DC TANF Program Short-Changed Core Purposes

April 23, 2015

My last post focused on the “cautionary tale” we can find in how states spent their Temporary Assistance for Needy Families funds. Now here, as promised, is what we learn about the District of Columbia’s TANF spending.*

The figures are somewhat dated, but they’re still relevant to decisions the DC Council must make as it works on the Mayor’s proposed budget for the upcoming fiscal year.

The District reported $254 million spent on TANF in 2013. Twenty-three percent went for cash assistance. This is a tad higher than the percent reported for 2012. But a family of three was still left at 26% of the federal poverty line. And that’s about where it is now, unless it’s one of the 6,300 families whose benefits have been cut three times already.

They’ll get zero, come October if the Council doesn’t approve the Mayor’s proposal to give them a one-year reprieve. Even if it does, our three-person family will have to get along somehow on $156 a month — roughly 9% of the current FPL.

The Bowser administration justifies the reprieve on the basis of continuing weaknesses in the employment component of the District’s TANF program.

I’ve previously reported the results of an audit that focused on outcomes for the parents facing benefit cut-offs who were actually referred to a contractor for job training and/or help in finding a job. Not encouraging.

But there are two other parts to this story. One is that some parents have had to wait for nearly a year to get those job-related services. This may be in part because the Gray administration froze additional funds for them.

And that’s perhaps because the Department of Human Services didn’t spend all the TANF employment funds in its budget, according to the new director. We certainly see what seems to be under-spending in the Center on Budget and Policy Priorities report I’m using here.

Only 15% of TANF funds spent on work-related activities in 2013. And even this was a marked improvement over 2012, when only 7% went for what surely ought to be a top priority for a TANF program.

At the same time, the District spent an unusually low percent of its TANF funds on administration and systems — 2%, as compared to a nationwide 7%.

This matters because the DC Council enacted exemptions from the benefits phase-out for families facing specified hardships, i.e., difficulties, beyond the usual, that parents would face trying to support themselves and their kids.

One, added for the current year, would temporarily stop the time clock for mothers with infants to care for. But the department hasn’t actually granted this exemption. The reason, we’re told, is that it doesn’t have the computer capacity to suspend time-counting for the moms and their babies.

I personally believe that the TANF time limits merit rethinking altogether. DHS itself is looking into a policy that would convert the one-time hardship exemptions for at least some of the designated families and perhaps others into hardship extensions, as federal law has always allowed.

But that’s not even on the drawing board yet. The proposed reprieve is on the Council’s must-decide agenda.

A rollback of the benefits cuts should be too, given what we know about job training waiting lists — and the many months families had to wait for the assessments used to decide what training and/or other services they should get to give them a reasonable chance of success in the workplace.

Beyond these obviously urgent issues, the Council should, I think, take a hard look at how DHS spends its TANF dollars. In 2013, the department spent nearly as much on “non-assistance” as on work activities. What’s in this catch-all category is a mystery. Not the department’s fault, but rather a flaw in the U.S. Department of Health and Human Services’ reporting format.

The new DHS director, unlike her predecessor, shared a break-out of TANF spending with parties interested enough to have attended a recent briefing. Some money here, some there, some someplace else.

I doubt the Council has ever delved into the dispersal of TANF funds. Every dollar may support something worthwhile. But the mechanism is hardly responsible — let alone transparent — budgeting.

And it inevitably diverts funds from cash support for very poor families and from work-related services that can help the parents get to the point where they can pay for their families needs.

These, I think most of us view as core purposes of the TANF program. And both the CBPP report and everything else we know suggests they’re being shorted.

* The TANF funds spent include the District’s federal block grant share and what it claimed as its maintenance of effort, i.e., what it spent of its own funds, plus funds that some nonprofits spent on at least on of the program’s four major goals.

UPDATE: Shortly after I finished this post, I learned of a petition the Fair Budget Coalition has created to drum up Council support for the proposed reprieve. Some on the Council, I’m told, are in need of persuasion. So I hope those of you who are District residents will sign. You’ll find the petition here.


