Reading the Fair Budget Coalition’s New Report

March 14, 2013

The Fair Budget Coalition released its eighth annual report last week. As in the past, the Coalition recommends specific funding and other policy priorities for the District of Columbia’s next annual budget.

There are 33 recommendations in all — nearly half of them related to housing. The remainder address jobs, health, safety and revenues.

No way I can cover so many and diverse recommendations in a post. And at this point, I don’t want to pick and choose.

So let me instead share some thoughts I had as a read the report.

Growing income inequality is one of the District’s biggest challenges.

The District’s poverty rate remains considerably higher than the rate before the recession set in. And that was pretty high.

But the overall rate — 18.7% — is an inadequate measure of the challenges our policymakers face if, as Fair Budget proposes, they choose to “advance dignity and equity for all.”

For one thing, the poverty rate masks huge disparities. The poverty rate for black residents, for example, is more than four times the rate for those classified as white/non-Hispanic.

Not coincidentally, the poverty rate for the Census Bureau’s “micro area” that’s mostly Wards 7 and 8 is 34.3%, as compared to 9.6% in the area that’s mostly upper Northwest.

As I’ve written before — probably too many times — the official poverty rates are based on an outdated, over-simple measure. So they egregiously fail to reflect the hardships low-income people struggle with, especially in a high-cost city like D.C.

Consider, for example, that the median income for all the District’s black households was only $39,302 last year — about $19, 140 less than what would make a modest two-bedroom apartment affordable.

Meanwhile, the wealthiest households were doing very well indeed. In 2009, the top 5% had incomes averaging $436,900 — 25.7 times greater than the average for households in the bottom fifth.

The District has done more to address the hardships of low-income people than most jurisdictions.

We see this very clearly in the recommendations themselves.

One set, for example, calls for targeted expansions of the Local Rent Supplement Program — a housing voucher program the District established to supplement the woefully under-funded federal equivalent. Only four states have voucher programs like this.

Another recommendation asks for continuing adequate investments in the DC Healthcare Alliance — a program the District created to provide affordable health care to residents barred from Medicaid under federal rules.

For perspective on this, look at the states that won’t expand their Medicaid programs now, even though the federal government would pick up all the initial costs — and all but 10% for the long term.

Recent budgets have short-changed programs that serve low-income residents’ needs.

Like state and local governments across the country, the District had to cope with revenue losses due to the recession. And, like most, it decided to cope mainly by cutting spending rather than raising more money through tax policy changes.

So some safety net programs, e.g., homeless services, didn’t expand as they should have to meet increased recession-related needs. Others that could have helped low-income residents support themselves and their families were actually cut.

As I’ve written (and written), the District decided to start phasing out benefits for families who’d participated in the Temporary Assistance for Needy Families program for a lifetime total of more than five years — even though officials knew the program had failed them.

Also knew that even well-trained people with substantial work experience were having a hard time finding employment unless they had at least a bachelor’s degree.

Meanwhile, the budget for child care subsidies was cut by a total of $30 million, making it difficult for low-income parents, especially those with infants and toddlers, to manage full-time jobs.

Funding for adult education was also cut, significantly limiting opportunities for the very large number of working-age residents who are functionally illiterate and others who aren’t, but lack a high school diploma or the equivalent.

The District now has an opportunity to rebuild and expand.

The District weathered the recession much better than many jurisdictions. And its economy has bounced back nicely.

Even the super-conservative Chief Financial Officer now projects $190 million more in revenues for the current fiscal year and nearly $178 million more for the upcoming fiscal year, when he (and everyone else) expects the District to experience greater impacts from the across-the-board cuts in federal spending.

The Mayor and the DC Council will still have to make choices. That’s what budgeting is about.

But they can, if they choose, invest more in programs that will alleviate the hardships of the have-nots and support their aspirations to share the opportunities and decent standard of living that many of us take for granted.

