The Districts Dime

Our TANF Families Can’t Wait Until 2017

April 23rd, 2014 | by Kate Coventry

The proposed budget would substantially increase income assistance to poor families with children over the next three years. This is a positive step that would help parents in deep poverty provide a more stable environment for their children. It is an important move because benefits in DC’s TANF program have remained flat for the last five years in the midst of the city’s rapidly rising housing costs. 

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Yet nearly all of the proposed increase would have to wait until FY 2017 – more than two years from now – with only modest increases in 2015 and 2016. It would be better to implement the increase evenly over the next three years, including a notable increase in FY 2015 to provide families with immediate assistance. 

DC’s Temporary Assistance to Needy Families program provides just $428 a month for a family of three, bringing families to just 26 percent of the poverty line (see Figure 1). Even counting SNAP benefits (food stamps), families have income of only 59 percent of the federal poverty line.[1] This threatens the future success of the one-third of DC children living on TANF assistance. New neuroscience research shows that poor children are more likely to suffer from “toxic stress” that disrupts the development of the brain, leading to lifelong negative impacts.[2] 

Children in poverty:

  • score lower on tests of cognitive skills;
  • have more behavior problems;
  • are more likely to have a child at a young age;
  • are more likely to drop out of high school;
  • are more likely to be poor as adults.[3]

Under the mayor’s budget proposal, a family of three will receive $438 in FY 2015, $449 in FY 2016, and then jump to $655 in FY 2017. This would put DC’s benefits in line with benefits in other high-cost jurisdictions such as Boston ($618), Los Angeles ($638), and New York City ($789). 

But given the clear inadequacy of the District’s current benefits and the continuing disappearance of low-cost housing, the District should implement the increase evenly over FYs 2015 through 2017 rather than waiting more than two years for the bulk if the increase. This would mean raising benefits to about $500 per month in 2015, which is consistent with legislation introduced last year to raise benefits 15 percent. This would allow the District to get an immediate start to improve family stability, reduce the negative effects of poverty and help ensure a brighter future for DC’s kids.

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[1]The Value of TANF Cash Benefits Continued to Erode in 2012 by Ife Finch and Liz Schott, Center on Budget and Policy Priorities. March 2013. www.cbpp.org/files/3-28-13tanf.pdf

[2] The Long Reach of Early Childhood Poverty: Pathways and Impacts: Q&As with Drs. Greg Duncan, Katherine Magnuson, Tom Boyce and Jack Shonkoff. Harvard University’s Center on Child Development developingchild.harvard.edu/index.php/download_file/-/view/623/

[3] The Foreseeable Harm from Governor Brown’s Proposal to Reduce CalWorks Grants for Children by Michael Herald and Jessica Bartholow. March 2011. 

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Make Work Pay: Fund Low Income Tax Relief in FY 2015!

April 22nd, 2014 | by Wes Rivers

The Earned Income Tax Credit (EITC) and the standard deduction are two of the most effective tools to target income tax assistance to low-and moderate-income DC families. That’s why the DC Tax Revision Commission recommended that each be expanded to help to correct DC’s unbalanced tax system, which leaves middle-income families paying more of their income in DC taxes than higher-income households. 

Unfortunately, Mayor Gray did not include these recommendations in his proposed fiscal year 2015 budget, although they were put on a wish list that would be funded if revenues next year exceed current projections. Instead, the proposed budget includes other commission recommendations, including a cut in the income tax rate that is not as well targeted on the working poor. As the Council works to modify the proposed budget, we hope the EITC and standard deduction move from the wish list to reality.  

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Here’s why: 

Expand the EITC for childless workers. The District offers one of the most generous state EITCs in the country. The EITC is refundable, meaning that if the credit exceeds the amount of income taxes owed, the excess is given as a tax refund. 

However, the DC EITC for workers without a child in the home is small – a maximum of only $195 – and workers get no EITC if they earn more than $14,000. A single worker working full time at the new minimum wage of $11.50 would not be eligible for the credit.  

The Tax Revision Commission recommended increasing eligibility for the credit to 200 percent of the poverty line, or about $23,000 a year, and raising the maximum credit to almost $500. A childless worker employed 30 hours per week at $11.50 an hour would get an EITC of $450 –  offsetting 90 percent of her or his income taxes.

