Schmudget Blog
Showing blog entries tagged as: Economic Security


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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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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President Trump’s budget won’t strengthen the economy. It will harm Washington state

By Misha Werschkul, executive director

President Trump’s 2019 budget does nothing to bolster the economic security of people with middle and low incomes – which is critical to create a thriving economy. Instead, his budget actually threatens the economic security of millions of Washingtonians who rely on federal programs to be able to pay for food on the table, a roof over their head, health care, and other basic needs. Further, it will have profound ripple effects on Washington's local economies. 

While this budget is largely symbolic, since the U.S. Congress just approved a two-year budget deal, these extreme proposals should not be ignored. They are an important signal of the president’s priorities. Many of the specific proposals included in the budget have been introduced before and could be incorporated in future budget proposals or stand-alone legislation this year.  

On the heels of the passage of harmful new federal tax breaks that benefit the wealthy and corporations to the detriment of people with low and middle incomes, President Trump laid out a recipe for increased poverty, homelessness, and inequality. Specifically:

  • He again calls for repealing the Affordable Care Act (ACA) and drastically cutting Medicaid, putting health insurance for millions of Washingtonians at risk.
  • He calls for huge cuts in nutrition, housing, and other basic assistance for millions of Americans below or close to the poverty line, most of whom work for low wages, are elderly or have disabilities, or care for young children. For example, the president cuts nearly 30 percent over 10 years from the Supplemental Nutrition Assistance Program, which currently helps put food on the table for more than 900,000 Washingtonians.
  • He proposes deep cuts to the non-defense discretionary budget that funds education, scientific research, job training, and other core government functions. This would result in massive and unsustainable cost shifts to state governments.  

Instead of pursuing the policies proposed by President Trump, federal leaders should take common-sense steps to support families and grow the economy. They can do this by investing in high-quality job training and apprenticeships; increasing access to safe, affordable, dependable child care and care for family members with disabilities; and advancing policies that create jobs and raise wages for working families. 

For more analysis about this harmful budget proposal, see this statement from Bob Greenstein, president of the Center on Budget and Policy Priorities: "Trump budget offers stark vision."


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Lawmakers must reinvest in WorkFirst to restore the promise of basic support to families facing poverty

Posted by Melinda Young-Flynn at Jan 30, 2018 04:15 PM |
Filed under: Poverty, Economic Security
By Julie Watts, deputy director
 
We all want to live in a state where, when people fall on hard times, they don’t go without the basics – food, shelter, and necessities of daily life that allow them to look for jobs and get back on their feet. WorkFirst, Washington state’s Temporary Assistance for Needy Families (TANF) program, is the main way our state protects children and families from the trauma and debilitating effects of poverty.
 
WorkFirst not only provides basic assistance to families in crisis, but it also is supposed to ensure they can move out of poverty through job training, child care, mental health, and support services.(1)

However the program is headed in the wrong direction. As a result of harmful policy changes and budget cuts over the last decade, the program is serving a smaller portion of families in poverty than it was a decade ago. Lawmakers must make investments in WorkFirst to reach more families living in poverty and provide families with more help.

Today, WorkFirst helps only 25 families with children for every 100 living in poverty, down from 50 families for every 100 in 2008. (See graphic below.) The sharp, alarming decline in the number of families being helped by WorkFirst has been driven by dramatic cuts in funding. Since 2008, lawmakers have cut state funding for the program by 47 percent (adjusted for inflation), or $179.6 million, and used those funds to plug holes in other parts of the state budget.

Click on image to enlarge.

 WorkFirst

Further, beginning in 2010, the governor and the state legislature made changes to the program that made it harder for families who were playing by the rules and meeting program requirements to get extensions to time limits. The changes also punished whole families (including children) when a parent failed to meet program requirements and gave families less time to come into compliance before they are cut off the program. Policymakers also cut the amount of cash assistance families could receive even as the cost of living was rising.

These decisions had a far more damaging impact than anyone anticipated. They sent the caseload into a free fall that continues today.

State lawmakers should make sure any new savings in the WorkFirst program that result from fewer families being served are reinvested to serve more families this legislative session. They must make sure that when families fall on hard times in Washington, they don’t go without the basics.

For more detailed recommendations on how to improve WorkFirst, see our policy brief, "Reinvest in WorkFirst: How we can restore the promise of basic support to Washington families facing poverty." 

[1] In addition, a portion of the state’s WorkFirst caseload are “child-only” cases – children who are living with a family member other than their parents or children who are living with parents who are not eligible for TANF.

 

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State legislators should focus on advancing shared prosperity during 2018 legislative session

By Misha Werschkul, executive director

As legislators convene in Olympia for the start of the 60-day state legislative session, the Washington State Budget & Policy Center encourages them to approach every budget-related policy decision this year by answering one critical question: Does this policy help put our state on a path toward an inclusive economy that promotes shared prosperity and advances racial equity?

At the Budget & Policy Center, our 2017-19 legislative agenda aims to meet that goal. We know that in order to build prosperity and to advance equity in our state and our economy, policymakers must keep the well-being and economic security of all Washingtonians top of mind. 

We are pleased that a number of our policy priorities advanced during the 2017 legislative session. In particular, elected leaders rightly strengthened supports for families to meet basic needs, closed outdated tax breaks like the sales tax exemption for bottled water and a tax break that largely benefited oil refineries, and approved paid family and medical leave. This progress is thanks in no small part to the work of community organizations, advocacy groups and everyday Washingtonians from across the state. [See the links at the end of this post for more details about our policy priorities that advanced in the 2017 session.]

Now, in 2018, elected leaders must take additional steps to ensure our state budget delivers on the values of our great state. They can no longer leave undone the important task of cleaning up our upside-down tax code – in which the wealthiest people pay the least state and local taxes as a share of their incomes. Cleaning up the tax code will help ensure our state has the revenue to pay for investments in great schools and strong communities. The stakes are higher than ever given that the U.S. Congress has passed new tax breaks benefiting the wealthy and profitable corporations and hasn’t acted to reauthorize funding for the Children’s Health Insurance Program.

When legislators convene in January, they should:

  • Ensure there is ample and equitable funding to raise the salaries of public K-12 teachers, as required by the state Supreme Court, in time for the 2018-19 school year.
  • Support strong investments in our communities and the well-being of Washingtonians into the future by: helping more kids get access to our successful state preschool program, the Early Childhood Education and Assistance Program, by expanding eligibility; passing “breakfast after the bell” legislation that supports student health and readiness through nutrition; increasing supports for people experiencing economic insecurity, homelessness, and behavioral health challenges; protecting health care funding provided by programs like the Affordable Care Act and Apple Health for Kids; and taking steps to correct the short-sighted fixes and accounting gimmicks from the 2017-19 biennial budget.
  • Enact long-term solutions to fix our upside-down tax code by: closing the tax break on capital gains; making the tax on sales of real estate more equitable by reducing the tax rates on the sale of lower-valued properties and increasing the rates applied to properties that sell for more than $1 million; and boosting the incomes of hardworking families through the Working Families Tax Rebate

As a result of the special election in November, the makeup of the legislature, the leadership in the Senate, and the people on the budget-writing committees are different than at the close of the last legislative session. This legislature has a fresh opportunity to set our state on a path toward prosperity and an inclusive economy through our state budget. 

See our Progress in Washington 2018 report, “Building an Inclusive Economy,” for more details on how our state is faring when it comes to building an inclusive economy. And read more about our policy priorities that advanced in the 2017 legislative session in the following schmudget blog posts:

 

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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

Misha TVW
Watch our 2018 legislative session testimonies on TVW: