Schmudget Blog

The State of Washington's Children

Posted by jeffc at Mar 23, 2009 04:30 PM |

Washington Kids Count, a project of the UW's Human Services Policy Center, is releasing the new edition of The State of Washington's Children.

This year's report focuses on poverty. A particularly notable finding is that rising unemployment rates could increase the number of children living in poverty by 37,000. That assumes that the unemployment rate reaches 9 percent, a likely scenario according to the most current state projections.

The authors point out that state government can help mitigate the impact of child poverty by improving work supports and sustaining critical benefits, a timely reminder as we await the legislature's budget proposals. In a KPLU radio piece on the report, lead author Lori Pfingst points out the importance of the Working Families Rebate as a tool to help lift families with children out of poverty.

The report is currently being pre-released to legislators and reporters. If you'd like to see an early copy, contact Lori Pfingst at 206-616-1506 or

Official Forecast Out, Now What?

Posted by jeffc at Mar 19, 2009 08:30 AM |
Filed under: State Budget, State Economy

The legislative session is halfway over and the discussion over what to do about the unprecedented deficit is not much further along than when the session started. Lawmakers have been waiting to hear the final shoe drop on the budget deficit, and today it did.

Earlier this morning, the Economic and Revenue Forecast Council released the official revenue forecast upon which budgeting decisions will be made. It includes an additional reduction in revenue of $553 million for fiscal years 2009 through 2011. Now that we have this number, the caseload forecast, and more clarity on the federal stimulus package, policymakers should have the information they need to write a budget.

That budget will most certainly include deep cuts in public programs and services. Hopefully the budget process will provide a basis for a broader public discussion about the importance of those investments and the need to have an open conversation about revenue.

One of the most striking things about the forecast released today is that the ERFC now expects general fund revenue to remain flat from 2007-09 to 2009-11. This means we will have more children to educate, more elderly to care for, and more unemployed families in need of health insurance, but no additional money to pay for that growth.

We can change that outcome by considering other ways to increase revenue. Thirty Washingtonian economists and public policy experts signed a letter last month agreeing that revenue options should be on the table. "Implementing deep cuts in government spending and declining to raise revenue through tax increases is not an effective strategy to guide Washington State out of this recession," the letter said. We have all the information we need. Now it’s time to act.

28 Percent of Lower Income Parents Uninsured in 2008

Posted by jeffc at Mar 18, 2009 09:40 AM |

For two decades, Washington State has been a national leader in providing health insurance to those who would otherwise be uninsured. Most recently, policymakers made a commitment to provide health insurance to every child in the state by 2010, a commitment that was put into law with the "Cover All Kids" legislation passed in 2007.

While significant progress has been made in providing health insurance to children, we have not done as well providing health insurance to parents. In early 2008, more than one in four lower income parents remained uninsured, compared to just 6 percent of higher-income parents (see below). Parental health insurance promotes financial security for lower income families and increases the likelihood that more children will be enrolled in public programs and have better access to care.


The graph above likely understates the problem. The data were collected in early 2008. Since then, unemployment in the state has spiked and is expected to reach 10 percent by next year. The proposed deep cuts in public health care investments would come at a time when those investments are more needed than ever.

Children and Homelessness in Washington State

Posted by staceys at Mar 17, 2009 09:00 PM |

Safe, stable, and affordable housing is an important component of economic security for Washington families. According to a new report by the National Center on Family Homelessness, more than 24,000 children are homeless in Washington State.* The report ranks Washington 25th in the nation in child homelessness. (This is a composite of the number of homeless children in the state, an assessment of their well-being, the risk of children becoming homeless, and state efforts to address the problem.)

Among the homeless children in Washington state, close to 11,000 are under six years old, about 9,500 are between kindergarten and eighth grade, and over 4,000 are in high school. (See graph) Fifty-eight percent of Washington’s homeless children are white, 28 percent are Hispanic, and ten percent are black.



Food security is very low for one in 26 of Washington’s households, which is comparable to national rates of food security. Households living in poverty and headed by single women are especially vulnerable to hunger.


Homeless children in Washington are also more than twice as likely as middle income children to have moderate or severe health problems, such as asthma, dental problems, and emotional difficulties.


Less than 25 percent of homeless high school students in Washington graduate, which has a significantly negative impact on their lifetime earning potential.

Affordable housing

In Washington, it can be especially difficult for low-wage workers to find affordable housing. A full-time worker earning minimum wage ($8.07 per hour) in Washington would need to work close to 80 hours per week for 52 weeks a year in order to afford a two-bedroom apartment at Fair Market Rent.**

For a typical homeless family, which consists of a single mother with two children, affordable housing can be even more out of reach. The average income for a single mother in Washington who receives public support is less than $550 per month, which means she could afford to pay $157 monthly in rent. The cost of a two-bedroom apartment at FMR would be $672 higher than that each month.

Shelter and transitional housing

Families in Washington seeking emergency shelter or transitional housing do have some options. The state currently supports 827 units of emergency housing or shelter for one family, 2,628 units of transitional housing, and 595 units of permanent supportive housing designated for families. In Washington, approximately 89 percent or 3,348 individuals, of the total number of people on wait lists for public housing are families with very low incomes. Washington State does give priority on the wait lists to families experiencing homelessness and to survivors of domestic violence.