Not Much Spent to Move Families From Welfare to Work

April 20, 2015

Nothing new in the big picture we get from the Center on Budget and Policy Priorities’ update on how states spend their Temporary Assistance for Needy Families funds. But even the same-old is timely, both because of what’s going on at the federal level and because we’ve got things brewing here in the District of Columbia.

I’m going to split these into two posts because the pressing issues are as different as the proclivities of the majorities in the Capitol building and those of the leaders in the city its dome looms over.

State spending and the federal policy implications first.

As you may know, Republicans on Capitol Hill — and conservatives they listen to — still view TANF as the model anti-poverty program. Time limits, rigid work requirements, lots of state flexibility and an ever-diminishing fraction of the federal budget. What’s not, for them, to like?

So we see another House budget plan that would convert both Medicaid and SNAP (the food stamp program) to block grants somewhat like TANF. States would get a fixed amount of funding, no matter what befalls their economies or drives up needs for other reasons. They would have the flexibility to reduce benefits and/or further restrict eligibility so as to manage with what they get.

States have had such flexibility — and then some — since welfare as we knew it ended in 1996. And they’ve received the same dollar amount in block-grant funds ever since.

Most of us, I think believe TANF should do two main things. It should provide a safety net for poor families with children. And it should help the parents get to the point where they can earn enough to pay for their families’ needs.

Yet states spent, on average, 28% of their TANF funds* on cash assistance in 2013, the latest year the U.S. Department of Health and Human Services has reported figures for. Even states that spent higher percents provided benefits too low to lift a family of three out of deep poverty, i.e., above 50% of the federal poverty line.

More remarkably, states spent, on average, just 8% of their TANF funds on work activities and supports to make participating in these activities possible, e.g., childcare subsidies, transportation.

Large disparities among states, as you might imagine. Yet every state spent at least some funds on programs not exclusively — or even primarily — for TANF-eligible families, e.g., child welfare services, Earned Income Tax Credit refunds, early childhood education.

However worthy these may be, states seem to be using their flexibility to shore them up at the expense of essential supports and services for TANF families. A dozen states spent at least half their TANF funds this way.

In short, a “cautionary tale,” as CBPP calls this prime example of the block-granting approach to safety-net programs.

* Here and throughout this post, TANF funds include federal block grant funds and what states claimed as their maintenance of effort, i.e. what they spent of their own funds and, in some cases, funds that nonprofits spent on any of the program’s four major goals.


Another Take on the Proposed DC Sales Tax Increase

April 16, 2015

The DC Fiscal Policy Institute makes a case for the proposed increase in the District of Columbia’s sales tax. It’s persuasive. And the more I’ve thought about it, the more I’m persuaded that the increase will serve the interests of some of the District’s poorest residents better than a campaign to replace it.

So, in a semi-retraction of my earlier post, here’s what DCFPI says, fleshed out for those who haven’t been immersed in the issues and punctuated with remarks of my own.

The increase is very small. It would add a quarter of a penny per dollar to the purchase price of anything subject to the sales tax. DCFPI has figured that poor families would probably have to pay at most $25 more a year.

The District needs additional revenues for homeless services. The Mayor has said that the additional tax revenues would fund the first steps in making reforms laid out in the new strategic plan adopted by the Interagency Council on Homelessness.

Her budget would, among other things, provide more permanent supportive housing for chronically homeless individuals and families with a chronically homeless adult member.

It would convert a pilot rapid re-housing program for individuals into a regular program and expand it so that more of them who don’t need PSH could move from shelter into housing they’ll be able to afford — at least, till their short-term subsidy expires.

It would create some new, specially-targeted housing vouchers for individuals and families who no longer need the intensive services PSH provides, but can’t afford market-rate rents. Individuals and families who come to the end of their term in rapid re-housing, but still can’t afford those rents would also be eligible for the vouchers.

The budget would also dedicate funds to begin the process of closing the over-large, decrepit DC General family shelter. About $4.9 million would pay rent to landlords who’ve offered up units — thus moving 84 families into more habitable living quarters swiftly.

All worthwhile investments, I think you’ll agree.

Other recent changes in the District’s tax code would more than offset the increased sales tax burden on lower-income residents. The DC Council enacted a higher standard deduction for income taxes last year. It expanded the Earned Income Tax Credit for childless adults, enabling them to get the same credit as from the federal EITC.

