The District’s approach to public assistance has undergone significant changes to make the transition from welfare to work better for families, but there are some cases in which major barriers cannot be removed so easily, such as domestic violence or serious family illness. In many other states, the time taken to address these difficult issues does not count against the five-year benefit limit on the program known as TANF, Temporary Assistance for Needy Families. This is a sensible approach, and the DC Council should put the $1.5 million needed in next year’s budget to make sure that parents are not forced to choose between a threatening situation and feeding their kids.

As it stands for next year’s budget, DC would send mixed signals to moms and dads trying to care for a seriously ill child. Here’s the problem:  the District doesn’t require families dealing with these circumstances to be looking for employment. These kinds of work exemptions are part of the TANF programs in nearly every state. Yet the family’s 60-month time limit clock would continue to run, even though most states stop the clock in these situations.

Last year, the DC Council agreed that these families should receive full benefits and a time limit break by including these protections in the adopted budget. But the Council put the money to make this happen on a contingent revenue list, meaning it would only be funded if additional money was identified by December 2012. This did not happen.

In these last few weeks, the Council’s human services committee was able to identify $4 million to fund some of what was passed last year, including protections for parents dealing with domestic violence, grandparents caring for grandchildren, and parents caring for a child under 12 months. An additional $1.5 million would cover the costs of the rest of the protections that the Council approved last year. For example, parents caring for a family member with a disability would be given the time to provide this care and to prepare for work after this care is no long needed. 

Without a time limit exemption, many families who have received an exemption from work requirements due to personal challenges will experience a steep cut in assistance in October. A family of three will see their benefits reduced to just $257 per month.  

DCFPI urges the Council to identify the additional $1.5 million needed to put these protections into the budget and to better align the time limit so that it only applies when families are able to prepare for work.

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Many hearts were broken to learn this year that 600 children were living in DC’s largest family emergency shelter. That crisis is still with us. With the District’s budget for 2014 about to be passed by the DC Council, it is time to take action so that the same problem won’t be repeated next winter. 

Today, a group of homeless service providers and advocates sent a letter to DC Council Chairman Mendelson and the rest of the Council, urging them to use final budget deliberations to put the District on a path to ending homelessness. There is broad agreement about the goals to focus on: opening access to shelter for families year-round, rather than restricting access to periods of cold weather; minimizing the length of time spent in emergency shelter; and reducing chronic homelessness. The letter highlights steps to address homelessness among families, single individuals, and youth. 

The good news is that steps already are being taken that will help reduce homelessness. Mayor Gray’s budget added funds for youth homeless services, emergency rental assistance, rent subsidies that flow through housing providers, and a program to move families out of shelter quickly. This past week, the DC Council identified additional funds for chronically homeless seniors, homeless LGBTQ youth, emergency rental assistance, and to create a “homelessness czar.” And Councilmembers Mary Cheh and Jim Graham just announced a broad plan to end homelessness. They should be applauded for setting a vision we can aim for. Their plan would be funded by applying the sales tax to online sales, assuming Congress adopts legislation to allow DC and the states to do so.  

But there is more the District can do to make progress now, including in the budget the Council will approve next week.   

Develop New Program Guidelines to Get Homeless Families into Housing Quickly:  A key tool to getting families out of shelter is “rapid re-housing,” under which families are moved into housing quickly and get rental help and services that last from one to two years. This may be enough to get many families back on their feet. The regulations for this program are published but not yet complete, and the program cannot be fully implemented until this is done. 

Expand Supportive Housing for Chronically Homeless residents:  A small share of homeless residents face challenges that can lead to long-term homelessness, such as severe mental illness. DC’s Permanent Supportive Housing program follows the successful “housing first” approach of placing residents into housing and then using that stability to address the challenges that led to homelessness. The plan of the Interagency Council on Homelessness to end chronic homelessness calls for $4.3 million in new funding for Permanent Supportive Housing in FY 2014, but so far the budget includes only $500,000 in new funding. 

Help Families with the High Cost of Rental Housing:  Efforts to reduce homelessness in the long-term must address the wide gap between low-wage work in DC and the very high costs of housing. A parent currently needs to earn $29 an hour to afford a decent two-bedroom apartment in DC, but nearly half of DC jobs pay less than that. DC’s Local Rent Supplement Program (LRSP) provides rent subsidies to either for-profit or non-profit developers to help make units affordable to low-income families or directly to families so they can afford the rent in private market housing.  There are no new funds for the tenant-based side of LRSP, which goes directly to families, in the proposed budget. This side of LRSP is critical because the housing assistance can be deployed quickly and help address some of DC’s immediate affordable housing needs. 

Keep More Residents From Losing Their Homes.  DC’s Emergency Rental Assistance program (ERAP) for families facing eviction should be modified to ensure it is targeting those most at risk and to better connect residents to services. Additionally under the current program, individuals without children are eligible only if they are seniors or have a disability. DC could pilot an ERAP expansion to cover low-income singles who are not elderly and without a disability but are at risk for homelessness.  

Coming together as a city to end family homelessness is something we should all rally around. It is time for the DC Council and Mayor Gray to start putting the pieces in place to make it a reality.  

The sign- on letter can be found here. 

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There’s been a lot of talk at the John A. Wilson Building about how to give financial assistance to one of our city’s most treasured assets:  our seniors. Yet instead of debating new proposals, the Council should first fund a proposal they have already passed, which would give property tax assistance to fixed-income seniors who need it the most. 

That legislation, which was approved but not funded late last year, is known as Schedule H. It is a property tax credit that helps low-and-moderate income residents who pay a large percentage of their income on property taxes or have substantial rent burdens, such as seniors on a fixed-income. 

This past December, the DC Council took an important step toward making this credit reach more residents who need it — they raised the maximum income from $20,000 to $50,000; raised the maximum tax credit from $750 to $1,000; increased the property tax equivalent for renters from 15 percent of rent paid to 20 percent of rent paid; and simplified complex rules that make it difficult for people sharing housing to qualify. 

There was only one problem with what the Council did:  they didn’t fund it! Instead, they passed the legislation “subject to appropriation,” meaning that they didn’t put dollars behind these great policy changes. 

So as the budget deliberations come to an end, the Council can accomplish tax relief for seniors by funding Schedule H. It will not only help the older generation of DC residents, but some of their children and grandchildren, too. In fact, once all of the changes to the property tax credit are phased in, it is estimated to reach a maximum of 125,000 residents across the city. 

By funding reforms to DC’s Schedule H property tax credit, the DC Council can direct resources towards those residents, both seniors and otherwise, who are most impacted by property taxes.

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As the DC Council nears its final deliberations on the fiscal year (FY) 2014 budget, there is plenty of back and forth on specific dollar amounts to spend. Yet there is general agreement that we should use our resources to assist residents who need help and provide it in a way that will be the most efficient and effective for our city. That’s why the Council should invest in a program that provides temporary assistance for residents with disabilities who cannot work while they apply for federal disability benefits, known as Supplemental Security Income (SSI). 

There’s several reasons to support full local funding this program, known as Interim Disability Assistance (IDA): it is humane, it is cost effective, and it is effective. IDA helps residents who are applying for federal assistance known as SSI, but who have not yet qualified for the program. 

Unfortunately, the Council has not focused on these important points. IDA is a worthwhile allocation of our tax dollars for these reasons: 

The SSI application process is not easy. Nationally, just one-third of SSI applicants are approved based on their initial application. The fact that DC’s success rate with getting IDA recipients on SSI is less than 100 percent reflects this difficulty, rather than an ineffective program. Applicants must complete a long written application, submit medical and vocational documentation, and often undergo special medical and psychological evaluations. The success rate increases when applicants receive outside help, such as the services of a pro-bono attorney. Many only receive benefits after completing a lengthy appeal process. 

The IDA recovery rate meets national standards. If the IDA recipient is approved for SSI, the federal government reimburses the District for 100 percent of IDA benefits. Right now, the District recovers approximately 40 percent of local funding through SSI reimbursement—in line with the national average and the Chief Financial Officer’s original estimates. The recovery rate is 40 percent because the application process is complicated. 

Program investments can make IDA even better. Currently, DC offers no application help to SSI applicants, despite the difficulty of the application process. Providing application assistance to SSI applicants can lead to quicker determinations and higher acceptance rates. Quicker determinations will reduce the number of months a recipient receives IDA, and higher acceptance rates will increase the amount of federal reimbursement the District receives. The mayor’s proposed FY 2014 budget includes $1 million to provide this assistance, but it is on the revenue contingency list rather than being actually funded. 

IDA is a humane way to help some residents with disabilities who cannot work. These residents are in limbo — they are unable to work and waiting to be approved for federal benefits, which can take a year or two, if not longer. IDA provides humane financial assistance during this period, helping residents meet basic needs, such as rent (often shared with others), prescriptions, and necessities like toothpaste. 

Without IDA, residents must rely on crisis services, costing the District government more. Lacking any income, these residents are unable to access the regular medical care they need. Instead they rely on DC’s emergency medical services, which leads to poorer health outcomes, a greater strain on our 911 system, and a greater cost to our government. Residents can also end up homeless. Without any financial assistance, these residents cannot qualify for many affordable housing programs because they require residents to have at least some monthly income. With IDA, residents can access these programs and move out of the emergency shelter system. 

IDA is a good investment in the well-being of residents with disabilities and for the city as a whole.

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This blog has been updated to correct that revenues collected from parking tax and not parking tickets could help replenish the Housing Production Trust Fund at the end of the fiscal year

Last week, District Dime readers, was a busy week for the Council as DC’s budget process marches forward.  The DC Council approved a supplemental budget for the current fiscal year – FY 2013 –and each Council committee held mark-up hearings to make changes to the proposed fiscal year 2014 budgets for several agencies.  The marked-up budgets now move forward to the full Council for consideration.   

Here is a run-down of some of the major changes that happened during the committee mark-ups, as well as summary of the changes made in the supplemental budget:  

Committee on Health:  Funding for the Department of Health (DOH) increased by $600,000, including $500,000 to increase efforts to manage and prevent chronic illness.  The remaining $100,000 will support efforts to increase farmers’ markets in areas of the city deemed to be food deserts.  In addition, the Committee also included language to monitor the recertification process for Alliance patients.  DCFPI and others have raised concerns about the process and adequate staffing.   

Committee on Workforce & Community Affairs: The Committee received transfers from several other committees that will help support increases in various programs, including $800,000 for the Office on Aging to support additional staff, social workers and grant funds; nearly $670,000 for the Washington Elderly and Handicapped Transportation Service; and $300,000 to the Department of Employment Services to revise an instructional programs that works to provide long-term support to people in apprenticeship programs. 

Committee on Education:  The Committee identified funds to stabilize DC Public Schools (DCPS) that face more than a 5 percent decrease in their individual budget from FY 13 to FY 14; to restore full-time librarians for DCPS schools that faced a cut due to being re-defined as a “small” school. ;to support the Public Charter School Board  to create a liaison focused on education planning and coordination for charter schools; and  to re-establish the Office of Ombudsman for Public Education within the State Board of Education. 

Committee on Economic Development:  The most notable change the Committee made was to re-establish the Neighborhood Investment Fund (NIF), which supports various affordable housing, job training, small businesses and economic development initiatives within targeted neighborhoods.  The Committee re-established the fund with $10 million—including $5 million from the Committee on Transportation and $5 million that will come from shifting $5 million of Housing Production Trust fund dollars that have been allocated to the Lead Safe Program. 

The Committee also included new reporting requirements for the New Communities Program that will help the public track the progress of the program, and it removed language from the Budget Support Act that would have changed how Local Rent Supplement vouchers are awarded.  The Committee also included language that will require LRSP vouchers to be reissued when families leave the program as well as a recommendation that half of the funds spent on the single-family rehab program be made available for seniors. 

Committee on Human Services: The Committee identified more than $4 million to fund time-limit exemptions for families who are experiencing domestic violence, who have a child under 12 months, or who are headed by someone who is elderly.  The Committee also received transfers from the Committee on Transportation and the Environment to add $500,000 to the Interim Disability Assistance Program; and $486,000 each to the Permanent Supportive Housing program to help fund housing assistance for elderly chronically homeless residents and for assistance for LGBTQ homeless youth.  

The Committee removed proposed changes to the Homeless Services Reform Act and suggested that they instead go through the normal legislative process to allow time for sufficient public input.  Separate legislation has already been introduced and a hearing set for June 3^rd.  

Fiscal Year 2013 Supplemental 

Last week, the DC Council voted on a supplemental budget for FY 2013.  District Dime readers may recall that back in February, DC’s Chief Financial Officer announced a $190 million boost in revenue for FY 2013.  Mayor Gray submitted his proposal for how to spend those dollars along with the FY 2014 budget.  The proposal passed largely as proposed, with a few amendments by the DC Council.  The funds will largely be used for: 

• Pay raises for DC government employees: $24 million
• Increase for the Housing Production Trust Fund: $63-$67 million
• Repeal out-of-state bonds and various tax abatements: $4.4 million 

The remaining balance, $96 million, was carried forward into fiscal year 2014 to help fund a number of increases to programs and services that year. 

The most notable of the changes the Council made to the Mayor’s proposal was to use $4 million from the Housing Production Trust Fund to fund an expansion of summer school in fiscal year 2013.  The funds from the HPTF are expected to be paid by the end of the fiscal year from additional revenues collected from parking tax and meters, although there is no guarantee this will happen.  

Check back at the end of the week when DCFPI’s budget toolkit will be updated to reflect mark-up changes. 

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This week, the DC Council took action to extend the reach of summer school programming this year, adding $4 million to increase slots at both DC Public Schools and DC Public Charter Schools. This reversed an approach that would have funded a much smaller group of students to participate this summer. 

The Council found the money to strengthen summer school by taking funds from one of the city’s best housing programs, with a plan that is expected — but not guaranteed — to restore the housing funds later in the year. It is unfortunate that efforts to fund a critical education program could put funding for another important program at risk.    

There’s a reason summer school should be a funding priority. Though many students look forward to having the summer off, research shows this time can be valuable to youngsters who are academically behind. With the right blend of programs, DC students can benefit from summer school offerings by catching up in key academic subjects and preventing “summer learning loss” from one grade to the next.  

DC Public Schools offers a range of summer school programming, including services for students in kindergarten through 12^th grade and a “summer bridge” program for rising 9^th graders. Over 6,000 children and youth were served last summer. This year, however, DCPS changed its K-8 summer school policy to serve students on an invitation-only basis. This meant that only about 2,700 students who were identified as high priority, or considered most likely to benefit from five weeks of summer school programming, were to be offered a DCPS K-8 slot this summer. 

While DCFPI supports the investment in summer school, the funding method is not ideal. The move to fund summer school took $4 million out of the city’s Housing Production Trust Fund, which supports the construction and rehabilitation of affordable housing. There is a plan to restore funds to the Trust Fund at the end of the fiscal year, using revenues for the Washington Metro Transit Authority that are projected to be higher than what is needed. But, it is uncertain at this point that resources will be sufficient to do this. 

In the short-term, we hope the DC Council will ensure that the $4 million in funds are paid back into the Housing Production Trust Fund at the end of this fiscal year. This situation also raises questions of whether DCPS funding is adequate to offer both a robust school-year program and a summer program to all students who need additional support. This is something the DC public education adequacy study, currently underway, will hopefully address.

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Next week, the DC Council will consider important health care legislation to guarantee that insurance plans sold to District residents and small businesses meet the consumer protections outlined under Obamacare, otherwise known as the Affordable Care Act. The DC Fiscal Policy Institute supports this bill, and you should as well. 

On Monday, May 13th, the Committee on Health will hear public testimony on how to create the insurance market known as the health exchange, as well as new District-specific consumer protections that aim to make health care more accessible.   

Under the legislation, all plans sold to District residents and small business must be sold through the exchange’s online shopping portal by no later than 2016. The exchange’s unified market ensures that District residents will receive the standard of health benefits intended in the President Obama’s health reform law and reinforces the District’s status as a national leader in providing quality health coverage to all of its residents. 

Why have one unified market? A smaller jurisdiction like the District needs one big pool for individual residents and small businesses so that they can achieve the same purchasing power as larger employers — putting downward pressure on prices and expanding health plan choices. 

The bill will also add transparency to the DC health insurance market. By placing all health plan prices, benefits, provider networks, and quality ratings side-by-side in an easy-to-compare format, the exchange portal forces insurers to compete on quality and pricing, and helps the District government monitor and enforce consumer protections. These protections include unlimited mental health services and clearer reporting on the number and types of doctors in a health plan’s network. 

The unified market proposal also promotes and expands consumer choice, allowing insurers to sell as many plans as they would like and helping residents connect with any plan available in the individual market. Small employers will have similar, if not more, options than they do today, and can expand choice even further by allowing their employees to choose from a wider range of offerings.   

The public roundtable on the proposal will occur on Monday, May 13^th at 11 a.m. in Room 123 of the Wilson Building (1350 Pennsylvania Avenue NW). To testify on the proposal, please contact Melanie Williamson (mwilliamson@dccouncil.us).

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Mayor Gray’s proposed FY 2014 budget includes significant investments in affordable housing in support of his goal of creating 10,000 net new units of affordable housing by 2020. Yet the new funds largely focus on construction and rehabilitation, meaning that most units will not come online until FY 2015.  While affordable housing production is critical, there are tools that DC can deploy to help address some of DC’s significant affordable housing needs immediately.  

One of those programs is DC’s tenant-based portion of the local rent supplement program.  There are no funds in the proposed FY 2014 budget to expand this program, but the Council should find ways to do so when it completes work on next year’s budget. 

The Local Rent Supplement Program (LRSP) was created in 2007 to make homes affordable to families with very low-incomes — 30 percent of area median income or less, or roughly $32,000 for a family of four.  It does this by providing rental assistance to bridge the gap between market rents and the rents that very low income families can afford to pay.  LRSP was created in large part to address the limited and declining federal support for housing vouchers.  

The program has three components; a tenant-based portion and a project-based and sponsor-based portion.  Under project- and sponsor-based LRSP, subsidies are tied to specific housing units operated by a for-profit or non-profit developer or to a non-profit developer that commits to using the subsidy to provide affordable housing to its clients.  Most of the subsidies go to newly built or renovated housing.  The mayor’s proposed budget includes a $5 million increase to this portion of the program.  

The tenant-based portion of the program goes to an individual family who can take the LRSP voucher and use it at any DC apartment that is under the fair market rent.  Because it is not tied to production, tenant-based LRSP can be deployed quickly.  

The tenant based portion of the program has been criticized as being more costly than the project-sponsor based side, when the costs per program are broken out by bedroom size, there is little  variance between the two programs (see Table 1). Tenant-based LRSP tends to serve larger families – 80 percent are two-bedroom units are larger, while 80 percent of the project/sponsor-based units serve residents that need one-bedroom units or efficiencies.

The program has also been criticized as creating long-term dependency on housing aid, yet this largely reflects the great mismatch between incomes and housing costs for residents living on low-wage work or public benefits — such as social security, disability income, or public assistance. In DC, a single-parent family with two children would need to work full time, year round and earn $28.96 to afford the market rate rent for a two bedroom apartment.  This is just under the median wage, or middle wage, for all jobs in DC which was $29.41 in 2011.  That means close to half of all jobs in DC do not pay enough for someone to afford the market-rate rent for a two bedroom apartment and suggests that efforts to help low-income families improve their incomes is key to housing mobility. 

Tenant-based LRSP helps ensure DC is able to serve the wide variety of families that need affordable housing assistance — from residents with severe barriers to stable housing to residents who simply don’t earn enough from their low-wage job.  For this reason, the DC budget needs to include increases for both tenant-based and project/sponsor-based LRSP. 

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Who is affected by DC’s current policy of phasing out the tax break for out-of-state bonds? That question is central to an ongoing debate about the future of this tax break, which Mayor Gray has proposed to restore. 

Newly available data provide stark evidence that tax-exempt bonds serve primarily as a tax shelter for very high-income DC residents, many of whom earn millions each year from these tax-free investments. However, the data also show that a small number of residents, with much more modest incomes, rely on municipal bonds as a major source of income. This suggests that it makes sense for the District to continue phasing out the out-of-state bond tax break — one that no other jurisdiction offers — while taking steps to make sure that low- and moderate-income families are protected. 

Here is what the new figures, from DC’s Office of Tax and Revenue, show:  Over three-fourths of tax-exempt interest income earned by DC residents goes to households who have income of $200,000 or more beyondwhat they earn from tax-exempt bonds. Indeed, 81 DC households earned an average of $2 million from tax-exempt interest in 2010, and these 81 households accounted for 43 percent of all tax-exempt interest earned in the city.  

At the same time, there are 338 households that have income below $50,000 and get more than one-third of their income from tax-exempt interest. These are likely to be the households that policymakers have in mind when they talk about restoring the out-of-state bonds tax break. 

Together, this suggests that DC’s current policy — which maintains a tax exemption for all investments in out-of-state bonds made prior to 2013 and eliminates the tax break for new investments— should be continued. It would raise roughly $1.7 million in revenue in 2014 and ultimately about $30 million per year. The current law maintains a tax break for investments in DC-issued bonds, which creates an incentive to buy these bonds, which, in turn, makes it easier and cheaper for the city to issue bonds. 

What about low- and moderate-income residents who rely on out-of-state bonds? The grandfathering of current tax exemptions provides time for these households to plan and adjust. Some will start investing in DC bonds, and others will seek other investment options, such as highly rated corporate bonds that yield similar after-tax returns. To further protect these residents, the District could allow households below a certain income level — such as $75,000 or $100,000 — to retain the tax break fully. 

A concern about protecting retirees who rely on out-of-state bonds makes sense. But, using that argument to protect a tax shelter for multi-millionaires does not.

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Today, many residents and organizations, including DCFPI, will share their thoughts on the FY 2014 Budget Support Act (BSA). DCFPI focused on two issues today; the proposed amendments to the Homeless Services Reform Act and the proposal to reinstate a tax break for residents who invest in out-of-state bonds. Here is a summary of what we said: 

On the proposed amendments to the Homeless Service Reform Act: 

• The proposed amendments to the Homeless Services Reform Act should be removed from the BSA and introduced as separate legislation.  These amendments would make significant changes to a law that impacts some of the District’s most vulnerable residents.  The changes have raised significant concerns and deserve careful consideration and stakeholder input that is allowed through the normal legislative process.  The proposed amendments have no fiscal impact and therefore do not need to be passed with the budget. 
• DCFPI strongly supports the goals of the Department of Human Services to both minimize the stay for families in emergency shelter and to open shelter to families year-round.  We encourage the Council to introduce and adopt the legislation that will be by the start of FY 2014.  Yet this is just one of the steps necessary to achieve the dual goals of shortening stays in shelter and opening it up families year-round.  In addition, investments in the permanent supportive housing and tenant-based side of the local rent supplement program as well as finalizing regulations for the rapid re-housing program are needed.  

On the reinstatement of the tax break for out-of-state bonds: 

• DCFPI supports maintaining the exemption for investments made prior to 2013 and phasing out the tax break on new investments.   Repealing the tax break on out-of-state bonds creates an incentive to purchase DC bonds, which helps reduce the interest rate the District pays on its debt.  DC’s CFO found that the number of DC buyers of DC bonds increased dramatically in 2012 after legislation to phase out the tax break was passed. 
• Most of the benefits of the tax break go to investors with substantial incomes; to protect low-income retirees, the tax break can be maintained for low- and moderate-income residents.  Three quarters of the interest earned on out-of-state bonds goes to residents with $200,000 or more in income beyond what they get from tax-exempt interest.  

It is important to note that the FY 2014 budget includes several proposals to help retirees in need that are not funded.  This includes $5.8 million through the Office of Aging to fund services for older residents, and $5 million to implement reforms to the Schedule H tax credit, which offsets property taxes when they consume a large share of a household’s income.  

Our full testimony on the proposed amendments to the Homeless Services Reform Act is here and the testimony on out-of-state bonds is here . And don’t forget to check out DCFPI’s analysis of the proposed FY 2014 budget for homeless services in our homeless services toolkit here and all revenue changes in the FY 2014 budget in our revenue toolkit!

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This past Tuesday, many residents and organizations, including DCFPI, shared their thoughts on revenue issues in the FY 2014 budget. DCFPI testified on the importance of funding improvements to DC’s low-income property tax credit which hasn’t been adjusted since 1979 but can play an important role in helping residents stay in their homes as property taxes and rents rise around them.  Up to 125,000 residents across the city — both homeowners and renters — could be helped. Here is a summary of what we said:

• The DC Council should fund improvements to Schedule H — DC’s low-income property tax credit — that it approved last year. In December 2012, the DC Council passed “The Schedule H Property Tax Relief Act of 2012” to address shortcomings that have limited the ability of DC residents to claim property tax assistance. While major changes were adopted, they were not funded. (They were made “subject to appropriation.”) The mayor included funding for Schedule H, but far down on the contingent revenue list — meaning that it would only get funded if revenue projections increased significantly. 
• The improvements are critical because current rules limit the effectiveness and reach of Schedule H. Because Schedule H hadn’t been updated since 1979, the current income limits and maximum credit are out of sync with the needs of today’s low and moderate-income residents. And overly restrictive rules limit participation in the program to just 20 percent of eligible households. “The Schedule H Property Tax Relief Act of 2012” addressed these problems in several ways, including: 
• An increase in the income eligibility level from $20,000 to $50,000;
• An increase in the maximum credit from $750 to $1,000 and adjustment for inflation each year;
• A change to the requirement that people sharing housing must file for Schedule H together, even if they file separate tax returns. This rule in particular has made it hard for residents to take advantage of Schedule H. 
• Up to 125,000 low- and moderate-income DC residents could get help with high housing costs. Across the District, tens of thousands of families could be helped by improvements to Schedule H. As DC’s economy continues to improve, neighborhoods continue to develop and home prices continue to rise, the improvements to Schedule H can help low- and moderate income residents cope with rising property taxes and rents and ease some of the impacts of gentrification that affect so many DC neighborhoods. 

Our full testimony is here. And don’t forget to check out DCFPI’s analysis of all revenue changes in the FY 2014 budget in our revenue toolkit!