Long-term investments

The state has made long-term investments in trying to address the lack of affordable housing. In 1987, the Washington State Housing Trust Fund was created as a source of capital funding to support affordable housing for lower income Washingtonians. The Fund supports the construction, acquisition or rehabilitation of over 4,500 units every two years. In 2008, the Fund was increased to $200 million for the biennium, but the need still exists for affordable housing.

*The definition of homeless children and youth used in the report is that described in Title X, Part C, Section 725 of the federal No Child Left Behind Act.

**Fair Market Rent is defined as "the maximum chargeable gross rent in an area for projects participating in the HUD Section 8 program," and is set at the 40th percentile of market rents for units at each bedroom size as determined by the Department of Housing and Urban Development. American Community Survey. (2006)

Unemployment Rate Expected to Reach 10%

Posted by jeffc at Mar 13, 2009 11:40 AM |
Filed under: State Economy

An updated March forecast from the Economic and Revenue Forecast Council shows further weakening of the economy.

Since the November forecast, the projected unemployment rate for next year has risen from 8.3% to 10%. We have not had an annual unemployment rate that high since 1983.


In addition, the leap from 5.3% in 2008 to 9.2% in 2009 would be the largest one-year leap in unemployment in at least three decades.

The ERFC notes that the downward revision is largely due to lower federal infrastructure funding than was expected, and is somewhat offset by higher funding for Hanford clean-up.

What is the unemployment rate? It's the share of the labor force that are looking for, but unable to find, work. This measure does not include people who have been discouraged from actively seeking work or people who are working part-time because they cannot find fulltime work.

"The High Cost of Subprime Lending" Part 3: Future of Housing Crisis in Washington

Posted by jeffc at Mar 13, 2009 08:25 AM |
Filed under: Economic Security

On Monday, the Budget & Policy Center released a paper entitled, "The High Cost of Subprime Lending in Washington State." Over the week we have posted here about the disproportionate effects of high cost lending on certain lower income neighborhoods and people of color. Today we will take a look at the future of the housing crisis in Washington State.

Washington has been relatively fortunate to avoid some of the deepest mortgage problems seen in other states as a result of the subprime lending crisis. Nationwide in the third quarter of 2008, over five percent of mortgages were seriously delinquent or in foreclosure, whereas in Washington, foreclosure rates were below 2.5 percent. (Only seven states in the country had such low foreclosure rates during this time.)

But the housing situation in Washington may take a turn for the worse in the near future. Nationwide, 77 percent of subprime loans with adjustable rates have already experienced a reset of the initial interest rate. In Washington State however, only 67 percent of loans have reset (see graph) The remainder are still at the original interest rate.


In the next 12 months, it is expected that interest rates will reset on 23 percent of subprime adjustable rate mortgages in the state, a higher share during that period than nearly every other state in the nation.

Problems for strapped homeowners can be exacerbated by prepayment penalties and large loan balances. Thirty-two percent of subprime mortgages in Washington State have prepayment penalties currently in force, a higher percentage than nearly every other state. And only 10 states have larger average subprime loan balances.

This is worrisome because the subprime mortgages that are most likely to go into delinquency or foreclosure are those with adjustable interest rates. Homeowners with these loans see sudden and significant increases in their mortgage bill from one month to the next and the additional cost can lead to late payments and eventually, foreclosure.

"The High Cost of Subprime Lending" Part Two: Loans by Neighborhood & Region

Posted by jeffc at Mar 12, 2009 09:30 AM |
Filed under: Economic Security

On Monday, the Budget & Policy Center released a new report on the "High Cost of Subprime Lending in Washington State." We will be blogging on the topic throughout the week. Check out the entire paper and part one of the blog series.

Statewide, mortgages in lower-income neighborhoods were almost twice as likely to be high-cost than those in higher-income neighborhoods.* (See graph.)


The effect on household finances of having a high-cost mortgage can be significant. The cost of a $230,000 mortgage can easily be $600 higher per month, or over $200,000 over the course of a 30-year loan. In the middle of the current housing crisis, having a high-cost mortgage also suggests a higher likelihood of foreclosure.

In most areas of the state, lower income neighborhoods had higher rates of high cost loans than wealthier neighborhoods (click on table below to see larger version). In Cowlitz County, for example, 45.5 percent of mortgages in the lowest income neighborhoods were high-cost, compared to 20.8 percent in the higher-income neighborhoods. Whatcom County was the only area where wealthier neighborhoods did not have significantly lower rates of high-cost mortgages than poorer neighborhoods.


The pockets of high-cost mortgages across the state raise the question of whether borrowers in lower income regions and neighborhoods have adequate access to financial education and whether they have a variety of lending options. This has an impact on all homeowners: when foreclosures concentrate within neighborhoods, it is not just the delinquent homeowner that suffers. Other owners are likely to see impacts such as property value decline and increased crime.


*The federal Home Mortgage Disclosure Act (HMDA) classifies mortgage as “high-cost” based on the loan’s annual percentage rate (APR). The APR is a better measure of the total cost than the contract interest rate alone because it includes points, fees, and other finance charges. Mortgages with APRs above designated thresholds are defined as “high-cost.”

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