Raise the Standard Deduction to the Federal Level.  Many states use a standard deduction to exclude a portion of income from tax. Standard deductions are especially important to low-income individuals, because they can remove all or a significant share of income from taxation, allowing workers to keep more of their limited pay. However, the District’s standard deduction of $4,050 is far lower than the federal standard deduction and smaller than the deductions in many other states

The Commission recommended raising the DC standard deduction to the federal level, or $6,100 for singles and $12,200 for married couples filing jointly. The change would largely benefit low- and moderate-income households, since two-thirds of those who claim the standard deduction have incomes below $75,000. (Higher income families tend to itemize.) The increase would also boost the effectiveness of the Earned Income Tax Credit for all low-income filers, as a higher deduction would exempt more income from tax and increase the amount of EITC refunds.

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How Does the FY 2015 Budget Propose to Tackle DC’s Affordable Housing Challenges?

April 21st, 2014 | by Jenny Reed

Affordable housing is undeniably one of the District’s biggest challenges. So what does the fiscal year 2015 budget propose to do to address it?   

The proposed budget makes a number of new investments in important housing programs, including steps to end chronic homelessness among veterans. But it also reveals serious gaps in the city’s approach to affordable housing. For example, the budget provides a one-time boost to the Housing Production Trust for a second year in a row, showing that the current taxes dedicated to the Fund are inadequate. Also, the budget would put only modest new resources into tenant-based rental assistance, even though it is the best tool for creating affordable housing quickly.

The budget proposes $145 million in local funds for a variety of affordable housing programs in FY 2015. The budget also adds $30 million in one-time funds for the Housing Production Trust Fund this year, FY 2014. When those funds are considered, the FY 2015 housing budget is lower than in both FY 2014 and FY 2013, after adjusting for inflation (see Figure 1). 4.21.14 Figure 1-03

The FY 2015 proposed budget includes new funds for three housing programs:

  • Local Rent Supplement Program: LRSP provides rental assistance to make homes affordable to residents with very low-incomes. The proposed budget includes $3 million for LRSP assistance tied to specific projects or to non-profit housing organizations.  That will help 280 households. Another $1 million will provide rental assistance directly to about 66 seniors to help them leave a nursing home and rent a private apartment.  
  • Permanent Supportive Housing: The proposed budget includes $4.7 million to end chronic homelessness among veterans through the Permanent Supportive housing program. However, funding used to help other chronically homeless individuals and families would be cut. 
  • Housing Production Trust Fund: The proposed budget is $40 million from the tax revenues dedicated to it under a statutory formula. That is lower than in FY 2013 and FY 2014, because the mayor added one-time funds of $69 million and $31 million, respectively, in those years. (See Figure 2.) 

    The reliance on one-time funds highlights the limited capacity of the Housing Production Trust Fund under its current funding formula. The District should create a significant and predictable investment into the HPTF each year through regular appropriations. A goal of $100 million annually for housing production and preservation would support a healthy number of new housing units each year. 4.21.14 Figure 4-03

The budget also needs to go beyond its current focus on housing production. While production of new housing is absolutely needed, it can take several years before the housing is available. A quick and efficient way to create affordable housing is through rental assistance to tenants – as part of the tenant-based Local Rent Supplement Program – that pays a portion of the rent for existing housing they find on their own. But, as noted, the mayor’s budget would provide tenant-based rental assistance to just 66 new households.  Increasing funds for tenant-based LRSP is an important part of addressing unmet affordable housing needs both now and in the future.

To read more about the proposed FY 2015 budget for affordable housing, visit our affordable housing budget toolkit

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What’s in Mayor Gray’s FY 2015 Proposed Budget?

April 18th, 2014 | by Jenny Reed

Today, DCFPI releases its budget toolkit, your in-depth guide to the proposed FY 2015 budget.  Our toolkit breaks down how Mayor Gray proposes to allocate local funds and analyzes how the proposed budget will impact education, health care, affordable housing, taxes and more.4-18-14-fy15-budget-blog

On April 3rd, Mayor Gray submitted his budget proposal for fiscal year 2015, which starts October 1, 2014. The proposed general fund budget — the portion of the DC budget that comes from local taxes and fees, including dedicated tax revenue and special purpose funds — is $7.72 billion — a $302 million, or 4 percent increase over FY 2014, after adjusting for inflation. 

