The Districts Dime

Melinda Gaino: Working But Left Behind in DC’s Prosperity

February 18th, 2015 | by Ed Lazere (DCFPI) and Ari Schwartz (DC Jobs with Justice)

Melinda Gaino has a full-time job in DC, but she struggles to make it. She earns $9.90 an hour as a cashier at Walmart on H Street, NW, bringing home about $20,000 a year. That is too little to support her and her four children in their SE apartment.

2.18.15 gaino left behindMelinda is an example of the many workers who have been left behind despite DC’s growing economy, according to a recent report from DCFPI. She is a victim of an economy that is failing to create shared prosperity, to ensure that everyone who works hard can get by.

Melinda’s life as a low-wage worker is not unique. There are thousands who work in DC every day but barely stay afloat: the lot attendants who park our cars ($9.72 average wage), the cashiers who check us out ($11.03 average wage), the people who make our sandwiches for lunch ($11.43 average pay for food prep workers).

These workers have not fared well, according to DCFPI’s report. Hourly earnings for DC’s lowest-paid workers grew just 7 percent over 35 years – about 2 cents per year, taking account of inflation – while the highest paid workers saw their paychecks grow by 55 percent. The pay gap between the people who earn the least and those who earn the most in DC is at a record high.

Melinda typifies the challenge to stay ahead in other ways. She worked at Blue Cross/Blue Shield for three years, earning $15.60 an hour, but then got laid off. She searched for employment for six months before starting at Walmart at a much lower salary. Her experience was typical – nearly three-fifths of high school graduates who lost a job in 2013 were out of work for more than six months.

Working at Walmart has been hard for Melinda for other reasons besides low pay. Last year, despite DC’s requirement that all employers provide paid sick leave, Melinda was disciplined for missing work when her 18-year-old was hospitalized.

“Even though I’m considered full-time and work 40 hours a week, I still rely on government assistance to get by,” said Melinda. “Living off $9.90 is too hard, having to provide for a college student and relying on food stamps.”

But Melinda’s story has some happy news, too, including the fact that her pay will rise to $11.50 in 2016, not as part of Walmart salary policy but because of scheduled increases in DC’s minimum wage. That will increase Melinda’s pay by $3,000 a year. It is an indication of what we can do to make DC’s economy work better for everyone.

While grateful, Melinda knows this is not enough. In November, she joined other associates with the worker organization OUR Walmart in calling on the mega-retailer to pay a living wage of $15 an hour. That way, she would no longer need to rely on public assistance despite working full-time.

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Ensuring Low-Income Kids Get the Behavioral Health Services They Need

February 13th, 2015 | by Wes Rivers

There is a tremendous need for mental health services among the District’s middle and high school students, especially in our poorest and lowest-performing schools. And schools are an ideal place to identify kids in needs and have trusted adults connect them to services. That’s why DC’s Department of Behavioral Health (DBH) should expand and improve mental health services in schools and coordinate with other agencies, such as Department of Health, to make sure kids are referred to the right programs. Here is how:

Expand school-based mental health and improve monitoring of student progress to make sure services are making a difference. The school-based mental health program puts mental health professionals in schools to provide early intervention with students and to treat kids with more serious issues. The program only operates in 69 schools, with funding available to expand to six more. Last school-year, of 1,700 students referred to the program, only 1,200 were assessed and referred to additional services and only half of those assessed received treatment from a clinician.

DC needs to track the progress of those who received treatment, to help understand the best ways to improve services. Not all of the students may need intensive services, but DC should keep better track of what happened to the students who were not treated. Finally, DBH needs more clinicians to treat or screen all kids who are referred to the program and to reach more schools.

Continue expanding early intervention services among younger children. The Primary Project provides socio-emotional health services for kids in Pre-K through third grade. It operates in 56 locations including schools and early childhood development centers. Like the school-based mental health program, limited evaluation data is available for the Primary Project, which makes it difficult to determine if children are getting referred to other programs or whether the early intervention is having the desired effect. DCFPI supports expanding this type of service to more environments, but also recommends stronger systems of monitoring and evaluation.

DBH, schools, and other agencies need to coordinate their services and share information. The Department of Health, DC Public Schools, and DC Public Charter Schools have mental health programs that may overlap or be complementary of DBH programs. For example, some children who benefit from DOH’s maternal and child home visiting program may also benefit from the Primary Project. Yet these agencies do not sharing information in a way that could facilitate better hand-offs between programs, reduce unnecessary duplication of services, and improve understanding of a given child and family’s larger needs. The same linkages should also exist between DBH’s school programs, community health providers, and the Medicaid managed care organizations that serve these kids. These agencies should work together to improve information sharing and access to each other’s databases.

The DC Fiscal Policy Institute testified today at DBH’s public oversight hearing on these issues. To read the full testimony, click here.

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The Surplus and the Shortfall: An Explainer

February 10th, 2015 | by Wes Rivers

Residents might be confused by two pieces of seemingly contradictory news: 1) The District had a surplus of $200 million last year and 2) The mayor and DC Council need to address a budget shortfall of $240 million for next year. Many are wondering how DC can have shortfalls when carrying a surplus. That is a great question, and the District Dime is here to explain.

A surplus means that the District took in more money than it spent last year. That can happen for two reasons: either DC collects more tax revenue than expected or government agencies spend less than what they were budgeted. The $200 million surplus in 2014 was due to the latter — agencies spent much less than what the Mayor and Council allowed them to.