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Every school in DC should have a mental health professional to help students deal with issues that could get in the way of learning. Yet, currently only 51 public and public charter schools — less than one-third — participate in the city’s school-based mental health (SBMH) program. A proposal now before the DC Council would expand SBMH to an additional 19 schools in the fiscal year (FY) 2014 budget, but for now this proposal is on a contingency list and will get funded only if the city’s projected revenues increase.    

The District’s school-based mental health program provides schools with a part-time or full-time mental health clinician, who provides a range of services — from prevention and screenings to more serious therapy and counseling. Prevention activities include education on mental health, sexual abuse and violence prevention, while treatment services focus on family and individual counseling and therapy for social-emotional functioning. The school-based clinicians also act as a referral source for intensive community mental health services. The program is active in 40 DCPS schools and 11 public charter schools, with more than half located in Wards 6, 7, and 8.  

The program prioritizes the lowest performing schools and schools with fewer or no existing social workers, counselors, and/or psychologists. But many of those schools still do not have a mental health clinician on staff. Currently, there is a waiting list of schools, serving 12,000 District students, that would like to participate in the program, including 17 of the lowest performing DCPS schools and 10 charter schools targeted by the program. 

Demand is high and need is great for these school-based services. Since the beginning of the 2011-12 school year, clinicians have performed over 12,600 individual student counseling sessions and about 800 family counseling visits. Mental health screenings at Early Childhood Centers suggest that half of the 2,600 children, in grades pre-kindergarten to second grade, need some type of mental health service. 

Currently, expansion of SBMH services to 19 additional schools is on the mayor’s “contingency funding list” — which includes items that will get funded if the city’s revenue improves. The expansion would help pursue the goal set in the 2013 South Capitol Street Legislation of expanding school-based mental health services to all District schools by the 2016-2017 school year. 

To meet this goal and to address the unmet needs of District children, the DC Council should move the expansion of school-based mental health services off the contingency list and fund it directly in the FY 2014 budget.  

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We have some good news to share on this rainy Monday! Some 360 DC residents with disabilities soon will get assistance from the District while they wait for their application for federal benefits to be considered. These residents will receive $270 a month from DC’s Interim Disability Assistance (IDA) program until the federal benefits approval process is complete. 

Yet even with this expansion, the number of IDA recipients will be two-thirds lower than it was just a few years ago. That is why we recommend that the DC Council increase the IDA budget in fiscal year (FY) 2014.

IDA serves residents who are facing a tough time—unable to work, and awaiting approval for federally funded Supplemental Security Income (SSI) benefits, a process that can take a year or two. IDA provides critical assistance during this period, helping residents afford rent, food, and medication. Left without income from work or this assistance, many people with disabilities may be forced into even more dire circumstances, like homelessness or more serious illness. 

The Interim Disability Assistance program has a low cost to the District, because the federal government reimburses the District after a resident’s federal SSI applications is approved. DC’s recovery rate is in line with similar state programs across the U.S. The FY 2014 budget also includes $1 million on its contingency list, services that will be funded if revenues rise above current projections, to help first time applicants for SSI. This has been shown to increase the likelihood of being approved for those benefits and could increase DC’s reimbursement rate.

Local funding for IDA has been slashed in recent years, from $5.6 million in FY 2008 to just $1.5 million in the proposed FY 2014 budget. The number of individuals served by the program has dropped by more than 70 percent, from 2,900 to 825.

IDA is a good investment in the well-being of residents with disabilities and for the city as a whole. The District can ensure an additional 1,200 residents get this critical assistance in FY 2014 by adding $3.9 million to IDA. 

DCFPI has put together our official FY 2014 budget priority list. The list includes increased funding to help DC residents who are currently in crisis, give our children safe places to learn and grow, give parents the tools they need to succeed in the job market, help residents coping with the high costs of housing, and ensure that residents have access to health care. We also take a close look at revenue changes, and technical issues that can be changed in the legislation that supports the budget. You can take a look at our priorities here.

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When a mother escapes domestic violence, she must do many things simultaneously: find new housing, make up for the loss of financial assistance from her abuser, seek treatment for injuries, attend day-long court hearings regarding protection orders, assist with criminal prosecution of the abuser. All of this must be done while also handling the regular responsibilities associated with being a parent. A mother receiving assistance from the TANF program is faced with a conflict–how to meet all of these responsibilities while also preparing for and looking for employment? 

Take the circumstances of a few TANF recipients in a District domestic violence shelter. One resident must care for her disabled child because other child care options have been inadequate. Another resident had to deal with a child’s medical emergency and missed an opportunity to join a job training program. These barriers are on top of living in a domestic violence shelter, working to achieve safety, and rebuild a new life with their children. 

About 2,700 families that receive TANF in DC have experienced severe domestic violence that prevented them from fulfilling their mandated work requirements, according to one study.  Although survivors can apply for exemptions from work requirements, the time limit clock keeps ticking. This is not the case in 43 states, which exempt or extend the TANF time limits for victims in recognition of the economic, social, and familial hardships they face and because of the logic of tying work exemptions to time limit exemptions. When survivors of domestic violence hit the time limit in states without an exemption, they more often return to abusive partners and rely on those partners for financial security.  

The District’s TANF reform, particularly the new in depth assessment, has done a better job than ever before at identifying survivors of domestic violence. Individual responsibility plans can be tailored to include the vast appointments and needs of survivors of domestic violence. Why then sharply cut income assistance at 60 months–and ultimately kick those recipients out of the TANF program–when they still need to address a significant barrier to work? 

The District must join the vast majority of the country in exempting survivors of domestic violence from the time limit. By fully funding this exemption, thousands of victims of domestic violence will not have to face untenable choices that could risk the safety and security of both themselves and their children. 

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Ms. C. is, by any measure, a success story.  A single mother of 5 children, three of whom have profound disabilities, Ms. C. has knit together a loving family that looks out for one another. She has gotten her children into good schools, found them a safe place to live, and recently graduated from a barbering course.  She is looking forward to a new career which will allow her to independently provide for her whole family. 

Yet Ms. C. also shows us that success against long odds often hangs by a thread.  During tough times, she has received Temporary Assistance for Needy Families (TANF), which kept her from facing impossible choices between things like food, children’s clothing and putting gas in the car that gets them to their many doctor’s appointments.  Today, she is concerned that she will not find a barbering job before her TANF benefits are cut sharply in October because she has received TANF for more than 60 months.  As DC’s law currently stands, there is absolutely no way to postpone the date when she—and other parents in challenging circumstances—will lose assistance. 

A closer look makes it clear that Ms. C.’s ability to get this far is a result of her amazing determination, but also help from several lawyers from Children’s Law Center and a District of Columbia safety net that has allowed her to keep her family from the brink. 

All three of her children with special needs require more intense medical attention than most children.  One of them is suffering from an autoimmune disease that has caused him to go deaf, develop diabetes, hypertension, and cataracts.  He requires constant professional care that his insurance company had threatened to cut. Ms. C. is routinely traveling throughout the Washington area for school meetings, to visit the family physician, or to see specialists.  These trips routinely take at least 15-20 hours a week of her time.

In addition, Ms. C. has been through three apartments in the last five years through no fault of her own. The first apartment had such deplorable conditions as a result of landlord neglect that the District moved her to a new one. Her landlord’s bank foreclosed on the second. With assistance from Children’s Law Center, she navigated the foreclosure process until she could locate a safe and healthy apartment for her family—although it is extremely far from her children’s schools and health centers. 

Ms. C. is not only the face of a tremendous mother and role model; she is also the face of a TANF recipient facing many personal challenges, like so many other TANF families. 

The instability that the upcoming benefit cut threatens for their family and others can be prevented. Many states allow for exemptions to the TANF time limit when a parent is taking care of a disabled child. States recognize that devoted parents, like Ms. C., will have a harder time obtaining work readiness skills and finding employment when their children require increased care. 

TANF is a vital lifeline to a family like this one.  By cutting it, DC would throw them into a chaos from which they might never recover.  By giving them time and resources while they look for employment, we can ensure that they will be productive and self-sustaining well into the future.

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When thinking about the District’s TANF program, one overlooked fact is that many of the families receiving benefits are headed by a young parent (one who is 24 years of age or younger). Research has consistently found that youth need a different set of services and supports than older adults to succeed, and thus we should not assume that the current TANF time limit policy — which applies to all families regardless of their situation — will fit the needs of young heads of household.

Instead, young parents would be much more likely to succeed if the District created time limit exemptions to allow them to finish job training or education without losing the benefits they need to support themselves and their children.  

Service providers who work with young parents in the District see the time extension as a common-sense policy. Lena Heid, Case Manager and Parent Educator at the Latin American Youth Center’s (LAYC) transitional living program for young parents says that many young parents are still trying to get on their feet, adjust to new roles as parents and finish school. “If the TANF benefits are not extended youth may have to choose between working full time and going to school” she said. “TANF is the only thing that allows some of our young parents to finish school.” 

Since young parents are still in the process of transitioning to adulthood while managing the demands of a family, offering them the additional support makes sense. Patricia Santucci, Director of Student Support Services at the LAYC Career Academy says that the added financial assistance will affect youth’s choices to continue in education programs versus leaving programs to go to work or stay at home with the kids. “If we are trying to encourage young people to be responsible parents and more productive in the community and care for themselves . . . an extension offered while youth are doing something productive is something that would be helpful” Santucci said.   

Another important distinction for young parents is the need for more time to acquire skills and education than many adults. “When older parents fall on hard times, they may have had the time to gain the skills or education, and TANF is temporary assistance” said Lena Heid. 

“Young people may not have work experience or even the time to obtain work experience” says Patricia Santucci, “while adults who have kids have had the time to do this. We don’t want young people to get to 30 or 40 years old without education or work experience.” Santucci said.  

“This is a good thing for our parents, that they can receive benefits and work on their education and hopefully in the future …see higher advancement in a career … it takes that pressure off of them, instead of thinking, ‘how am I going to survive?’ and then repeating the cycle [of intergenerational poverty].” said Eric Collins, Manager of Residential Programs at Sasha Bruce Youthwork.

Recognizing that young people have different needs than their adult counterparts, the District should align its time limit policy with the needs of young families. 

For more information on DCAYA’s work around supporting young parents please visit our policy and advocacy pages at www.dc-aya.org.

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As regular District’s Dime readers know, DC is in the process of implementing improved employment services for parents on TANF, DC’s welfare-to-work program. Early results are very promising with a little more than 1,050 parents securing a job and leaving TANF within the past six months.  

Alvin Smith works for Grant Associates, one of the main providers of TANF employment services.  He kindly shared the following stories of two of these successful TANF parents, both of whom received services from Grant Associates.  

One of our first clients was Ms. M., a single mother of four children, including one child with a disability. Grant Associates was able to place her at a nonprofit organization as part of a work experience program, allowing her to develop skills and build experience in the workplace. The organization wanted to hire her on permanently but did not have the budget to do so. Although disappointed that the work experience would not lead to a permanent job, she continued to exhibit a fantastic work ethic and a commitment to excellence with the hope that she could leverage her experience to get a job at another company. She was able to do just that, securing a job in April 2012 that she continues to hold today. After just ninety days on the job, she received a favorable review and pay increase. She now makes $8.25 per hour. She has found it difficult to concentrate at work given the difficulties of raising four children on her own, but has been able to reach out to our staff to find effective ways to create a positive balance between her work life and her personal life. 

Ms. B. was referred to Grant Associates in March 2012. From the first day, she was a vocal advocate for herself, setting goals and then meeting them. Ms. remained encouraged despite facing obstacles, including care for a child with special needs. With staff assistance, she was able to obtain a position at a local airport, making $6 per hour plus tips. She set a goal of securing a management position, and worked diligently to achieve this goal. Her hard work was recognized by management at another company, who offered her a management job at a wage four times what she was currently making. She was thrilled to get this opportunity but struggled with her new employer as they did not want to honor the higher wage they promised her. She decided to take a supervisory job at another company, a job she continues to enjoy. She currently makes more than three times what she was making in her first job at the airport. She has been willing to help other TANF parents, and because of her great reputation, she has helped others gain employment in her industry. 

Ms. M. and Ms. B. are just two of our clients who have been able to achieve success. Their hard work and determination in the face of obstacles has been inspirational.

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This week, the District Dime is running a special series to highlight stories of parents trying to move from welfare to work while also keeping their children safe and well cared for. We have invited colleagues from other organizations to share these stories—about young parents, families with serious health issues, and parents coping with domestic violence. Some have successfully secured employment, and many needed special help along the way.

These stories illustrate that families often face multiple challenges on the path to employment and economic security. And it shows that DC’s TANF program—our main welfare to work program—needs to be flexible to be successful. In particular, the District’s “one size fits all” approach to time limits, which cuts benefits for families regardless of how hard they are trying and regardless of the barriers to employment they face, needs to become more flexible and include sensible time limit exemptions.

Here’s what you can expect this week:

• Alvin Smith of Grant Associates, a TANF employment services provider, will highlight two parents who have successfully obtained employment.
• Susan Ruether of the DC Alliance for Youth Advocates will discuss how young parents need time to adjust to their new roles and responsibilities and need time to make sure they can complete school.
• Judith Sandalow of the Children’s Law Center will discuss how parents of children with disabilities need support and time to complete job training while also making sure that their children’s needs are met
• Lindsey Bartlett of the DC Coalition Against Domestic Violence will discuss why it doesn’t make sense to run the TANF time clock when parents are dealing with domestic violence, and how most states stop the clock in these situations

While all of these stories are different, the common thread is the value of reasonable exemptions to time limits, which most states offer, to give families time to deal with serious issues that interfere with their ability to work such as domestic violence, illness, or caring for a family member with a disability. While the District doesn’t require families to be looking for employment while they are facing serious issues such as these, the TANF time clock continues to run, leaving the family at risk for steep benefit cuts. That doesn’t make sense. 

By ensuring that vulnerable families have time to prepare for work and that all participants have timely access to employment services, we can ensure the TANF redesign is a success. We hope you enjoy the series!

The Community Foundation invests in programs throughout the region that build workers’ literacy and workforce skills. We make these investments knowing that in today’s economy, 8 in 10 jobs are beyond the reach of workers who lack a postsecondary credential. Moreover, the potential earnings gap between low- and high-skilled workers has grown from 40 percent in 1980 to 74 percent today. It is more evident than ever that equipping District residents with basic literacy skills and credentials is an essential first step to these residents to take on their path to self-sufficiency.

Without basic math, reading, and digital literacy skills, DC residents cannot follow written instructions, complete paperwork, communicate effectively with colleagues, or help their children with homework. This undermines the job security of working parents, the economic viability of our businesses, and the well-being of our families.

The DC Office of the State Superintendent for Education has drafted an FY14 budget proposal requesting $4 million to help to address these challenges. Amongst the items requested by OSSE are:

• Funds to grow the Accelerated Learning program to enable 1,000 additional DC residents to obtain a post-secondary credential;
• Funds to help nonprofits update curriculum and train teachers to prepare for impending changes to the GED and National External Diploma Program; and,
• Funds to help up to 150 residents complete Microsoft Office and Microsoft Technician Certifications, building their skills to compete in the in-demand IT sector.

Click here to sign our petition urging the Council to fully fund the $4 million Pathways to Adult Literacy Fund – and help 1,000 District residents enhance their basic skills and earn necessary credentials.

And once you’ve signed, help spread the word – share the petition on Facebook, Twitter, or e-mail.

For background on why this is so important, read our fact sheet here.

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Today, many residents and organizations, including DCFPI, will share their thoughts on the proposed fiscal year 2014 budget for the Department of Behavioral Health, a newly created agency that will take on the functions of the Department of Mental Health and substance abuse services now managed by the Department of Health. 

Here is what DCFPI is saying: 

• A proposed funding increase for mental health services will help ensure that DC residents have timely access needed care. The budget would add $7 million in local funds for mental health services for residents on Medicaid and $2 million for mental health treatment for low income residents not on Medicaid. The funding will help expand services to residents and increase provider reimbursement rates that have gone largely unchanged since 2001. This would alleviate cost pressures that have made it hard for community-based providers to stay in business, which in turn would increase access to treatment for DC residents. 
• The Committee on Health should find a way to expand school-based mental health services — instead of leaving it on the mayor’s “contingency funding list.” The District has mental health clinicians in 53 schools, providing a range of services from early intervention and prevention to treatment of more severe issues. Demand for the program is high, with schools on a waiting list to receive a clinician and some participating schools having a separate waiting list for students. The budget includes a $1.9 million proposal to help 19 additional schools receive a full-time clinician, but this is on the budget’s “contingency funding list” and will be funded only if DC’s revenues rise beyond current projections. The DC Council should find a way to fund this expansion rather than leaving it on a wish list.

Our full testimony can be found here.

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Today, many residents and organizations, including DCFPI, will share their thoughts on the proposed FY 2014 budget for DC Public Schools, at a budget hearing held by the DC Council’s Education Committee. Here is a summary of what we are saying:

• DCPS is cutting resources to some schools by defining more schools as “small schools.” For the second year in a row, the enrollment level used by DCPS to define a “small school” will increase, this year from 300 to 400 students. As a result, most of the DCPS school system will be considered small schools next year and will get fewer resources than larger schools. In particular, 30 schools that are projecting 300-400 students will face reduced staffing by being re-defined as small schools. In a school system where many schools face declining enrollment, a policy of widening the definition of small schools – and limiting resources to those schools – does not make sense.   
• Need for proven investments in struggling schools. There are still questions about how DCPS plans to invest in our lowest performing schools to meet the ambitious goals set out in their Capital Commitment plan. For example, “Proving What’s Possible” (PWP) funding, which provided $10 million in grants to 59 schools to implement innovative programming this school year, will face reductions in FY 2014. It is also not yet clear how program evaluation is driving DCPS investments. We think DCPS should use evaluation data to replicate successful programs and communicate to residents how these investments are part of a long-term strategy across the school system.
• DCPS budget takes some steps toward transparency but still leaves a lot to be desired. For the first time, DCPS posted an Excel file with data on the submitted budgets of individual schools, a very helpful step for budget analysts and advocates. Yet the official DCPS budget, published by DC’s Chief Financial Officer, continues to be largely unreadable to District residents.

Our full testimony is HERE. And don’t forget to check our DCFPI’s analysis of all education agencies in our education toolkit!

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While the fiscal year (FY) 2014 budget proposal shows higher funding levels for most of the District’s health care programs, the Healthcare Alliance faces its second consecutive cut as enrollment in the program continues to decline. The Alliance program provides basic health coverage for uninsured District residents who have incomes below 200 percent of the federal poverty line but do not qualify for Medicaid. Since the implementation of a six-month, face-to-face recertification process for Alliance participants, enrollment in the Alliance has declined significantly.  The rapid decline suggests that this restrictive process is creating hurdles for eligible residents and is overburdening the DC government staff in charge of administering the policy. 

For FY 2014, the Department of Healthcare Finance’s proposed budget provides $40 million for Alliance provider payments, a cut of $2 million, or 5 percent, over the FY 2013 budget after adjusting for inflation. The cut corresponds with a decline in enrollment — from 24,000 enrollees in September of 2011 to 15,400 in November — that began with the implementation of a six-month, face-to-face recertification interview requirement in early FY 2012 (see Figure 1). The new rules were intended to limit ineligible people from participating in Alliance — especially non-District residents — but the drastic enrollment decline suggests the rule is affecting eligible residents’ ability to enroll. 

The Alliance recertification requirement is far more burdensome than in other health or social service programs in the District. For example, DC’s Medicaid program requires only annual renewal and does not require participants to interview face-to-face with government staff (documentation can be sent in via mail). Beginning in 2014, eligibility and enrollment in the Medicaid and other social programs will also be conducted electronically via the DC Access System, which streamlines access to multiple public benefits through one point of entry.  

The frequent in-person recertification can make it difficult for eligible residents to enroll and maintain eligibility for Alliance, especially working individuals under strict time constraints. National research suggests that when application or recertification processes become more challenging, participation among eligible participants can drop sharply. In addition, community-based organizations and health care providers report that their clients have experienced increased wait-times when recertifying in-person for Alliance, due in part to limited staff available to conduct interviews and even fewer bilingual staff needed to meet the unique language needs of the Alliance population.  

Two strategies can address these barriers to participation among eligible residents, while also limiting the ability of non-residents to participate. First, in the short term, a portion of the $2 million cut from the Alliance could go to enhancing staffing for recertification at service centers. The funding can help ensure there are enough staff, reasonable office hours, and needed foreign language competence among interviewers.   

Second, as the Alliance is added to the DC Access System, Alliance’s recertification should be streamlined to match the annual renewal requirements of other health care programs. DC Access’s integrated eligibility system, with connections to data sources that can be used to verify residency electronically, will make it easier for eligible residents to recertify without creating a risk of ineligible people getting assistance. It also would reduce the number of times participants need to visit service centers, which would free up staff for more complicated eligibility determinations.  

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Budget season is in full swing!  To help our District Dime readers understand what is in Mayor Gray’s proposed fiscal year 2014 budget, DCFPI has released our budget toolkit, including an overview of the entire DC budget and analyses of proposed funding for education, health care, affordable housing, homeless services, Interim Disability Assistance, Temporary Assistance for Needy Families, workforce development and revenues. 

Another great opportunity to learn about the budget is a series of budget briefings taking place this week for a number of DC agencies, where the agency’s Director and key staff will be on hand to explain their budget and answer questions.   Briefings will take place this week for the Department of Human Services (April 17^th), Department of Housing and Community Development, DC Housing Authority and DC Housing Finance Agency (April 18^th), Office of the State Superintendent of Education (April 19^th), and Department of Disability Services and Office of Disability Rights (April 19^th and April 25^th).   The full details of each briefing are below, including how to RSVP.  

We look forward to seeing you at one or more briefings!

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A growing economy gave Mayor Gray the first opportunity as DC mayor to propose a budget to the DC Council that didn’t have to address a significant budget gap. Mayor Gray’s proposed general fund budget is $7.15 billion, an increase of 4 percent after adjusting for inflation, which allowed him to propose new investments in a wide array of city services, including affordable housing, public safety, libraries, education, public works and human services.  

How did Mayor Gray propose to spend the additional funds? How is funding proposed to change between FY 2013 and FY 2014 across DC government? Today, DCFPI released its budget toolkit to help you answer these questions and more. Our budget toolkit contains an analysis of the entire proposed FY 2014 DC budget, as well as in-depth looks at a number of key areas:  affordable housing, education, health care, homeless services, workforce development, revenues, homeless services, Temporary Assistance for Needy Families, Interim Disability Assistance, and energy assistance. 

The largest increases in the FY 2014 budget would address rising enrollment in some publicly funded schools, payments on funds borrowed for school modernization and other construction projects, rising Medicaid enrollment, pay raises for DC government employees, the need to replace federal dollars that will not be available in FY 2014, and other priorities discussed the budget overview.   

Despite these program enhancements, many DC residents have not yet felt the benefits of the recovery, and a number of programs aimed at helping these residents remain strapped. For example, the District’s Interim Disability Assistance Program, which helps residents who are unable to work and who are waiting for determination of eligibility for federal disability benefits, is funded wellbelow pre-recession levels. Provisions to help Temporary Assistance for Needy Families recipients who are facing severe barriers to work remain unfunded. 

To learn more about what is in Mayor Gray’s FY 2014 proposed budget, click here.

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You may have heard the phrase, “the mayor’s wish list” thrown around this budget season. What exactly is on this list and how should it impact your advocacy strategy? DCFPI is here to explain it to you. 

The mayor’s proposed budget overview presentation included a list of 16 programs totaling $70 million that did not make it into the FY 2014 budget itself, but will be funded if the city’s revenue projections for 2014 are revised upward before the end of 2013. The official name of the list is the “revised revenue estimate contingency priority list.” The order of items on the list represents the order in which items will be funded if revenue collections improve at the end of FY 2014. 

DCFPI hopes the Council will take the extra step needed to move some of these key programs from the “contingency list” to actually being funded within the budget before it is approved in May.  There have been similar lists in the budget for the past two years, with only a handful of things funded in 2012 and nothing funded from the list in 2013.  Here are some of the programs on the list we think are high priority: 

• $11 million to increase the child care subsidies. The first item on the contingency priority list is $11 million for OSSE to increase the subsidy rate by 10 percent and provide child care subsidies to 200 more families with infants and toddlers. The bulk of this funding would go towards increasing the reimbursement rate paid to child care providers, which has not been updated since 2006 and is based on child care costs in 2004. A rate increase would help ensure that providers can provide quality child care and that families have access to child care centers throughout the city. 
• $5.8 million to support provider rate increases at the Office on Aging. Most of this would go toward an increase in the contracts with agencies that provide services to seniors. These contracts have remained essentially flat-funded for ten years. This item also includes $900,000 to hire two additional social workers each at the five lead agencies that provide aging services, $300,000 in operational support for five wellness centers, and $440,000 for Washington Elderly Handicapped Transportation Service (WEHTS) operations, including raises for drivers, who have not received raises for several years.  
• $4 million to support additional adult literacy and career and technology education. Both Adult and Family Education and Career and Technical Education stand to see funding cuts in the proposed FY 2014 OSSE budget. These programs help residents by providing adult education services, including family literacy, and offering college and career pathways to students based on their needs.  
• $1.9 million to expand mental health services in schools. The fourth item on the list is $1.9 million to provide school-based mental health services to 19 additional schools, beyond the services already being provided in 53 DC Public Schools and public charter schools. 
• $4 million for the Program on Work Employment and Responsibility (POWER). POWER serves TANF families whose head of household is unable to meet program requirements due to incapacity, such as a physical health, mental health, or substance abuse problem. These funds will help increase the capacity of the POWER program to serve more eligible TANF families.  Without these funds, families with these problems will face a steep cut in TANF benefits next year, if they have received assistance for more than 60 months, even though their ability to replace lost income is limited. 
• $1 million to provide application assistance to first-time applicants for federal Supplemental Security Income (SSI) benefits. This would help individuals who are also applying for the District’s Interim Disability Assistance (IDA) program at the same time. The SSI application process can take more than a year. There is substantial research showing that early assistance in the SSI process, which the District currently does not offer, decreases the application wait time and greatly increases the likelihood of getting approved for SSI. 
• $10.9 million to fund Schedule H for property tax relief. Schedule H is a property tax credit targeted at low-income DC residents who spend an excessive portion of their income on property taxes. This past December, the DC Council took steps to make Schedule H more effective for DC residents. The changes made include raising the income eligibility level from $20,000 to $50,000 and simplifying complicated rules that limit participation. But without funding in the fiscal year 2014 budget, these changes will not go into effect. 

