Plan and the Affordable Care Act. The League was part of a strong, diverse coalition that helped make the Healthy Michigan Plan a reality.

From increasing the minimum wage to funding preschool education, subsidizing high-quality child care, improving workforce development, and focusing on women’s issues, the League has been a trusted voice in advocating on behalf of men, women and children who are still struggling every day to make ends meet.

I’m glad that #GivingTuesday gave us the opportunity to recapture the spirit of the season.

Will you join us in making a difference? Your gift of $25, $50, $100 or whatever you can afford will help us meet that goal.

A gift of any size from new donors will help us expand our reach to make life better for all in Michigan.

– Gilda Z. Jacobs

Maintaining cultural ties and family stability for American Indian Children

Added November 25th, 2014 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

American Indian children in Michigan are the most likely to be removed from their homes due to abuse and/or neglect: 1.5 times the rate of white children and the highest of all children of color in the state, according to the Michigan Race Equity Coalition. They are also more likely to age out of the foster care system. It is disturbing, however, that the rate of investigation for abuse and/or neglect is lower compared with white children.

Removing American Indian children from their homes at higher rates is cause for alarm. Research indicates that placement in the foster care system can lead to an increased risk of homelessness, unemployment, incarceration, substance abuse, and more. Although American Indian children in Michigan fare better than their peers in other states, the disparities in the child welfare system persist, creating instability for American Indian children and their families and jeopardizing their cultural ties.

Photo from Livingston Community News. Native American Veterans of Southeastern Michigan event.

As background, Michigan is one of the top 10 states with the largest American Indian populations in the country. The state is home to 130,000 American Indians, including 14,000 children. We have 12 federally recognized tribes and the vast majority of American Indians in the state do not live on a reservation. In 2013, the Department of Human Services supervised 240 Indian child welfare cases; a number that tribal representatives believe to be understated.

The Indian Child Welfare Act, or ICWA, was passed by Congress in 1978 to protect the best interest of American Indian children and to promote stability and security for tribes and families. The most recent annual progress report found that to be in better compliance with ICWA, DHS needed improvements in four areas:

  • Notification to Indian parents and tribes of state proceedings involving Indian children and their right to intervene.
  • Placement preferences of Indian children in foster care, pre-adoptive, and adoptive homes.
  • Active efforts to prevent the breakup of the Indian family when parties seek to place a child in foster care or for adoption.
  • Tribal right to intervene in state proceedings or transfer proceedings to the jurisdiction of the tribe.

To strengthen practices used in American Indian child welfare cases, the Michigan Legislature enacted the Michigan Indian Family Preservation Act in 2012. However, embedding ICWA in state law is not enough. Training in the law and cultural competency for all workers at every point in the system—caseworkers, court employees, and others—is critical. Additionally, there needs to be active recruitment of Indian foster care and adoptive homes. Also important to measure compliance and improvements, along with having the ability to identify areas of inadequacy in the system, is data collection.

Finally, as we celebrate Native American Heritage Month, appreciating cultural differences and continuing to build and develop relationships with Michigan’s tribes and their leaders will truly enhance outcomes for American Indian children and their families.

– Alicia Guevara Warren

Moving from mass incarceration to mass education

Added November 21st, 2014 by Judy Putnam | Email This Entry Email This Entry
Judy Putnam

Michigan needs to spend less on prisons and more on schools.

Between 1986 and 2013, Michigan’s spending on prisons jumped 147% when inflation is counted, according to research by the Center on Budget and Policy Priorities. Meanwhile, per-pupil foundation spending in Michigan remains lower than before the Great Recession began.

“Even as states spend more on corrections, they are underinvesting in educating children and young adults, especially those in high-poverty neighborhoods. At least 30 states (including Michigan) are providing less general funding per student this year for K-12 schools than before the recession, after adjusting for inflation…’’ a recent report by the Center on Budget and Policy Priorities concludes.

Dennis Schrantz of the Michigan Council on Crime and Delinquency and Shaka Senghor of the Atonement Project at the League's recent policy forum.

Just last month, the League sponsored a policy forum on reducing mass incarceration. The upshot of the forum is that Michigan’s unusually long prison sentences mean that more dollars than necessary are being spent on corrections without improving public safety. And students are not getting what they need to avoid the “school to prison” pipeline.

Laura Sager, executive director of the Citizens Alliance on Prisons and Public Spending, spoke about the need for a sentencing commission to examine Michigan’s sentencing structure with an eye on reducing the prison population.

Sager said that mandatory minimums and harsh penalties for drug offenses are not the cause of mass incarceration in Michigan. Unusually long prison sentences drive high costs without providing additional safety, she said. Judges set a minimum and maximum sentence but it is the state Parole Board has the ultimate decision on how much time a prisoner will serve after the minimum sentence is completed.Incarceration also costs $35,000 per inmate per year — more than a year of college at the University of Michigan.

A package of bills by Rep. Joe Haveman, R-Holland, that could see action in lame-duck session next month, is aimed at reducing the time offenders spend in prison and jail. It would require “presumptive parole” for inmates who have served their minimum sentence unless there were “substantial and compelling” reasons to deny parole. The language of the package is still being negotiated, according to CAPPS, but the introduction is a very hopeful step.

Michigan’s parole system has long been criticized for allowing parole board members to pile on additional punishment beyond the judges’ sentences rather than look at the inmate’s prison record.

“The economic health of many low-income neighborhoods, which face disproportionately high incarceration rates, could particularly improve if states reordered their spending in such a way. States could use the freed-up funds in a number of ways, such as expanding access to high-quality preschool, reducing class sizes in high-poverty schools, and revising state funding formulas to invest more in high-poverty neighborhoods,’’ the Center’s report suggests.

Michigan spends $1.2 billion more on corrections in 2013 than it did in 1986, the report found. That’s a lot of money that could be better invested in our students and in our future.

– Judy Putnam

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