And it raised the income threshold for Schedule H property tax relief, which benefits renters, as well as homeowners. Elderly residents get a higher tax credit too.

Now, of course, residents with no earned income and not enough income from any other source to owe income taxes or pay rent won’t benefit from these changes. But “a large share of lower-income households” would come out ahead, even with the sales tax increase, according to DCFPI.

The Tax Revision Commission recommended the increase. Now, the Commission need hardly be the last word on the District’s tax policies. In fact, at least one of its recommendations made me cringe — a five-fold, plus increase in the dollar value of estates exempt from our local estate tax. (DCFPI didn’t like this either.)

At the same time, the Commission’s recommendations have credibility where it counts. The income tax and EITC changes I mentioned above originated with the Commission. So from a political perspective, the sales tax increase stands a better chance in the Council than some more progressive revenue raisers coming out of left field (pun intended). And we already have some evidence that any increase is likely to encounter headwinds.

The increase would make the sales tax rate the same as Maryland’s and Virginia’s. The point, I think, is not that the District should model its tax policies on its neighbors’. It’s rather that the new sales tax rate wouldn’t be higher than theirs — and thus tend to shift retail purchases across the borders.

Perhaps DCFPI is also giving preemptive reassurance to Councilmembers who’ve used Maryland and/or Virginia tax rates as arguments against tax increases here. Whether this strategy will work remains to be seen. It doesn’t seem to have gotten Finance and Revenue Committee Chairman Jack Evans on board. Nor will it, I suspect. But he’s only one Councilmember out of what will soon be twelve.

Bottom line: I doubt the Council will adopt an alternative, more progressive revenue raiser to support reforms in our homeless services system. And I’m quite sure it won’t shift nearly $19 million from other programs to support them while leaving revenues alone.

If we want those homeless service reforms, then we’ve seemingly got to settle for a less than ideal way of getting money for them. And this won’t be the end of the story anyway because the sales tax revenues won’t cover the costs of putting all those needed reforms in place.

 



Public Housing Policies Deny Second Chances to Ex-Offenders

April 9, 2015

The Washington Post recently told the story of a highly-qualified woman who’s had difficulties getting — and keeping — jobs because she committed a crime 25 years ago. We’ve had quite a few such stories, plus reports, conferences and the like.

But a criminal record — not necessarily a conviction — can effectively condemn a low-income person to homelessness in another way. And homelessness can propel the person back into the criminal justice system. Congress bears some share of the responsibility for this, but not as much as public housing authorities.

Federal law prohibits PHAs and private-sector owners of federally-subsidized housing from accepting as tenants people who’ve been convicted of certain sex offenses or of manufacturing methamphetamine in federally-assisted housing.

The ban applies to these ex-offenders not only as renters, but as members of households that could otherwise qualify. Generally speaking, PHAs must also impose a three-year ban on people who’ve been evicted because of a drug-related crime.

Both PHAs and the federally-assisted project owners must have written policies specifying how they will screen applicants and decide whom to house. These must include the aforementioned bans. They must also comply with some legal limits, e.g., the anti-discrimination provisions in the Fair Housing Act.

But within these bounds, PHAs and project owners can exercise discretion. And that, all too often, means denial, as a new report from the Shriver Center on Poverty Law shows.

The researchers reviewed more than 300 policies. They found a goodly number that use their permissible discretion — even exceed it — to deny housing to people who pose no manifest risk to tenants, employees, the owners themselves or the property.

Nor do they establish a legitimate basis for determining that the screened-out people would adversely affect the “right to peaceful enjoyment of the property” — a screening criterion the law allows.

The report identifies four major ways policies deny affordable housing to people who deserve a second chance, as well as some that shouldn’t need it.

Unreasonable lookback periods. The U.S. Department of Housing and Urban Development expects policies to set a reasonable lookback period, i.e., time limit, for the criminal history they’ll consider relevant.

But some policies have no time limit — or even expressly establish lifetime bans beyond those federal law requires. Some others look back as far as 25 years. So an applicant in his early 40s could be rejected because he got into a gang fight as a teenager.

