Schmudget Blog


Income gains are not being shared equally

Posted by Julie Watts at Oct 12, 2018 01:50 PM |

New Census data show many Washingtonians of color are still facing barriers to economic opportunity 

By Liz Olson, State Priorities Partnership policy fellow

From 2016 to 2017, Washington state’s median household income rose while the statewide poverty rate slightly declined, according to new data released by the U.S. Census Bureau. While this is good news, it is tempered by the fact that gains in prosperity have not been shared equally across racial and ethnic groups. Substantial barriers to financial well-being persist for many people of color as a result of a continued legacy of discrimination in hiring and promotions, overrepresentation in low-wage work, and redlining policies that pushed people into neighborhoods that often don’t have the resources they need to thrive. 

In 2017, our state’s median annual household income increased by $2,430 (in inflation-adjusted dollars) from the previous year. But even though hardworking people of every racial and ethnic identity are driving growing economic prosperity in our state, not all households are reaping the benefits. 

White households represent the only racial group in Washington to have seen a meaningful bump in household income (1),  with median income rising to $72,254 in 2017. Meanwhile, income growth stalled for Black and Latinx households. And even more disconcertingly, incomes for Native American and Alaska Native households slid backwards. 

Washington’s median income was just $52,212 for Latinx households, $49,300 for Black households, and $42,127 for Native American and Alaska Native households in 2017. This means that many households of color are struggling to make ends meet, with incomes well below the high cost of living in our state – $64,203 for a single parent with two kids (2). These patterns reflect the outcomes of centuries of discriminatory federal, state, and local policies.

Census data also show that 3,532 fewer Washingtonians lived in poverty last year than in 2016, as the overall poverty rate fell slightly from 11.3 to 11 percent. Even with this modest decline, the actual number of people in poverty in Washington remains higher than it was a decade ago at the onset of the Great Recession. In fact, the number of Washington families living in deep poverty (with an income of less than $10,210 for a family of three) grew by nearly 30 percent from 2007 to 2016 (3).

 

Families of color – particularly those headed by single women – and kids are hit especially hard. As the chart below illustrates, too many young people of color don’t have access to the financial resources they need for a safe, secure, and bright start in life. More than a quarter of Latinx, Native American, and Pacific Islander children, and nearly 30 percent of Black children, lived in a household below the poverty level in 2017. 

(click on image to enlarge)

Children in poverty

 

Washington’s kids and families deserve better, and our policymakers can do better by making investments in our communities that enable all of us to thrive. We know that anti-poverty programs like the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families (WorkFirst), affordable housing, affordable childcare, and Apple Health work. They provide families who have fallen on hard times the opportunity to meet basic needs, get and keep jobs, and increase their income over time. State lawmakers should take advantage of a growing state economy to invest in poverty reduction efforts so that everyone in our state can have the opportunity to thrive – especially those communities of color who have historically been excluded from economic opportunity.

1. While other racial/ethnic groups also saw an increase in annual median household income from 2016 to 2017, the bump in median income for white households was not only larger than most other groups but also the only statistically significant increase, according to Center on Budget and Policy Priorities analysis of 2017 American Community Survey (ACS) data.

2.  MIT Living Wage Calculator for single-parent household with two children, Washington state; http://livingwage.mit.edu/states/53

3.  Center on Budget and Policy Priorities two-year analysis of Current Population Survey (CPS) data.

 

I-1631 invests in what matters

Posted by Andy Nicholas at Oct 05, 2018 12:35 PM |

Clean air, thriving communities, and good jobs far outweigh pollution fee’s costs

As we’ve previously written, Initiative 1631 would inject hundreds of millions of dollars per year directly into communities in Washington by imposing a carbon pollution fee on businesses that emit large amounts of carbon dioxide or sell carbon-laden fuels. Revenues from the fee would help our state transition to a dynamic, low-carbon economy with cleaner air and water. And a substantial portion of the new revenue would be rightly invested directly into communities that have been most harmed by decades of air pollution.

Yet to persuade voters to reject this commonsense initiative on the November ballot, opponents (mostly massive, multinational oil companies) frequently reference an unrealistically high estimate  of the pollution fee’s average cost to households. While the measure would appropriately increase the costs of carbon-intensive fuels, the actual average impact on households is up to $100 per year lower than opponents are claiming.

