The Districts Dime

On the 18th, Help Put Homelessness and Affordable Housing at the Top of DC’s Agenda!

March 6th, 2017 | by Kate Coventry and Claire Zippel

housing rally adThe number of residents experiencing chronic homelessness and the lack of affordable housing are two of the biggest challenges facing the District. Over the last decade, DC has lost half of its low-cost housing, and as housing prices continue to rise much faster than incomes, more and more residents face difficult choices about putting a roof over their heads or food on their table. So DCFPI is excited to join DC residents from across the city at the More for Housing Now! rally on March 18th.

The rally is calling for investments in DC’s key programs for individuals experiencing chronic homelessness:

  • Permanent Supportive (PSH) which provides long terms affordable housing with intensive wrap around services,
  • Rapid Re-Housing which provides short term rental subsidy with services to help individuals leave shelter or the street for housing, and
  • Targeted Affordable Housing (TAH) which provides long term affordable housing for individuals who no longer need the intensive services provided by PSH or who need help affording housing after their Rapid Re-Housing subsidy ends.

The rally also calls for investments in programs such as the Housing Production Trust Fund (HPTF)—which helps build and preserve affordable housing—and in the Local Rent Supplement Program (LRSP), which helps make housing affordable for very low-income families through ongoing rental assistance.

Mayor Bowser and the DC Council have made big investments in chronic homelessness and affordable housing in the past two years, but these kinds of investments will be needed each year to ensure DC continues to make progress. So please join our many partners and DCFPI at the More for Housing Now! rally on March 18th to make your voice heard about the need to tackle two of the District’s greatest challenges. RSVP here.

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DC Revenue Growth Far Exceeds Expectations, but Will Much-Needed Services Be Funded?

March 3rd, 2017 | by Chaz Rotenberg

DC’s revenues are rising sharply due to a robust economy, but most of the money is not available to spend on needed services, due to an automatic “tax-cut trigger” policy. Mayor Bowser and the DC Council should revisit this policy in order to ensure that the District’s growing prosperity can be used to address our major challenges, like DC’s affordable housing crisis or persistently high unemployment among black residents.

The increasing tax collections, revealed this week in a new revenue projection, reflect expected growth in collections from real property taxes, sales taxes, business income taxes, and deed transfer and recordation taxes. Notably, business taxes income taxes will rise to a record level next year even though overall business tax rates have been cut recently.

Current law devotes all recurring revenue above the prior year’s forecast to tax cuts recommended by the Tax Revision Commission a few years ago. The new revenue estimate is enough to implement all remaining tax-cuts on the list, totaling $100 million in FY 2018 and about $140 million in subsequent years.

The revenue forecast increase is big enough to also support increased investments in the upcoming Fiscal Year 2018 budget, but tax cuts will still consume over half of our growing revenue. Under the tax-cut trigger policy, $100 million in taxes will be cut next year, while new revenue available for schools, housing, Metro and other needs will be $75 million.

revenue forecase blog chart

The tax cuts include changes that especially help low- and moderate-income residents, like increasing the standard deduction in DC’s income tax. The new tax cuts also include things that help the most wealthy DC residents, like eliminating taxes for estates worth up to $5.25 million (up from a $1 million exemption threshold last year).

The key problem with the tax cuts is their automatic nature, which ties policymakers’ hands and does not allow them to weigh other uses of growing revenue, such as schools, housing, or health care. With the highest level of homelessness among major cities, growing school enrollment, and a Metro system badly in need of repairs, a policy that prioritizes tax cuts over everything else doesn’t make sense. The automatic tax cuts make it hard to address the uneven benefits from DC’s growing economy, including poverty east of the Anacostia River that remains higher than a decade ago. The $100 million in tax cuts would be enough funding to provide housing vouchers for approximately 6,250 families or build over 1,000 new affordable homes a year.

We hope that Mayor Bowser and the DC Council will modify the tax-cut trigger policy in the FY 2018 budget to untie our policymakers’ hands and make it easier to meet the demands of a growing and divided city.

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Unemployment in DC Reveals Racial Inequity

March 2nd, 2017 | by Linnea Lassiter

DCFPI’s latest report, Still Looking for Work: Unemployment in DC Highlights Racial Inequity, finds that despite significant economic growth in the District since 2010 and an overall drop in unemployment, the recovery since the Great Recession has been very uneven, particularly across racial groups. Black DC residents continue to experience elevated rates of joblessness since the Great Recession of almost a decade ago—meaning they cannot find a job despite actively looking. As a result, the black-white unemployment gap in DC is widening even further.

Black DC residents are the only racial/ethnic group whose unemployment rate is actually worse than it was in 2007, prior to the Great Recession, according to a DCFPI analysis of data from the Current Population Survey. While unemployment among black working-age DC residents has fallen in recent years, 13.4 percent still were unemployed in 2016, compared with 9.5 percent in 2007. Meanwhile, just 1.6 percent of white residents and 3.6 percent of Hispanic adults were unemployed in 2016.

unemployment paper graphThe slow decline in unemployment among black residents affects the entire District. DC’s overall unemployment rate in 2016—6.4 percent—was still higher than the 5.6 percent rate in 2007. If black unemployment had fallen at the same rate as for other groups, the city’s unemployment rate today would be lower than in 2007.

Because unemployment for black DC adults has not fallen substantially in the economic recovery, unlike white and Hispanic workers, DC’s unemployment gap across race is growing.

  • Black unemployment in DC is far higher than white or Hispanic unemployment
  • Black residents are four times as likely as Hispanic residents to be unemployed, and eight times as likely as white residents
  • The black-white unemployment gap is far higher now than in 2007, when black residents were five times more likely to be unemployed than white workers

This racial unemployment gap even affects residents with an advanced education. Black college graduates have a higher likelihood of being unemployed than other residents who also have a Bachelor’s degree or higher. Furthermore, unemployment has not fully recovered from the recession for black college graduates, while it has for other college graduates.