And I believe a large majority of the community would support this.

Those who do need to let the Mayor know ASAP. Fair Budget has an editable e-mail we can use.

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How to Narrow the DC Income Gap: Some First Steps

March 29, 2012

As I recently wrote, the DC Fiscal Policy Institute has issued an eye-opening report on income inequality in the District of Columbia.

It’s got some recommendations for narrowing the income gap between the richest and the poorest. No revolutionary attack on “the system” that’s enriching the top 1% at the expense of the rest of us.

Instead some modest, politically-feasible our steps our local government could take right now to lift the incomes of some portion of the bottom 20% — now, on average, well below the poverty line.

With two limited exceptions, the recommendations address policies and programs already in place. As so often in the District, it’s the funding that’s wanting — and for the most part, will be wanting if the DC Council approves what Mayor Gray has proposed.

Bigger budgets for the initiatives would help achieve three objectives.

Help Residents Prepare for Living Wage Jobs

One initiative DCFPI cites is the recently-established workforce intermediary pilot. When/if implemented, the intermediary would get training programs better tailored to local workforce needs and then refer qualified candidates to employers.

Mayor Gray’s Fiscal Year 2013 proposes $1.6 million to “fully fund the creation of the pilot.” Unclear, at least to me, whether this means we’d have an ongoing, fully functional intermediary.

The second initiative is the unfolding redesign of the Temporary Assistance for Needy Families program. Participants are to get in-depth assessments of their strengths and needs, then be linked to appropriate services and a broader range of work-preparation opportunities than was previously available.

The problem here, as I (and others) have mentioned before, is that the current law calls for a phase-out of cash benefits for long-term participants who’ve had no opportunity to benefit from the improvements. It also fails to carve out needed exemptions, as federal rules allow.

Unfair and very unwise, given all we know about the lifelong disadvantages children suffer when they grow up in poverty.

Address Housing Concerns

The “concerns” here are budget cuts to the District’s main affordable housing programs.

One — the Housing Production Trust Fund — was all but gutted last year, stalling numerous projects to develop and preserve housing that low and moderate-income residents could afford.

The other — the Local Rent Supplement Program — provides housing vouchers residents can use to rent apartments on the open market.

It would need regular budget increases just to keep pace with rising rents. It hasn’t gotten them and now reportedly has a shortfall that could leave more than 500 households with no more rental assistance.

The Mayor’s proposed budget addresses the shortfall — by once again raiding the Trust Fund. Says he’ll put the money back if revenues come in substantially higher than projected. Well, he agreed to something similar last year. And the Trust Fund got zip.

Make Work Pay Better

DCFPI focuses on the District’s living wage law, which establishes a higher minimum wage requirement for employers that benefit from District government contracts and/or various types of financial assistance worth $100,000 or more.

The law, DCFPI says, needs to be more strictly enforced, suggesting that the District has finally gotten around to enforcing it at all. DCFPI also recommends expanding the law. No details here.

Other Work-Related Needs

The DCFPI recommendations are, as I said, very modest. And with the exception of affordable housing funding, they’d help only those in the bottom fifth who work or potentially could work if properly trained.

Even for this group, the District could — and should — do more. But the Mayor doesn’t see it that way.

For example, as the Fair Budget Coalition notes, child care programs have been cut by more than $20 million in the last five years. The Mayor’s proposed budget cuts an additional $5.7 million from child care subsidies.

Without funding to increase provider reimbursement rates, low-income parents with little kids may have no choice but to stay home.

Funding for basic adult education has also been cut. Two years ago, programs funded in part by local taxpayer dollars served only 8% of need — this when more than one in three¬† D.C. adults is functionally illiterate.

How many aren’t working because they can’t read even well enough to fill out a job application? How many are stuck in part-time, minimum wage jobs because they can’t pass the GED exams?

How many more will be stuck if the Council approves the Mayor’s proposed $950,000 cut for adults and family education?