See below for the full revised revenue priority list that was released with the mayor’s proposed budget:

1. Office of the State Superintendent of Education: $11 million to increase infant and toddler slots by 200 and to increase the subsidy rate by 10 percent
2. DC Office on Aging: $5.8 million to support provider rate increase
3. Office of the State Superintendent of Education: $4 million for additional adult literacy-career and technology education
4. Department of Behavioral Health: $2 million for the expansion of the school-based mental health program
5. Children and Youth Investment Trust Corporation: $3 million to increase funding to cover summer initiatives
6. Department of Human Services: $4 million for POWER expansion
7. Department of Human Services: $1 million to provide SSI application assistance for first time applicants
8. HHS Disaster and Behavioral Health: $0.5 million for additional staff for CPEP, Mobile Crisis and HOP (8 FTEs)
9. Department of Human Services: An additional $4 million for rapid rehousing
10. DC Commission on the Arts and Humanities: $7 million for New Arts Stabilization Grant Program
11. Office of the Chief Technology Officer: $2.2 million to enhance PeopleSoft program
12. Department of Forensic  Sciences: $1.9 million for civilian Crime Scene Response Program
13. Department of Housing and Community Development: $0.7 million to increase small business technical assistance
14. General Fund Revenue: $10 million to reduce the commercial property tax rate on the first $3 million of assessed value from $1.65 to $1.55 per $100 of assessed value
15. General Fund Revenue: $10.9 million to fund the Schedule H Property Tax Relief Act of 2012
16. DC self-determination advocacy:  $0.45 million to support additional DC self-determination advocacy

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The DC Health Exchange’s governing body voted this week to prohibit a surcharge on health insurance premiums for people who use tobacco, a step that will help ensure vulnerable populations in the District can afford health insurance. The Affordable Care Act allows state health regulators to give health insurers the ability to add up to 50 percent to a tobacco user’s premiums — a provision known as tobacco rating.  While intended to deter tobacco use, tobacco rating is unlikely to have much effect on smoking and, instead, would simply make health insurance more costly and potentially unaffordable.  

A surcharge on health insurance would increase the difficulty for residents with a tobacco addiction to access the health services that they need to quit. Unlike a tobacco sales tax, which raises the price sharply and prevents early use and addiction, a tobacco surcharge would affect those who already are addicted, including vulnerable populations trying to access private health insurance for the first time. 

Residents with behavioral health disorders would be particularly affected.  A study by the Substance Abuse and Mental Health Services Administration shows that people with mental health and substance abuse disorders make up 40 percent of all cigarettes smoked nationally. With significant disparities today in access to mental health and substance abuse services in the District, health insurance premium increases for tobacco use would make it that much harder to get treatment.   

DC Fiscal Policy Institute supports the District’s decision to ban tobacco rating on health insurance premiums.

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Mayor Gray wants to change the District’s tax code to help DC’s senior citizens. That’s a goal we at the DC Fiscal Policy Institute share. Yet the mayor’s budget goes about it backwards. It would re-establish a tax break for income from out-of-state bonds, even though most people who claim that tax break are not retired or low-income. The mayor’s budget also would enhance a property tax credit—know as Schedule H— that is targeted on lower-income seniors and other residents who need help, but that was put on the budget’s wish list instead of actually being funded. 

If the Council wants to target its tax cuts this year to help low-income seniors, fixing Schedule H is the better approach.  

The proposal to restore the out-of-state bond tax is touted as a way to ease tax burdens on seniors, but in reality it helps a very different set of residents. In 2008, just 2 percent of households with income from out-of-state bonds — 482 households citywide — were retiree households with incomes below $50,000.  The vast majority of out-of-state bond income goes to households with incomes above $200,000. 

Schedule H, by contrast, is a property tax credit for low-income renters and homeowners who spend an excessive portion of their incomes on property taxes. Because property taxes are tied to home value, not income, they can become unaffordable for some residents. Seniors living on fixed incomes or low-income residents living in gentrifying areas might find their increasing property taxes difficult to pay.    

This past December, the DC Council took steps make Schedule H more effective for DC residents. The changes made include raising the income eligibility level from $20,000 to $50,000 and simplifying complicated rules that limit participation. There are 15,000 seniors in DC with incomes below $50,000, and many of them would benefit from improving Schedule H, but the Council did not fund these changes.  

Mayor Gray included Schedule H in his budget — but as number 15 on a list of things that will be funded only if the city’s revenue collections rise. If funded, the changes would benefit both seniors who want to age in place and low-income residents struggling to make ends meet while remaining in the District. 

Consider a retiree on a fixed income of just $30,000 a year and property taxes of $2,000. Under the current rules, she gets no benefit from the low income property tax credit. However, if the DC Council finds the funding for Schedule H reforms, she could receive a credit of $800. 

As the DC Council tweaks the DC budget to make it even more beneficial to DC residents, they should consider finding funding to support the Schedule H reforms that they have already approved.

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There is little doubt that the District’s leaders, especially Mayor Gray, are serious about helping residents get jobs, with an array of new initiatives that include a workforce intermediary and an independent community college.  Yet the District’s largest workforce service – its network of “one-stop career centers” – is not living up to its potential.  In a policy brief issued today, we call on the District to strengthen these one-stop centers as the next step in reforming workforce development.

With over 84,000 people visitors annually, D.C.’s one-stop centers should be a primary tool for solving the District’s unemployment crisis.  Yet job placement and retention rates at the city’s one-stops are low, services are inconsistent, and both jobseekers and employers say that they don’t feel particularly well served by D.C.’s one-stops. In fact, the District has no real standards to guide the activities of the one-stops or to measure their success.

The most effective one-stop centers across the nation help residents find the right job or training program and connect them to other services like child care that can help them get ready for work.  They also help employers recruit skilled workers.  These one-stops meet the needs of jobseekers and employers by analyzing information on the labor market and customers’ needs, using modern data and technology systems, and maintaining a focus on strong customer service.

We believe that the District can use a process known as “certification” to transform its one-stop centers into places where residents and businesses can count on getting the assistance they need.  Federal law requires local workforce boards — in D.C.’s case, the Workforce Investment Council — to provide oversight of one-stop centers by certifying and monitoring them.  The District has not done this, however, and the WIC is now leading an effort to certify D.C.’s one-stops under a requirement set by the U.S. Department of Labor.

The District should use certification to go beyond meeting minimal federal requirements to set clear standards for D.C.’s one stop centers, identify a path for improvement, and hold them accountable when they fail to meet basic standards or improvements.   This includes:

• Articulating a clear mission and goals for what effective one-stop centers should do;
• Adopting ambitious performance standards that drive D.C.’s one-stops to move to effective practices;
• Evaluating D.C.’s existing one-stop centers using the new certification standards and provide technical assistance to help them meet new standards.

Just as importantly, the Mayor should make sure the Workforce Investment Council has the authority it needs to hold centers accountable if they do not make progress toward meeting certification standards.  The Mayor can do this by giving the WIC authority over federal grant funds that support one-stop centers and ensuring it has capacity to monitor one-stops.  If the WIC had a say over federal workforce funds, it could use them to drive improvement at D.C.’s one-stops.  Some other cities tie one-stop funding to certification, performance outcomes, or improvement actions.  The same could be true here.   

You can find the DC Appleseed/DC Fiscal Policy Institute brief here.

Executive Summary

The District of Columbia has taken a number of steps to strengthen its workforce development system.  Yet central components of that system – one-stop career centers (recently re-branded as American Job Centers) – have not been reformed and have serious limitations.  Residents and businesses are supposed to access employment services at one-stops.  Yet job placement and retention rates are low, both job seekers and employers feel that one-stops do not serve them well, there is little consistency in services at the city’s centers, and one stops lack a clearly defined mission. 

The District can better meet the needs of job seekers and businesses – and make the most of its resources – by transforming its one-stop career centers.  This policy brief describes the characteristics of effective one-stop centers and explains how the District can use a process known as “certification” to set uniform standards, drive improvement, and provide accountability for its one-stops. 

The District is currently developing a certification process in response to U.S. Department of Labor requirements.  The effort’s success, however, will depend on making certification a meaningful exercise: setting a clear mission, developing high-quality standards, establishing accountability tools, and connecting one-stops with experts to make needed changes.  

Strengthening D.C.’s one-stops can also make the District’s other workforce efforts more effective.  This includes the One City One Hire program started in 2011, which has placed over 5,000 unemployed residents in D.C. jobs, the workforce intermediary that will be launched this year to match hospitality and construction employers with workers in those fields, and the D.C. community college.  As a gateway to the District’s workforce system, effective one-stops can help job seekers and businesses take advantage of these other efforts.   

This post has been updated to clarify the fiscal impact of the out of state bonds proposal.

Mayor Gray’s budget shows that he wants to make a number of important investments to help DC residents — in education, housing, libraries, parks and more.  That’s why we’re surprised that the mayor also wants to encourage investments outside of DC — by restoring a tax break to residents who invest in out-of-state bonds. That would make DC the only jurisdiction to offer this tax break, which ultimately will have costs that are more than half of what we spend each year on libraries.     

Supporters of the tax break say that it is needed to protect seniors on limited incomes who live off such investments. Yet only one of 40 residents who invest in out-of-state bonds is a lower-income retiree. And when the DC Council eliminated this tax break, any investment made before January 2013 remained tax exempt, preserving the tax break for residents who had already made investments that they expected to be tax free.  

Why should the District not re-instate the out-of-state bonds tax break? 

• The bond tax break is not critical to protecting low-income seniors.  Most out-of-state bond holders are not retirees and most are not low-income.  In 2008, just 6 percent of all taxpayers hold out-of-state bonds, and only one-fourth of them had retirement income.  Two-thirds of the income from out-of-state bonds goes to households with income over $200,000.  In fact, just 2 percent of households with income from out-of-state bonds —482 households citywide — are retiree households with incomes below $50,000.  
• Bringing back the tax break is not needed to protect residents with current investments:  Some residents with investments in mutual funds are concerned that they are at a disadvantage.  This is because bond managers will often re-arrange a portfolio, and when they do, some share of the resident’s mutual fund could be considered a ‘new investment’ — and thus subject to tax — when they have in fact owned the shares for years.  The District could fix the law so that the out-of-state bonds tax would not apply to mutual fund investments purchased before the law took effect, no matter how the composition of the fund changes.  
• The tax break would be very costly to the District.  While the out-of-state bonds tax break would cost just $1.7 million in 2014, it would result in $3.9 million of lost revenue by 2017, for a total of $13 million in lost revenue over the next five years, and  and ultimately more than $30 million.  
• Eliminating the tax break for out-of-state bonds helped spike interest in investments in the District‘s infrastructure bonds.  In 2012, DC’s Chief Financial Officer reported that demand for DC bonds from DC residents was up significantly from the prior year and that this helped lower the costs of issuing those bonds. This progress would be lost if he District becomes once again the only state to offer a tax break for investing in bonds issued by any city or state. 

For these reasons, the current law that maintains the exemption for current investments in out-of-state bonds — with possible tweaks — makes more sense than bringing back a tax break for higher-income households that no other jurisdiction offers.

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As we have noted, a growing economy allowed Mayor Gray to include a number of investments in programs across DC government in his fiscal year (FY) 2014 budget. However, one missed opportunity in the budget is the need to better align the District’s time limit policy for parents on Temporary Assistance for Needy Families (TANF) with the policy governing when parents are expected to look for work. Today, a parent with serious personal challenges can receive an exemption from engaging in work preparation activities. But the same family’s TANF time clock continues to run, leaving it at risk of steep benefit cuts. That doesn’t make sense. 

Under longstanding rules, the District doesn’t require families to be looking for employment while they are facing serious issues such as domestic violence or the need to care for a seriously ill child. Instead the parent is supposed to focus on accessing services to address these issues. These kinds of work exemptions are part of the TANF programs in nearly every state.

But in DC, each family’s 60-month time limit clock continues to run, even though most states stop the clock in these situations. This leaves these parents with little time remaining, once they have gotten past their problem, to prepare for and train for work. The DC Council agreed that these families should receive full benefits and a time limit break by including these protections in the adopted budget for FY 2013. Unfortunately these were put on a contingent revenue list, meaning they would only be funded if additional revenues were identified by December 2012. These revenues were not identified, even though substantial increases in revenues were subsequently identified, so these protections have not been implemented.

The mayor’s proposed FY 2014 budget includes a new contingent funding list, items that will be funded if additional revenues are identified. This list includes a $4 million increase for the District’s special TANF program for particularly vulnerable families, known as the Program on Work, Employment, and Responsibility (POWER). It is not clear if this is enough funding to help all the families that the DC Council determined should be eligible for a time limit exemption. Also, because this is on a contingent list, there is no guarantee it will be funded. (Very few items have been funded off such lists in the past two years.) 

Without a time limit exemption, many families who have received an exemption from work requirements due to personal challenges will experience a steep cut in assistance in October. A family of three will see their benefits reduced to just $257 per month.  

DCFPI urges the Council to identify the funding needed to put these protections into the budget and to better align the time limit so that it only applies when families are able to prepare for work.

To print a copy of today’s blog, click here.

With a recovering economy, Mayor Gray was able to propose a number of investments in programs across DC government in his fiscal year (FY) 2014 budget. Unfortunately, not all DC residents are recovering along with the economy and the mayor’s budget left out some of the programs that help these residents, behind. One of those programs is Interim Disability Assistance (IDA) which provides short-term assistance to residents with disabilities that prevent them from working. During the Great Recession, funding for IDA was cut and the number of individuals the program can serve dropped by 80 percent.  The District should use its growing resources to reinvest in IDA, ensuring that all residents benefit from the city’s recovery.

The IDA program provides $270 a month — or about $9 a day — to residents who have disabilities that prevent them from working. These residents are in limbo — unable to work and waiting to learn if they are approved for federally Supplemental Security Income (SSI) benefits, which can take a year or two, if not longer. IDA provides critical financial assistance during this period, helping residents meet basic needs, such as rent (often shared with others), prescriptions, and necessities like toothpaste. Without IDA, many people with disabilities are forced to rely on more costly crisis services, such as emergency rooms and shelters, thus costing the District more. 

In addition, if the federal SSI application is approved, the federal government reimburses the District for IDA assistance paid during the application period, thus helping to fund the program. DC’s recovery rate is in line with similar state programs across the U.S. 

Here is the story of one the DC residents helped by IDA: 

Mr. R is a native Washingtonian who was forced to rely on emergency services when an injury left him without the use of his right arm, leaving him unable to continue working as a street vendor. After losing his job, he ended up living in a homeless shelter but once he received IDA benefits he was able to move into a permanent supportive housing (PSH) apartment. After a year and a half, he was approved for SSI benefits. The District was reimbursed for the IDA payments made to Mr. R., and he now has a stable source of income that will allow him to remain in his apartment. 

Yet, despite these benefits, funding for IDA has been slashed in recent years, from $5.6 million in FY 2008 to just $1.5 million in FY 2013. As a result, the number of individuals served by the program dropped 80 percent, from 2,900 to 550, even though the need has remained the same.  The mayor’s budget has only a modest increase of $125,000 for IDA in FY 2014, enough to provide benefits for only 38 additional individuals. 

IDA is a good investment in the well-being of residents with disabilities and for the city as a whole. The District can ensure an additional 1,200 residents get this critical assistance in FY 2014 by adding an additional $3.8 million to the modest budget increase included in the mayor’s budget. 

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We know our District Dime readers have spent the last few days poring over the budget books — okay, maybe not all of you — trying to figure out the impacts to programs and services you care about in the proposed fiscal year 2014 budget Mayor Gray released last week.  In addition to DCFPI’s Budget Toolkit (which should be out by April 11^th), Citizen’s Guide to the DC Budget and DC’s Revenue, there will be several budget briefings and/or information sessions held over the next month or so to help you understand what is in the fiscal year 2014 budget.

• Mayor Gray’s budget town halls.  Starting April 10^th, Mayor Gray will visit every ward to present his fiscal year 2014 budget and answer questions about changes included in it.  Click hereto see the complete schedule of his budget town halls by ward.  
• DC Council Committee on Education hosts “FY 2014 Budget Open House.”  Starting at 10am on April 4^th, stop by room 119 of the Wilson Building for an open house on the education budget in fiscal year 2014. Education committee staff will be on hand to answer questions for the public, with a brief presentation at 3pm and 6pm in room 123.
• DC Agencies hold Public Budget Briefings.  Several agencies will be holding budget briefings to help the public understand how the fiscal year 2014 budget impacts the programs and services the agency delivers.  These briefings are held after the Mayor’s budget is released, but before an agency’s budget oversight hearing in order to give the public a chance to learn more about the budget and ask questions that may help them prepare their testimony.  Below is a listing of the currently scheduled briefings.  DCFPI will send out updates through the blog as more are scheduled. 

Stay tuned to the District’s Dime this week for more fiscal year 2014 budget news and analysis. 

Thanks to an improving economy, Mayor Gray submitted his first budget that didn’t have to focus on closing a significant budget shortfall. The mayor’s proposed budget for fiscal year 2014 includes notable investments that will support DC residents and communities — including investments in affordable housing, libraries, education, public safety, public works, and human services. 

At the same time, many DC residents have not felt the benefits of the recovery, and a number of programs aimed at helping these residents remain strapped.  Identifying additional resources for these services could help the District fully recover from the impacts of the Great Recession.

Mayor Gray’s proposed budget makes a number of notable investments that would help low- and moderate-income residents:

•  Affordable housing.  Mayor Gray made good on his $100 million pledge for affordable housing, including $87 million for the Housing Production Trust Fund. Other housing investments include $1 million each for Emergency Rental Assistance, Rapid Re-Housing, and Home Purchase Assistance, and $3 million each for the Local Rent Supplement program and housing for victims of domestic violence.  The proposed budget also allocates $4 million to further efforts to create a centralized affordable housing database.

•  Special education early intervention. The mayor’s budget includes $4 million in the current year and $6 million in fiscal year 2014 to expand early intervention services for infants and toddlers with developmental delays. The funding will allow the DC Early Intervention Program to broaden coverage to serve children with a 25 percent developmental delay in two or more areas, rather than the current standard of only serving children with delays of 50 percent or more.  Funding for next year also will extend coverage until age four. Identifying and addressing delays early can improve a child’s chances of succeeding in school.

•  Delay in the benefit cut for Temporary Assistance for Needy Families (TANF) recipients.   Cash assistance benefits for families who have received benefits for more than 60 months were cut 20 percent in 2011. Under current law those benefits would have been cut further in October 2013, with the maximum benefit for a family of three falling from $342 per month to $171.  The proposed budget slows down the pace of the reductions, setting the maximum benefit for a family of three at $257 for fiscal year 2014 for affected families.

•  Domestic Violence Services.  Mayor Gray’s budget includes increased funding for services for domestic violence victims, in addition to the funding for housing for these residents, to head off a potential significant cut to this area from lost federal funds.

Mayor Gray’s fiscal year 2014 budget also included $30 million for the Department of Human Services to replace federal TANF funds that have been carried over from prior years but will be fully spent in 2013.  In addition, the Mayor’s budget restored a $20 million cut to the Housing Production Fund that had been in place for the last two years.

While Mayor Gray’s budget included great investments across DC government, his budget unfortunately left some areas behind. 

•  Interim Disability Assistance (IDA). The IDA program provides $270 a month to residents with disabilities that prevent them from working. These residents are in limbo — unable to work and waiting for a determination on whether they qualify for federally-funded Supplemental Security Income (SSI) benefits, which can take a year or two, if not longer.  Local funding for IDA was cut from $6 million in FY 2008 to $1.5 million in FY 2013 which led to an 80 percent decrease in the number of residents served, even though the need remained the same, with caseloads falling from 2,900 to 550 individuals.  The mayor’s budget has only a modest increase of $125,000 for IDA in fiscal year 2014, enough to provide benefits for only 38 additional individuals.

•  Temporary Assistance for Needy Families.  Mayor Gray’s budget did not provide funding to protect particularly vulnerable families who need time to deal with serious issues that interfere with their ability to work, such as domestic violence or the care for an ill child.  Currently, the District doesn’t require these families to be looking for employment, but each family’s 60-month time limit clock continues to run.  Most states stop the clock to allow families time to deal with these issues.  The Council’s adopted budget for 2013 provided time limit exemptions for these families, but it was put on a contingent list that was not funded due to inadequate revenues.  The FY 2014 budget does not include funding for these protections.

It is also unclear at this point if the budget includes enough additional funding to address the significant increase of homeless families at the DC General shelter.  Family homelessness has nearly doubled since the recession and while the budget includes funding for homeless families, it isn’t clear if it is much of a change from last year’s funding.  Already this year, there is not enough space at DC General to serve all families and over 150 are at motels.  Also, the budget would make significant changes to the policies governing the services for homeless families, and the impacts of these proposed changes on families needing help is unclear.  Stay tuned to the District’s Dime over the next few weeks for a more complete analysis of these changes and the budget for homeless services.

While Mayor’s Gray budget was helped by the growing economy, unfortunately sequestration limited the growth in overall revenue.  The mayor again included this year a priority restoration list of programs and services he would like to see funded if revenues grow more than anticipated.  The top five items include: $11 million to increase funding for child care to expand the number of slots and increase the reimbursement rates for providers; $6 million to the Office on Aging to support provider rate increases; $4 million to increase adult literacy programs; $2 million to expand the school mental health program and $3 million to increase funding for summer initiatives funded by the Children and Youth Investment Trust Corporation.

Lastly, Mayor Gray’s budget includes a proposal to restore a tax break for residents who invest in out-of-state bonds.  This move would make DC the only state to offer a tax break to residents that encourages them to invest in other states infrastructure and would cost the District nearly $12 million over the financial plan window. 

The out-of-state bonds tax break was eliminated just a few years ago and DC’s leaders dealt with the elimination in a reasonable way—by exempting residents who had already made investments assuming they would be tax exempt.  The benefits of this decision to limit the bond tax break to residents who invest in DC bonds was clear, with an increased demand for DC bonds that helped lower the cost of issuing them.  The District should not reinstate a costly tax break that encourages residents to invest in other states infrastructure.

Check back into DCFPI over the next few weeks as we will be breaking down the mayor’s budget in greater detail and for the release our budget toolkit that include in-depth analyses of the entire DC budget and key issue areas including: education, affordable housing, homeless services, health care, and revenues, just to name a few. 

Tomorrow, Mayor Gray will release his proposed budget for fiscal year 2014 to the DC Council.  From there, the Council will have just under eight weeks to review it, hold hearings, get public input, make changes and take a vote on how the city’s resources should be best deployed to meet the needs of DC residents and businesses.  To help kick things off, here’s DCFPI’s quick rundown of key dates and resources to help you understand the budget.    

Key Dates in the Fiscal Year 2014 Budget Process 

• March 28^th: Mayor Gray releases his proposed fiscal year 2014 budget.  The Mayor will hold a briefing for the Council at 9:30am, followed by a press conference at 11:00 am.  The entire budget likely will be available online at both the Mayor’s budget website (budget.dc.gov) and the Chief Financial Officer’s website (cfo.dc.gov/page/budget-0) sometime later that day.  
• April 8^th: DC Council holds hearing on mayor’s proposed budget.  At this hearing, open to the public (but not to testify), the Mayor, Mayor’s Budget Director and the Chief Financial Officer will testify about the ins and outs of the Mayor’s proposed budget.  
• April 10^th- May 2^nd: DC Council holds hearings on proposed budget for each agency.  Here is a great chance to have your voice heard on the District’s budget priorities.  The DC Council holds an oversight hearing to hear questions, concerns and support for the proposed budgets for each agency and the public is encouraged to testify.  A full schedule of the hearing dates is available on the Council’s website.  Can’t make it in person?  You can always submit written testimony for the public record.  
• May 3^rd: DC Council holds public hearing on fiscal year 2014 budget request act and budget support act.  Bring snacks and sign up early for this typically full-day hearing that covers the entire proposed fiscal 2014 budget.  It is also the last public hearing before the DC Council begins to mark-up the budget so if you haven’t been able to testify, now is the time! 
• May 22^nd: DC Council votes on the fiscal year 2014 DC budget.  This is the first of two votes held on the fiscal year 2014 budget, but this is a really important one! Why? While there are two votes on the budget support act (the legislation necessary to implement the budget) there is only one vote on the budget request act which governs the spending authority for the entire DC government.  This means that once the DC Council takes the vote on the 22^nd, the budget is really locked down and any changes made between this vote and second vote on the budget support act really cannot change allocated dollar amounts.  

Resources to Help You Understand the Fiscal Year 2014 Budget  

• DCFPI’s budget & revenue guides.    Just yesterday, we wrote about our new citizen’s guide to the DC budget; a user-friendly guide to help you understand the DC budget and how it is put together each year.  Complement this with our guide to the District’s revenues, and you’ll be well on your way to becoming a DC budget guru.  
• DCFPI’s analyses of the fiscal year 2014 budget.  Each year, DCFPI puts out an in-depth look at the entire DC budget as well as analyses of the budget for key issues areas, including:  Education, health care, affordable housing, TANF, revenues and more!  Keep an eye on the District’s Dime and our website about two weeks after the budget comes out for these in-depth analyses on the fiscal year 2014 budget.  
• Budget Briefings.  Each year, Mayor Gray and several DC agencies hold budget briefings to help the public better understand what is in the budget. Mayor Gray kicks off his Budget Town Halls (held in each ward) on April 10th in Ward 5; a full list of the dates, times and locations can be found here.  In addition, several agencies will hold budget briefings after the Mayor’s budget is released to help people understand how the proposed budget will impact the programs and services that the agency provides. Below is a list of the briefings that have been scheduled to date. DCFPI will send out more details of other agency briefings as they are scheduled. 
• DC Council’s budget website.  In addition to the list of budget oversight hearings, the DC Council’s website includes a section on the fiscal year 2014 budget where you can find additional resources on the DC budget including answers to questions that the DC Council’s budget office asks of the mayor, and questions and answers that each council committee submits to an agency in advance of their oversight hearing.  