Use of arrests as proof of criminal activity. The law allows PHAs and project owners to screen out people who’ve “engaged in” certain criminal activities, rather than only those who’ve actually been convicted.

Some policies expressly deny housing on the basis of arrests. Others treat arrests as evidence, though not necessarily conclusive proof of criminal activity. In either case, people are guilty, even if a judge or jury has found the contrary — or even if they were never tried.

Knowing, as we do, how our criminal justice system sweeps in a far higher proportion of blacks than whites, these policies arguably violate not only the Fair Housing Act, but similar state laws or provisions in their broader civil rights laws.

Overbroad categories of criminal activity. The law apparently envisions policies designed to protect tenants and others on covered housing properties from harm, truly intrusive disruption — or in the case of drug felonies, perhaps temptation.

Some policies go much further, effectively banning people with a record of any felony whatever — or in fact, no felony, but a misdemeanor, e.g., trespassing, urinating in public.

You see what a catch-22 we have here. Homeless people who’ve got no place to take a pee, except in an alley or behind a bush denied housing because some police officer decided to run them in.

Underuse of mitigating circumstances. The law requires PHAs to consider mitigating circumstances if applicants appeal denials based on their criminal records, i.e., reasons the crimes don’t reflect their current or likely behavior.

These may include gainful, legal employment, participation in a job training program or some other program designed to help ex-offenders stay on the straight and narrow, a strong support network or even simply the fact that the crime was committed a long time ago and says nothing about suitability as a tenant now.

Both PHAs and project owners may consider such circumstances in their initial screenings. Policies reviewed indicate that some PHAs do, while others don’t even acknowledge the opportunity to ask for reconsideration.

Nearly four years ago, HUD urged PHAs to exercise their discretion in ways that would tend to give ex-offenders second chances. “A place to live,” its letter said, is “one of the most fundamental building blocks of a stable life.”

The PHAs “essentially … put it in their pocket and continued to deny people housing,” says the Shriver Center’s Director of Housing Justice.

The new report is primarily a message to HUD, which, it says, should step up the pressure. But we can use it as a lens to screen our local PHAs’ screening policies and practices.

The latter could well include what pressure, if any they exert on project owners that won’t rent to people who may — or may not — have committed a crime. There’s obviously a role here for our civil rights enforcement authorities too.

And for our policymakers, who need to step up funding so there’s room in public and other subsidized housing for everyone who needs it, including those who deserve a second chance.


Should DC Raise Its Sales Tax to Help End Homelessness?

April 6, 2015

As you may have read, Mayor Bowser has proposed a quarter of a percent increase in the District of Columbia’s sales tax to raise revenues for homeless services. The new rate would be 6%, as it was from mid-2009 until October 2013.

The bump-up would raise an estimated $22.2 million in the upcoming fiscal year and slightly more in each of the three out-years the budget must project. About $18.7 million would move the District toward the goal of ending homelessness.

One of those quick, easy Washington Post online articles asks whether Bowser should be increasing the sales tax — quick and easy because it consists mainly of imported tweets. But it poses a good question. And we’re bound to hear more answers than we already have.

Here’s how I see the issue at this point.

For the Sales Tax Increase

The best argument in favor of the increase is that the District needs more money to reduce homelessness — let alone to make it “brief, rare, and non-recurring,” as the new strategic plan intends.

The DC Fiscal Policy Institute gives us an itemized account of $12.7 million in spending on plan priorities that the sales tax increase would apparently cover.* The remainder of the $18.7 million would give about 6,000 families a yearlong reprieve from the impending cut-off of their Temporary Assistance for Needy Families benefits.

Many are homeless already. But the reprieve is still a fair, sensible preventive measure if ever there was one. It would be even more effective (and fairer) if the budget rolled back at least some portion of the earlier benefits cuts that have left the families with a pittance.

Against the Sales Tax Increase

DC Council Chairman Phil Mendelson was quick off the dime. “When revenues are growing by 3 percent,” he told reporters, “you don’t need to be raising taxes.” This, however, assumes that projected revenuessans tax increases, will be enough to pay for all critical needs.

Tackling the large, complex homelessness problem is, of course, only one of them. Perhaps Councilmembers can carve out sufficient funding from other programs, but neither he nor anyone else knows that now. And it’s not what he’s saying.