The budget would make investments across DC government in a number of critical areas, particularly education, health care, cash assistance for families with children and affordable housing. The largest increases from FY 2014 to FY 2015 include funds to cover: repayments of debt issued for construction and other capital projects; increases in enrollment in publicly funded schools and new supplemental funding for at-risk students; increases in mental health services; increases for maintain, operating and leasing DC government buildings, and other mayoral policy priorities that will be discussed in greater detail.   

The proposed budget also includes a variety of changes to taxes and fees that would result in a $27 million reduction in revenues, equal to about one-third of one percent of the city’s locally funded budget. The proposed revenue changes would start to implement a number of recommendations issued by the DC Tax Revision Commission in February 2014 as well as a number of changes that were not recommended by the commission. 

Despite the many investments in the budget, some areas remain left behind. The proposed budget appears to cut funding for homeless families services despite the tremendous increase in families seeking shelter this past winter.  

To read more about the overall budget, or in-depth analyses of funding for education, health care, energy assistance, affordable housing, workforce development, or taxes, check out our toolkit website. We also have a spreadsheet that tracks funding across agencies from FY 2000 — FY 2015; use it to do your own budget analysis! And check back next week for more detailed information on the budgets for homeless services, Temporary Assistance for Needy Families (TANF) and Interim Disability Assistance.

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Where Does the Money Go? – A Resource Map for the District’s Disconnected Youth Dollars

April 17th, 2014 | by Amy Dudas, DC Alliance for Youth Advocates

4-17-14 blogWith the intent to outline the funding streams that sustain reconnection opportunities for DC youth, the DC Alliance of Youth Advocates (DCAYA), in partnership with The Community Foundation for the National Capital Region, releases “Connecting Youth to Opportunity: A Resource Map for the District’s Disconnected Youth Dollars.” The network of services navigated by disconnected youth is complex, with the District offering several programs and services across eight city agencies. The resource map is a tool for those seeking to utilize the District’s resources most effectively and to understand the complexities behind funding this unique, at-risk population. So what does this initial roadmap tell us about DC’s inventory of reconnection services? DCAYA has three key take-aways:

First, while cross agency coordination has improved to a degree, there still remains room for improvement. In order to capture the dynamic needs of youth and maximize investments in our public systems, agencies must collaborate to share services, expertise, and resources. One example, which is seen in the funding map, is the Pathways for Young Adults program. The Department of Employment Services (DOES) is partnering with the Community College of the District of Columbia (UDCC) to address the needs of disconnected youth by supplementing traditional occupational training with the chance to learn key life skills. Intentional partnerships between our workforce system and sister agencies is necessary if we are going to build a comprehensive and efficient workforce development system that youth can readily access and transition through as their needs evolve.

Second, the resource map also reveals a severe scarcity of year-round programming specific to disconnected young people. While $12,000,000 is spent on the six-week-long Summer Youth Employment Program (SYEP), less than $5,000,000 is slated for year-round workforce development training for out-of-school youth. Even though adult training programs are available for youth over 18, the rate at which youth access these programs is low, given their overrepresentation in our unemployment rate. Higher-need, less-skilled youth require modified programming that meets them where they’re at. We need to invest in year round training and job placement services that are designed to meet the unique needs of the disconnected youth population.

Third, and perhaps one of the most poignant pieces of the map, is the lack of local funding directed to youth who face the greatest risks of disconnection at key points of transition, like aging out of foster care, exiting the juvenile justice system, becoming young parents, or acclimating as first generation immigrations. We know these youth are especially vulnerable to disconnection and the resources and support they require are often a bit different and deeper than their peers. Yet, the District invests less than $1,500,000 in local dollars to these particularly high risk populations, while federal funds only account for $5,191,409 more.

In reviewing the resource roadmap and comparing various agency programs side-by-side, it is easy to see the startling reality of where the gaps and opportunities lie for disconnected youth. By understanding the various funding streams within our system of reconnection foundations, community advocates and policymakers can target future investments and strengthen our ability to intervene early and effectively. Join us in working with the Council to ensure that the 2015 budget includes strategic investments that connect youth to opportunities.

View “Connecting Youth to Opportunity: A Resource Map of the District’s Disconnected Youth Dollars.”   

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