Still have questions? Unsure where to find budget documents? Don’t hesitate to contact DCFPI with any questions on the budget or budget process and stay tuned to the District’s Dime for our first take on the mayor’s fiscal year 2014 budget before the end of the week.

To print a copy of today’s blog, click here.

Whether it is the number of sworn police officers DC maintains, the number of days your public library is open, the number of families who receive cash assistance, or the amount of assistance provided to small businesses — it’s all decided in the District’s annual budget. 

Mayor Gray is set to release his proposed 2014 budget this week.  And just in time, the DC Fiscal Policy Institute has issued a guide to help you understand this critical, yet often confusing process used to fund the services that are important to DC’s residents and our economy.

DCFPI’s Citizen’s Guide to the DC Budget can help you understand the ins and outs of the DC budget: how DC’s budget is put together each year, how to read budget documents, how the District spends the revenue it collects — and how you can get involved in the budget process!  Along with our guide to the District’s revenues, you are on your way to becoming a DC budget expert.

The complete guide can be found here.

Today’s guest blog is written by M. Bruce Lustig, Senior Rabbi at the Washington Hebrew Congregation, & James E. Terrell,  Pastor of the Second Baptist Church of Washington and President of the Council of Churches of Greater Washington

Whether it be a time of prosperity or economic crisis, the community has a moral obligation to care for the least among us.  The obligation is always there and we must respond. As leaders of faith communities and members of Good Faith Communities Coalition we remind those throughout the city of our common responsibility to share the gifts of God with all God’s Children. The District is prospering, adding thousands of new residents each month and announcing large surpluses in revenue.  But many residents are struggling and the prosperity that has helped so many in DC has also left so many behind.  

DC lost half of its low-cost rental units over the last ten years.  With rents skyrocketing and incomes staying flat, many families who must spend more than half of their income each month on housing are living just one step away from homelessness.  For these low-income families it means little left each month to cover basic necessities like food, clothing, transportation and savings.  It also means that they are more vulnerable to a sudden job loss or illness forcing them onto the streets.  

Mayor Gray has pledged to invest the District’s “prosperity dividend” to create and preserve 10,000 units of affordable housing by 2020.  To jumpstart this effort he has stated that he will commit $100 million from his upcoming budget to help meet the need.  We urge him to focus this current investment on those residents in greatest need—very low income individuals and families (those earning less than 30 percent of area median income, or $32,200 for a family of four) and the homeless.  We applaud this $100 million commitment, but even this substantial investment can only be a beginning.   We urge Mayor Gray to make this investment the first step in a long term commitment to address the full range of affordable housing challenges the city faces.  

For too many families homelessness is already an unfortunate reality.  With the dramatic increase DC has seen in homeless families over past several years, Mayor Gray’s budget must also include additional assistance for homeless residents.  We are deeply concerned as a community by the 600 children at the family shelter at DC General and the lack of a right to year round shelter for priority one families (families with no safe place to go), persons with disabilities and seniors.  For the most vulnerable among us, shelter must always be available, not just in hypothermia season.  And shelters must not be a permanent address, but rather a first step to affordable, sustainable housing. 

The recent report of the Comprehensive Housing Strategy Task Force, Bridges to Opportunity, set ambitious goals for DC — 8,000 units of affordable housing preserved and 10,000 net new units of affordable housing by 2020. Achieving this goal will take a long term commitment of resources and will from the District government and the community as a whole to see it through.  We must have this resolve not only in times of prosperity, but also when the economy is lean.  It is our moral obligation to respond.

To print a copy of today’s blog, click here.

DC’s Health Exchange recently decided to unify the marketplace for individual and small employer health plans.  This means that by 2016, all individuals and small businesses in the District will purchase health insurance through the new Exchange marketplace. The DC Exchange will ensure that quality and affordable health plans are available to all District residents. DCFPI’s Ed Lazere issued a statement in favor of this approach, which is reprinted here.  

“The DC Health Benefits Exchange Board’s decision to move to a unified health insurance market for all small business and individual health insurance plans — with a two-year transition period — is an opportunity to make quality and affordable health insurance accessible to all District residents. The DC Exchange will provide an online portal where consumers will be able to make apples-to-apples comparisons of a robust set of health plans, knowing that every plan will provide the consumer protections promised by the Affordable Care Act.    

Beginning in 2014, individuals and small employers (fewer than 50 employees) will be able to access health insurance and new federal subsidies through the Exchange. Small employers that currently offer insurance will be given a transition period to evaluate the new options on the Exchange. They will be able to purchase coverage outside of the Exchange until 2016.  

This unified market approach is the best way to improve access to affordable and high-quality health plans for individuals and small businesses, groups that historically have faced limited choices and high costs.   

All plans sold on the Exchange will meet the higher standards of quality and consumer protection that are intended by the Affordable Care Act and reflected in the standards established by the DC Exchange Board.  For example, consumers will have timelier access to services and be assured that their insurer has a sufficient pool of doctors in its network.  The Exchange will also improve access to mental health and other services.  A unified market ensures that these protections are consistent across every plan and that all residents will have a consistent shopping experience.  

In addition, creating one marketplace for health insurance will give small businesses and individuals access to a wide range of plans. The online shopping experience will be consumer friendly and lead insurers to compete based on price and the quality of their products.  This competition and transparency should stabilize premium costs over time.   

Unifying the healthcare market under the exchange is the best way to ensure that small businesses and individuals have a robust range of health plan options.  A unified market also is the best way to improve quality and affordability.  Due to the District’s unique geography and size, it is very unlikely the city could operate a high-quality Exchange while also having a parallel market for small businesses and individuals.  Without full participation in the Exchange, the outside market would likely offer lower-quality plans — with fewer consumer protections — that would nonetheless be cheaper and attract healthier residents.  This would leave less healthy residents in the Exchange, driving up premium costs and decreasing the quality of health insurance received by DC residents.   The unified market ensures a viable pool of residents in the insurance market and that they all receive a quality health plan.”  

To view the official statement, please visit here.

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While most District agencies are eagerly awaiting the Mayor’s budget to be released on March 28^th, leaders at DC Public Schools have already received their initial budget allocations for the next school year. As in years past, principals and Local School Advisory Teams (LSATs) were given only about a week to digest the changes in the FY 2014 Budget Development Guide and make decisions about how best to staff their school, with their final school budgets submitted to DCPS last Thursday. 

Here is our summary of the major changes schools will see next year, based on the DCPS FY 14 budget guide and initial school allocations. Note that these figures are preliminary and may change when the Mayor’s budget is released, so, check back with DCFPI for updated analyses in the coming weeks.

School Funding Will Decrease from FY 2013 to FY 2014

Mayor Gray announced that the new Uniform Per Student Funding Formula foundation level, which is used to fund both DCPS and public charter schools, will increase by two percent in FY 2014, to $9,306. Despite this increase, analysis of the preliminary allocations by DCPS to local schools shows an $8 million reduction in general education funding, from $358 million to $349 million.  (See DCPS General Education Spending Tables)  General education spending per pupil — which excludes federal funds and funds for special education, Title I and ELL — will increase for elementary schools and education campuses but will fall for secondary schools, particularly magnet high schools, saw the steepest decline in average per pupil spending. Update: This analysis was based on initial school allocations – please check DCFPI’s FY 2014 education budget toolkit for the latest information.

Increased investments at the primary school level

The local school allocations reflect an increased emphasis on literacy and language at the elementary school and education campus levels. Small elementary schools serving fewer than 250 students will receive 2.5 staff to fund their required art, music, PE, and world language positions, while elementary schools between 250 and 400 students will receive three full-time allocations for these four staff positions. Schools serving over 400 students will be allocated 4.5 for all four positions.

Change in Small School Size

DCPS allocates staff differently to schools defined as “small.”  For FY 2014, the enrollment level used to define a small school increased, which means more schools will get the reduced staffing associated with smaller schools.  Smaller schools were defined this year as those with fewer than 300. Next year, schools enrolling at least 400 students will qualify as a small school.  This is the second year in a row that this definition has been changed.  

Small schools, under this new definition, get less funding for administrative staff. For example, schools serving fewer than 400 are only funded for a half-time business manager and do not receive a clerk allocation, while larger schools get full-time staff for these positions. Small elementary schools between 300-400 that were funded for a full-time art, music, and PE teacher in the current year’s budget will only see 0.75 allocations for the required art, music, PE and world language teachers for next year.

Special Education Student-Teacher Ratios

The student-teacher ratio for some special education classrooms appears to have increased. This year, students with learning disabilities who needed full-time specialized instruction had student-teacher ratios of 12:1 at the high school level and 10:1 at the elementary and middle school level. Those have both increased to 15:1 this year. Early childhood autism classrooms have also increased from 3:1 ratios to 8:1 ratios. Update: DCPS has since verified that the special education ratios have not changed from FY13 to FY14 and both aide and teacher ratios should be considered when looking at the budget guide.

School Librarians

Last year, schools enrolling fewer than 300 students were not funded for a librarian position. In the FY 2014 initial budget allocations, every school is funded a librarian, with small schools (under 400 students) receiving a half-time position and large schools receiving a full-time position. However, because the new definition of a “large school” is enrollment of at least 400 students,  schools serving between 300 and 400 students that had funding for a full-time librarian this year will get funding only for  a half-time librarian next year.

Out-of-School Time Programs

There is a change in how out-of-school time funding will be distributed to schools next year – funding for afterschool program staff now appears within individual school budget allocations to ease the hiring process for schools. The new line item, which encompasses Afterschool Programs, Evening Credit Recovery (ECR), and Proving What’s Possible extended-day grants, amounts to less than $5 million across DCPS schools. DCFPI was informed that some additional funding for curriculum, security, supplies, field trips and other support is expected to be available again from the Out of School Time Program (OSTP) central office, and should appear in the Mayor’s budget. Total funding for OSTP is $6.7 million total (including what is in school budgets), which keeps in place the cuts that were made for the current year. According to the budget guide, 15 schools will receive ECR funding and 59 schools will receive Title I and TANF funded afterschool programs.

Proving What’s Possible Funding

Last summer, DCPS announced that $10.4 million in grants would go to 59 schools to implement innovative programming.  For next year, the total Proving What’s Possible (PWP) funding totals $6.5 million, which will go towards continuation grants (which will be specified in the Mayor’s budget next week), staff positions focused on literacy, and the extended day programs mentioned above.  According to the budget guide, the PWP funding distributed to schools in FY 2013 were mostly one-time awards. However, 9 schools that began implementing extended-day programs in 2013 will be funded again next year to continue their programs. Eleven of the 40 lowest performing schools will receive PWP funds to focus on literacy, including an assistant principal and reading specialist positions. 

Looking for even more budget information? See below for a few handouts that were passed out by DCFPI at last night’s DCPS budget briefing:

• Budget Timeline for Education
• DCPS Budgeting Basics
• DCPS General Education Spending Tables

There will be more information to analyze when the Mayor’s budget does come out later this month, providing the full funding picture for DCPS and Public Charter Schools. DCPS staff have also committed to another budget briefing prior to the April 17^th budget hearing, so keep checking the District’s Dime for updates this budget season!

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The DC Council held a hearing today to address the fact that the DC economy sets many residents up for failure. The problem:  thousands of low-wage jobs that leave workers and their families in poverty and struggling to cope with DC’s very high cost of living.  

The bill before the DC Council, the Large Retailer Accountability Act, is one effort to find solutions to this problem.  It would require large retail corporations to pay their workers a living wage, defined in the bill as $11.75 per hour in combined pay and benefits.  The bill would affect only the largest retailers in the city, including Target and the soon-to-be-open Walmart stores.  

One-fifth of working DC residents earns below $13 per hour.  Even with full-time year-round work, that leaves a family of three below 150 percent of the poverty line.  Many of the lowest-wage occupations in the District are in retail.  The median wage for cashiers in the DC area is $10 an hour and the median wage for retail sales workers is $11 an hour.  

There are many negative effects of low-wage work in the District:  

• High Rates of Working Poverty:  The majority of DC families with incomes below 150 percent of poverty work, and one-third are working full-time year-round.
• Affordable Housing Challenges for Low-Income Working Families:  DC’s housing costs are rising sharply, while incomes at the bottom of the earnings scale are staying flat.  The typical low-income family now spends more than half its income for housing, leaving families at risk of homelessness.  

Low wages also create challenges for important District initiatives.  Families living on low wages are forced to live in the areas of the city with the lowest housing costs, leading to neighborhoods with high concentrations of poverty.  These neighborhoods tend to have the highest crime rates and lowest-performing schools.  The District is moving assertively to help families prepare for work, but the low wages of families leaving welfare — $9 an hour on average — threaten the success of these reforms.  

In other words, low-wage jobs create costs that all of us pay.

Some opponents of the bill say that it is unfair to set higher wage standards just for large retailers, and indeed there are other policy changes that could affect a larger number of workers, such as an increase in the minimum wage.  Nevertheless, there are at least two reasons why it may make sense to start with large retailers.  As noted, retail jobs are among the lowest-paying overall.  Large retailers have greater ability than small businesses to reduce prices charged by suppliers, and large retailers have substantial marketing budgets, both of which make them more able to absorb pay increases.  Beyond that, large retailers are also large employers, and the wages they pay heavily influence the industry standard.   

The hearing on the Large Retailer Accountability Act is an important opportunity to discuss solutions to the problem of low-wage work in the District.  You can read DCFPI’s testimony here.

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The District’s Dime is focusing on the themes that we hope will be reflected in the fiscal year (FY) 2014 budget. Our focus today is on helping DC residents in crisis.  

Many programs that serve DC’s most vulnerable residents were cut during the Great Recession.  This includes an 80 percent cut in the number of residents with disabilities who get help from the District while they apply for federal benefits.  It also includes reductions in benefits for long-term welfare recipients without any of the protections most states put in place for families facing severe barriers to work. 

As the city’s revenues improve, the District can use its growing resources to reinvest in these programs, particularly Interim Disability Assistance (IDA) and Temporary Assistance for Needy Families (TANF). The District also should use its resources smartly to help more DC residents through the complicated process of applying for federal disability benefits.  The more help is provided up front, the more likely residents are to get through the complex application process.  Federal SSI benefits provide more stable incomes while also reducing DC’s budget demands. 

Help More Residents with Disabilities:  The IDA program provides $270 a month to residents with disabilities that prevent them from working. These residents are in limbo — unable to work and waiting to qualify for federally Supplemental Security Income (SSI) benefits, which can take a year or two, if not longer.  Local funding for IDA was cut from $5.6 million in FY 2008 to $1.5 million this year.  Only 550 residents are currently receiving assistance each month, compared to 2,900 in recent years. 

Help Families with Serious Barriers to Work:  Currently, the District doesn’t require families facing serious issues, such as domestic violence or the need to care of an ill child, to be looking for employment, but each family’s 60-month time limit clock continues to run, even though most states stop the clock in these situations.  The Council’s adopted budget for 2013 time limit exemptions for these families, but it was  put on a contingent list was not funded due to inadequate revenues.  Now that new revenue has been identified, these exemptions should be included in the FY 2014 budget.    

Help More Residents Apply for Federal Disability Benefits:  SSI provides a steady, monthly income for people who have disabilities that prevent them from working.   There is substantial research showing that early assistance in the SSI application process — which the District currently does not offer — greatly increases the success in getting approved for benefits. Other states have increased the number of successful SSI applicants by training existing staff or contracting with a for-profit company or non-profit organization, at relatively minor expense.  The District should adopt one of these strategies to enable residents with severe disabilities to exit crisis and secure a stable income.

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The District’s Dime is focusing on the themes that we hope will be reflected in the fiscal year (FY) 2014 budget. Our focus today is on giving children a safe place to learn and grow. 

Children need a safe place to go where they can continue to learn and be nurtured outside of the traditional school day.  Yet programming for out-of-school time programming within DCPS was cut for the current school year, and it appears that those cuts will remain in place next year under current plans.

The Office of Out-of-School Time Programming (OSTP) within DCPS, promotes high-quality programs and access to out-of-school time services for the city’s neediest residents, through a combination of organized school-based services and intentional coordination with community partners.

This year, the OSTP provided programming for 61 sites, but funding was cut by $3 million and many schools had to share an afterschool coordinator. In addition, DCPS administered a “Proving What’s Possible” (PWP) grant competition last summer which awarded 59 schools with grants ranging from $10,000 to $490,000 to implement “innovative programming” to improve academic achievement. To date, an evaluation of these programs has not yet been done, making the impact and sustainability of PWP funding uncertain.

In addition, DCFPI’s first look at the initial school budget allocations  for next school year suggests that OSTP funding will remain at this year’s reduced level.  There is also a change in how OST funding will be distributed to schools next year – funding for afterschool program staff now appears within individual school budget allocations to ease the hiring process for schools. The new line item, which encompasses Afterschool Programs, Evening Credit Recovery, and Proving What’s Possible extended-day grants, amounts to less than $5 million across DCPS schools. DCFPI was informed that some additional funding for security, supplies, field trips and other support is expected to be available again from the OSTP central office, and should appear in the Mayor’s budget released March 28th.

DCFPI thinks funding for OST programs should be a priority for the District. Research indicates that participation in quality out-of-school-time programs is associated with lower grade retention, greater student attendance, and an increased interest in school, all of which can lead to better academic outcomes.

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The District’s Dime is focusing this week on the themes that we hope will be reflected in the fiscal year (FY) 2014 budget. Our focus today is on giving parents the tools to succeed in the job market. 

Unemployment remains extraordinarily high for certain groups of DC residents, including single parents.  In 2012, nearly one in four single parents were unemployed in DC—almost double the unemployment rate for this group in 2006. The District can help these parents get back to work. By making improvements to the Temporary Aid to Needy Families (TANF) program and increasing access to affordable child care. 

As regular District’s Dime readers know, DC is in the process of implementing improved employment services for TANF parents. The results of this approach have been very promising, but a lack of funding threatens this success.  More than 1,200 parents are waiting for a slot to open up at an employment service provider, meaning they are unable to receive the services they need to prepare for work. The current wait time is four months, but is likely to increase as the District plans on assessing more than 9,000 parents in the next four months, many of whom will be referred for employment services.  The District can help more parents by increasing funding for TANF employment services.      

Access to affordable child care is another factor in getting parents back to work. Yet low reimbursement rates for providers in the DC’s child care program create major barrier to access to high-quality child care. DC’s child care reimbursement rates are pegged to 2004 child care costs. Without adequate reimbursement, providers are unable to keep up with their rising costs and offer quality child care.  

Many centers that offer care primarily to infants and toddlers face financial challenges, and several have closed their doors. According to the 2010 DC market rate survey, about 30 percent of all family home providers and 17 percent of all child care center providers operating in 2008 were no longer in business in 2010.  This leads to a shortage of child care providers for families with infants and toddlers and children with special needs. 

DCFPI thinks it’s time to update DC’s child care reimbursement rates to match current costs of providing care. Child care centers and other providers help make sure children start school ready to learn while allowing their parents to go to work or school. 

The DC economy offers tremendous opportunities, but without providing the tools to succeed, economic recovery will leave many residents behind. By increasing our investments in TANF employment services and affordable child care, we can help parents succeed.

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The District’s Dime is focusing this week on the themes that we hope will be reflected in the fiscal year (FY) 2014 budget that Mayor Gray will soon release. Our focus today is on housing. 

DC’s economic resurgence — evidenced by a growing population and increasing employment base — is generally good news, but it also is contributing to skyrocketing housing costs that are increasingly out of reach for many. Over the last decade, DC lost half of its low-cost rental units and more than 70 percent of its low-value homes. At the same time, the incomes of DC households have not kept pace. The bottom 40 percent of DC households haven’t seen their incomes rise by any statistically significant amount. 

That’s why it is great news that Mayor Gray pledged $100 million in the upcoming budget to kick-start an effort to create 10,000 affordable housing units — a notable investment. As Mayor Gray gets ready to present his budget to the DC Council on March 28^th, what are some programs that should be included in the FY 2014 budget to help residents cope with rising housing costs? 

• Invest in New Housing:  The Housing Production Trust Fund (HPTF) is DC’s main source for affordable housing construction and renovation.  It also helps tenants who wish to purchase their building if it is put up for sale.  Funding for HPTF fell sharply in the Great Recession, setting back efforts to construct and preserve affordable housing.  
• Help Very Low Income Residents Pay Rent:  DC’s Local Rent Supplement Program (LRSP) helps make housing affordable to very low-income DC residents.  LRSP provides rental assistance to owners of housing, often non-profits, to make their units affordable to residents in low-wage jobs or living on fixed incomes.  LRSP also provides monthly assistance directly to residents to help them afford housing they find on their own.  
• Provide Housing and Services for Homeless Residents:   DC’s Housing First Program, also known as permanent supportive housing, provides housing and case management services to the chronically homeless, helping people with severe barriers to housing stability get back on their feet.   
• Improve DC’s Tax Credit for Residents Struggling with High Housing Costs:  The DC Council recently passed legislation that would make significant improvements to Schedule H — DC’s tax credit for households with high rents or property taxes — that could help tens of thousands of DC residents cope with the rising costs of housing.  Unfortunately, the improvements need to be funded before they can take effect.   
• Prevent Homelessness through the Emergency Rental Assistance Program (ERAP):  ERAP provides one-time assistance to residents at risk of losing their housing. The program prevents homelessness and always runs out of resources before the end of the year. 

Support for these programs in the FY 2014 budget will help meet the growing number of residents who need help coping with rising housing costs. Stay tuned to the District’s Dime tomorrow for what programs the FY 2014 budget should include in order to give parents the tools to succeed in the job market. 

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Much of the discussion of school test scores in the District focuses on system-wide changes from year to year, such as the change in proficiency among all DCPS students.  While this information is important, we at the DC Fiscal Policy Institute think it also is worthwhile to look at changes at the individual school level.  How well is the typical school doing?  What is the range of progress among various schools?  We decided to look at the proficiency rate in every school — the share of students scoring at the proficient or advanced level — in both 2008 and 2012. 

What did our analysis find? The proficiency level at the typical publicly funded DC school — that is, the mid-point among all DCPS and public charter schools combined — stood at 41.2 percent in 2012, down slightly from 41.8 percent in 2008. Behind this overall lack of progress, however, there is a lot of diversity. Of the schools operating in both 2008 and 2012, roughly one-third saw a notable decline in proficiency, one-third had modest changes, and another third saw notable increases.  In every ward and at every age level, there were schools where proficiency improved during the four-year period and schools where proficiency declined. 

That said, there also were some notable trends:    

• Math proficiency at the typical school improved, while reading proficiency fell. The most dramatic growth for math was seen at the typical middle school.  The most dramatic decline was in reading at the elementary school level. 
• The typical public charter school showed improvement in proficiency, while the typical DCPS school declined over the four years.
• The typical DC schools in Wards 4, 5, 7, and 8 saw proficiency declines while the typical school in Wards 1, 2, 3, and 6 saw increases.
• The lowest scoring schools in 2008 experienced increases in test scores between 2008 and 2012, but they still struggle with very low proficiency rates. The schools in the broad middle in 2008 saw declining proficiency rates over the four years, while the top performers saw a small increase. 

DC Public Schools 2012 “Capital Commitment” plan includes the ambitious goal of increasing proficiency rates at the 40 lowest performing schools by 40 percentage points by 2017. Given the test score trends over the past four years, DCPS will needs to change the ways it supports individual schools to make this goal a reality, including steering more resources to lower-performing schools.  DCFPI soon will analyze DCPS’ proposed school budget allocations for 2013-14 to see whether they reflect efforts to add supports to schools in need.

You can read the full report here.

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The District’s budget for Fiscal Year 2014 offers an opportunity to improve access to health services in the city, especially among low-income, uninsured residents and those in need of mental health services.  While the Affordable Care Act will bring many improvements to health access over the next year, with creation of a new DC Health Benefit Exchange, the District’s health system depends on strong publicly funded programs for uninsured low-income residents including the Healthcare Alliance and Medicaid.  The FY 2014 budget can be used to address gaps in both programs.

Addressing Barriers to Access in the Healthcare Alliance for Residents with Language and Cultural Barriers. The Alliance serves residents with incomes below 200 percent of the federal poverty line who are otherwise ineligible for Medicaid, including noncitizens.  Enrollment in the Healthcare Alliance has declined significantly, in part because of new recertification rules designed by the District to limit the number of non-DC residents accessing the program.  The recertification requires a face-to-face interview every six months, which was expected to reduce the caseload by 20 percent, or fewer than 4,700, but the actual drop during 2012 was nearly 8,000 participants.  This suggests, not surprisingly, that the frequent recertification process is creating barriers to participation among eligible residents, many of whom are working and unable to leave work for frequent in-person interviews.  

Mayor Gray should maintain funding for the Alliance in FY 2014, rather than diverting savings from enrollment declines to other programs. Moreover, as the District implements a coordinated eligibility and enrollment system under health reform, DC should begin aligning Alliance’s recertification with Medicaid’s annual renewal to reduce barriers to participation. 

Increasing Medicaid reimbursement for Mental Health Services will help increase access to providers and address growing mental health disparities in our community.  As a result of low Medicaid reimbursement rates, there aren’t enough mental health providers serving Medicaid recipients.    The Districts’ reimbursement rates for mental health services have gone unchanged since 2001.  When taking inflation into account, the average 2012 reimbursement rate is 19 percent lower than in 2001.   As reimbursement rates fall behind medical inflation and other operating costs, providers are unable to maintain services.  

Given that, the District’s FY 2014 budget should adjust reimbursement rates for lost ground and adjust them in the future to keep pace with inflation.  This should improve the number mental health providers and help ensure timely access to treatment for low-income residents. 

