The Districts Dime

Guest Blog: Laying the Groundwork with Investments in Adult Literacy

July 18th, 2014 | by Judy Berman, Deputy Director, DC Appleseed

The budget recently passed by the DC Council includes two provisions that will benefit District adults who need basic skills education in order to achieve greater economic security. These investments are important because District adults without a high school diploma or equivalent are more than twice as likely to be poor as those with some college or an associate’s degree (see Figure), and our current system is not well-designed to help adult learners move from adult basic skills to get a GED and then on to post-secondary success. 

One provision in the budget establishes an Adult Career Pathways Task Force housed by the Workforce Investment Council. With funding for a senior staff person and technical assistance (a total of $175,000), this task force has been charged with analyzing the current use of the District’s adult literacy dollars across agencies and funding streams, and developing a plan to better integrate adult literacy services with workforce and career training. These integrated services will enable adult learners to advance in workforce skills and knowledge at the same time as they advance in basic literacy, numeracy, and computer literacy. They will include industry-specific credentials and certifications so learners are building their earning capacity while increasing their literacy skills. 

The District currently offers a variety of literacy programs, some better integrated with industry than others. When the programs are aligned properly into “career pathways,” they enable learners to move seamlessly from one level to the next by making sure that the exit criteria from one stage match the entrance criteria for the next. Career pathways are key to helping low-income adults at all stages of the education spectrum move toward greater economic security, whether they are starting at a third grade reading level or have already passed their GED. The Task Force is expected to have its recommendations by June 1, 2015.  

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The second provision added funds to the Office of the State Superintendent of Education’s Post-Secondary and Career Education Division to provide clinical learning disability assessments for 200 adult learners. Why is this important? We know that students with disabilities are more likely to drop out of school, and thus are disproportionately represented in the adult learner population. People with documented learning disabilities are eligible for accommodations when they take high school equivalency and industry certification exams. For example, just as a blind student might be provided a computer that will read questions aloud, a student with a learning disability that affects memory might need additional time to complete a math test that relies on memorization of math facts. Without appropriate assessments and documentation, adults with learning disabilities may fail exams that they would otherwise be able to pass. However, it is not sufficient just to know that someone has a disability. The specific areas of disability must be named and must justify the specific accommodations requested. Good information about specific learning deficits has benefits in addition to test accommodations: instructors can use it to tailor instruction to help adults with disabilities master necessary skills.

We will be monitoring the implementation of these investments to ensure they produce better results for adult learners in the District. 

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Housing Insecurity in the DC Metro Region

July 17th, 2014 | by Jenny Reed

A new study released by the Community Foundation for the National Capital Region reveals startling figures on the level of housing insecurity in the DC metro region. The findings highlight both how critical affordable housing is to the region — and how far we have to go to address the problem. 7-17-14 Housing inecurity f1

The study, conducted by the Urban Institute and the Washington Council of Governments, looked at homelessness and affordable housing in the metro region, including how many people have access to it, how many still need it, and the level of resources local governments and the philanthropic community allocate to support it. Here are some of the key findings:

  • About half of renters in the region are housing cost-burdened.  These are households that pay more than 30 percent of their income on housing. Close to one in four devote more than half of their income on housing. At this level, research shows, many families are unable to meet other basic necessities like clothing, transportation and retirement savings.
  • There is a shortage of 22,100 affordable rental units for extremely low-income DC households.  The greatest housing challenges are for households earning 30 percent or less than area median income, or $28,700 for a family of three. Across the entire region, more than 94,000 affordable units are needed for families with these incomes.
  • A lot of higher-income families live in homes that would be affordable to these and other very low-income families.  The report found that more than half of the region’s rental units are affordable to extremely low and very-low income households. But two-fifths of these homes are occupied by families at somewhat higher income levels. This means that in addition to building new housing for lower-income families, housing at all income levels is needed to lessen the competition for these lower-cost units.
  • Federal funds for public housing and rental assistance only reach one in three extremely low-income households in the region.  The region spends about $1.3 billion on affordable housing — with 57 percent of that coming from federal dollars, a source that has been declining in recent years. Private philanthropy contributed $33 million in fiscal year 2013 — but about half of that money is now gone as a result of the loss of Freddie Mac and Fannie Mae’s charitable giving. 