  • The unemployment rate among black college graduates was 5.7 percent in 2016. Although this is substantially lower than the overall unemployment rate for black workers, it is three times higher than the 1.9 percent rate for non-black college graduates.
  • While non-black college graduates now have a slightly lower unemployment rate in 2016 as before the recession, black college graduates are still more likely to be unemployed today than before the recession, when their unemployment rate was 4.2 percent.

Although the black-white unemployment gap is often attributed primarily to disparities in education, this indicates that other factors, such as systemic racism and employment discrimination also contribute to high unemployment among black residents.

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Another Victim of Federal Medicaid Cuts: DC Schools

February 23rd, 2017 | by Jodi Kwarciany

New federal proposals to fundamentally alter Medicaid could slash school budgets and hurt vulnerable students. Caps on Medicaid, such as block grants, would squeeze resources that schools use to provide health screenings, mental health services, and special education services.

Kids In CircleWhen children are healthy, they’re better able to succeed. For low-income students and those with significant health needs, Medicaid can connect low-income students to needed services, including direct medical services for those with an Individualized Education Plan (IEP) that require more intensive needs, or preventive health screenings through Early Periodic Screening Diagnosis and Treatment Benefits (EPSDT). Schools can get federal Medicaid funds to provide these services to students who are Medicaid-eligible.

Proposed changes to Medicaid could jeopardize this funding. Federal and state governments currently share the costs of Medicaid through a fixed matching rate, allowing Medicaid programs to reimburse schools as needed for the services they provide. Two commonly floated proposals for Medicaid as a part of Affordable Care Act repeal, block grants and per-capita-caps, would change this. Block grants would mean that school districts would have to compete with other entities like hospitals and health clinics for a fixed allocation of federal funds. Per-capita-caps would provide a set amount per child enrolled in Medicaid, but may still prevent schools from providing unexpected but necessary costs, like if a child experiences trauma and needs mental health services.

A recent survey found that school leaders around the country are concerned that Medicaid changes would harm low-income students and those with special education needs and/or disabilities. A large reimbursement decline would affect the quality of special education programs and the degree to which schools could provide preventive health screenings and services for low-income students, or handle the growing need for mental health services. Some leaders anticipated making staffing cuts to make up for reimbursement losses. And with less funding available for enrollment outreach, leaders worried that it could increase the number of uninsured children.

These changes would be particularly harmful in DC. There are over 118,000 children under the age of 18 in the District, and the majority are covered by Medicaid. Over 11,400 children had an IEP during the 2015-2016 school year, or about 10 percent of all DC children.

Any Medicaid cuts would disproportionately impact schools with higher concentrations of Medicaid-eligible students, like those in Wards 7 and 8. These wards have the highest number of children living in poverty, and are also the home to about 35 percent of DC’s children.

The District has made incredible gains in connecting children to coverage, with just 1.5 percent currently uninsured. When schools have the resources to support student health, they’re able to help students of all backgrounds succeed. DC’s students cannot afford changes that jeopardize their health and well-being.

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As Universal Paid Leave Moves Forward, an Alternative Proposal Is Introduced

February 22nd, 2017 | by Ilana Boivie

You may have heard that DC’s paid family and medical leave program took an important step forward last week—but also that a new paid family leave bill was just introduced in the DC Council. Both are correct. Understandably, you might be a little confused.

pflNever fear—DCFPI is here to break it down for you.

The short story is that while the DC Council approved a bill in December, some members and the business community want to consider an alternative that lowers the tax businesses would pay to support the program. As discussed below, any alternative should be assessed to make sure it is better for workers, as well as businesses.

Last Wednesday, Mayor Bowser allowed the Universal Paid Leave Act (UPLA) to move back to the City Council without her signature. This means the bill will become law after a 30-day congressional review period. Workers will get 8 weeks of paid leave to be with a new child, 6 weeks to care for an ill relative, and 2 weeks for their own health needs. DC employers would pay a 0.62 percent payroll tax ($310 a year for a $50,000 salary) into a fund that would be managed by the city.

Then, just yesterday, Councilmembers Evans and Cheh introduced a new bill that would provide the same benefits, but with a different structure. Smaller businesses (under 50 employees) would be covered by a government-administered program like UPLA and pay a 0.4 percent payroll tax into the fund. Larger employers would be required to provide family and medical leave benefits on their own—without the fund—but would still pay a 0.2 percent tax to help support the cost for small businesses.

Like unemployment insurance and Social Security, UPLA uses a social insurance model, which has been tested and proven to work well. Similar to these programs, a DC-run family leave program can provide benefits to workers with a predictable tax and low administrative costs. For this reason, all of the states that currently offer paid family and medical leave use this structure.

Any alternative structure should be studied carefully. We’ll be assessing it to see, for example:

  • Whether low-wage workers have the same access to benefits,
  • Whether the program is financially predictable and administratively manageable for employers of all sizes, and
  • Whether the program is easy to enforce, and would be robustly enforced

It’s important to note that both the approved bill and the new proposal require DC to set up its own program. This means that policymakers should begin moving forward with implementation, to ensure that workers can begin collecting benefits as soon as possible. First and foremost, $20 million in new funding is needed in the FY 2018 budget for important start-up costs, such as IT infrastructure. This could be funded by changing DC’s fiscal policy to allow spending some of the recent surplus.

Because UPLA stands to help DC residents, small businesses, and the broader economy, we encourage policymakers to fully fund the program in the FY 2018 budget, so that we can get to work on implementing this very important program.

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