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Last week, we let you know that even though DC is recovering from the recession, many of our residents haven’t been able to climb out.  The fiscal year 2014 budget season and DC’s improving finances offer an excellent chance for DC to invest resources to make sure that all residents can experience a recovery as well.

Here are some principles that should guide the budget for Fiscal Year 2014

Help DC Residents Cope with the Rising Costs of Housing

Everyone knows that the cost of living in DC – especially housing – has risen to levels that are out of reach for many residents. To help families cope with rising costs, the budget should devote significant resources to programs that build new housing or make existing housing affordable, such as the Housing Production Trust Fund and the Local Rent Supplement Program.  DC’s underfunded Emergency Rental Assistance Program is a cost-effective way to help families avoid housing crises, and the Tenant Opportunity to Purchase Program can help residents buy their apartment building and avoid displacement while their neighborhood develops.  The FY 2014 budget also should be used to develop a new approach to rising homelessness among families with children. 

Give Parents the Tools to Succeed in the Job Market

The Temporary Assistance to Needy Families (TANF) program helps vulnerable families to pull themselves up to a place of self sufficiency. The program offers training to those parents who need certain skills before they can compete in the labor market. Unfortunately, the program’s capacity is insufficient for DC needs. The budget should include funding for an increase in job training slots so that all work ready parents can get the skills they need to succeed.

The FY 2014 budget also should address a growing problem that is making it had for working parents to get child care. Right now, many child care centers cannot afford to take in low-income children because reimbursement rates in DC’s child care subsidy program are insufficient. When parents do not have stable and safe childcare, they cannot maintain stable employment.

Make Sure People Have Access to Care

The DC Healthcare Alliance offers health care services for thousands of low-income residents, but new administrative burdens, such as twice a year re-certification for current participants, has made it harder for eligible residents to get health care.  Beyond addressing that, the FY 2014 budget should increase low Medicaid reimbursement rates for mental health services, to ensure that there will be enough providers to meet the needs of residents needing caret.

Give Children a Safe Place to Learn and Grow

Outside of the traditional school day, many students need a safe place to go where they can continue to learn and be nurtured. Out of school time programs, which have been cut in recent years, and summer programs, should be adequately funded in 2014.

Help DC Residents in Crisis

DC’s most vulnerable residents need a significant amount of help in this budget. Many families in the TANF program are unable to work because they are in crisis or dealing with serious chronic problems. The DC budget should include funding for time limit exemptions for families who are facing issues like domestic violence or serious illness.

The FY2014 budget should also increase funding for Interim Disability Assistance (IDA). This program provides benefits for individuals with disabilities while they await approval of Supplemental Security Income from the federal government. Unfortunately, the program is underfunded, leaving many DC residents who are unable to work, without any income whatsoever.

The dynamic DC economy offers tremendous opportunities, but without providing the tools to succeed, economic recovery will leave many residents behind.  Like any community, the District will be a stronger place if everyone succeeds. Stay tuned to the blog for more details on each of our FY2014 budget goals and how they can make DC stronger for everyone.

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We learned a lot about the city’s economic and  financial health — and about the outlook for DC’s upcoming fiscal year 2014 budget — at Thursday’s “What’s In Store?” forum held at DCFPI’s offices.  The District’s leading budget and finance officials were on hand to share their insights, and here are highlights of what they said.

Steve Swaim, a senior economist with the office of the Chief Financial Officer, told a mixed story on DC’s economy.  He noted that “there are more jobs in DC than ever” and that the number of working DC residents is growing rapidly.  But he also noted that rapid job growth of recent years is slowing down. As for DC’s budget, Swaim pointed out that the CFO expects DC’s revenue collections to grow slowly this year and next, in large part because federal budget sequestration will take a toll on the DC economy.

Steve’s presentation can be found here. 

Jennifer Budoff, Budoff stressed that the Council’s budget office plays a supportive role in the budget process, helping all 13 Council members meet their budget goals. But she also recommended that when advocates are working with individual Council members on a budget issue, they also should share the proposal with her office so that she and her team can play that supportive role.

Jennifer’s presentation can be found here. 

Eric Goulet, director of the Mayor’s Office of Budget and Finance, discussed the city’s recent surplus and revenue forecast and their impact on the upcoming budget.  Goulet highlighted a number of demands that will eat into DC’s growing revenues, including higher school enrollment and the need to replace depleted federal TANF funds, but he also noted there will be some opportunities for new investments.  Mayor Gray’s pledge to add $100 million to affordable housing is one example. 

Goulet noted that budget decisions will be made soon, and that any last-minute requests from the public need to be received very soon — by email to eric.goulet@dc.gov. 

Eric’s presentation can be found here. 

Jenny Reed, policy director with the DC Fiscal Policy Institute, noted that DC’s economic recovery has been uneven, with unemployment and poverty remaining high in the wake of the recession for many groups of DC residents.  Reed noted that many of the programs that could help unemployed residents were cut in the recession, but that the city’s improving finances create an opportunity to start re-storing those supports.

Jenny’s presentation can be found here. 

Also, you can read a great summary of the forum from the Washington Post’s Mike DeBonis.

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A new analysis of unemployment figures from DCFPI highlights the uneven impact the recession has had on District residents.  While DC’s overall unemployment rate fell from ten percent in 2011 to nine percent in 2012, unemployment for several groups of DC residents continues to be far higher than before the onset of the recession. 

• Single parents.  In 2012 nearly one in four single parents were unemployed in DC— almost double the unemployment rate for this group in 2006. 
• Low-wage workers.  In 2012, unemployment among workers in low-wage occupations is more than four times as high as for high-wage workers.  Nearly 16 percent of low-wage workers were unemployed last year, a decrease from the 2011 rate of 18 percent.  Yet, unemployment levels remain far higher for low-wage workers than in 2006 when unemployment was 11 percent. 
• African-American workers.  The unemployment rate among African-American DC workers was 18 percent in 2012, a decrease from 2011.  However, unemployment remains nearly twice as high as in 2006, before the onset of the recession, when unemployment among African-American workers was 10 percent.  
• Residents without a degree.  While unemployment fell for residents without a postsecondary degree in 2012, it remains far higher than before the recession.  In 2012, some 19 percent of residents without a high school diploma were unemployed, compared with 16 percent in 2006.  Unemployment among those with a high school diploma, 21 percent in 2012, is twice as high as it was in 2006.  

Unemployment levels fell substantially in 2012 for residents with post-secondary degrees, those in high-wage occupations, and White residents — dropping to levels that are close to pre-recession levels.  

The full analysis that highlights the continued impact of the recession on certain groups of residents can be found here.

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The Snowquester will not stop the District’s Dime!  We hope all our readers are staying safe today. 

The financial news coming from the District shows that DC is climbing out of the hole left by the recession, even with the recent sequestration.  DC’s revenue collections are back to pre-recession levels, the city had a $240 million surplus in 2011 and a $417 million surplus in 2012, and thousands have made DC their new home.  

Yet for many residents, their circumstances have not recovered from the recession, a topic discussed at a forum yesterday sponsored by the Fair Budget Coalition.  Poverty and unemployment remain high, and many programs that support residents in need were cut in recent years to help balance budgets.  With DC’s finances recovering, it is time to begin to re-invest in programs that help ensure all residents can succeed.  

Here are some trends highlighted at the forum: 

• Nearly one third of DC’s children live in poverty, a sharp increase since 2007.
• The number of homeless families has nearly doubled since 2008.
• One in four single parents is unemployed despite looking for work, a rate that doubled in the recession.  Unemployment also remains far higher than before the recession for DC residents without a postsecondary degree and low-wage workers. 

Amidst these growing challenges, several programs aimed at helping residents are strapped. 

• Funding for TANF work programs can serve only 63 percent of time-limited families.  DCFPI applauds Mayor Gray for taking steps to delay the TANF benefit cuts, but we also encourage the Mayor and Council to ensure every parent is able to take advantage of new TANF services. 
• DC’s childcare program has seen its subsidy budget cut by $30 million over the last five years.
• The number of residents with disabilities getting assistance from the Interim Disability Assistance program has dropped 80 percent since 2009. 

 With a $190 million surplus in FY 2013, it is time to use some of DC’s revenue growth to help residents who are still struggling in wake of the recession.  Mayor Gray has already pledged $100 million for affordable housing — an area that has seen funding reduced by 27 percent since 2008 — and DCFPI encourages the Mayor and Council to see how the increased prosperity in DC can continue to be re-invested in programs that help ensure all residents succeed.

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Today the DC Council will consider a bill to delay steep cuts in Temporary Assistance for Needy Families (TANF) cash assistance that would otherwise go into effect April 1^st for 6,500 families.  The delay in cuts until October 1^st was included in the 2013 budget on a “contingent” list, but could not be funded until the recent increase in DC’s revenue forecast. Today’s action, if approved, will give parents more time to access the services they need to successfully transition to self sufficiency. 

Even with this short-term delay, however, it is likely that many families will see a benefit cut in October without a job to replace the lost assistance.  Steps will need to be taken to make sure these families don’t fall into crisis — when TANF benefits fall to just $257 for a family of three who has received assistance for 60 months or longer.

DC’s Department of Human Services is in the midst of implementing promising reforms that, if given time, will help more families prepare for work.  By delaying cuts until October, for example, DHS will be able to complete one-on-one assessments for nearly all families facing a cut, providing an in-depth evaluation of each parent’s strengths and barriers to employment.  Based on these results, parents are referred to targeted support services or an employment service provider.  The results of this approach have been very promising, with parents in the pilot program increasing work participation ten-fold. 

Unfortunately, the six-month delay in benefit cuts is not enough to protect particularly vulnerable families who need more time to deal with serious issues that interfere with their ability to work, such as domestic violence or the care for an ill child.  Currently, the District doesn’t require these families to be looking for employment, but each family’s 60-month time limit clock continues to run.  Most states stop the clock to allow families time to deal with these issues.  The Council’s adopted budget for 2013 also proposed creating time limit exemptions for these families, but this was also put on the contingent list and will not be funded by today’s Council action.

DCFPI encourages the Council to support this bill to help parents on TANF get the resources they need to be successful.  We also urge Mayor Gray and the Council to work together to identify $7 million in the fiscal year 2014 budget to maintain benefits for families with barriers that prevent  them from looking for work.  By working together, they can keep families on a path of progress and independence.

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The sequester is here and revenue growth has slowed, but DC still has needs. How is the picture looking for DC given these concerns? DCFPI and the Fair Budget Coalition are hosting a forum this Thursday to find out.

The forum will be held Thursday, March 7th at 9:30AM at DCFPI, located at 820 First Street NE (near Union Station Metro). Please R.S.V.P by March 6th to Tina Marshall, marshall@cbpp.org. 

We look forward to seeing you there!

To print a copy of today’s blog, click here.

It appears inevitable that on Friday, March 1^st, sequestration — or automatic federal budget cuts — will take effect. These immediate budget cuts will reduce federal funding for a vast array of programs, including many that provide grants to DC and other cities and states. The cuts that will affect DC include, among others, education, affordable housing, assistance for homeless residents, HIV/AIDS services, and workforce development. 

Unfortunately, the round of cuts triggered this Friday may not be the last one.  A second, much smaller, sequestration could hit on March 27^th if Congress opts to reauthorize the current “continuing resolution” to fund the federal government for the rest of 2013. (As the District Dime noted yesterday, reduced federal spending also will hurt the local economy, which relies heavily on federal employment and contracting, and this slowdown will reduce the city’s expected tax collections.) 

This Friday’s sequestration will result in 5 percent cuts to all non-defense programs, and these cuts will have to be absorbed in the remaining seven months of the fiscal year.  How will this impact DC?  While there is some uncertainty as to how cuts to each program area will be achieved, here are some examples of some likely cuts in the District.

• Education: Funding to DC for Title I to provide supports for low-income children would be cut by $533,000 and federal IDEA funds for special education services would lose $925,000. 

• Affordable Housing:  Federal cuts will reduce funding for the DC Housing Authority which manages the District’s public housing and federal housing voucher programs. The sequester will also reduce the federal Community Development Block Grant by $723,000 and HOME Grant programs by $226,000, which DC’s Department of Housing and Community Development uses to support affordable housing and community development projects.  Finally, sequestration will reduce federal funds for homelessness assistance (such as the Emergency Shelter Grant and Shelter Plus Care Grant) by $1.1 million at a time when DC is experiencing a huge rise in the number of homeless families.

Some safety net programs are exempt from sequestration, including Social Security, Medicaid, Children’s Health Insurance Program (CHIP), child nutrition, Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income, and the Earned Income Tax Credit. 

The second, and much smaller, sequestration could hit on March 27^th and stems from a law passed last year that established caps to reduce funding for discretionary programs (i.e. non-entitlement programs) through 2021.  The Congress has not yet adopted a budget for 2013 and is operating on a temporary measure, or continuing resolution (CR) until March 27^th.  The funding levels in the CR exceed the budget caps for 2013.  This means if Congress extends the current CR to fund the federal government beyond March 27^th, it will have to reduce discretionary spending — by about $1 billion — to fit within the cap.  Many of the programs subject to the March 1^st sequestration will see further cuts at the end of March.

DC’s Chief Financial Officer confirmed last week that the city’s revenue collections are increasing due to a growing population and expanding economy. The upward changes to the city’s revenue forecast will allow the Mayor and Council to support a supplemental budget for 2013, and will give the Mayor some opportunities to make new investments when he submits a budget for 2014 in March. 

The bad news is that the new CFO forecast actually projects weak revenue growth for this year and next, especially compared with recent trends. While DC’s tax collections grew an average of 8.4 percent per year in 2011 and 2012, the new forecast suggests revenues will grow only 1.4 percent per year in 2013 and 2014. The main culprit:  federal budget cuts from sequestration (or whatever may ultimately replace it) that will affect employment in the DC region and sap the main driver of our local economy. 

The key figure reported last week is that projected revenues for 2013 are now $190 million higher than the last forecast for 2013.  That sounds like — and is — a substantial increase.  But it also is a bit misleading, because the last forecast was made a year ago, and the city’s economy has grown a lot since then.  

A clearer picture of the state of DC’s finances comes from looking at actual revenue collections in the last two years and projections for this year and next. By that, the District’s finances are not looking strong at all. DC’s tax collections soared in 2011 and 2012 — rising $315 million in one year and $572 million in the second. But last week’s forecast projects that revenues will rise just $92 million in 2013 followed by another $80 million in 2014.

The CFO’s forecast seems to assume the impact of federal budget cuts will be swift and severe — largely as a result of furloughs of federal government employees and cuts in federal contracting starting in March.  Consider this: DC’s sales tax collections in the first four months of Fiscal Year 2013 are running 18 percent higher than the same period last year, and income tax collections are 22 percent higher, a reflection of a growing population and rising incomes.  Yet the new revenue projection suggests that both sales tax and income tax collections will be lower for the last eight months of the year than in the same period in 2012.  In other words, the federal cuts will almost immediately slam the brakes on our fast-moving economy. 

There are some other signs of softening in DC’s economy, too. While the number of working DC residents is growing, the number of jobs in the city (held by residents and non-residents) is not. And the amount of office space in use in the city fell slightly last year. Both of those seem to reflect early signs of a shrinking federal government.  

The CFO’s revenue projection finds that DC’s economy and finances are strong — but very vulnerable. Even with federal budget cuts, the city’s tax collections are growing and creating some opportunities for new initiatives.  But economic and revenue growth will be hampered greatly by federal budget cuts. DC, like the rest of the region and nation, will be in much better shape if the President and Congress work to create a more thoughtful plan to address the federal budget.

To print a copy of today’s blog, click here. 

With just a few weeks to go before the Mayor releases his fiscal year (FY) 2014 budget, join DCFPI and the Fair Budget Coalition for a forum on the FY 2014 budget. 

The forum will be held Thursday, March 7th at 9:30AM at DCFPI, located at 820 First Street NE (near Union Station Metro). Please R.S.V.P by March 6th to Tina Marshall, marshall@cbpp.org. 

We look forward to seeing you there!

To print a copy of today’s blog, click here.

DCFPI testified today before the DC Council Committee on Education to highlight two ways that that DC Public Schools can extend the reach of its limited resources while serving the needs of our most vulnerable students. These kinds of targeted steps are needed to meet the school system’s goal of improving test scores dramatically at lower-performing schools. 

• Effective out-of-school time programming: Through a combination of organized school-based services and coordination with community partners, the DCPS Out-of-School Time Programming has promoted high-quality programs and increased access to out-of-school time services for the city’s neediest residents. Yet DCPS cut funding for these services this year, and the process for awarding new “Proving What’s Possible grants” was rushed and lacked transparency.  DCFPI recommends that funding be strategically invested to ensure the continuity and scaling up off effective programming. The school-based coordinator model should be reinstated to improve the ability to partner with community-based organization to support each school’s academic plans. 
• Expand quality parent engagement efforts: DCPS is working in partnership with the Flamboyan Foundation to provide robust parent engagement services in a handful of schools.  These privately funded efforts already are showing positive outcomes but will need to be supported with public to be scaled up system-wide.  DCFPI encourages the Council to identify plans and funding to scale up these strategies across DC’s schools. 

We hope that DCPS will address these priorities during next Friday’s performance oversight hearing with government witnesses. You can read the full DCFPI testimony here.

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Mayor Gray announced this month that he will invest$100 million in affordable housing to help 10,000 DC households have an affordable and decent place to live. DCFPI applauds the Mayor for focusing on an area that is sorely in need and making affordable housing a high priority.  

But it now raises the question:  How should we use those funds? As substantial as $100 million is, it is not enough to meet the full range of affordable housing needs in DC. 

As a starting point, the District should target the dollars on families that need the most help. In addition to homeless families and individuals, assistance should focus on the large number of households with severe housing burdens — those paying more than half of their income on housing. And generally this means low- and moderate income families, those with incomes below 80 percent of the area median. 

These are the working poor or families living on fixed incomes who have very little left over each month for basic necessities after paying the rent. Severely burdened low-income households spend less each month on food, clothing, savings and transportation than their unburdened counterparts. Many of these families are one economic shock — such as a job loss — away from being homeless.  

Very low-income families have the highest incidence of severe housing burdens.  More than one-third of DC families with income between 30 percent ($32,000 for a family of four) and half the area median ($58,000 for a family of four) spend at least half their income on housing, and a growing number of families with incomes up to 80 percent of the area median ($83,000 for a family of four) are severely burdened.  (See Figure 1.) However, the incidence of severe housing burdens drops off significantly above that income level.   

Targeting housing assistance this way will help bridge the gap between housing costs in DC and the low wages than many jobs in DC pay.  The majority of renters with severe housing burdens work, with two-fifths working full-time (see Figure 2).  For several of the most frequently held jobs in DC — such as those that work as janitors, security guards, and cashiers — low-wages do not pay enough to afford the fair market rent for a two-bedroom apartment in the District.  And housing costs have grown far faster than incomes for most DC residents. 

Targeting assistance to those earning less than 80 percent of area median income — with the greatest share targeted to those earning less than 50 percent of area median income — can help ensure that DC is targeting its limited resources on those with the greatest need.  

Stay tuned to the District Dime in the coming weeks for more thoughts on getting the most out of Mayor Gray’s $100 million housing commitment.

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A key program for DC residents with disabilities has been cut 80 percent since 2008, a victim of recession-driven budget cuts. As the District’s economy and finances recover, restoring the Interim Disability Assistance (IDA) program — which provides short-term assistance to residents waiting for federal disability benefits to be approved — should be a priority. 

The IDA program provides $270 a month — or about $9 a day — to residents who have disabilities that prevent them from working. These residents are in limbo — unable to work and waiting to qualify for federally Supplemental Security Income benefits, which can take a year or two, if not longer. IDA provides critical financial assistance during this period, helping residents meet basic needs, such as rent (often shared with others), prescriptions, and necessities like toothpaste.  Without IDA, many people with disabilities are forced to rely on more costly crisis services, such as emergency rooms and shelters, thus costing the District more. 

Despite the benefits, local funding for IDA was slashed in recent years, from $5.6 million in fiscal year 2008 to just $1.5 million this year. As a result, only 550 residents are currently receiving assistance each month, compared to 2,900 in recent years.   

Although $270 is not a lot, this small monthly payment has a real impact on the residents who receive it. One of these residents is “Ms. I,” a native Washington who spent decades cleaning offices, hospitals, and nursing homes. She began struggling as a result of her health conditions—AIDS, hypertension, and carpal tunnel syndrome.  IDA helped her avoid eviction while awaiting a determination from SSI, paying for bus fare to get to medical appointments and for a cell phone so she could communicate with her lawyer. After nearly two years, her SSI application was finally approved. 

At that point, the federal government re-paid the District for all of the IDA benefits Ms. I. had received. That is how interim disability programs work in DC and the 37 states that have them.  Once an SSI application is approved, the federal government reimburses DC and the states for benefits provided during the application period.  

IDA is a good investment in the well-being of recipients and for the city as a whole. The District can help an additional 1,200 residents get this critical assistance by increasing local funding for IDA by $3.9 million in the fiscal year 2014 budget. 

To print a copy of today’s blog, click here.

The District took an important step this week to make sure that private health insurance plans in the city offer a solid set of basic benefits, including prescription drugs, mental health, and substance abuse services. The DC Health Benefits Exchange board approved modifications to a minimum set of services — known as the Essential Health Benefits (EHB) package — that will apply to all health plans sold to individuals and small businesses in the District starting in 2014. The package reflects consensus recommendations from a broad-based stakeholder working group. 

The process started last fall, when DC selected the most commonly purchased health plan used by small businesses in the area — a CareFirst plan — as the starting point for the city’s essential benefits package. The District then appointed a stakeholder workgroup to address some remaining details needed to comply with federal guidelines. The Exchange’s governing board approved the group’s recommendations this week, with the following important elements.  

• A core set of health services without substitutions:  The approved essential health benefits package requires all health plans sold in the District to cover the same core services. Insurers will not be able to modify any plan’s core services by “benefit substitution” under which they reduce one benefit and increase another at the same “value.” Substitution, if allowed, could result in health plans that don’t serve people with certain health conditions  DC’s actions to prohibit substitution ensure that District consumers will have access to a comprehensive set of  health services. 
• Mental health and substance abuse services:  The adopted package requires all health plans to cover these services and prohibits insurers from setting limits on the number of visits or the number of days that behavioral services can be received. This move to create coverage parity between behavioral health services and other health services is an important step to addressing the mental health disparities within the District.  
• Prescription drug coverage:  The adopted essential benefits package requires every plan to offer at least one drug in every class and category of prescription drugs covered by the essential health benefits benchmark plan. This means consumers will have access to needed drugs, no matter what plan they choose.  

It is important to note that the 35-member work group that developed these recommendations   represented health insurers, providers, brokers, patients, community-based organizations, and the District government. The group adopted its recommendations by consensus, which the Exchange’s governing board then approved in a unanimous decision.  

The District’s essential health benefits package represents progress in establishing consistent, high quality health plans in the market and a victory for the Exchange’s community-based working group process. DCFPI applauds the efforts of the working group and the Exchange board, and hopes forthcoming issues are approached with the same thoughtfulness and diligence. 

To print a copy of today’s blog, click here.

Imagine your boss tells you one day that your pay will be frozen and not adjusted for the cost of living for the next ten years, but that you still will be expected to meet the demands of the job. Sounds a bit unfair, right? 

Yet, that’s how child care providers serving low- and moderate-income families are being treated.  DC’s reimbursement rates for child care providers serving eligible families were last updated in 2006 and are based on child care costs in 2004. Worse yet , even the highest- rated centers  (those who rate “gold” in the city’s rating system) do not receive 100 percent of the 2004 market rates.  This issue was discussed at a forum held on Wednesday by Empower DC. 

This means many centers and family home providers simply have to eat the extra cost not covered by reimbursement. Over time, they may be unable to maintain a high level of quality — a clean and safe environment that supports a child’s development— and may force some centers to close their doors or no longer accept families using a child care subsidy.   

DCFPI thinks it’s time to update DC’s child care reimbursement rates to match current costs of providing care.  Child care centers and other providers help make sure children start school ready to learn while allowing their parents to go to work or school. As a first step, we urge the Office of the State Superintendent of Education to release the 2012 child care market rate survey and use the data to make child care more accessible for the DC residents who need it the most.

To print a copy of today’s blog, click here.

There are many ways to help DC residents struggling with high and rising housing costs, including Mayor Gray’s recent commitment for 10,000 units of affordable housing.  Yet even that tremendous effort will leave many families in need, with more than 50,000 households now paying over half of their income on housing. 

Another important way to ease the impact of severe housing cost burdens is by improving DC’s tax credit for residents with high property tax bills or high rents — known as schedule H. Improvements adopted last year by the DC Council — but not yet funded — could help tens of thousands of DC families and individuals throughout the city. 

The Schedule H Property Tax Relief Act passed by the DC Council would increase the maximum credit to $1,000 and would increase the income eligibility from $20,000 to $50,000 by 2016. Unfortunately, these changes cannot be implemented until funds are found to pay for them.  

If implemented, Schedule H could help tens of thousands of DC families and individuals, based on their income, by 2016.  These families live throughout the city, including as many as 8,900 in Ward 3, 20,300 in Ward 1, and 18,200 in Ward 8 (see Table 1).  Even if participation in Schedule H is less than 100 percent, as is expected with tax credits, there is no doubt that thousands of families across the District would benefit.  The Schedule H changes will make many residents newly eligible for the credit, but even currently eligible residents will benefit from the increased maximum credit and other changes that make applying for Schedule H easier. 

With the likelihood of increased revenues for DC on the horizon, and with housing costs that continue to rise faster than incomes, we urge Mayor Gray to make funding improvements to Schedule H part of his commitment to making housing affordable in his fiscal year 2014 budget.

To print a copy of today’s blog, click here.

