Schmudget Blog


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

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 $1.4 billion in new resources for community investments in the upcoming 2019-21 budget cycle and more than $2 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 2019-21 budget cycle, the measure would require:

  • Substantial clean energy infrastructure projects located directly within pollution and health action areas ($145 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 ($152 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 ($146 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)
  • 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 ($15 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 estimate based on state carbon dioxide emissions data from the U.S. Energy Information Administration from 2015. Carbon emissions since 2015 were assumed to grow at an annual rate of 2.35 percent, the average annual rate of emission growth from 2012-2015. It is assumed that 10 percent of carbon dioxide emissions would not be covered by the fee due to noncompliance or exclusion. Twenty percent of revenues were assumed to be lost due to credits for emitters, exemptions for Energy Intensive Trade Exposed industries, exemptions for marine and aircraft fuels, and other exemptions included in the measure. This estimate will be updated once the state Office of Financial Management publishes an official estimate in the coming weeks.

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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Brief: Child savings accounts advance economic opportunities for kids and families

Posted by Jennifer Tran at Jul 02, 2018 10:10 AM |
By Hana Jang, 2017-18 Narver policy fellow, and Jennifer Tran, senior policy analyst


In an inclusive economy, everyone – including the youngest among us – would have the means to have a lifetime of economic security. Yet this is not the case for many children and families in Washington state. Financial security and stability remain out of reach for many families, especially for families of color. Thirty percent of all households and 50 percent of households headed by people of color do not have enough savings to cover basic expenses for three months in the case of a sudden job loss, medical emergency, or another financial crisis – let alone enough resources to save for their own future and the future of their kids.

Our new brief, “Building Assets for Washington State’s Future” (the second in the Progress in Washington series), focuses on the need to create a statewide child savings account (CSA) program. CSAs are long-term savings accounts established for children early on in life that build until they reach adulthood, and offer incentives that can help accumulate savings along the way. By creating such a program, policymakers have the opportunity to give kids the opportunity for lifelong prosperity. CSA programs structured to advance equity can set kids up for lifelong economic success, particularly for kids of color in families who may face additional barriers to economic opportunity.

CSA

Whether they are set up at birth, kindergarten, or middle school, CSAs can have a big impact on a child’s life. Research shows that low- and moderate-income children with college savings are significantly more likely to go to college and graduate than those with no college savings. But the benefits of CSAs are not just limited to children’s post-secondary education opportunities. These accounts demonstrate the potential for parents and caregivers, together with children, to create a shared culture around savings. 

Washington’s elected leaders can give kids a strong financial foundation by developing a statewide CSA program. There are certainly logistics to work out to determine how best to establish a CSA program that reaches the needs of every child, but now is the time for big thinkers to come together and strategize about what that could look like in our state.

Our brief highlights the key elements of a CSA program that can advance equity and help build an inclusive economy for Washington state. Features that remove barriers to participation and encourage families to save – such as automatically enrolling every child, providing an initial deposit to kick start savings, and including additional incentives for children from families with low- and moderate-incomes – can help ensure all children from Washington state have the tools for lifelong financial security and stability.

Our state’s well-being is tied to the health and prosperity of kids and families. Policymakers who pursue the creation of CSAs can help our state thrive into the future and invest in our shared economic prosperity.

Building Assets for Washington State’s Future” is the second publication in our Progress in Washington 2018  series (see the first publication, “Building an Inclusive Economy,” here). This series examines ways our state can reach the goal of an inclusive Washington state economy with shared prosperity for everyone.


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U.S. Supreme Court decision puts Washington’s economic well-being at risk

Statement from Washington State Budget & Policy Center Executive Director Misha Werschkul 
 
The U.S. Supreme Court ruling in Janus v. American Federation of State, County, and Municipal Employees will have a negative impact on all of us who rely on the critical public services that public sector employees deliver in communities across the state. And it will especially hurt the employees themselves – hundreds of thousands of firefighters, teachers, park rangers, nurses, and other public sector workers.


Since the 1970s, the U.S. economy has become increasingly out of balance, with gains in income concentrating among the very wealthiest, while low- and middle-wage workers have seen stagnating or declining incomes. In Washington state, the top 1 percent has an average income 22 times higher than the average income of the entire bottom 99 percent (see our "Building an Inclusive Economy" report for more details). A key driver of increased wage inequality is declining union membership, which has weakened the bargaining power of working households, especially in private sector jobs.   

Washington state has one of the highest rates of union membership in the country. A majority of state and local government employees are currently represented by unions, and these unions have led the way on efforts to reduce poverty, promote equity, and improve public services – both through the collective bargaining process and through public policy advocacy. Public sector unions have been key partners in efforts to raise the statewide minimum wage, provide paid family and medical leave to all workers, and make sure all children have access to a great public education.