Since the surplus is a look into the past, it does not say a lot about the future state of the District’s budget or economy. The surplus was in 2014, while the budget shortfall is for 2016, and a lot can change in two years. What’s more, surpluses caused by underspending are not necessarily a sign that DC is in a great financial position. Even in bad economic years, the city will run a surplus if agencies spend less than what they had planned.  

The shortfall for 2016 is based on projections of the District’s future ability to pay for services like health care and schools. Those costs tend to rise from year to year, due to health care inflation, rising school enrollment, pay increases for DC workers, and other factors. City leaders have known since last year that tax collections for 2016 would not be enough to cover our bills. In addition, the Chief Financial Officer recently revealed that revenues from traffic cameras and income taxes are coming in lower than they had previously thought, not because the economy is slowing down but for other reasons, some of which are technical.

These factors combine to create a projected 2016 shortfall of $240 million, which the mayor and council must address when they put together a budget this spring. That could be resolved in a number of ways. 

  • Revenues could start to grow faster than what is expected right now. The next revenue forecast comes out later this month.
  • DC government agencies might underspend again. Some of the low spending in 2014 may carry forward into future years, to the extent that the city needed less money than budgeted to meet some of its needs.
  • The mayor and council could find other savings that don’t require cutting services, or unexpected resources to pay for some its bills. The city could, for example, use some of the $200 million surplus to meet its needs next year.
  • Finally, the mayor and council could cut services, raise revenues, or some combination of the two.

We will know more when the next revenue forecast comes out later this month. That will give Mayor Bowser a clear picture of the size of the financial challenges she faces. And it will frame the steps she must take to put together a budget that is balanced while also meeting important needs of DC residents, such as housing and public safety.

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Getting the Most Out of DC’s Job Training Programs

February 9th, 2015 | by Ed Lazere

The District can help residents get good jobs by doing more to coordinate its many adult education and training programs, and by focusing resources on the thousands of residents who lack a high school degree. Making sure adults are able to get basic education and then easily transition to more advanced training will allow the District to get the most out of its investments in jobs. Improving the employment prospects of DC households is good for the entire city, leading to more stable families and more spending in local communities.  (Click on figure below for better viewing.)

2.9.15 Career PathwaysThere is tremendous potential for changing how the District approaches these services, with a new mayor focused on improving residents’ job chances, a new DC taskforce focused on adult education and training, and recent changes in federal training programs. A new report from a number of non-profit partners, including DCFPI, recommends how DC’s leaders can take advantage of these opportunities.

  • Put more residents on a career path: Many states and cities are creating clearer connections between adult education programs and training programs, so that a high school diploma or GED is just a first step toward additional education and training, not an end. A District taskforce charged with developing this so-called “career pathways” approach will issue its report this year. And recent changes in federal law encourage DC to unify job training plans across agencies.                                                                                                                                 A well-integrated education and training system will ensure residents get the right kind of help and are connected to a job when their training is done. The District offers a variety of adult education and job training services across many agencies, as DCFPI identified a few years ago. Mayor Bowser has stressed the need to better coordinate these efforts, and the recommendations of the Career Pathways taskforce can serve as a guide.
  •  Focus on residents who need the most help: About 60,000 DC adults DC lack a high school diploma, and many have literacy skills too low to take advantage of job training.  Investing more in basic education, in the context of job preparation, will be important.
  •  Support successful programs: The District should do more to measure the outcomes of education and training programs, to ensure that the most effective practices are used, and to offer technical assistance to help education and training providers succeed. 
  •  Allow the Workforce Investment Council to lead: Mayor Bowser should enable the WIC to play a central role in reforming how the city approaches adult education and job training. The WIC oversees federal job training programs and advises the mayor and DC Council on DC’s workforce investment system. It is led by the private sector – including local businesses and organized labor – and also includes government officials. The WIC is convening the Career Pathways taskforce and has responsibility under the new federal law for helping coordinate education and training services.

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This Year, Spend the Surplus to Make DC Stronger

February 6th, 2015 | by Ed Lazere

The District ran a surplus of over $200 million last year, which offers a great opportunity to invest in things that will help DC residents and make the city stronger, such as replacing the DC General shelter or buying more technology for schools. The mayor and council will need to take special action, however, because current law requires every dollar of surplus to be saved in reserves. At a time when the city’s savings are at a record level and resident needs are great, using a portion of the surplus for other needs is a prudent move.2.6.15-FundBalance

Some of the latest surplus cannot be used, such as funds set aside for the new soccer stadium. But the mayor and council could decide to use other portions. For example, $48 million of the surplus is earmarked for a “cashflow” reserve that reduces the District’s need to borrow in the middle of the year in between major tax collections. Yet the benefits of adding to this reserve are modest, because short-term borrowing currently costs the city less than $1 million a year. Rather than adding to this reserve, the funds could be spent to help residents.

DC’s leaders also could examine the city’s multiple special funds, which contributed $50 million to the surplus. Some of these funds may have more resources than needed for their specified purposes.

These steps could free up millions of dollars for a range of one-time investments, such as helping families facing eviction or utility shutoffs, helping moderate-income residents buy their first home, or adding to library collections. 

Some people may express concern about spending surplus funds, but consider this:

  • Even before the latest surplus, the city’s savings (its fund balance) were the highest on record.
  • The city has saved almost $1 billion in surplus funds in the last three year.
  • The District’s fund balance is larger than in most states. Only seven states have larger balances than DC when measured as a share of its budget. 
  • When the District had substantial surpluses in the mid-2000s, then-Mayor Williams used as much as $500 million per year in surplus funds for a variety of purposes. 

 A balanced approach to the 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.  

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