The District’s New Communities program was initiated in the mid-2000s to revitalize the housing and surrounding neighborhoods of four subsidized housing sites in DC — Park Morton (Ward 1), Northwest One (Ward 6), Lincoln Heights/Richardson Dwellings (Ward 7), and Barry Farm (Ward 8). It does this by tearing down the existing public housing and replacing it with mixed-income housing, and by also improving major public amenities in the area such as schools and recreation centers.  

Unfortunately, a lack of transparency about the program — from funding to outcomes — makes it hard to determine the impact the program is having on the low-income residents living in these communities. For example, it is unclear if the original goal of building mixed income communities on the sites — with one third of the housing units low-income, one-third moderate-income, and one third market rate — is still being achieved.  Moreover, it is unclear what the timeline is for the replacement of the re-developed public housing units to be completed.  

Today, the Committee on Economic Development is taking an important step to shed some sunlight on New Communities by holding a roundtable. The hearing will include testimony from residents living in these communities, government officials, service providers and researchers, including DCFPI. Our testimony focuses on improving the transparency of the New Communities program so that the public can determine if public dollars are being spent efficiently and effectively to improve the lives of the low-income residents living in these neighborhoods.   

You can read DCFPI’s complete testimony here. 

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A little-noticed part of the story behind DC’s $417 million surplus is that corporate income tax collections jumped substantially in 2012. In fact, it was the largest single-year jump in 20 years.  A major factor behind the dramatic increase is that DC’s leaders took steps in recent years – which DCFPI had promoted – to close tax shelters used by large multi-state corporations.  The tax reform, known as “combined reporting,” was implemented in the District in 2012.

This means that DC’s finances are improving in part because the city is doing a better job of enforcing existing taxes and collecting the revenues that are due to us. That is great news. 

DC’s corporate income taxes totaled $303 million in 2012, a 40 percent increase from the $216 million collected in 2011. That one-year percentage increase is the largest since 1993,  The growth in collections partly reflects policy changes, such as an increase in the minimum corporate tax, but those changes were expected to bring in just $20 million. And, no doubt, a growing economy meant that more businesses had profits to report.  But, the record one-year increase of $87 million is unlikely to reflect those factors alone. As Dr. Gandhi noted in his testimony on the surplus, combined reporting was a major contributing factor to DC’s improved corporate tax collections.

Without combined reporting, large multi-state corporations can shift their reported income and profits among various subsidiaries in ways that reduce the profits reported in any given state.  Beyond the problem of avoiding taxes, this also creates an unfair advantage over local businesses, which don’t have any way to shift their profits. Combined reporting requires corporations to report the income of all subsidiaries together and then apportion that total income among the states where they do business. It is viewed as the most comprehensive way to close corporate tax shelters, and is now used by 23 states and the District. DCFPI had recommended that the District adopt combined reporting for this reason.

Combined reporting was opposed by business interests in the District, as it is in every state when it is proposed. The success of combined reporting in improving tax collections should be a sign to DC policymakers that they did the right thing.

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Ever wondered how DC collects the funds it needs to provide critical services such as schools, libraries, and road construction?  DCFPI is here to help with a new report, Revenue: Where DC Gets Its Money.  This report aims to answer your questions about how much DC collects and from whom, how revenue sources have changed over time, and how DC stacks up against surrounding jurisdictions.  

In fiscal year 2011, the District collected about $8.8 billion in revenue. As seen in Figure 1, the majority came from local taxes. Federal grants made up the next largest share at 28 percent.  This includes the grants that most other states receive, such as Title I funds for schools serving low-income children.  Other sources including federal payments and private donations; each makes up 5 percent or less of the District’s total revenue sources.  

This is just the beginning of the story when it comes to DC’s revenue. Read the report to find out more, including the difference between alcohol excise taxes and alcohol sales taxes. And how DC’s residential property tax rate compares to the rate in surrounding counties (spoiler alert: DC’s rate is lower). And why exercise equipment is taxed but gym memberships are not. We could go on and on, but we’ll leave some surprises for the report itself. 

To print a copy of today’s blog, click here.

Mayor Gray drew a standing ovation last night during his State of the District address when he pledged to invest $100 million to create 10,000 units of affordable housing. It isn’t a surprise that this drew such a positive reaction given the rapid loss of affordable housing in DC, the fact that residents rated it the number one issue at a city-wide summit, and that funding for affordable housing has fallen significantly in recent years. 

DCFPI applauds Mayor Gray for pledging a big investment in affordable housing. At the same time, getting to 10,000 units may require additional support. In particular, the mayor indicated that the funding would be provided on a one-time basis, rather than serving as an ongoing commitment every year. That works out to be about $10,000 per unit — an amount that is unlikely to be enough to support affordable development, as mentioned by Coalition for Nonprofit Housing and Economic Development’s Bob Pohlman in a Housing Complex post. Housing built under the Housing Production Trust Fund, for example, typically requires subsidies of $75,000 or more per unit.  

A one-time commitment also would make it unlikely that this new housing investment could serve DC’s most vulnerable residents — a population Mayor Gray pointed out in his speech. This is because programs geared at helping these residents — such as the Local Rent Supplement Program or Permanent Supportive Housing Program — require funding each year to help residents pay the difference between their very low-incomes and the high costs of rent.  

The $100 million investment will come on top of the affordable housing funding already committed to various programs. After seeing funding for affordable housing fall 27 percent from its peak in fiscal year 2008, Mayor Gray’s pledged investment in fiscal year 2014 would represent the largest one-year investment in affordable housing in the city’s history. We look forward to the details of Mayor’s Gray’s planned investment and strategies for creating 10,000 units of affordable housing — housing we urge to be made available to both low- and moderate-income residents.

To print a copy of today’s blog, click here.

The District offers many tax incentives to promote economic development, yet little is done to find out how well they work.  Take, for example, the tax incentives offered to supermarkets that open in targeted neighborhoods — an effort to make sure all DC residents have access to an important amenity.  The program provides $3 million in each year in tax breaks, but that doesn’t necessarily mean it is working.  Have any supermarkets opened that otherwise would not have?  

The sad reality is that no one can answer that question. The District does a terrific job identifying the costs of its tax incentives — in a Tax Expenditure Budget — but it does not evaluate whether they generate jobs or actually encourage new businesses to open up.  DC and 25 states are “trailing behind” in efforts to oversee tax incentives, according to a 2012 report from the Pew Center on the States. The study was presented at this week’s meeting of the DC Tax Revision Commission. 

It only makes sense to understand whether the District’s tax incentive programs, which have a cost just like libraries and trash pick-up, are meeting their intended purpose in a cost-efficient way.  The good news is that the District has taken some steps in this direction.  In 2011, the CFO started conducting analyses of all proposed tax abatements and exemptions, to determine whether a given tax break is needed for a project to move forward and to list the project’s community benefits.  The so-called “Tax Abatement Financial Analyses” or TAFAs, are now a routine part of DC’s tax abatement process.  

But the city should look to great models from a number of states to create a process to evaluate all tax incentive programs in an ongoing way. The Pew study offers several suggestions: 

• Regular review:  All tax incentive programs should expire after five years or so —called a “sunset” — to give policymakers a chance to evaluate them.  Oregon recently created a sunset of 6 years for its tax incentives. 
• Rigorous data collection and evaluation: Washington State adopted a process to evaluate all of its tax incentive programs over a 10-year period.  Evaluations should assess the economic impact of the tax break, whether it is meeting its intent, and whether the original goal is still an important one, Pew recommends.  
• Manage Costs of Tax Breaks:  Most tax incentive programs in the District allow any eligible business to claim them, but this can lead to higher-than-expected costs.  DCFPI has recommended, and another Pew report agrees, that cities and states should set caps on the amount of any tax incentive that will be provided, so that costs do not balloon out of control. 

The efforts to evaluate tax incentives are important and don’t require huge investments of staff or money.  Washington State is evaluating its tax programs with just two staff.  As a member of the DC Tax Revision Commission, I hope we will explore this model and others as we move toward final recommendations.

 To print out a copy of today’s blog, click here.

High housing prices in the District lead many DC residents to share housing with other family members or with non-relatives. Even with roommates, however, many people still have trouble making ends meet. Yet DC’s tax credit for lower-income residents facing high rents or property taxes is very hard for those in shared housing to claim.  Fortunately, reforms to the credit, known as Schedule H, were adopted last year that would make it easier for those sharing housing who are still burdened by high housing costs to get some relief.  The reforms have not been funded, which means they cannot yet go into effect. 

Currently, families that share housing must report their income together when applying for Schedule H, which creates a barrier to claiming it.  Consider a working mother who lives with her mother, who also works.  It is likely that they file separate tax returns.  Yet only one of them can claim Schedule H – and their combined household income must be under $20,000. 

The challenges are greater for non-relatives sharing a home.  To apply for Schedule H, the two must share personal information on their income and then decide which person will claim the credit for the household.  

Fortunately, there is a better way, and it is embodied in the legislation passed last December by the DC Council.  The reforms allow these residents to apply for the property tax credit individually, reporting only their personal income, and taking into consideration their share of rent or property taxes.  This is a practice used in many states that have similar tax credits.  Combined with other reforms adopted last year, each person or family earning under $50,000 and spending a significant portion of their income on property taxes can receive up to a $1,000 property tax credit. 

By reforming the low income property tax credit, the DC Council took a significant step towards helping DC residents cope with rising housing costs. Now, we need to support these reforms by putting funding in the fiscal year 2014 budget.

To print out a copy of today’s blog, click here.

DCFPI would like to thank Dr. Natwar Gandhi, DC’s Chief Financial Officer, for his fifteen years of service to the District of Columbia. During his tenure, the District made significant strides in developing a sophisticated financial management system that has contributed greatly to keeping the city’s financial health strong.   

Dr. Gandhi has much to be proud of. Under his leadership, for example, the Office of Budget and Planning developed an online tool to help the public access budget information quickly, which is extremely important to anyone interested in how the city spends its resources. The Office of Revenue Analysis began sharing information on the long-term fiscal impact of proposed legislation, to help uncover when proposed legislation had been designed to hide costs by pushing those costs into the out years. And at Dr. Gandhi’s suggestion, the District has set a 12 percent cap on the portion of the city’s budget that can be used for debt service. Without a cap, there are no constraints with regards to debt-financed projects, and projects were often done on a first come, first served basis. Now, policymakers must make choices and set priorities over the use of economic development resources. 

We are grateful for your service, Dr. Gandhi, and wish you much success in your future endeavors!

Part I: Testimony on DC’s Health Benefit Exchange 

DC Fiscal Policy Institute’s Wes Rivers testified before the Committee on Health today at a hearing on the status of DC’s Health Benefit Exchange. The Exchange is being created as a result of the Affordable Care Act (Obamacare), and it is the portal through which small businesses and individuals can learn about and enroll in health insurance plans and access newly available subsidies to help pay for insurance. Enrollment starts on October 1, 2013, with coverage beginning January 1, 2014.

DCFPI testified in support of the District Health Benefit Exchange’s current effort to use stakeholder workgroups to inform the numerous complex issues that must be resolved before the DC Exchange starts to operate in October. Rivers also highlighted a few of those key issues, namely the importance of setting rules that result in affordable, high quality health plans on the Exchange,  developing a robust system to help consumers navigate the new process, and creating a sustainable model for financing the ongoing operations of the Exchange.

You can find the testimony here.

Part II: Fiscal Year 2012-2013 Performance & Fiscal Year 2014 Budget Oversight Hearing Schedules 

The DC Council has published the schedules for two sets of upcoming hearings: agency performance and budget oversight. The schedules lay out the dates and times of the hearings for each DC agency to review their performance in fiscal year 2012 and fiscal year 2013 to date, to review the mayor’s proposed budget after it is released in March, and key dates for the FY 2014 budget season. Some highlights include: 

• February 6^th: DC Council hearing on the CAFR (Certified Annual Financial Report—includes fiscal year 2012 surplus)
• February 11^th: Performance Oversight hearings begin
• March 28^th: Mayor submits fiscal year 2014 budget to DC Council
• April 8^th: DC Council hearing on fiscal year 2014 budget
• April 10^th: Fiscal year 2014 budget oversight hearings begin
• May 22^nd: First and only vote on the fiscal year 2014 Budget Request Act & first vote on the fiscal year 2014 Budget Support Act

DC taxes fall most heavily on moderate-income families, according to a report released today from the Institute for Taxation and Economic Policy (ITEP), while DC’s highest-income families face the lowest combined DC taxes as a share of income. This report, an update to a 2009 report that was analyzed by DCFPI, finds that families with incomes between $22,000 and $62,000 pay between 10 percent and 11 percent of their overall income in combined sales, income, and property taxes after taking into account any federal offsets. The top 1 percent of DC families, making more than $1.4 million, pay a lower share of their income in taxes — 6 percent — than any other group of residents.  

The main reason for DC’s tilted tax structure is the city’s reliance on higher sales and excise taxes which consume a larger share of DC’s low- and moderate-income families’ budgets. For example, sales and excise taxes take up just under 5 percent of the income of DC’s middle income households, but just under 1 percent for DC’s top 1 percent (see Table1). DC’s property tax also falls most heavily on low- and moderate-income families. DC’s income tax is progressive, with higher rates and liabilities as incomes rise, but it does not fully offset the effect of sales and property taxes. 

The good news is that taxes remain relatively low for DC’s lowest income households. Those  earning less than $22,000 a year pay 6.6 percent of income in taxes, lower than for most other income groups, thanks in large part to a progressive income tax structure, a refundable earned income tax credit (EITC) and a refundable property tax credit for renters and homeowners named schedule H. Last month, the Council passed changes to schedule H that would in part extend the property tax relief up the economic ladder to a large share of middle- income DC households with the highest tax burdens. In fact, recent changes to schedule H would increase the income eligibility ceiling from $20,000 a year to $50,000. 

You can read the full report, which includes more detailed charts and taxes paid by families in DC and the rest of the states, by visiting ITEP at: www.itep.org

Today, District officials announced that DC ended fiscal year 2012 with a stunning surplus of $417 million. That comes on top of the $240 million surplus announced just last year. This is a clear sign that DC is turning the financial corner from the recession. Officials today also noted that DC’s tax collections this year are running well above their levels last year and expect to announce an increase in revenues in February.

But while DC has been building up significant resources, many DC residents continue to struggle in the wake of the recession. Unemployment remains high for residents without a college degree, and cuts in services during the recession, from disability services to libraries to public works have affected all DC residents.

The Mayor and Council should take this opportunity to use some of DC’s substantial resources to make investments in areas that have been neglected since the recession — such as affordable housing and job training for families with children, just to name a few.

How did DC get a $417 million surplus and what’s next?  The $417 million surplus is largely the result of higher than expected tax collections and under-spending in some areas of the budget (see Table 1). In recent years, 100 percent of the surplus has been added into DC’s fund balance — which is part savings account, part bond escrow and part holding tank for various reserve funds.  Figure 1 breaks out the various parts of DC’s fund balance which now stand at $1.5 billion. 

Legislation passed in 2010 required that all surplus funds be saved. That law mandated that any of DC’s undesignated end-of-year surplus (meaning not reserved for debt service, the rainy day fund or other policy reasons) would be put into two new reserve accounts. The first, a working capital reserve, helps the CFO cover the District’s bills throughout the year (revenues don’t always come in just as bills are due) and reduces the need for DC to do short-term borrowing. The second, the fiscal stabilization reserve, is modeled after DC’s rainy day fund and is to help DC cushion the blow from any sort of unforeseen disaster—which can include financial crises.  With $248 million added to the two reserves in fiscal year 2012, the total for the two reserves now stands at $442 million (see Figure 1).

Should we use this money to roll back some of the tax increases made in prior years?  The surplus is one-time money, meaning can’t be spent on programs or services that re-occur every year, like a tax break.  But beyond that, DCFPI’s analysis shows that DC already has the lowest taxes on families in the region, and a 2011 poll found that DC residents overwhelmingly feel it is more important to maintain services than to hold taxes down. In addition, DC has a Tax Revision Commission (DCFPI’s Ed Lazere is a member) that is currently analyzing what DC’s tax rates should look like.  Both Mayor Gray and DC Council Chairman Mendelson said today that they too felt that DC’s current unmet needs should be a priority over broad tax cuts at this point in time, and they felt that when the Commission produces its recommendations is the right opportunity to look at changing major DC taxes.   

Should we spend some of DC’s additional resources?  We at DCFPI don’t think DC needs to save every penny it collects each year, especially since the city’s fund balance is one of the largest in the nation. When the proposal to save all surplus funds was raised in 2010, DCFPI argued for a more balanced approach to save some and spend some, a position we continue to support. However, this year it looks like the city will be able to accomplish both goals by saving DC’s 2012 surplus to build up reserve accounts and then investing the growing revenues this year in DC neighborhoods and residents.

How can we invest in DC residents?  The additional revenue the city expects to collect this year could help make investments in a number of areas that have been neglected since the start of the recession. Affordable housing, which is disappearing at a rapid pace, has seen resources cut back;  there are currently waiting lists for vendors that provide job training to adults with children; school library collections are in need of books, magazines and other materials; and DC’s shelters have been overwhelmed with an increase in homeless families who have nowhere else to turn.

In the coming week, the District’s Dime will look more closely at the unmeet needs in DC and how expected additional revenues could help meet those needs. Stay tuned!

The District needs to employ a range of strategies to keep DC residents from being displaced in the midst of widespread gentrification. That was a key conclusion of a lively forum held last week by the Coalition for Smarter Growth, where DCFPI Executive Director Ed Lazere spoke. The group discussed changes in zoning, more focus on development near transportation hubs, and the need to devote a portion of the increased revenue collections brought by gentrification into making housing affordable. 

The District has another tool in its back pocket that can keep residents living in DC. It can strengthen a tax credit for residents facing property taxes or rents that are high relative to their income, known as Schedule H. Legislation adopted last fall would allow households with incomes up to $50,000 to claim a tax credit of up to $1,000. But the changes have not been funded yet. 

Schedule H targets relief at those with the least ability to pay, and those most burdened by housing costs. Under the changes approved by the DC Council, a family with an income of $25,000 and rent of $750 would get $1,000 from Schedule H, while a family earning $40,000 and paying $1,000 in rent would get an $800 tax credit.  

This is just the kind of targeted relief that we need to help low- and moderate-income residents stay in the District and benefit from the positive changes brought by gentrification. We need Mayor Gray to fully fund Schedule H in the FY2014 budget, to make this anti-displacement tool as strong as possible.

DCPS Chancellor Kaya Henderson offered a glimpse yesterday of how savings from school closures will be reinvested next year at the first public hearing of the newly reinstated DC Council Committee for Education. But it looks like specific funding changes will not be known until DCPS releases the budgets for each local school for next year, which is expected to occur in March. 

The DCPS closure plan, released last week, notes that the annual savings will be $8.5 million, which is consistent with the savings projected by the DC Fiscal Policy Institute and Mary Levy.  It is relatively small – only one percent of the total school budget – and next year’s savings may be insignificant because of transition costs. 

So, what specific strategies does DCPS have in store for schools next year to improve the academic quality of DC Public Schools? During the hearing, the Chancellor mentioned plans to better match resources to high priority schools, focus spending more on instructional activities, and exert more control over the scheduling and staffing of individual schools. DCPS also is considering a larger academic strategy that may include art, music, and PE for every elementary student, targeted literacy interventions, world language offerings at elementary school level, and access to library services.   

It looks like the devil will be in the details, or in this case, the budget allocations to each school to be released in March. This will offer a clearer view of how DCPS funds are being focused to boost quality and outcomes. One positive sign is that DCPS is looking to extend the timeline between when schools receive their initial allocations and when final budgets are due. This will allow for school leaders and Local School Advisory Teams (LSATs) to have more time for critical budgeting decisions. 

We at the DC Fiscal Policy Institute hope that DCPS will use the annual school budgeting process to target resources to support the goal of improving outcomes in the city’s lowest-performing schools.  Like many parents and principals, we eagerly await the release of the school budgets for next year.

With nearly one in ten DC residents out of work and a workforce development budget of $57.5 million, DC needs to know whether its efforts to put residents to work are effective.  A provision in the FY 2013 budget aims to help answer this question by requiring quarterly reporting on the outcomes of DC’s locally-funded job training and adult education programs.  This is a great first step in assessing our efforts, but a full assessment must include all of DC’s workforce development programs, including the Mayor’s One-City One-Hire initiative. 

Preparing residents for jobs is one of the key ways the District can shape its future. Effectively using resources to help DC residents learn new job skills, sharpen existing ones, and match them with employers is critical not only to economic development but to reducing unemployment, lifting families out of poverty, and lessening  income inequality. 

But in the past, the performance measures for the District’s workforce development programs did little to tell whether the city was achieving these goals.  The measures focused primarily on outputs, such as how many participants completed training, rather than on outcomes that truly measure progress, such as how many participants secured jobs. 

A provision in the FY 2013 budget addresses these inadequacies by mandating quarterly reporting to include the number of participants who secure and retain employment, among other measures.  Using the same measures for each program will show whether certain types of training lead to better employment outcomes than others.  Additionally, for programs where services are contracted out, the data will be broken down by provider, showing whether some vendors are more effective than others.  The reporting will also allow us to compare programs and vendors on costs and numbers served. 

These are very promising steps toward increasing the performance and accountability of DC’s workforce development programs.  To be most useful, the reporting should include all workforce development programs, particularly the new One-City One-Hire program.  This program acts as a matchmaker in the jobs market, helping to match workers to employers.  As a new program, stakeholders should be reviewing outcomes both to ensure that it is meeting its goals as well as to identify potential areas of improvement.  Let’s make sure DC is doing all it can to help residents secure and retain employment.

DC ran a budget surplus last year — and we will find out just how much next week, when the audit for Fiscal Year 2012 is released.  The surplus will be at least $140 million, and some speculate it will be as large as $400 million.  The surplus will create an opportunity to make a number of important investments that would strengthen the city, including services placed on the Fiscal Year 2013 budget’s “contingent funding list” that have not been funded yet.  

There is an obstacle to taking advantage of the surplus, however.  New rules adopted in 2010 prohibit the city from using any surplus funds, even if the surplus runs as large as $500 million!  While the intent was reasonable — to replenish DC’s savings that fell in the late 2000s — this savings-only approach seems extreme given the District’s current finances.  DC’s fund balance — in effect its savings account — reached $1.1 billion at the end of 2011.  DC’s fund balance is larger than in all but eight states, when measured as a share of the budget. 

A more balanced approach to the surplus would be to save a portion — such as half — while using the remainder.  The city’s savings would continue to grow, but the District could also use its resources on smart and needed investments.  Just today, the Fair Budget Coalition put out an action alert with its suggestions for using the surplus.   

• DC has significant investment needs.  The adopted budget for 2013 cut funding for affordable housing production in half — in the face of a huge shortfall of low-cost housing.  The budget called for restoring that cut if the city’s revenue forecast improved, but that has not happened, mostly due to concerns over the federal budget — leaving the housing trust fund and everything else on the contingent funding list unfunded.  The surplus could be used for other things as well, generally one-time expenses.  For example, the surplus could be used to pay for construction projects directly, rather than the standard practice of borrowing for such projects. 
• DC’s fund balance has been used in the past as part of prudent fiscal operations:  When the District experienced substantial annual surpluses in the mid-2000s, then-Mayor Williams used as much as $500 million per year in surplus funds for a variety of purposes.  During that period, the city’s fund balance continued to grow or remained stable. 
• DC’s conservative revenue forecasting often results in large annual surpluses.  The CFO’s revenue forecasts are intentionally conservative, to ensure that the District has the funds needed to meet its obligations.  This approach means that the city will end most years with a surplus.  That makes it even more reasonable to plan to spend some the surplus each year. 

A balanced approach to any year-end surplus makes sense.  Setting aside huge amounts of city resources in savings, when savings already are sizable, is a wasted opportunity to make investments that will improve the quality of life in the District. 

When you think about property taxes, you probably don’t think about renters, but you should.  Renters pay property taxes, too, even though they don’t get a tax bill directly. Instead, landlords get the bill, but the rents they charge need to cover all of their expenses, including property taxes.  This means that a portion of every rent tenant’s payment indirectly is a property tax payment.

And that’s why it is important for property tax relief measures to include renters as well as homeowners. The good news is that DC’s low-income property tax credit, known as Schedule H, offers help to both renters and homeowners. And legislation adopted late last year to improve Schedule H, if funded this year, would allow thousands of homeowners and renters to get help with high housing bills.

But how will this work? How can renters claim a credit for taxes they pay indirectly? The answer is pretty straightforward.  DC’s Schedule H, like property tax credits in many states that also cover renters, assumes that a portion of a resident’s rent payment goes to cover their landlord’s property taxes. For Schedule H, the property tax equivalent now stands at 15 percent of rent but would rise to 20 percent under the reforms passed in the last council session.

Schedule H provides assistance when property taxes or the rent equivalent are high compared to a family’s income. The new Schedule H reforms could do a lot to help renters pay their bills.  For example, a family earning $40,000 and paying $1,100 a month in rent — the average for a one bedroom in DC — would be considered as having paid $220 a month and $2,640 for the year in property taxes.  Based on the Schedule H formula, they would be able to claim a tax credit of $1,000, defraying almost half of their property tax equivalent.

That could make a big difference for low and moderate income DC residents!

As housing costs rise in DC, and the waiting list for subsidized housing remains huge, it becomes more and more important that DC take the needs of renters into consideration. Sixty-three percent of renters earning under 30 percent of the District’s Area Median Income (or less than about $32,000 for a family of four) are spending at least half of their incomes on housing. And the number of renters paying at least half of their incomes on housing is increasing across all income groups.

Apparently, the DC Council wants to explore reducing property taxes for DC residents this year.  Two such bills were introduced last week at the Council’s first meeting of 2013.  

We at the District’s Dime support the idea of reducing property taxes, but we want to make sure it helps the residents who need it the most. DC homeowners already pay lower taxes than homeowners in any suburban jurisdiction, so tax cuts targeting all homeowners are not needed.  But that doesn’t mean that there aren’t DC residents who struggle to pay property taxes. Indeed, low-income DC households pay a large share of their income toward property taxes — and a greater share than higher-income households do. 