In reality, I-1631 would raise high-carbon fuel and energy costs by an average of $13 per month per Washington household in 2020. That’s a small price to pay for cleaner air, healthier communities, and more efficient energy and transportation infrastructure – all of which would create new good-paying jobs in the clean energy, or “green jobs” sector. This estimate is derived from the same model used by the state Office of Financial Management to estimate the amount of revenue that would be generated each year under I-1631.(1) 

It’s also important to note that carbon pollution fee costs would vary significantly across households. People with SUVs; long, single-driver commutes; and large, poorly insulated homes would likely pay more than $13 dollars per month. People with more efficient cars, shorter commutes (or who carpool, bike, or use public transportation), and well-insulated homes would pay less.

Further, the measure would devote significant resources ($144 million in the 2021-22 budget cycle alone) to reduce energy costs for low-income households. These resources would be used to assist Washingtonians with low incomes with weatherizing their homes, purchasing energy efficient appliances and vehicles, and installing solar panels. It would also provide them with cash rebates to offset additional higher costs.  All these actions would reduce carbon pollution, stimulate local economies, and generate good-paying jobs in the clean energy sector.

The bottom line is that the benefits of I-1631 – cleaner air, improved public health, clean energy and transportation infrastructure investments in communities, and new good-paying green jobs, just to name a few – far outweigh its costs. That’s why the Budget & Policy Center enthusiastically joins Tribal Nations, businesses, climate scientists, public health experts, and many organizations representing communities of color to endorse I-1631. It is an equitable and inclusive way to build a cleaner and more prosperous future for all Washingtonians, especially those who have been denied their just share of the state’s growing prosperity. 

Voters shouldn’t let the overly broad and unrealistically high cost estimate circulated by large oil companies and climate-science deniers dissuade them from approving I-1631 on the November ballot.

(1) Carbon pollution fee revenues were obtained from Carbon Tax Assessment Model (CTAM) that is maintained by the Washington State Energy Office. Per I-1631, the fee was assumed to take effect in calendar year 2020; the rate was set at $15.00 per ton; jet fuel, marine fuel, transition coal, and emissions from Colstrip 1&2 were exempted. Under these assumptions the model determined $858 million in carbon pollution fee revenues would be generated in 2020. $472 million of that amount would be paid by individuals; $387 million would be paid by businesses. The number of households in Washington state in 2020 was estimated to be 2,969,980. This was obtained by growing the 2017 estimate (2,840,377) from the U.S. Census Bureau’s American Community Survey by 1.5 percent per year, which is the average annual rate of growth from 2012 to 2017, through 2020. Dividing the amount of carbon pollution fee’s estimated to be paid by individuals ($472,000,000) in 2020 by the estimated number of households in Washington state for that year (2,969,980) yields an average household cost of $159 in 2020. 

 

Four community leaders join the Budget & Policy Center board

Posted by Melinda Young-Flynn at Sep 07, 2018 02:15 PM |
Filed under: BPC News

We are pleased to welcome the following people to the Washington State Budget & Policy Center board of directors! They join a group of dedicated community leaders, academics, policy experts, and strategists who help shape the direction of our organization.  

Irene Basloe Saraf, community advocate

Irene Basloe SarafIrene is the founding board president of the Washington Housing Alliance Action Fund, and she also served on the board of the Tenants Union of Washington. Prior to moving to Seattle in 2003, Irene was the legislative director of the National Low Income Housing Coalition in Washington, D.C. Irene has a bachelor’s in humanities from Yale, a master’s in public policy from the University of Chicago, and a juris doctor from New York University. She is especially passionate about how the Budget & Policy Center’s work aligns with her commitment to advocating for the needs of people with low incomes. “I understand how access to stable, safe, and affordable housing supports people in the other aspects of their lives – education, employment, health, family – and that government investment is often necessary to ensure housing quality and affordability for low-income people,” she says. “Our social safety net depends on an equitable budget that includes sufficient taxation and ample investment in programs serving low- and moderate-income people.”

Karan Gill, chief of staff of King County Councilmember Dave Upthegrove 

Karan Gill headshotIn addition to his responsibilities with the King County Council, Karan (“ker-in”) is the lead on budget issues and oversees a variety of other policy issues for the district representing much of South King County. Previously, Karan led the public policy efforts for a local nonprofit, was the legislative aide to Washington State House Speaker Frank Chopp, and was campaign manager for Senator Kevin Van De Wege. He earned his bachelor’s degree from the University of Washington and a Master of Public Administration from Seattle University. “The mission and the work of the Budget & Policy Center is personal to me,” he says. “I was raised in a low-income household in South King County and witnessed first-hand many of the inequities that families face in our community. With that perspective, I have been fortunate to work on the state and local side of public policy to help advance policies through an equity and social justice lens.” Karan, who previously served on our community advisory board, is dedicated to undoing racial disparities in public institutions and fighting for more resources for those communities who are furthest from opportunity.