It is clear that the region needs to increase its investments in housing dramatically — from private, philanthropic, and public sources — to meet the need for affordable housing in the metro region.  But our region also needs to increase the amount of housing overall to help relieve some of the pressure on the lower end of the market.  

The report is filled with compelling data, including snapshots by jurisdiction. You can read the complete report here.

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DC Health Link Is Fostering Competition to Keep Health Plans Affordable

July 16th, 2014 | by Wes Rivers

There is great news that the DC Health Link – the online health exchange – is fostering competition among insurers and helping keep health plans affordable for residents. Earlier this summer, CareFirst was the only insurance company to propose major rate increases for 2015. But last week, the insurer trimmed rates to better align with rates its competitors had proposed and displayed on DC Health Link. 

The initial 2015 rate filings for three of the four health insurers operating on DC Health Link were a mixture of price increases and decreases over 2014, depending on the type of plan. CareFirst was the exception, proposing significant rate increases across all of its plans, ranging from 4 percent to 24 percent over 2014.  

Last week, CareFirst revised its submission, cutting proposed rate increases by an average of 4 percentage points. While CareFirst will still have rate increases for all of their plan offerings, the move puts them more in line with their competitors. For example, prices for CareFirst’s “silver” plans – those that cover about 70 percent of total health care costs – will only increase about 0.3 percent over 2014.

CareFirst is not the first insurer to cut rates after an initial rate filing. Last year, three of the four health insurers on DC Health Link reduced rates, with UnitedHealthcare cutting rates twice.

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These downward price revisions highlight a key benefit of DC Health Link’s open and transparent marketplace. All health plans sold to individuals and small businesses must be sold through DC Health Link. This means that consumers can see prices side-by-side for all health plan options available to them. Not surprisingly, this gives insurers more incentive to undercut their competitors. 

Rates may change again before the filings are finalized, but so far, DC Health Link’s transparency is helping put downward pressure on rates and keeping plans affordable for District residents.   

To get more information on 2015 health plan rates, visit here.

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The DC Council Should Override Mayor Gray’s Veto on the FY 2015 Budget

July 14th, 2014 |

Mayor Gray vetoed the fiscal year 2015 Budget Support Act on Friday, in part over concerns about changes to income and property taxes for seniors. Yet it is important to note that the budget adopted by the DC Council expands DC’s already substantial property tax relief mechanisms for seniors. The budget also makes substantial cuts in income taxes that will help all households, including most senior households.  The tax changes will raise taxes next year on some senior residents, as they lose special deductions, but the changes generally will be modest and will apply only in limited circumstances.  And even those affected households will face net tax reductions as the Council’s tax package is fully implemented.

DC Council Expanded Property Tax Relief for Seniors and Included Senior Renters

The District provides significant property tax relief for seniors.  Currently, senior homeowners with incomes below $125,000 receive a 50 percent reduction in their property tax bills.  These seniors pay far lower property taxes than others (see Figure).  The typical senior homeowner in DC paid $822 per year in property taxes in 2012-2013.  That is just one-third of the $2,513 paid by the typical non-senior homeowner in that same year.

The mayor’s budget proposed implementing Council-approved legislation to eliminate property taxes for certain senior homeowners. That, however, would have provided substantial new help to some homeowners but nothing to senior renters—even though lower-income senior renters are more likely than homeowners to have severe housing cost burdens. The Council ultimately voted to expand Schedule H, DC’s low-income property tax credit that applies to both renters and homeowners, rather than eliminating taxes for some homeowners.

Under the Council’s changes to schedule H, a senior with $30,000 of income and a property tax bill of $3,200 would get a 50 percent reduction followed by a Schedule H credit of $400, leaving net taxes of $1,200.  This is a 62 percent reduction from the original tax bill.

DC Council Changes to DC Income Tax Will More than Offset Any Modest Tax Increases When Fully Implemented

The tax package adopted by the Council includes a number of income tax changes that will benefit nearly all households, including a new middle-income tax bracket and substantial increases to the personal exemption and standard deduction.

The mayor’s veto letter raised concerns that the DC Council also eliminated a deduction of up to $3,000 of government pension income and a long-term care credit.  The D.C. Tax Revision Commission had recommended eliminating these to make the tax code more simple and in the context of broad-based tax reductions.

There are three important things to consider when reviewing these changes. 

First, when the DC Council’s tax package is fully implemented in 2019, any tax increases as a result of eliminating these deductions will be more than offset by other tax reductions.  A senior married couple earning $50,000 will see their taxes reduced by $600 when the Council’s tax package is fully implemented—even if both spouses currently claim the maximum pension and long-term care credit deductions. 

Second, even next year, it is likely that most seniors will see net income tax reductions.  Less than one-third of senior households claim the pension deduction and no more than 8 percent of senior households claim the long-term care credit.  In other words, most seniors will benefit from income tax reductions with no loss of current deductions.

For example, a married couple with $50,000 income that has not claimed the pensions or long-term care deductions will see taxes fall $255 next year.  A married couple with $100,000 of income from one spouse will see taxes fall $300.

Third, some seniors will see slight tax increases in 2015 if they have claimed the full pension and long-term care credit.  But the changes generally will be modest and temporary.

Some families that claim the pension and long-term deductions still will see tax cuts in 2015 as they lose these deductions, as a result of other tax changes.  Some other families will see modest tax increases next year, but net tax cuts as the Council package is fully implemented.

  • A married couple with $50,000 of income and one spouse who claims the pension and long-term care deductions will get a tax cut of $45 in 2015 (and an $810 tax cut in future years)
  • A married couple with $50,000 income would see their taxes go up by $165 — or 0.33 percent of income — if both spouses took the maximum pension and long-term care credit deductions turn.  As noted, this family will see a $600 tax cut over time.
  • A married couple with income of $100,000 would see their taxes go up by $840 — or 0.84 percent of income — if both spouses took the maximum pension and long-term care credit deductions and chose to split their income on their DC tax return.  When all tax cuts are fully implemented, this family will see a $114 tax cut.

These suggest that even in the rare situation of a family where two seniors claim these deductions fully, the tax increase in 2015 would be relatively modest.  And within a few years, further reductions in income taxes would leave even these families with net tax cuts.

In the end, because the final tax package will result in significant tax reductions, we urge the DC Council to vote to override Mayor Gray’s veto.  The tax increases that may result on small share of DC residents in the first year would be minimal and would help pay for the larger tax relief that will be available to nearly all residents when the tax package is fully implemented.

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The District Is Not Prepared to Shelter Families During the Next Hypothermia Season: A New Plan Is Needed

July 11th, 2014 | by Kate Coventry

The District announced this week that it had identified more than 450 apartments suitable for homeless families, as part of its “500 Families: 100 Days” effort. The good news that the city almost met its goal to find suitable housing is tempered, however, by the fact that the city moved only 55 to 60 families per month out of shelter, far short of the goal of 100 per month. At that rate, the DC General Shelter will be almost full at the start of the next hypothermia season, and the shelter system could be once again overwhelmed. Yet the fiscal year (FY) 2015 budget provides fewer resources for homeless families than this year.

Given the almost certainty of another shelter crisis, Mayor Gray should develop a new plan, with adequate funding, for how the city will shelter all families safely in the upcoming winter.

Since 2010, the number of families with children in emergency shelter during the annual count has grown from 326 to 907 (see Figure 1). It is reasonable to expect similarly large, if not larger, need for family shelter in FY 2015. But it isn’t clear how DC will safely shelter all families that need it.

Like last winter, the DC General shelter is likely to be nearly full when cold weather arrives. At the current exit rate, between 230 and 254 families will be in shelter on November 1, close to its full capacity of 289. Because families have a right to shelter when it is cold, the system is likely to be quickly overwhelmed again.    

Yet the Department of Human Services (DHS) could have fewer financial resources to meet the need. DHS will spend over $9 million on motels this year using federal carryover dollars, but those funds are not likely to be available in FY 2015. 

Beyond that, the DHS budget for FY 2015 contains no funding for motels and only funding for 150 families at DC General throughout the winter hypothermia season. This is not enough even to cover the costs of the approximately 254 units for the families who will already be in shelter at the start of the season. 

Without adequate planning and funding, the city is setting itself up for another homeless crisis next year. This could lead once again to conditions that are harmful to children and families, such as removing families from shelter any day that is not expected to fall below 32 degrees, when there is no right to shelter.

Rather than allowing this to happen, the mayor and DHS should develop a plan detailing how they will shelter all families safely in the upcoming winter. There is no excuse for failing to prepare.

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