The best approach to property tax cuts, then, would target lower-income residents facing the highest property tax burdens. The good news is that the Council already has passed legislation to do just that, although it has not been funded yet. 

The average property tax on a DC home worth $500,000 was $2,700 in 2011. That compares with $3,500 in Arlington County, $4,700 in Montgomery and Fairfax counties, and $5,400 in Prince George’s County. This stems from DC having the lowest  homeowner property tax rate in the region and from other generous benefits, including a homestead deduction of nearly $70,000, and a 10 percent cap on annual tax increases. 

Given this, further broad-based cuts in property taxes for homeowners shouldn’t be a high priority. Yet one bill before the DC Council would lower the annual tax cap to 5 percent for all homeowners, and another bill would freeze taxes entirely for long-term homeowners with incomes below $125,000. 

Broad cuts to property taxes for homeowners have the problem that they help residents in higher-income neighborhoods far more than in lower-income neighborhoods. Half of the benefits of the 5 percent annual cap would go to residents in Wards 2 and 3, while only 4 percent would go to those living in Wards 7 and 8. 

The great news is the District has a tool to target property tax assistance on lower-income families — the ones most likely to be struggling to pay their bills.  The DC Council passed legislation in December to improve DC’s Schedule H tax credit, and if it is funded this year, it will provide needed property tax relief to thousands of DC residents.

 And Schedule H has one great advantage over other property tax relief bills: it helps renters as well as homeowners.  Check out tomorrow’s blog to find out how.

DC Public Schools (DCPS) Chancellor Kaya Henderson has announced plans to close and consolidate as many as 20 public schools, with the final decision expected soon. If approved, this would be the largest set of school closures in the District since 2008, when 23 public schools were closed. 

The DCPS proposal cites under-enrollment and fiscal inefficiency as major factors in the selection of schools for closing. It also states that closing schools will free up resources and allow DCPS to create stronger education environments in the consolidated schools. Yet DCPS has not shared information to demonstrate how much would be saved by closing under-enrolled schools or how the savings would be used. 

An analysis by Mary Levy[1] and the DC Fiscal Policy institute (DCFPI) suggests that the savings from closing schools may be relatively small, and possibly non-existent in the first year following closure. This information should give pause to policymakers and anyone else hoping for significant savings to be reinvested in the remaining schools. Among the key findings:  

• Smaller DCPS schools are only slightly more costly than larger schools. Smaller DCPS elementary schools typically received only 4 percent more per-pupil funding this year than larger schools and have teacher-student ratios that are roughly the same as in larger schools. A number of schools on the closing list also have lower per-pupil budgets than larger schools. The difference in spending allocated per pupil is greater at the middle school and high school levels. This means that the smaller schools are not always more expensive relative to larger schools. 
• Cost savings from closing and consolidating schools may not be substantial. We estimate that savings in staffing costs next school year would be about $10.4 million. Based on the city’s 2008 experience, transition costs of closing schools could amount to $10.2 million in 2013-14 — in inventory, relocation and storage costs — erasing any savings in the first year. 
• Consolidated schools may not be better resourced than they are now. If the DCPS proposal is implemented, it is not certain that schools receiving students from closing schools will experience greater quality, such as smaller class sizes. Based on the current staffing model used by DCPS, student-teacher ratios and class sizes actually may go up at many schools as a result of consolidation. 

It is not clear if and how the school closing plan will contribute to strengthening the school system. The fact that DCPS has not identified the expected savings and or indicated how programs and resources would be enhanced in the remaining schools contributes to this concern. 

A final DCPS school closure and consolidation plan should also be accompanied by information on how savings from closures, if any will be realized after the first year, will be reinvested. Doing so will help parents and other stakeholders better understand if and how school closures are linked to larger efforts to improve the quality of DCPS schools.

 To read the full report, click here.

District officials have announced an important plan to involve community members in key decisions over the city’s Health Exchange, which will start offering health plans to DC residents in 2014.  The city is creating a number of policy workgroups to deal with important issues, such as ensuring that health plans have an adequate number of providers in their network, and each workgroup will include a diverse range of volunteer stakeholders and community members.

If you care about the future of health reform in DC, this is your chance to get involved. The DC Health Exchange has many decisions to make in a short period of time. Because enrollment in health insurance through the Exchange begins in October, these workgroups must make decisions quickly – with meetings taking place in a two- to four-week period by the end of February.

Each group will be chaired by a member of the Exchange’s governing body. Group members will be balanced among consumer/patient advocates, providers, insurers, brokers, and other community members. Consultants and staff will assist the workgroups and conduct background research as requested. The workgroup meetings will be open to the public, but the decisions will truly be member driven. The goal is to reach consensus, and where consensus cannot be found, to provide a pros and cons analysis to the Exchange’s executive board. 

The initial workgroups and the issues they will address are below. Exchange staff are accepting volunteers this week and will make appointments ASAP.

1. Essential Health Benefits Package - How will the District define mental health parity? To what extent will the District cover habilitative services, such as speech therapy? Can insurers substitute benefits in and out of the essential health benefits package proposed by the District?
2. Network Adequacy- How can we ensure plans have enough primary care doctors, specialists, and other providers to serve enrollees?  How can we ensure that provider directory information is accurate and up-to-date?
3. Quality Data Reporting- What quality data should insurance companies have to collect, share with the Exchange, and post online for the public?
4. QHP Carrier Certification Process- What should DC’s process be for assessing insurer compliance with all Exchange requirements and certifying them to sell plans in the Exchange?
5. Premium Billing and Collections – Should the Exchange collect premiums on behalf of residents and deliver them to insurers, or should consumers pay the insurers directly?
6. Employee and Employer Plan Selection- For small businesses using the Exchange, how many and which plan choices should their workers have?
7. Financial Sustainability – How should the Exchange’s ongoing operations be financed?
8. Plan Number/Standardization – How many different plans should consumers have to choose from? Should there be a standardized plan that all insurers must offer? What mix of plans in the Exchange provides sufficient choice while not being overwhelming?

Unlike past workgroups, members of this group will make key policy decisions, so it is important that community members, consumers, patients, providers, and advocates be represented.  If you have any interest and/or expertise in any of the areas above, please consider signing up by contacting:  Bonnie Norton at bonnie.norton@dc.gov or Linda Wharton Boyd at linda.whartonboyd@dchbx.com. Again, workgroup appointments will be made as soon as possible, so sign up soon!

Last month, the DC Council took an important step to help low and moderate income families struggling with high housing costs. They did this by passing reforms to Schedule H, a refundable tax credit for DC residents that spend a particularly high portion of their incomes on property taxes.  This tax credit is available to renters as well as homeowners, since renters pay property taxes, too, just indirectly through their rent.  This makes the Schedule H tax credit an important tool to help all DC residents with housing challenges. 

But one critical step remains before residents can take advantage of this help.  Mayor Gray or the DC Council must allocate funding for the improvements to the Schedule H tax credit in the DC budget for Fiscal Year 2014.

The DC Council made the following changes to make the tax credit more effective:

Increasing the Number of Residents Who Can Get Help with High Housing Costs. The DC Council raised the income eligibility for Schedule H from $20,000 to $50,000, which would allow thousands of additional families to get help, including the vast majority of DC residents with severe housing burdens (spending more than half of their income on housing).

Increasing the Help Residents Can Receive.  The DC Council increased the maximum annual credit from $750, which had not been adjusted since the 1970s, to $1,000. This will make Schedule H more effective at helping the most vulnerable families in the District.

Making it Easier for Eligible Families to Apply. The new legislation eliminated several cumbersome rules that made applying and qualifying difficult.  These changes should help households get the tax benefits they are eligible for, and reverse the very low rate of participation in Schedule H

Improving DC’s low income property tax credit is an excellent way to target relief to District renters and homeowners who need it the most. Now, we just need to make sure that the District government provides the funding to make these improvements a reality.

Today, the Council adopted a new sanction policy for the Temporary Assistance for Needy Families (TANF) program, DC’s welfare-to-work initiative.  The policy reflects months of negotiations between the Department of Human Services, Human Services Committee members, and TANF advocates over how to set financial penalties that encourage parents to comply with program requirements while also protecting vulnerable children.

The TANF sanctions are imposed when a parent does not comply with expectations agreed to in their Individual Responsibility Plan (IRP), which outlines the services available to the parent and the activities she is required to participate in.  Under DC’s new TANF redesign, all new applicants develop an IRP, while current TANF recipients develop their IRP at their annual reapplication for benefits.  If a parent does not complete the activities laid out in their plan for a period of 4 to 8 weeks, the family will be subject to a sanction, a reduction in their cash benefits.

The adopted policy has 3 levels of sanctions with the severity of the sanction, increasing at each step.

• Level One – the head of household is removed from the benefit amount. For a family of three, this means cutting benefits from $428 to $336 a month.  DC’s current sanction policy has only this level. 

• Level Two – Under this new provision, the family receives a 50 reduction in the amount they usually receive after a second period of non-compliance.  A family of three will see their benefits drop from $428 to $214 per month.
• Level Three – Under this provision, the family receives a full-family sanction, meaning they will receive no cash assistance for at least one month.  

To cure the sanction and return to their full benefit amount, a parent must comply with their Individual Responsibility Plan for 4 consecutive weeks.  

TANF advocates expressed serious concerns about the effects of full-family sanctions on children, particularly given research showing that that sanctioned families face more hardships than other TANF families.  In addition, research on state TANF programs has found that full-family sanctions are not a more effective way to encourage compliance than partial-benefit sanctions. 

It is noteworthy that the full-family sanctions policy adopted by the DC Council – one month – is far shorter than the initial proposal from the Department of Human Services, which would have imposed a 6-month full family sanction.  In its 11-2 vote today, the DC Council explicitly rejected the most recent DHS proposal for a 3-month full family sanction.   TANF families face many issues that make participation in work activities difficult.  Imposing a minimum duration of 3 months would have left recipients with no income and no opportunity to re-engage and get their benefits back quickly.  DC’s adopted policy is in line with 23 states that have full family sanctions but allow families to get back on TANF quickly if they comply with program requirements. 

DCFPI thanks the Council for passing a balanced TANF sanction policy and continuing to improve our TANF program so that families are on a path of progress and independence.

Last week, the DC Council kicked off Council period twenty with a meeting to set the framework for the next two years by finalizing the Council’s committee structure — including the re-creation of an education committee — and approving the rules that will govern their operations and procedures.  DCFPI, along with several others, had proposed a number of changes to the Council rules to improve transparency and public access to information.  Unfortunately, the majority of those changes were not accepted.  

The majority of the Council’s committees will have new Chairs in Council period twenty (see below for a full listing of chairs and members); however, the biggest change to the Committee structure is the re-creation of the Committee on Education, which was eliminated by the Council in 2007 following mayoral takeover of the DC Public Schools.  The Committee on Education will be chaired by Councilmember Catania (I-At Large) and it will oversee several agencies, boards and commissions related to education, including the DC Public Schools and DC Public Charter School Board, the State Board of Education, the Deputy Mayor for Education, the Office of State Superintendent for Education, and DC Public Libraries.  

The Council also adopted a set of rules that will govern its organization and procedures for the next two years.  Last month, DCFPI, along with several organizations and individuals, sent a memo to the Council that highlighted ways that the rules could be amended to improve the transparency of the Council’s operations and public access to information. The Council did adopt changes that will help increase public access to information: requiring use of government issued emails for public business and including relevant documents, in addition to testimony, as part of the public record for every piece of legislation.  Unfortunately, many of the suggestions that would have improved the transparency of the Council’s operations, such as improving the notice to the public of hearings and roundtables and the transparency and public access of emergency legislation and amendments, were not adopted.  

The Council holds its first Committee of the Whole and Legislative meeting tomorrow starting at 10am.  The full calendar of COW and Legislative meetings for 2013 can be found here.  DCFPI looks forward to working with the Council in council period twenty to improve the lives of DC’s low- and moderate-income residents. 

Council Committee Membership: Council Period 20 

Committee on Business, Consumer and Regulatory Affairs

• Chair: Councilmember Orange
• Members: Councilmembers Alexander, Cheh, Graham and Grosso 

Committee on Economic Development

• Chair: Councilmember Bowser
• Members: Councilmembers Bonds, Evans, McDuffie, and Orange 

Committee on Education

• Chair: Councilmember Catania
• Members: Councilmembers Alexander, Barry, Grosso, and Wells

 Committee on Finance and Revenue

• Chair: Councilmember Evans
• Members: Councilmembers Barry, Bowser, Catania, and Grosso 

Committee on Government Operations

• Chair: Councilmember McDuffie
• Members: Councilmembers Bowser, Catania, Cheh and Orange 

Committee on Health

• Chair: Councilmember Alexander
• Members: Councilmembers Bonds, Catania, Grosso, and Orange 

Committee on Human Services

• Chair: Councilmember Graham
• Members: Councilmembers Barry, Bonds, McDuffie, Wells 

Committee on the Judiciary

• Chair: Councilmember Wells
• Members: Councilmembers Bonds, Bowser, Cheh and Evans 

Committee on Transportation and the Environment

• Chair: Councilmember Cheh
• Members: Councilmembers Evans, Graham, McDuffie, and Wells 

Committee on Workforce Development

• Chair: Councilmember Barry
• Members: Councilmembers Alexander, Graham, McDuffie, and Wells.

The DC Health Benefits Exchange will create new opportunities for DC families and individuals to access health insurance, and the federal Affordable Care Act created a new set of subsidies – mostly in the form of federal tax credits – to keep the premiums in those plans affordable. While tax credits can be efficient, they also can create complications for enrolled families. That is because the tax credits will be based on projected income for the year, but if any family’s income turns out to be different than projected, the tax credits they receive may be too high. That could put families in the difficult situation of having to repay some of their credits.

This means it will be important to help families project their annual income accurately and to set up a way for families to report when their income changes substantially in the middle of the year. In the months ahead, District officials will need to decide how eligibility for tax credits will be determined and when families will have to report income changes. It will be important to make sure this system helps families get the right amount of tax credits without burdening them with frequent income reporting.

In general, District residents with incomes below 400 percent of the federal poverty line will be eligible for federal tax credits to help them pay health premiums, and the value of the credit will vary based on family size and income – with the largest credits going to lower income families. The advantage of these “advanced” tax credits is that families can claim them at the beginning of the year and will not have to wait until after they file their taxes to receive reimbursement. This means credits will begin offsetting monthly premium costs as soon as the family enrolls on the exchange

But two things could cause complications in administering credits:  1) the value of the credit is based on projected taxable income for the year and 2) individuals will have to “reconcile” their credits with their actual earned income at the end of the year. If actual income is greater than projected income, an individual will have received more credits than they were eligible for and will owe money back to the federal government. If actual income is lower than had been projected, then the individual will have received fewer credits than needed and will receive a refund.  

Among low income families, incomes can vary greatly over the year, and due to the way the credit values are determined, a small change in income can yield a substantial change in the value of a tax credit. If not properly monitored, many Exchange enrollees who benefit from premium tax credits could face a large financial burden every tax season if their incomes increase – owing up to $2,500 for a family.     

One way the DC Exchange can remedy this problem is to require families to report increases in income so that credits can be adjusted – limiting individuals’ exposure to end-of-year tax liability. However, a requirement to report all changes of income may become overly burdensome for both the enrollee and for the District.  Enrollees may forget about or not notice very small changes in income, and the administrative resources needed to monitor such reporting would be substantial.  Also, small income changes may not need to be reported, because they will have no effect on the subsidy.  

Instead, the Exchange should only require enrollees to report increases in income that will substantially reduce the credits they can claim. The reporting requirement could be a flat dollar amount such as the $150 threshold in Wisconsin or it could be tied to a percentage of income such as a five to ten percent increase. Another option is to require Navigators and other assisters to educate residents on the penalties they will pay if they end up claiming more tax credits than they were eligible for and could encourage enrollees to report all substantial increases in income. These options will reduce errors in reporting by enrollees and help staff concentrate on needed adjustments.  

Exchange staff are still in the early development stage of the credit’s program rules, with meetings open for public comment and discussion.

Happy New Year, District Dime readers!  We hope 2013 brings you many good things. 

We also hope it brings many good things for DC, including the opportunity to address some of the city’s greatest challenges, such as education and affordable housing. Unfortunately, the major ongoing debate over how to reduce the federal budget deficit is making it hard for DC to do that. 

The impact of the federal budget impasse on the District was felt 10 days before the New Year’s Eve fiscal cliff deal.  On December 21, Dr. Gandhi released the latest revenue forecast for the city, and for the third quarter in a row, the CFO declined to make a new revenue projection for 2013 and beyond.  The reason? Uncertainty over the federal budget and its possible negative impact on the DC economy.

The federal budget gridlock has been holding the city back. There are many signs that DC’s economy is doing well, from revenues that were higher than expected in 2012 to the recent news that the city added as many residents in the last two years – 30,000 – as in the entire prior decade. Without the concerns over the future of the federal budget, there is no doubt that the CFO’s December revenue forecast would have shown that the city’s tax collections are growing notably.

The inability to officially recognize the growth in DC’s tax base is stopping the city from meeting many needs. The budget for 2013, adopted last June, left a number of important programs under-funded.  The Housing Production Trust Fund, for example, was cut in half. The budget also left holes in other areas such as domestic violence services, efforts to meet the mental health needs of teens, and plans to better identify young children with developmental delays, just to name a few.  All of these were included in the 2013 budget on a “contingent revenue” list – services that would get funded if the city’s revenues grew faster than expected.

Many of those services would be funded today if the CFO were able to project revenues based on current economic trends – without the fear that deep federal budget cuts will take DC’s economy in the other direction.

Unfortunately, the deal passed by Congress to avoid the fiscal cliff did not resolve all of the issues that have been holding DC’s revenue projections back. In particular, the deal did not resolve how to address the “sequester,” the planned deep cuts in both defense and non-defense programs, which could affect federal government employment and federal contracting, and thus could put a drag on the DC economy.  Right now, it appears that the sequestration cuts will not be addressed until March.

The District needs to move ahead with its financial planning, despite the federal budget uncertainty.  The CFO will release the next revenue forecast in February, and that forecast will be used to set the budget for the upcoming year. 

We hope that the federal government will resolve its budget debates before the next revenue forecast, but that seems unlikely. Until then, we hope that the CFO will make new projections for 2013 and beyond that reflect the city’s growing economy, allowing the city to move ahead with important investments, while also making reasonable guesses about the near-term impact of the federal budget on the city’s economy.

The District continues to prove that it is a national leader in health reform. Last week, the Federal government granted the DC Health Benefits Exchange conditional approval to begin operations in January 2014. This makes DC one of just nine states considered on track for delivering quality and affordable health insurance through the online portal within the year. 

That is great news, but the celebration should not last too long. There is a lot of work to be done soon to ensure that the Exchange offers a solid set of health plans and that DC residents know how to use it to access affordable health insurance. 

The heart of the Exchange is an online platform for offering health plans that meet certain quality standards. This will allow consumers to make true side-by-side, apples-to-apples comparisons of available health insurance options. Also through the Exchange, small businesses and individuals will be able to claim tax credits and other subsidies to help pay for premiums and out-of-pocket costs, essential steps to making plans more affordable. 

Now that DC’s Exchange has been approved, its governing board must soon set the quality standards for health plans that will be sold on the Exchange. The board will need to address network adequacy — making sure plans have an adequate number of providers — an issue that many consumer groups have flagged. The board also will need to set limits in the variation of co-pays and deductibles for plans on the Exchange and set standards for annual caps on certain services. Getting these standards right is critical to ensuring that residents can afford and have access to needed care. 

The District also will need to design programs that help consumers select the plan that best meets their needs and enroll in applicable subsidies. This includes creating a robust “Navigator” program — a network of community assisters that provide outreach, education, and guidance on purchasing insurance through the Exchange. The District will soon have to select a vendor to build the information technology required for the Exchange portal to work. Finally, many District officials believe the DC Council will need to approve the Exchange’s proposal this spring to consolidate the insurance market for individual and small business health insurance plans under the Exchange. 

Receiving federal approval for DC’s Exchange is commendable, and the Exchange’s staff and leadership should be congratulated for their efforts. With that said, the next few months will be a critical period in determining if the Exchange will be a viable market place for high-quality, affordable health insurance options that District residents and small employers need.

Last week, DCFPI and several other organizations submitted recommendations to Chairman Mendelson on ways to improve the transparency of the DC Council’s operations and to improve public access to information on actions of the Council. From requiring five days’ notice before a legislative mark-up is held , to improving the accessibility of the Wilson Building, to adding greater detail to the legislative information online, we hope the Chairman and the rest of the Council will take these recommendations into consideration as they set the Council Rules for Council Period 20 starting in January. 

The recommendations focus on eight major areas:  hearing/roundtable procedures, hearing/meeting logistics, the budget process, the legislative process, John A. Wilson building access and use, public access to information, open meetings, and Council structure. Some examples include: 

• Require five days’ public notice for Council committee mark-ups or roundtables. Too often, mark-ups and roundtables are held with very little public notice, which limits public participation. Requiring five days’ notice would give the public time to weigh in on critical issues at roundtables and on potential changes to legislation in a mark-up.  
• Require that the final Council budget proposal be available to the public at least two working days prior to the vote. The annual budget is one of the most important pieces of legislation the Council must complete. Yet, the budget often is not released until very close to the vote — sometimes just a matter of hours. This gives Council members, Council staff, and the public very little time to analyze and comment on the substantial budget changes that often show up in the final proposal. The Council’s budget office has made significant improvements over the past couple of years in getting the budget out the day before the budget vote, but releasing the final proposal at least two working days before the scheduled vote would give the public and Council a better chance to weigh in. 
• Improve transparency and use of amendments. While amendments can make significant changes to legislation, they are not included in the legislative record on the DC Council website (LIMS) and often are not available to the public. We recommend that all proposed amendments be read aloud at Council committee mark-ups and legislative meetings so that the public can understand the proposed change. We also recommend that all proposed amendments, and the resulting vote and outcome, be included as part of the LIMS record. 

The full memo with all of the recommendations and organizations that signed on can be found here.  We look forward to the Council’s January 2^nd organizational meeting when they will vote on the DC Council Rules, and we hope that the Council is able take steps to improve the transparency of its operations and the accessibility of its information.

Housing is often the biggest cost families face, and with rents rising and the cost of homes getting out of reach for many in the District, affordable housing is in short supply. This is an issue we need to grapple with as a city. A bill before the DC Council this week will help address this critical issue in a novel way, by providing up to $1,000 each year to lower-income residents with high property tax bills or rents. There’s just one problem:  the Council will pass the bill subject to appropriation—which means that there’s no money to pay for it right now. 

The bill — the Schedule H Property Tax Relief Act — was introduced by Councilmembers Jack Evans, Phil Mendelson and Michael Brown, and it has been shepherded through the Finance and Revenue Committee by Chairman Evans this fall. The bill updates a property tax credit for low-income homeowners and renters that currently works very poorly, going to only 12 percent of eligible households because it hasn’t been modified in 35 years.     

The credit is based on both a family’s income and its property taxes. The credit amount is greatest for very low income families with high housing costs, which means it is targeted on those who need it the most. The credit applies to rents as well as homeowners, because it assumes that a share of monthly rent payments is for property taxes passed on by the landlord. 

Here are some of the things the new bill would do: 

• Raise the income eligibility level. The bill would raise the income eligibility level to $50,000 from $20,000. The last time the eligibility level was set was 1977, when the cost of housing in DC was much, much less. Raising the income eligibility would make about half of all DC households potentially eligible and would include the vast majority of those with severe housing cost burdens.
• Increase the maximum credit. The current bill would increase the maximum credit to $1,000 from $750, or about $60 a month. Once again, that amount was set in the mid-1970s.  
• Make it easier for eligible families to apply. The current Schedule H rules are complex, and that contributes to the very low participation rate. The new bill would eliminate many cumbersome rules, such as the requirement that people sharing housing file for Schedule H using combined income, even if they otherwise file taxes separately. 

While the price tag for these reforms – about $11 million per year — is not insignificant, the changes would update a program that has not been updated for 35 years. And the reforms would help thousands of DC families and individuals, most of who have very high housing costs and have limited opportunities to access housing assistance program, given enormous waiting lists. 

The Council’s adoption of Schedule H reforms is a great step forward to helping residents pressured by DC’s high and rising housing costs. The next step is to make these reforms real by funding them, in the budget for fiscal year 2014 or sooner.

Next week, the DC Council will hold a second and final vote on an $11 million tax break — for the Howard Town Center housing and retail development — that the Chief Financial Officer concluded was not needed to make the project viable.   Although DCFPI thinks the best approach would be to hold off on the tax break and let the developer work on alternate financing, there are ways the tax abatement could be improved even if the Council approves it.  And we hope the discussion around this tax abatement will help inform future discussions among the DC Council to ensure it is pursuing responsible economic development with DC’s limited tax dollars. 

Until recently, the DC Council typically had very little information that it could use to assess the merits of proposed commercial tax abatements.  But last year, the Council set new requirements to analyze the costs and benefits of every proposed tax abatement to better understand whether any given project really needs special tax treatment. 

The proposed Howard Town Center property tax abatement is the first time the DC Chief Financial Officer unequivocally concluded that a proposed tax break is not needed for a project to proceed, because the developer could seek financing from federal low-income housing tax credits, charge higher rents or defer a portion of the fee paid to the developer. Despite this information, the tax break passed on first reading by an 8-4 vote. 

Given what the CFO found, there are some ways that the Howard Town Center abatement could be changed that ensure the project can move forward but also ensure a tax break is granted only if it is really needed.  It is important to note that the Council approved the tax break but did not fund it, and that funding is unlikely to occur before the 2014 budget is adopted in June.  That means there is time to tweak the tax break without jeopardizing it. More specifically, the Council could: 

• Amend the legislation to require the developer to apply for low-income housing tax credits before the DC tax abatement goes into effect.  If the tax credits come through, a DC tax break may not be needed. 
• Require the developer to commission an independent market study on the rents that can be charged when the housing is completed.  If the project can charge higher rents, that may provide the income needed to make the project financially viable. 