Jan Harrison, director of diversity stewardship and Achievement Rewards for College Scientists (ARCS) Foundation liaison, University of Washington 

Jan Harrison headshotJan has been with the University of Washington for more than 10 years. In her current role, she works to build healthy and productive communities and organizations through the application of critical race theory and impact-driven philanthropy. She also serves as a liaison for Achievement Rewards for College Scientists Foundation, an organization that supports graduate education in science, engineering, and medical research. She has a bachelor’s degree in marketing from Western Washington University and a master’s in cultural studies from UW. She is excited about helping the Budget & Policy Center serve the needs of populations who have historically faced barriers to opportunity through innovative, data-driven policies. “Economic, education, health care, and social inequities aren’t random, but are the outcomes of race-based oppressions embedded in policy and budget decisions,” she says. “As a race scholar, community activist, and Black American woman, I have unique perspectives on social areas concerning fiscal allocations and policy development that have been under-emphasized and under-utilized.”

Lauren Hipp, early learning senior campaign director for MomsRising

Lauren Hipp headshotIn her role at MomsRising, Lauren works to advance the organization’s commitment to ensuring all families have access to affordable, high-quality early care and education opportunities that are welcoming and inclusive, and that create environments where all children can thrive. She has almost 10 years of experience in the early learning field doing policy, advocacy and organizing, and program implementation in both Washington state and nationally. She has previously worked with Thrive by Five Washington, the League of Education Voters, and the University of Washington. She has a Master of Public Administration from the Evans School of Public Affairs at the University of Washington. She looks forward to supporting our organization's work on increasing opportunity and prosperity for all families in Washington, including our focus on racial justice. “I believe in the mission and guiding values of the organization and deeply appreciate the analysis and focus on budget and tax policy to ensure Washington is budgeting with a centering on families and communities,” she says.

 

Brief: Modernizing the Working Families Tax Rebate would rebalance the tax code, grow local economies, and help workers thrive

In an inclusive economy, all Washingtonians would have access to economic security and the opportunity to prosper. Even though Washington’s economy is growing, progress isn’t reaching everybody. Income inequality is increasing, and too many people are still struggling to make ends meet – even those who work full time. This is especially true for many workers and families of color, who have long faced greater barriers to opportunity than their white neighbors – the result of historically racist policies and practices.

Our state’s upside-down tax code – in which people with low and moderate incomes pay up to six times more in state and local taxes as a share of their income than the wealthiest 1 percent – exacerbates these inequities. As a result, working families can’t keep up with the rising cost of living and housing, and many are pushed further into poverty.

Our new brief, “Promoting Economic Security through Commonsense Tax Reform,” provides a road map for how to make our tax code work for working people. It lays out our proposal to modernize and expand the Working Families Tax Rebate, our state’s version of the federal Earned Income Tax Credit (EITC). This modernization and expansion would transform our tax code from one that holds back hardworking but low-paid Washingtonians to one that promotes economic security. Ultimately, it would increase opportunities for working families to get ahead, mitigate the effects of historically racist policies, and strengthen the economy. Lawmakers can make lasting positive impacts on the well-being of Washingtonians by enacting this real, commonsense reform to our tax code. 

Promoting Economic Security through Commonsense Tax Reform” is the third publication in our Progress in Washington 2018 series. This series examines the ways our state can reach the goal of an inclusive Washington state economy with shared prosperity for everyone.

Brief: Poverty reduction programs support families to work and should be strengthened

Posted by Julie Watts at Aug 01, 2018 03:50 PM |

Even with a strong economy and low unemployment rates, many households in Washington struggle to meet basic needs. Fortunately, poverty reduction programs remove obstacles that make it harder for families to get and keep jobs and help them grow their incomes over time. 

Our new policy brief, “Supporting Parents to Work,” shows how programs like the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) support families to work. It also identifies certain situations in which families may face benefit “cliffs,” or a sudden loss of support that hurts their financial bottom line. State lawmakers need to take steps to strengthen some benefits so families can better take advantage of opportunities to increase their incomes. 

The good news is it pays to work when participating in anti-poverty programs. Programs like SNAP, TANF, Apple Health and Affordable Care Act health insurance subsidies, and federal housing assistance are all designed to allow families to take advantage of wage and income growth (see chart below). That helps a family’s financial bottom line when they work more hours or get a raise or promotion.

(Click on image to enlarge)

public benefits support work

 

However, families with children who receive child care subsidies through Working Connections Child Care (WCCC), do face a benefit cliff when their wages go up (see chart below). A benefit cliff is a sudden loss in benefits that results in a net loss in income. This can set families back substantially when they need to buy child care at market rates. 

 (Click on image to enlarge.)

benefit cliff in Working Connections Child Care

 

There are also some cases in which families may face a benefit cliff even when they do not see an increase in earnings. This can happen when families hit time limits or face sanctions in Washington’s TANF, or WorkFirst, program. This particular cliff is the result of a series of legislative and executive policies enacted over the past 12 years that cut off TANF benefits for the entire family when a parent failed to meet work requirements and that restricted time limit extensions. (For more information see our policy brief, “Reinvest in WorkFirst.”)

Every family should be able to meet their basic needs so that they can work, get ahead, and help their children reach their full potential. Washington lawmakers must take commonsense steps to strengthen poverty reduction programs. For WCCC, they should increase the period of time a family can participate in the “phase down” period from three months to 12 months. They should also increase program eligibility from 200 percent of the federal poverty line (or $3,462 for a family of three) up to 325 percent of poverty (or $5,625 for a family of three). For WorkFirst, lawmakers should provide extensions to program time limits for families who are “playing by the rules” and meeting program requirements, but aren’t making enough to be able to move off the program. They should also make it easier for families to comply with work requirements. Taking these kinds of steps will create better opportunities for all families to thrive.

Read the full brief, “Supporting Parents to Work: How poverty reduction programs in Washington support employment and need to be strengthened.” 

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Yes on I-1631: An inclusive approach to building healthier communities

Updated August 20, 2018: This post has been updated to include official carbon fee revenue estimates from the Washington State Office of Financial Management. The original version of this post included rough carbon fee revenues calculated by the Budget & Policy Center. The updates are in the fourth paragraph and the bullets below.

Washingtonians must take bold action to confront the serious threat that air pollution poses to the health and well-being of communities from Longview to Walla Walla. But meaningful action can only be achieved and sustained if people and communities – especially people of color, rural communities, and other populations that are often overlooked by lawmakers and initiative campaigns – are rightfully included in developing solutions to this threat from the very beginning.

That's why the Washington State Budget & Policy Center is joining Tribal Nations, businesses, climate scientists, public health experts, and organizations representing communities of color, workers, and families with lower incomes in endorsing Initiative 1631.

I-1631 is a smart, inclusive proposal to invest in clean air and water in Washington state. Under the measure, hundreds of millions of dollars would be invested in communities like Yakima, South Seattle, Centralia, and other areas that have been most harmed by air pollution to build clean and efficient transportation and energy infrastructure. And workers in these communities would benefit from new "green collar" jobs that would be created in the process of building and maintaining the new clean infrastructure.

Here’s how it would work: Beginning in 2020, I-1631 would impose a first-in-the-nation pollution fee on the biggest polluters in Washington state that emit large amounts of carbon dioxide into the atmosphere or that import carbon-laden fossil fuels. The fee would initially be set at $15 per ton of carbon dioxide and would increase annually at a rate of $2 per ton, adjusted for inflation, until the state meets specific air pollution reduction goals. It would generate roughly $850 million in new resources for community investments in the upcoming 2019-21 budget cycle and more than $1.3 billion in the following 2021-23 cycle. (1)   

But the truly remarkable feature of I-1631 is the amount of revenue that would be directly invested into "pollution and health action areas," or areas that have been disproportionately impacted by air pollution. That includes many rural areas. It also includes places with large concentrations of people of color who, due to systemic racism, are much more likely to live in heavily polluted areas and areas with fewer employment opportunities.   

For example, in the 2021-23 budget cycle, the first biennium in which the carbon fee would be fully implemented, the measure would require:

  • Substantial clean energy infrastructure projects located directly within pollution and health action areas ($245 million); 
  • Resources to help people with lower incomes upgrade to newer, energy-efficient appliances, transition to low-carbon fuels, weatherize their homes, install solar panels, and offset other costs associated with transitioning to a low-carbon economy ($144 million); 
  • Sovereign Indian Tribes receive a just share of resources to help address climate-related dislocation, fight poor health associated with disproportionate exposure to air pollution, build low-carbon energy and transportation infrastructure, and more ($139 million); 
  • Assistance for workers employed in the fossil fuel industry to transition to good, clean-energy jobs. Workers near retirement would be eligible to receive wage replacements, health benefits, pension contributions, and other benefits. Younger workers would also be eligible for wage replacement, health benefits, and pension contributions. They would also be granted free access to retraining programs at state technical and community colleges, assistance with relocation costs, and priority placement at jobs in the clean energy sector ($50 million); and 
  • Resources to help people living in pollution and health action areas participate in the process of developing and monitoring clean energy projects and programs to help their communities transition to a vibrant clean energy economy ($14 million). 

The remaining two-thirds of revenue from the pollution fee would be used to fund clean air and energy projects located outside of these targeted areas, and to sustain clean water and healthy forests throughout the state.

It's important to note that residents from pollution and health action areas would have a direct and strong voice in developing, approving, and overseeing projects funded by the pollution fee. That's because the measure would establish a public oversight board of representatives from Tribal governments, labor unions, and people living in pollution and health action areas, alongside agencies and experts in pollution reduction and clean energy. 

I-1631 would also create an environmental and economic justice panel composed of residents from pollution and health action areas, members of Tribal Nations, labor unions, and experts in clean energy and economic dislocation. The panel would be charged with developing and recommending projects to be located directly within the pollution and health action areas. It would also be responsible for developing programs to ensure people with lower incomes have the support they need to adapt and thrive in a low-carbon economy. 

Voters should approve I-1631 on the November ballot. The measure would help jumpstart Washington’s transition to a healthier, low-carbon economy in which all communities will have opportunities to thrive in the coming years. It is also the most inclusive effort ever undertaken to improve the health and well-being of communities in every corner of Washington state. 

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(1) Washington State Budget & Policy Center calculations of data from the Office of Financial Management’s Fiscal Impact Statement for Initiative 1631.  

Brief: Set kids up for success from early learning through higher education

Posted by Julie Watts at Jul 10, 2018 05:10 PM |

In recent years, Washington state has made important strides in investing in public education and early learning. In the coming years, these changes will be put to a crucial test: Will they help children, especially children of color, surmount the barriers to quality K-12 learning and lifelong achievement?

For KIDS COUNT in Washington’s new “Ensuring All Kids Have an Opportunity to Succeed” brief (a part of the State of Washington Kids 2018 series), we asked local education leader Matt Charlton, superintendent of Manson School District, “What would it take to make sure all kids have a path to success in life?” 

Thanks to local voter levies and to the state’s Early Childhood Education Assistance Program (ECEAP), which provides high-quality preschool to kids with very low incomes, the Manson School District offers free preschool to every four-year-old residing within its boundaries. Charlton said his district looked at the data to make this decision. And he said that quality pre-kindergarten was the single best investment the school district could make “in terms of readying children for kindergarten and overcoming language and poverty barriers.”

All kids should get off to a strong start in school. Yet in Washington, kids of color face the greatest barriers to kindergarten readiness. Far too many families cannot afford high quality early learning, especially programs that have a track record in addressing racial disparities.

Click on image to enlarge.

Many kids of color face the greatest barriers to a strong start in school

Fortunately, our state has powerful tools for removing barriers to kindergarten readiness through ECEAP and robust quality standards in child care. Recent analysis by KIDS COUNT in Washington found that additional investments in ECEAP to serve more kids would dramatically reduce disparities in kindergarten readiness for kids of color.

Kids also need to be able to stay strong through elementary and middle school and finish strong through graduation and post-secondary enrollment. Yet, kids of color face the greatest barriers to success there, too. 

Racial disparities persist in our education system because of systemic racism, including factors like inequitable funding between low-income and high-income schools, housing instability and racially disproportionate disciplinary practices. 

For example, an extensive body of research shows that systemic barriers like living in poverty and having low socioeconomic status are leading predictors of whether or not kids graduate on time. Kids of color face the greatest barriers to on-time graduation. American Indian, Pacific Islander, Black, Latinx, and mixed race students are two to three times more likely to live in poverty in Washington state than their white and Asian counterparts.

More public investments are needed to address these kinds of disparities. While recent investments in public education and early learning are an important step, more needs to be done to address racial disparities in education and to ensure all kids, especially kids of color, have a path to success in school and life. State lawmakers, parents, educators and administrators should consider supporting the following steps to boost success of children in school and in life: 

  • Expand the reach and flexibility of the Early Childhood Education and Assistance Program and invest in affordable access to quality child care, including investing in family, friend, and neighbor care.
  • Expand the state need grant, which provides tuition assistance to all students with a household income below 70 percent of state median income, so all income-eligible students have an affordable path to a degree or certificate. 
  • Invest in local communities and school districts that are designing programs and policy solutions that remove barriers for students of color to thrive in school, including investing in school board trainings on race and racial equity, ensuring parents of color are included in the hiring of leadership staff and principal leaders, and taking other important steps to create accountability and make progress toward more equitable outcomes for students of color.

Ensuring All Kids Have the Opportunity to Succeed” is the third release in the State of Washington’s Kids 2018 series.

KCinWA

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