What he also says, however, raises what’s probably the most significant objection to the sales tax increase — and to sales taxes generally. They’re regressive, i.e., take larger shares of income from lower-income people than from those who are wealthier.

The District’s sales tax isn’t as regressive as some. I recall my shock when I moved from Berkeley, California to St. Louis and discovered that I had to pay tax on food I bought at the grocery store and on over-the-counter medicines.

The proposed increase would nevertheless require anyone who shops in the District to pay somewhat more for items that are also basic necessities — toilet paper, soap, light bulbs, shoes, etc. Most shoppers who’d take the hit are District residents.

DCFPI’s Executive Director, Ed Lazere, puts the best face on this he can, telling a Washington Times reporter that the effect on families is likely to be modest — a point the Institute’s budget brief repeats.

But, he adds, “All things being equal in a city that is marked by increasing income inequality, it probably would have been reasonable to raise revenues by asking those with the highest incomes to pay a little bit more.”

Alternative Revenue Raisers

Now, I don’t have anything like the expertise to say how the District could raise at least as much revenue as the proposed sales tax increase in a more progressive way. But I can draw on concepts experts have floated.

You who follow this blog know I’m about to get on my hobby horse and cite services that are still exempt from the sales tax. All but six in the long list DCFPI compiled in 2010 still are. And the vast majority of them can hardly be viewed as basic necessities.

Our property taxes are also worth a look. We have some extraordinarily pricey homes here in the District that are taxed at the same relatively low rate as small, unrenovated homes in our as-yet ungentrified neighborhoods.

And the tax collected doesn’t capture their actual increasing value because residential property tax increases are capped. Owners who live in those homes most of the year also benefit from reduced assessments.

I understand the need to craft a property tax increase carefully so as to protect low-income owners who bought their homes many years ago, before housing prices soared. But I think it could be done.

What surely could be done is to repeal the recent property tax break for seniors with incomes far from low. This beneficiary would willingly forfeit it to help fellow residents with no homes whatever.

There are probably other — and perhaps better — alternatives. But whatever the DC Council may consider will raise outcries from some interested parties. That’s just how revenue policymaking works. As former Senator Russell Long quipped many years ago, “[D]on’t tax you, don’t tax me, tax that fellow behind the tree.”

In the immediate case, I hope that fellow behind the tree won’t be a mother who already can’t afford to buy enough diapers.

That said, it may be wrong to frame this issue as an either-or choice. DCFPI cites several priorities that could require more revenues than the sales tax hike would raise. Two speak directly to homelessness — the rollback of the TANF benefits cuts and additional locally-funded housing vouchers.

More generally, I suspect that dedicated sales tax revenues will fall far short of the funds needed to end long-term homelessness in the District within five years — even if budgets continue to ensure $100 million a year for the Housing Production Trust Fund.

I note that the Mayor’s State of the District address pushes the target year forward to 2025. Doubt this is just a slip by her speechwriter.

* As DCFPI notes, the Mayor’s budget includes $40 million to construct some smaller shelters — a step toward replacing the DC General family shelter. The money would be borrowed, however, not drawn from sales tax revenues.

 

 


CHIP Renewal: Will the Perfect Be the Enemy of the Good?

April 2, 2015

Last week, the House passed a bipartisan (yes, really) bill that would, among other things, extend the Children’s Health Insurance Program for two years, with the higher matching rate that was part of the Affordable Care Act. The Senate will vote on the shortly after members return from their two-week break.

The bill is far from perfect. CHIP supporters and others of progressive leanings will have to decide whether — and at what point — to say it’s good enough.

A Lot at Stake and the Outcome Uncertain

Some Senate Democrats, urged on by lead children’s advocates, have insisted on a four-year CHIP extension. That would, of course, tend to avert another go round in 2017, when we could have a Republican President. And it would enable states to plan for the longer term.

But withholding support for the package could kill it, especially because it’s under fire for reasons that have nothing to do with CHIP, e.g., an offset that would raise Medicare premiums for better-off beneficiaries, the usual ban on using federal funds for abortions, except in certain limited cases. And, of course, some of those self-identified deficit hawks object because the costs aren’t fully offset.

Defeat of the bill would leave not only CHIP imperiled, but also other programs that benefit low-income children, including the Maternal, Infant and Early Childhood Visitation program, the Transitional Medical Assistance program and a provision in the ACA that funds community health centers.

Why the Bipartisan Deal Now?

As I’ve written before, CHIP will receive no more federal funding after September unless Congress extends it. That, however, is not why we’ve got votes on an extension now. There’s an urgent need, as there is virtually every year, to prevent the Sustainable Growth Rate from taking effect.

Congress enacted the SGR nearly 20 years ago in an effort to control Medicare costs. It provided a formula to curb spending on physicians’ services to Medicare beneficiaries.

But physicians claimed — perhaps, in some cases, rightly — that the reimbursements wouldn’t even cover their costs of providing care. So Congress temporarily suspended the SGR, but left the provision otherwise intact.

And it’s done the same ever since, allowing instead very small — or in some years, no — rate increases. The so-called doc fix has become increasingly necessary because, without it, all the annual rate reductions would take effect. Doctors are thus hypothetically facing a rate cut of 21% — hypothetically because, of course, Congress won’t let that happen.

The package now pending in the Senate would, at long last, repeal the SGR, but not the intent because it establishes a new reimbursement rate scheme.

Risks for CHIP

We’ll, of course, have another doc fix if the final package doesn’t pass. But we can’t count on full funding for CHIP — let alone, at the higher matching rate. For one thing, a bill brewing in the Senate would not only repeal that rate, but cut program funding in several other ways.

For another, we’ve now got a House budget plan that would fold CHIP into the same block grant as Medicaid. States would thus have to cope with an ever-greater funding squeeze. And they’d have the “flexibility” to eliminate benefits and/or beneficiaries.

Fund Cut-Off for Home Visiting Programs

Meanwhile, funding for MIECV would remain in limbo. And it expires at the end of this month. The pending bill would extend it until October 2018, at the same funding level it has now.

The program is quite small. It has nevertheless helped agencies establish and expand programs that offer poor and other at-risk pregnant women and parents of young children the opportunity to have trained professionals come to their homes, assess their family’s needs and then provide and/or refer them to a variety of services.

These include, but are by no means limited to health-related services, e.g., advice on infant care and child nutrition, screenings for developmental disabilities.

States reported serving about 115,000 families last year — surely a small fraction of those that could benefit. Hard to believe that as many would be served if Congress lets funding for the home visiting program dry up.

Other Health-Related Programs

The bill would convert two time-limited healthcare law programs that benefit low-income people into permanent law.

One — Transitional Medical Assistance — enables families to temporarily remain in Medicaid after they’ve moved from welfare to work. That move can happen when they’re by no means earning enough to afford other health insurance because state income eligibility thresholds for welfare, i.e., Temporary Assistance for Needy Families, are so low.

TMA doesn’t altogether take care of the problem, especially in states that have refused to expand their Medicaid programs. But it gives parents some additional time to increase their income — or find an employer that offers health insurance they can afford.

The other program provides states with funds to pay for the Medicare Part B premiums of qualifying individuals. Since I’m focusing here on support for children’s health and wellbeing, I’ll refer those interested to a short, clear summary by the Center on Budget and Policy Priorities.

Lastly, the bill would extend the funding for community health centers initiated by the ACA. It’s helped support preventive care and treatment for 21.7 million people, according to the latest (somewhat outdated) figures from the U.S. Department of Health and Human Services. Nearly a third of those people were children.

A Difficult Balancing Act

What all this means, I think, is that advocates for children — and for appropriate, affordable health care generally — have to balance priorities and prospects. They understandably want CHIP funded at the higher matching rate for the full four years the ACA envisions. Backing off now could doom efforts to get that in the Senate.

On the other hand, once Congress has taken care of the SGR problem — permanently or just for another year or two — chances it will renew CHIP at the higher matching rate don’t look good. What will happen to the other programs that benefit low-income children is a question mark.

Recall that both House and Senate Republicans seem set on drastically reducing federal spending (except for defense, of course). Not a good time to leave some many healthcare programs for vulnerable people wide open.

 

 

 

 


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