Beyond that, we hope that the “Tax Abatement Financial Analysis” that now accompanies each proposed tax abatement becomes a vital part of the discussion over each proposed tax break.  If the CFO raises questions about a project’s need for special tax treatment for the city, the developer could be asked to provide their own detailed response. Depending on the response, the Council could direct the developer to take additional steps to seek financing other than from the city, before the tax break is voted on.  This kind of process would help make sure that DC’s economic development subsidies are offered only when needed to help an important project move forward.

Another big decision happened this week regarding the District’s implementation of federal health reform:  last night, the governing board of DC’s Health Benefits Exchange voted unanimously to appoint Mila Kofman as its Executive Director. Kofman’s experience and knowledge in private insurance markets make her well-suited to guide the Exchange through the District’s particular circumstances and challenges, such as having a small population, network adequacy problems, and health disparities. DCFPI is equally impressed with her work as a consumer advocate.

Kofman most recently worked at Georgetown University’s Health Policy Institute, where she assisted other states in implementing national health reform or what’s now known as Obamacare. Before that, she served as Superintendent of Insurance for the state of Maine, overseeing a large state agency that regulates Maine’s entire insurance market. Among her accomplishments, she created a unit specifically for enforcing insurer compliance with market regulations, and she set up improved channels for customer service delivery. 

While at Georgetown, she provided guidance to states as they implemented health insurance reforms. This includes helping coalitions of employers to improve their purchasing power — allowing small businesses buy more affordable and quality plans for their employees. At the national level, she has worked on a host of patient protection initiatives and research including implementing health information privacy laws, documenting health insurance scams, and working on the Patient’s Bill of Rights legislation in the early 2000s. 

DCFPI looks forward to working with Kofman and her staff on improving the quality and affordability of health insurance offered in the District. 

The board governing DC’s implementation of federal health reform will soon decide how individuals will purchase insurance plans from what’s known as the DC Health Benefits Exchange. The Affordable Care Act mandates that individuals must have the option of paying their premiums directly to insurers, but DC is also considering allowing individuals to make payments to the Exchange. With this approach, the Exchange could become a one-stop shop for a family’s health insurance needs—and streamline the payment process. Currently, the Exchange board is taking public comment on how to collect payments, with a formal proposal forthcoming.    

Payment to the Exchange is known as “individual premium aggregation” — in which the Exchange would collect premiums from consumers, aggregate them, and then forward them to the plan issuer.  For small employers in the Exchange, proposed federal regulations already require the Exchange to collect all payments, so the premium aggregation decision only will affect individual consumers.  

Allowing consumers to choose payment through the Exchange could add additional convenience.  After shopping and enrolling in a plan, the online portal would offer a consistent and streamlined billing process. Individuals could go to the same place for all health insurance functions. The Exchange’s customer service system would be available to answer questions on an array of topics spanning from initial enrollment to late payment fees.   

There are costs, however, to adding this option. The board will have to weigh the benefits to consumers against the costs associated with monthly billing, tracking payments, and contracting with a vendor who will aggregate and forward premiums to insurers. However, the Exchange will face these costs and administrative burdens for small employers no matter what they decide for individuals, which suggests that applying it to individuals may not add much to these costs.  Moreover, the additional costs of enhancing the payment options could substantially increase individuals’ ability to maintain coverage on the Exchange, especially among those who are new to the private insurance market.  

DCFPI encourages the Exchange board to consider adding this option. Unless there is evidence that allowing individuals to pay for their insurance through the Exchange is overly costly or burdensome, we believe this is the approach DC should take. Public comment on individual premium payments ends at 5:00 pm on Friday, December 14^th.  To send comments, contact Rekha Ayalur at Rekha.ayalur@dc.gov.

With everyone focused on Chancellor Kaya Henderson’s school closures proposal, you might not be aware that a new study is just getting started to help answer a critical education policy question: Are we spending enough on public schools in the District? 

The year-long study—funded by the DC Deputy Mayor for Education—will analyze the cost of providing an “adequate” public education in the District. Interested in learning more about the study? There will be a public information and discussion session on the study this Wednesday night from 6:00 to 8:00 pm at the Charles Sumner School Museum and Archives, 1201 17th St. NW. 

The idea for the adequacy study stems from the DC Public Education Finance Reform Commission. The independent commission, which was created by DC Council legislation in 2010 and issued its recommendations this past February, mainly tackled the issue of “equity” of school funding between DC Public Schools and DC Public Charter Schools. But it also looked at broader issues of adequacy, affordability, and transparency in public education in DC. The Commission recommended that a full-scale study be completed to analyze the full costs of an adequate education in DC. 

DCFPI thinks the study is a good opportunity for the District to see if we are spending the right amount per student to meet our city’s educational needs. For example, the study might recommend revisions to the Uniform Per Student Funding Formula, which has not been updated since 2008, and offer a template for a working group to update the formula on a regular basis in the future. In addition, the adequacy study may make recommendations to change the way the needs of certain students are “weighted” or given additional funds because of greater levels of need, like we do now for English language learners and students in special education. One of the Commission’s recommendations was that additional funding be considered for schools based on the number of students who are both low-income and academically behind. The adequacy study is also going to analyze the way DC finances and manages capital investments, maintenance, utilities and custodial services for school buildings and facilities. 

Again, the public information and discussion session on the study will be this Wednesday from 6:00 to 8:00 pm at the Charles Sumner School Museum and Archives, 1201 17th St. NW.

District’s Dime readers, our monthly column in the Capital Community newspapers is out!

A preview:

Going over the “fiscal cliff” is the talk of Washington right now, but what will stepping over that brink mean for local DC?

The term is shorthand for the payroll and income tax cuts that are set to expire at the end of the year combined with automatic cuts in federal spending that were put into law by Congress during the debt ceiling debate, known as sequestration. Many economists say that the scenario is less a cliff than a slope or hill, because the economic impact likely will not be immediately calamitous. It is more likely to be gradual, and many predict that a compromise will be reached that would stave off more severe consequences such as a recession. Yet the issue is a good reminder that what’s decided within the hallways of Capitol Hill can be felt on the streets of Capitol Hill—as well as Congress Heights, Cleveland Park and Chinatown.

In fact, the folks in DC government who look into the crystal ball and tell us how many dollars we have to spend have been thinking about the impact of the fiscal cliff for some time now. Any policy that broadly influences the size and scope of the federal government will be felt here in DC, since we are the seat of government and many federal workers are located here. A reduction of staff or decrease in federal contracting translates into a reduction in local income taxes, since some residents might lose their jobs, as well as a drop in sales taxes, because residents will have less money to spend, fewer workers will be eating lunches at local restaurants and food trucks, and so on.

This impacts the District’s revenue projections, and how much we can budget for various programs and services. Therefore, it is important that we consider the most likely scenarios and forecast accordingly.

The Federal Factor

There are more than 200,000 federal jobs in the District, according to the U.S. Department of Labor, but only about one in five, or a little more than 45,000, are held by District residents. Yet there are many other jobs that rely on the federal government and federal workers. This would include contractors that do work for federal agencies or companies that supply products for the federal government or even restaurants, dry cleaners or clothing stores that have federal workers as customers.

According to some projections, full sequestration could result in the loss of up to 127,000 DC jobs over the next decade. This number includes 35,000 federal jobs, 34,000 federal contracting and subcontracting jobs, and 58,000 jobs that would be impacted due to the decline in the federal payroll.

Yet there are few who believe full sequestration will happen. Most likely, say many economists and Congressional experts, a compromise will emerge and the automatic reductions will not all take place. Nevertheless, the economists in the revenue analysis division of DC’s Office of the Chief Financial Officer have to make some assumptions about the federal budget and what impact this will have on both the national and regional economy to calculate how much money the city can expect to have in its coffers. CFO Gandhi and his deputies have said that it would be irresponsible not to show an impact from sequestration even if it is not fully implemented. “Despite the recent District job market strength and stronger than expected revenue, the continued uncertainty regarding post-election federal budget actions poses a real risk to the District’s finances,” Gandhi wrote in the September quarterly forecast. He calls the impact of the local cuts and a possible national economic impact a “double-whammy” for the District.

Economic indicators continue to show that the District is on the rise. Income and sales taxes remain strong and growing. Yet this was not reflected in an uptick projected future revenues in September’s revenue forecast because Gandhi said there was too much uncertainty about the fiscal cliff and how Congress would handle it. The murkiness led Gandhi to be cautious, and therefore despite strong revenue trends, the CFO declined to make any new projections for tax collections in 2013 and beyond.

Yet, the CFO wrote, if the fiscal cliff is largely avoided, “the revenue picture for the District would improve significantly” from what the CFO projected in his September revenue forecast.

Why The Cliff is Not a Cliff

Economists like Mark Zandi of Moody’s Analytics say that the most likely scenario is that the fiscal cliff will be avoided, and that a budget deal will likely keep many of the tax cuts in place and avert the automatic spending cuts, while coming up with another long-term plan for reducing spending. Therefore, the fiscal cliff is really not a cliff.

Thus, it seems likely that there will be some impact on economic growth, but DC will not end up seeing huge federal workforce cutbacks right away.  This is very important, because it means that the impact on income and sales tax revenues will not likely be as severe as the CFO has projected. It also means that the city’s leaders will have a number of years to adjust to the downsizing of the federal government.

And this has a very direct impact on how the District can allocate its resources this budget year.

Once the specter of the fiscal cliff is lifted, the revenue forecast likely will show we have more money right now. That would almost certainly mean that Gandhi and his fellow economists would project an uptick in revenue in the December forecast.

In most years, the September and December revenue forecasts would not be a major issue, since the most important forecast for the budget is issued in February.  But for this year’s budget, the Mayor and DC Council anticipated that revenues might rise, factored that into its budget plan, and created a contingency budget on how to spend those dollars.  For example, the approved homeless services budget is $7 million shy of what is needed just to maintain current services.  That means that choosing not to adjust the 2013 forecast until February or later could mean that many basic services will go unfunded.

Revenue Forecasting With and Without The Cliff

Revenue forecasting is not an exact science. Economists use economic data to make assumptions about what will happen, but it is worth making sure those assumptions are based on the most likely scenarios. Given that most economists believe that the cliff will be averted and sequestration will likely not take effect, our city’s revenues should reflect those likely assumptions.

For that reason, we’re hopeful that the next revenue forecast reflects the expectation that the fiscal cliff will likely be avoided. But the CFO may feel the need to be cautious until a federal budget deal is fully worked out, which may not occur before the next DC revenue forecast is due. One idea would be for the next revenue forecast in December to reflect revenues if the fiscal cliff should occur—as well as if it should not.

There are several advantages to this approach. First, it will make the calculated impact of the federal cliff scenario more transparent. And the Mayor and DC Council would have an idea of what revenues might be available if a compromise happens.

The District has taken another step forward in implementing health care reform — aka Obamacare — by taking initial votes on the program that will help residents and small businesses understand and purchase insurance plans under the Affordable Care Act. Last week, the board charged with governing the DC Health Care Exchange unanimously approved recommendations for the Navigator Program, which set the broad structure and core functions of the program.  While the initial recommendations are promising, the next design phase of the program will need to flesh out more details as to ensure that the program will be an effective tool for consumers seeking affordable health insurance.

Navigators will be a network of consumer assisters, contracted and trained by the DC exchange authority, to provide outreach, education, and guidance on purchasing insurance through the Exchange. The Exchange Board voted to limit a Navigator’s role to five functions defined in the Affordable Care Act: providing education and outreach to consumers on health plans offered on the Exchange; distributing impartial information on plan enrollment and eligibility for premium subsidies and other public programs; helping consumers and businesses select and enroll in a plan; referring consumers with complaints or concerns to District regulatory agencies; and presenting information in a ways that are culturally and linguistically appropriate for all DC consumers.

Due to the barriers many District residents face, the city may need to provide more help than the basics required by the federal law to connect residents buying health insurance for the first time with the plan that best fits their needs. The District should not limit itself to federal regulations, since many of the Navigators will be community-based organizations, chosen because of their long-standing understanding and relationships with our city’s vulnerable and hard-to-reach populations.  These community-based organizations may have the capacity to provide more intensive assistance that will decrease the barriers between consumers and the health insurance option that best meets their needs.

The board also voiced the need for all Navigators to go through training and certification — including testing requirements — to ensure that they understand and can share with consumers the full range of the Exchange’s functions.  Lastly, the board voted to have the Exchange pay Navigators set amounts as opposed to on a fee-for-enrollment basis. This will incentivize Navigators to provide the wide range of services above, rather than focusing mainly on enrollment.

The board’s approval of the Navigator recommendations only sets the broad program structure and core functions.  We hope that the board revisits several of these areas in the design phase, especially with respect to clarifying the limits on services provided by Navigators.  With continued development, the program could be a key driver in helping DC residents and small business find the health plan that best meets their needs and pocket books.

Mayor Gray’s recently released five-year economic plan makes many good choices for the city: laying out a vision, focusing on sector-specific approaches, and identifying key measures of success. But there is one choice that isn’t in the best interest of the District—removing Tax Increment Financing (TIF) from the city’s debt cap.

Here’s why:  doing that will bring less scrutiny and accountability to how we spend our critical public dollars toward development. Keeping TIF dollars within the debt cap forces us to make choices about which projects should get priority, which is a good thing.

Under TIF, the city borrows funds that then go toward commercial development projects. Rather than having the developers of these projects pay back the city directly, the loans are repaid using sales taxes and property taxes generated by the completed project. For example, the District paid $42 million to support the parking garage at the DC USA mall in Columbia Heights. Another example is the nearly $40 million the District put toward the O Street Market development in Shaw, which will include a re-built Giant grocery store, new housing, and more. 

Under this design, DC’s TIF projects are considered self-financing, with no net fiscal impact to the District. However, the borrowed funds are counted as part of the city’s debt, which is subject to a cap.  Because the city also borrows money for public projects – such as renovating schools or building new libraries  the debt cap requires the District to make choices over which economic development projects to subsidize.

The mayor’s economic development plan, however, proposes not counting TIF subsidies toward the debt cap, presumably so the city could support more of them.

That would be a bad move.  If all TIF projects were treated as both self-financing and debt-free, the District’s economic development officials would have no incentive to scrutinize proposed TIF projects to see if they are well designed and important for the city. They could just approve them all.   

It would be like eating pumpkin pie and pecan pie – and maybe some chocolate cake, too. That might be okay one day a year at Thanksgiving, but it’s an unhealthy year-round diet.

And it would be an unhealthy diet for the District, too.  An unchecked expansion of TIF-subsidized projects  could lead to large “tax holes” throughout the city, areas where property taxes and sales taxes would be diverted to pay off TIF loans, rather than going into the city’s coffers and being available to support city services, such as police or schools.

The mayor’s five-year development plan creates an ambitious vision for strengthening and diversifying DC’s economy, from high-tech to health care to retail. The plan is so wide-ranging that DC’s leaders will need to make lots of choices over which parts to prioritize and pursue first. They will need to make smart choices. And those smart choices should include which projects to subsidize under the TIF program.  That can only occur if the money borrowed to pay off TIF subsidies is counted as part of the city’s tax-supported debt.

A smart shopper never pays more for something than they need to. That applies to holiday gift-buying, but also to the DC government. No one wants the city to pay more than it has to for the services it provides. Efficient use of DC resources helps stretch our dollars and make the city as strong as possible. 

In the case of economic development, being a smart consumer means holding off on subsidies for certain developments when it is not clear they are needed. The Howard Town Center — a housing and retail development near Howard University — falls into this category. An independent financial analysis found that the developer does not need the ten-year property tax abatement it has requested from the District. The project should be able to move forward on its own.           

Nevertheless, the $11 million tax break for this development will be before the DC Council this Tuesday, and the position the Council takes on this bill is important. Just last year, the Council set new requirements to analyze the costs and benefits of every proposed tax abatement — because it wanted to better understand whether a given project really needed special tax treatment. The proposed property Howard Town Center abatement is the first time the DC Chief Financial Officer has unequivocally concluded that a proposed tax break is not needed for a project to proceed. The CFO found that the developer should be able to re-arrange financing by:

•  Seeking Low-Income Housing Tax Credits for the development’s affordable housing component;
• Charging higher rents than currently planned, given the project’s location in one of the most rapidly developing parts of the city; and
• Deferring a portion of the developer’s fee from the project. 

If those steps are taken, the project should be able to move forward — without getting special tax assistance from the city. Setting aside the proposed tax break does not mean the District doesn’t support the Howard Town Center. It would just mean DC is being a more responsible consumer when it comes to economic development. And the District could continue to help the project in other ways, such as helping the developer seek federal Low-income Housing Tax Credits. 

We hope that the DC Council will take into account the financial advice it asked for — and set aside this tax abatement.

This fall, the DC Department of Health (DOH) was one of six applicants nationwide to win a competitive federal grant to expand DC’s Home Visitation Program, which serves at-risk families with young children.  The grant, $2.25 million per year for two years, provides the District with many opportunities, and it will be critical for DOH to adopt long-term strategies to make sure the system is sustained past the two-year grant cycle.

 Due to limited funding, the current home visiting program only serves at-risk families in Wards 5, 7 and 8. The new funds will allow DC to provide home visitation services to such families, no matter what part of the city they live in. High-priority families who may be eligible for home visitation services include those that are low-income, have a history of child abuse or neglect, have children with developmental delays or disabilities, and pregnant teenagers.

The new funds also will enhance DC’s ability to connect high-risk families to needed home visitation programs and other services, by building a centralized intake and referral system, a hotline for families seeking help, and a universal screening tool for groups that work with high-risk families who are pregnant or already parents of young children.

The new grant will also boost the capacity of the Home Visitation Program through professional development. Currently, the District does not have any coordinated professional training in place to make sure all providers have the necessary skills to deliver high-quality home visitation services to families.

Finally, DOH is partnering with Georgetown University Center for Child and Human Development to study the implementation and impact of the expansion through a formal program evaluation. This process will help identify what is working and what is not to create a more effective delivery system.

As DC DOH begins the hard work of implementing these plans with the new funding, DCFPI would like to offer a few considerations:

• Fiscal sustainability is key to ensuring the long-term success of the expansion. Specifically, this means the need to secure investments by District agencies to maintain the universal screening and assessment mechanism that is being developed. Without an integrated approach, the additional services being provided to families in need may have to be dropped once the funding cycle ends.
• Similarly, initial investments in data and professional development infrastructure could benefit several other initiatives that fall under the Mayor’s Early Success Framework, an initiative to improve city-wide coordination to better serve families with young children.
• Finally, the investment can continue to build communication and collaboration across District agencies, and put service provision in the hands of community-based organizations that are familiar with the people and needs of the communities served.

 A copy of the final home visitation grant application can be found here.

District’s Dime readers, this is a special time of year for us at DCFPI. The week after Thanksgiving is when we host our colleagues from around the country at the State Fiscal Analysis Initiative conference here at the Washington Hilton. That’s right, there’s a DCFPI-like group in approximately 40 states including places like Arkansas, Oklahoma and Mississippi! We not only meet and greet, but we also attend interesting workshops and seminars on budgeting, tax policy, and how not to let Council member David Catania (I-At-Large) get the best of us.

Actually, the writer of this blog went to a communications session yesterday on how not to cross the line in blogging–and we apparently didn’t pay attention enough.

So in order to keep our attention on these great workshops, we’re going to be blogging a little less these next few days. However, we wanted to let you know of an important public meeting of the D.C. Tax Revision Commission on December 3rd at 4 pm in Room 412 of the John A. Wilson Building.

This will be your chance to provide comment and input on the commission’s research agenda,  which will guide its work and ultimate recommendations to the mayor and DC Council. The proposed research agenda is available on the Commission’s website (http://www.dctaxrevisioncommission.org/). You can also access all materials and resources the Commission has considered and studied—including presentations and reports provided at previous Commission meetings—on the website’s resource page (http://www.dctaxrevisioncommission.org/#!documents/cp9p).

Those wishing to testify before the Commission on Dec. 3 should contact Ashley Lee by email at ashley.lee@dc.gov.  Public testimony will be limited to three minutes.  The Commission also welcomes written testimony, which can be submitted via email to Ms. Lee or presented to Commissioner members in person on December 3. 

Sign up!

It’s a common practice in DC: A developer, with plans in hand to build housing or office space or retail or a mixed-use combo, says a tax break is needed to make the project work. A logical set of next questions would be: “Does this project really need a tax break to go forward? And what is the District getting in return?”

Until recently, these questions were hard to answer because there was little information to help policymakers get to the bottom of these vital questions. The tax breaks typically were approved, although sometimes with misgivings.

That all changed last year, when the DC Council adopted new requirements to assess the costs and benefits of all proposed economic development tax breaks. The Council made it clear that they do not want to approve these tax breaks in a vacuum.

Now, for the first time, the new system is being put to the test. The developers of the proposed Howard Town Center — a housing and retail development in Shaw-LeDroit Park — are seeking a ten-year, 100 percent property tax abatement. In other words,  the developers don’t want to pay property taxes for a decade. But an analysis from DC’s Chief Financial Officer (CFO) concluded the $11 million tax break “is not necessary for the site to be developed” for the following reasons:

• The project, which includes an affordable housing component, should be able to get funding using Low-Income Housing Tax Credits. The developer hasn’t been able to get a tax credit investor yet, but the CFO thinks that will change soon.
• The project should be able to charge higher rents than the developer is claiming.
• The developer can save money by deferring a portion of the developer’s fee from the project, a common practice with developments that include affordable housing.

Now the real test comes of whether the District is serious about greater accountability for economic development subsidies. The CFO’s analysis is purely advisory, which means the DC Council could move ahead and approve the proposed tax break as is. That would be unfortunate.

Instead, Mayor Gray and the Council should tell the developer to go back to the drawing board and to push a little harder to make the numbers work without a subsidy. This doesn’t necessarily mean the tax break should be rejected outright. If, for example, the developer demonstrates sincere but unsuccessful efforts to secure low income housing tax credits, the Council could decide that some subsidy is needed, though perhaps less than a full tax break for ten years.

In the end, the District should push to get the most bang for its economic development buck. That means directing resources to projects that will move the city forward — such as projects that will create jobs or promote development in under-served areas. But it also means only offering public subsidies when it’s clear that help is needed to move the project along.

Happy Thanksgiving from the District’s Dime!

Families and friends across the country will join together to appreciate their good fortune over the past year. We here at DCFPI have quite a few things to be grateful for as well. So tomorrow, while we’re all taking the time to eat, rest, and be thankful, here’s what DCFPI will be celebrating:

• DC’s Local Rent Supplement Program (LRSP): This year, the District took action to allow 17 LRSP vouchers to be used instead of sitting on a shelf collecting dust. That’s 17 District families who will now have a place to call home.
• Steps Taken Toward Increased Transparency at DCPS: While there is more to be done on making the schools budget more accessible and transparent, the release of a new budget guide outlining the funding breakdown of the DCPS budget, including how the program is described in the CFO’s budget book, is a step in the right direction.  
• Increased Funding for Affordable Housing Programs: Nearly $22 million of additional funds were added for critical affordable housing programs in the FY 2013 budget: $15 million to the Housing Production Trust Fund to largely help offset a $20 million proposed cut; $2.5 million to the Home Purchase Assistance Program; and $4 million for the Local Rent Supplement Program to help move families out of emergency shelter and into stable housing. 
• Groundbreaking health care reform: DCFPI is happy that DC has aggressively pushed forward on federal health care reform, earning the District $73 million from the U.S. Department of Health and Human Services. 
• New Federal Funds for Home Visiting Programs: The DC Department of Health partnered with the Home Visiting Council to successfully compete for federal funding to expand evidence-based home visiting programs in the city. The department will receive $2.25 million per year for the next two years to build up DC’s Home Visitation program, which will benefit at-risk families with young children across our community.
• Acceleration of TANF Redesign: The District reprogrammed funds to ensure that all families receiving TANF will receive an assessment in time to allow them time to access employment services before their benefits are cut.
• Innovative Approaches to Workforce Development: A newly reinvigorated Workforce Investment Council is developing a pilot workforce intermediary for the District, a job matching approach that has been successful in other cities.
• DC Following the Buffett Rule, Not Breaking It: The DC Council rejected the cut on capital gains taxes for tech investors, ensuring that they would not pay a lower tax rate on their returns than DC residents pay on their incomes.  
• Timely Information: The CFO released the Current Services Funding Level nearly three months earlier than last year! We’re so excited!

 So, that’s our list. What are you thankful for?

Happy Thanksgiving, and we will be back on Monday!

Last night, the DC Council concluded its second round of public oversight hearings on Chancellor Kaya Henderson’s plan to close 20 public schools across the District. DCFPI was one of more than 100 public witnesses signed up to testify before the Council about the issue. Final decisions about school closings are expected to be made by the Chancellor and Mayor Gray around mid-January. 

Much of the hearing focused on the cost ineffectiveness of operating small, under-enrolled DCPS schools, many of which appear on the closure list. Currently, schools that are under-enrolled are often subsidized, or offered additional funding beyond what they are initially allocated in the school budget, to help them have adequate staffing during the school year. However, DCPS has not yet quantified what it expects to save in total from school closures or what the transition costs may be. Without that information, it is hard to assess whether school closures make financial sense. 

Yesterday, the Chancellor alluded to some savings that could provide for additional staffing positions in newly consolidated schools. She said, on average, a school receiving students from a closed school could expect to be able to afford a full-time librarian and five additional teachers. The Chancellor cited a potential $20 million in savings across the school system if DCPS no longer has to subsidize 20 small schools in this way. 

DCFPI urges the Chancellor to clearly identify what cost savings may be seen by closing these 20 schools. After those numbers are released there should be a public discussion if this amount is enough to justify closure, particularly if some schools are located in areas where there may be a population boom in school-age children only a few years down the road. If savings are seen, DCPS should also be transparent about how the funds will be used to support individual schools or the overall system. This will give residents a better understanding of how school closure savings will translate into greater academic investments. You can read the entire testimony from DCFPI here.

If you were not able to testify, there will still be opportunities to offer feedback. DCPS will be holding community meetings to discuss the proposed closures in the following wards starting next week: