Lansing Update: May 27, 2011

In This Week’s Lansing Update:

1. Human Services Budget Wrapped up as Legislature Finalizes 2012 Spending Plan
2. MCC State Budget Advocacy Recap

Human Services Budget Wrapped up as Legislature Finalizes 2012 Spending Plan

In what is being hailed by many in the Legislature and the news media as a historic accomplishment, the Michigan Legislature this week wrapped up the State of Michigan Fiscal Year 2012 budget several days before Governor Snyder’s self-imposed May 31 deadline. For the first time in nearly 30 years, the Legislature finalized a state budget prior to June 1, and several months before to the October 1 constitutional deadline—a deadline that elected officials have missed twice in the last five years.

While the early completion of the state’s spending plan for the forthcoming fiscal year is somewhat of a novelty, the details of the plan, especially in the Department of Human Services (DHS), are cause for concern for many who advocate on behalf of Michigan’s poor and vulnerable citizens.

Michigan Catholic Conference staff has worked diligently over the past three months to improve legislation that impacts vulnerable children, families on assistance programs and individuals with disabilities. Those policies include:

Children’s Clothing Allowance program:

In late August/early September each year the Department of Human Services sends to families enrolled in the Family Independence Program (FIP) a small allotment to purchase clothing for children for the school year. The current cost of this program to the Department is approximately $12.9 million. The average statewide amount is $79 per child and there are approximately 158,205 children who are recipients of this policy.

Michigan Catholic Conference supports the Children’s Clothing Allowance program as it helps to ensure children in low-income families are able to start the new school year off with weather-appropriate clothing as well as the bare necessities, such as undergarments, t-shirts, slacks, etc. MCC believes this policy upholds the human dignity of vulnerable children who may otherwise lack for weather appropriate or proper size clothes.

The final version of the DHS budget reduces the clothing allowance program from $12.9 million to approximately $2.9 million and shifts eligibility to those children with no work-eligible adult in the home. The policy shift eliminated the benefit for over 124,000 children. Roughly 36,000 children will retain the benefit at an average of $80 per child.

Earned Income Disregard:

Michigan Catholic Conference has supported an increase in the Family Independence Program’s (FIP) earned income disregard for several years. Currently, families receiving assistance are allowed to receive benefits as long as they work a limited number of hours and earn no more than roughly $9,800 per year.

The final DHS budget increases the earned income disregard by approximately $4,000 per family, meaning a low-income worker can work approximately 37 hours at minimum wage and earn up to $14,000 per year while still receiving FIP benefits. This increase costs the state some $10 million. According to the House DHS subcommittee chair, the increased income will allow families to purchase clothes for their children without needing the clothing allowance program.

State Disability Assistance Program:

The State Disability Assistance (SDA) program provides those persons incapable of working with a monthly benefit of $269. Michigan Catholic Conference staff has advocated for the protection of this funding as those receiving the benefit are physically unable to work and rely on this program to help with basic living necessities.

The Senate-passed version of this program proposed shifting SDA eligibility requirements to federal Supplemental Security Income requirements, meaning recipients would have to include assets such as a home and a vehicle that are currently not considered for SDA.  This change would have cut off approximately two-thirds of recipients. The recommendation also sought to eliminate assistance to caregivers and reduce the monthly assistance amount. The House-passed version simply sought to decrease the monthly benefit from $269 to $175.

The final DHS budget thankfully retained the monthly benefit at $269 per month for current recipients. However, future SDA cases will be reduced to a $200 monthly benefit.

MCC State Budget Advocacy Recap

The following issues highlight MCC staff’s advocacy on state budget issues for the 2012 fiscal year that begins October 1:

• A letter from the seven diocesan bishops in Michigan was sent to the Governor, Senate Majority Leader, Speaker of the House, and copied to all 148 members of the Legislature, urging greater awareness of the needs of the poor and vulnerable in the state budget debate. The letter highlighted concerns over a proposal to eliminate the State Earned Income Tax Credit (EITC); a proposal to eliminate those with past drug-related offenses from receiving state assistance; and harsh welfare reform proposals that would include a lifetime ban for noncompliance and a retroactive 48-month lifetime limit proposal that would kick 12,600 families off of assistance.
• At the outset of the legislative session MCC staff made protecting the state EITC its top advocacy priority. The governor and legislative leaders had proposed eliminating the credit altogether to help resolve the state’s $1.6 billion deficit. The current credit of 20 percent of the federal credit was reduced in the House to a $25 per child credit for those with children who qualify for the federal credit while the Senate version preserved the EITC at 6 percent of the federal credit. MCC was pleased that the governor signed into law this 6 percent credit, thereby preserving the policy.
• Advocating on behalf of several programs within the Department of Human Services. While eligibility and funding for the children’s clothing allowance was significantly reduced, the Conference was pleased to see an increase to the earned income disregard provision for those receiving assistance and a preservation of current funding for the State Disability Program. MCC spoke of the final DHS budget as a “mixed bag.”
• Calling for the Legislature to support in the state’s higher education budget a provision that would require those research institutions that conduct human embryo research to report to the state how many embryos they have acquired, how many have been destroyed and how many stem cell lines have been created. The Higher Education budget with the “embryo census” language has been sent to the Governor, who opposes the provision.
• Urging the Legislature to abandon efforts to reform the state’s welfare system as a law that went into effect in 2006 seems to be working. The Conference is advocating against a lifetime ban on assistance for those who have a third occasion of noncompliance with DHS requirements. MCC staff is also encouraging members, as the debate continues in the coming weeks, to strengthen welfare reform legislation by taking into consideration areas with excessively high unemployment and including provisions that are helpful for teenage parents and people with disabilities.