This Supreme Court decision goes far beyond an attack on public sector workers. It is a setback for efforts to promote shared prosperity in Washington state and across the country. Now it is time for our state and local elected leaders to respond with policies that strengthen the economic well-being of Washington's working people and communities. They must enact and enforce stronger labor standards in our state, implement and modernize the Working Families Tax Rebate, protect workers' rights to organize, and ensure sufficient funding for vital public services.

For more details on the importance of public sector unions, read this Washington Post article by economist Jared Bernstein: "Bend the trend: Reviving unionization in America." 

KIDS COUNT: Inaccurate census data could jeopardize progress for Washington’s kids

Posted by Melinda Young-Flynn at Jun 27, 2018 09:50 AM |
 
Nearly 1 in 6 Washington children under age 5 live in neighborhoods where there’s a high risk that the U.S. census will fail to count them accurately, says a new report from the Annie E. Casey Foundation. An inaccurate 2020 census will erode essential public services for children in Washington and across the country, according to the 2018 KIDS COUNT Data Book released today.


Funding for essential health care, early education and K-12 learning, and other basic services depend on an accurate count of our communities. In Washington state, more than $3 billion in federal dollars are allocated yearly to Medicaid, food assistance, Head Start and other programs that help families meet basic needs. 

KIDS COUNT 2018 Data Book

Low-income children, children of color and children living in immigrant households are at greatest risk of being undercounted. The census may also miss children growing up in rural areas, tribal lands or in urban neighborhoods where census workers may have a hard time reaching households.

Further, the Trump administration’s proposed addition of an unnecessary question about citizenship will discourage countless others from filling out the 2020 census form. People without documentation and their families will be afraid that participation will result in having their lives, their families or their communities torn apart by Immigration and Customs Enforcement. 

“To give kids the full and equal opportunities to grow and thrive so they can be counted on in the future, we need to count them now,” said Paola Maranan, executive director of the Children’s Alliance. “Without robust efforts to get an accurate 2020 census, we place our shared future in jeopardy.”

In Washington state, an estimated 67,000 of the state’s 447,000 children under age 5 live in census tracts where households responded poorly by mail to the 2010 census—and may do so again in 2020. 

The Data Book notes that the threat of greater inaccuracies in the census coincides with the child population passing a landmark: in 2020, most of the U.S. population aged 18 and under will be of color.

“Low-income children, children of color and kids living in immigrant families stand to be disproportionately undercounted, while also having the most to lose as vital programs are sapped of public investment,” said Misha Werschkul, executive director of the Washington State Budget & Policy Center.

The annual KIDS COUNT Data Book ranks each state across four domains of child well-being: health; education; economic well-being; and family and community.

Washington state, which ranked 15th among the 50 states overall, ranked in the top 5 for child health. The percentage of uninsured Washington children fell by half from 2010 to 2016, from 6 to 3 percent. This progress is partially due to state-level efforts to connect more children with affordable, preventive health care through Apple Health for Kids. Apple Health for Kids is supported by federal investments in Medicaid and the Children’s Health Insurance Program, with funding allocations that depend on population estimates derived from the census.

Our state has the greatest room for improvement in the education domain, where it ranks 26th. One in 5 students don’t graduate on time, and almost 60 percent of three- and four-year-olds are not enrolled in preschool.

KIDS COUNT in Washington recommends that two things about the flawed census be changed. First, federal officials need to allocate sufficient funds to support a more accurate census in which as many people as possible can be counted. Second, the census form should be true to the purpose of the count that was originally stipulated in the U.S. Constitution: to count all people who live within U.S. borders. Questions that ask about citizenship will undermine participation—and they are simply not required.

Read the full 2018 KIDS COUNT Data Book. And read the KIDS COUNT Washington state 2018 profile 

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Media Contacts: 

Melinda Young-Flynn, melinday(at)budgetandpolicy(dot)org, (206) 262-0973, x223
Adam Hyla E. Holdorf, adam(at)childrensalliance(dot)org, (206) 324-0340 ext. 18

About KIDS COUNT in Washington
KIDS COUNT in Washington is a partnership of the Children’s Alliance and the Washington State Budget & Policy Center, made possible by support from the Annie E. Casey Foundation. It pursues measurable improvements in child outcomes through equitable public policy measures. For more information, visit www.kidscountwa.org

About the Annie E. Casey Foundation
The Casey Foundation creates a brighter future for the nation’s children by developing solutions to strengthen families, build paths to economic opportunity and transform struggling communities into healthier places to live, work and grow. Visit datacenter.kidscount.org for the most recent national, state, and local data on child well-being from the Casey Foundation's KIDS COUNT Data Center. 

 

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HIGHLIGHTS

Save the date!

Our Budget Matters 2018 policy conference will take place on November 13 at Seattle Center. john a. powell from the Haas Institute for a Fair and Inclusive Society is the keynote. Stay tuned for more details. 

Our policy priorities

Washington state should be a place where all our residents have strong communities, great schools, and the chance for a bright future. Our 2017-2019 Legislative Agenda outlines the priorities we are working to advance.

Testimonies in Olympia

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Watch our 2018 legislative session testimonies on TVW: