State-funding for Pre-K in Montana Gains Momentum

Pre-K is an excellent opportunity for Montana to improve the lives of children, families, and strengthen our communities, and press and policymakers are starting to take note.

Montana Budget and Policy Center’s work on the benefits of pre-Kindergarten has been cited in several newspapers around the state lately, as evidence to why state-funded pre-K would benefit Montana’s children.

Bozeman Daily Chronicle Editorial: Lawmakers urged to do right thing for Montana’s children, June 10, 2014.

The Montana Budget & Policy Center recently issued a report that concluded that pre-kindergarten schooling raises IQs, enhances math and reading schools in later grades, lowers dropout rates and decreases the likelihood that students will abuse alcohol or drugs and end up in trouble with the law later in life.

Dropouts, drug abuse and crime are all societal ills that come with heavy costs to our justice system and publicly funded rehabilitation programs. Spending a little money providing preschool to all the state’s children now could save a lot of money down the road.

Bozeman Daily Chronicle: Bozeman educators learn about governor’s plan to expand preschool, May 29, 2014.

[Superintendent] Watson shared copies of a report by the Montana Budget & Policy Center, which made the case that pre-kindergarten education can help Montana children, particularly the 20 percent who live in poverty.

Benefits include raising children’s IQs and improving reading and math skills, the report said. Children are less likely to drop out, become delinquent, be arrested and get into drugs. Pre-kindergarten schools help working parents and help businesses keep their employees.

Missoulian: Business Leaders’ Summit on Early Childhood Education meets in Missoula, May 28, 2014.

A report by the Montana Budget and Policy Center found that a universal program would begin paying for itself in nine years and cost $88 million a year to run once fully phased in. By 2050, the costs are estimated at $212 million, far less than the $1.7 billion in anticipated benefits.

Missoulian Editorial: Investment in early education will pay off exponentially, June 1, 2014.

A comprehensive look at the economics of early childhood education in Montana can be found in the Montana Budget and Policy Center’s 10-page report “Pre-Kindergarten: An Investment in Montana’s Future” (Fall 2013).

With solid research backing up the push for universal pre-kindergarten education in Montana, the initiative is being embraced by local, state and government officials, social welfare agencies, nonprofits, churches and charities and a host of others.

For more information about pre-K in Montana, be sure to read our reports: Pre-Kindergarten: An Investment in Montana’s Future and The High Cost of Child Care: State Funding for Pre-K Would Benefit Montana Families.

 

Wonky Word Wednesdays: Supplemental Nutrition Assistance Program

As the summer kicks off and we start planning picnics and BBQs, I think of the many families in Montana who struggle to put food on the table. Budgets are stretched even more in the summer because of increased child care costs when kids are out of school. What do these families do without school lunch programs? How do families survive?

One program to help is SNAP – Supplemental Nutrition Assistance Program –this week’s wonky word.

SNAP doesn’t ring a bell?  It’s the new name for the federal program formally known as the Food Stamp Program. The original Food Stamp Program ran from 1939-1943, and yes, it did use orange and blue stamps to purchase food. The Food Stamp Act passed in 1964 making food stamps a permanent program, but it wasn’t nationwide until 1974.

SNAP is the nation’s most important anti-hunger program. It provides a monthly benefit to qualified persons according to need – the poorer you are, the more you receive. The vast majority of SNAP recipients in Montana live below the poverty line, and nearly 40% live in “deep poverty” – the equivalent of having an income of less than $12,000 for a family of four. snap

In 2013, SNAP helped an average of 129,000 Montanans each month – that is 1 in 8 people.  Of these, nearly three-fifths were children, elderly, or disabled adults. The average benefit per person was $125 per month. In 2009, the Recovery Act increased benefits. Unfortunately this increase expired this past November, which resulted in all Montana SNAP recipients receiving a cut in monthly allotments, despite the fact many families were still struggling to recover from the recession.

SNAP does more than feed the hungry. For every dollar spent on SNAP, it generates $1.70 in economic activity. This means that not only are families able to put food on the table, but they are spending more at grocery stores and farmers markets, which means more money being pumped into our communities that stimulates the economy.

Well, I think this wonky word was a bit easier than some of our past words, but it’s no less important for us to understand. Each year, $192 million dollars comes into our state from just this one program.  That’s significant to our state and a lifeline to the people who need it.

 If you have suggestions for next week, email me at tjensen@montanabudget.org or post something to our Facebook page.

Wonky Word Wednesdays: Coverage Gap

Yesterday, petition gatherers across the state asked voters to sign petitions on a variety of issues. One of these issues – especially important to us at MBPC – is the Healthy Montana Initiative I-170 to expand health care coverage to people caught in the “Coverage Gap,” also known as the Medicaid gap.

When I first started working at MBPC, Medicaid expansion was the first meeting I had and I felt painfully out of touch with what was happening. I knew that 70,000 Montanans were without access to affordable health care, but I wasn’t sure exactly why. This is the reason I wanted to write about the Coverage Gap today. I think most of us could have a better understanding of this issue.

Under current Montana law, an individual qualifies for Medicaid if he or she is a low-income child, parent of a Medicaid eligible kid, former foster child, a pregnant woman, a woman with breast or cervical cancer, or a disabled adult. Otherwise healthy childless adults, no matter how small their income, currently can’t receive Medicaid in Montana.

When the Affordable Care Act (ACA) passed in 2009, it required all states to expand Medicaid to include people with household income up to 133% of the federal poverty level — about $16,000 for a single person, about $27,000 for a family of three. The federal government would pay the bill entirely for the first three years and then gradually phased back to a 90% contribution.

Then the ACA was challenged in the Supreme Court. The Court ruled that it was unconstitutional to require the states to expand Medicaid. It had to be optional. Since then, 26 states expanded Medicaid and 24, including Montana, haven’t yet.

This created a problem. As the ACA was written, people who make above 100% of the FPL qualify for a variety of cost reductions to buy private health insurance on the marketplace/exchange. This is how people are getting health insurance for $25 a month in some situations. Those below 138% would qualify for Medicaid, and everyone would be covered. But when Montana and other states didn’t expand, we ended up with this Coverage Gap.

There are 70,000 people in Montana who would qualify for Medicaid under expansion – veterans, home health care workers, child care workers, and others. Of those, 50,000 are in the gap – Montanans with the lowest income who are receiving no help to buy insurance. The other 20,000 are just over the poverty line — from 100 to 133 percent of poverty. They can go into the new exchanges and get a subsidized health insurance policy. But the poorest, whom Congress thought they had covered with Medicaid, have nothing.

Simply put, they make too much to qualify for Medicaid under current law and too little to qualify for reductions in health care premiums. And don’t forget “too much” isn’t much at all –   these are people making less than $16,000 per year.

No Montanan should be left in the gap. We’ll keep you updated as Montana looks for ways to expand Medicaid and ensure all Montanans have access to quality, affordable health care coverage.

I hope you will check back each Wednesday for more wonky words. If you have suggestions, email me at tjensen@montanabudget.org or post something to our Facebook page.

Montana Can Make Tax System More Fair by Enacting a State Earned Income Tax Credit

“I remember the first time I got the EITC,” said Christy, a single working mom from Missoula.  “I had old debt and the EITC allowed me to clean up my credit and pay off debt that I hadn’t paid for years.  The second time I got the EITC, I was able to pay for my daughter’s braces.  She had very crooked teeth and wouldn’t even smile.”  The federal Earned Income Tax Credit (EITC) has helped Christy and her family achieve financial stability – and Montana could do the same.

It comes as no surprise to working families that Montana’s tax system is fundamentally unfair.  On average, in the state, the percent of their income that low and middle income workers pay is one-third greater than what highest income earners spend. But Montana taxpayers don’t have to accept this fundamental inequity. One of the best ways we can improve the fairness of our tax structure is through enacting a refundable state EITC A new report by the Institute on Taxation and Economic Policy shows just how effective this state EITC can be.

For Montanans like Christy and her family, the federal EITC helps low-wage workers get by year to year.  “Every year I use the credit to make investments that would otherwise be impossible.  I pre-pay our cell phone bills because I cannot afford to make a monthly payment with my tight budget.  These days I often use my credit to buy gift cards to use later in the year when school starts for school clothes and supplies.  Without these benefits, I would not be able to afford for my kids to fully participate in school programs like band or woodshop.”

The federal EITC was introduced in 1975 and provides targeted tax reductions to low-income workers to reward work and boost income.  The EITC allows working families to keep more of what they earn to make ends meet. In fact, expansions to the EITC in the 1990s moved more poor mothers into the workforce than any other single factor, like welfare reform or a strong labor market, transitioning nearly half a million poor mothers from cash assistance to work. By all accounts, the federal EITC has been wildly successful, increasing workforce participation and helping 6.5 million Americans escape poverty in 2012, including 3.3 million children.  In 2011, 86,646 Montanans claimed the federal EITC, injecting over $169 million of federal dollars into the Montana economy.

How would a state EITC work in Montana?

Twenty-five states and the District of Columbia already have some version of a state EITC. Most state EITCs are equal to a percentage of the federal EITC. In the same vein, Montana should look to the EITC to help working families even more.

As a working mom myself, I know how hard it can be to juggle family and work.  At the same time, being in the workforce is incredibly meaningful and satisfying to me.  I talk to many parents who feel the same, but who worry that their decisions aren’t paying off financially, due to low wages and the high costs of childcare.  A state EITC would benefit low-income families by keeping more of their paycheck in their pockets.

Montana Women Vote has worked alongside single moms and working families across the state over the last 15 years.  These families work hard, often at two or three jobs, but still struggle to make ends meet.  The rising costs of childcare, housing, and even food can make low-wage jobs unsustainable.  A state EITC would provide the added security these families need to stay in the workforce.

Lawmakers in Helena can take immediate steps to address the inherent unfairness in the tax code by introducing a refundable state EITC.  Repealing tax breaks that benefit just the wealthy is one way Montana can raise the revenue needed to create a state EITC, while helping to further improve not only the fairness of our tax system, but our state’s economy as a whole.

To read ITEP’s full report click hereSarah and Adrien (2)

Sarah Howell is the Executive Director of Montana Women Vote, a statewide organization that works to engage low-income women and families as informed voters, policy advocates, and community leaders.  She lives in Missoula with her partner and two-year-old son.

MISSOULIAN EDITORIAL: Investment in early education will pay off exponentially

“MISSOULIAN EDITORIAL: Investment in early education will pay off exponentially,” Missoulian, June 1, 2014

That’s according to statistics gathered by Early Edge Montana, the state initiative to raise awareness and support for a pre-kindergarten program. A comprehensive look at the economics of early childhood education in Montana can be found in the Montana Budget and Policy Center’s 10-page report “Pre-Kindergarten: An Investment in Montana’s Future” (Fall 2013).

Dr. Jon Griffin’s Story: A Physician’s Perspective

Earlier this month, we shared with you Michele’s story, the story of a woman caught in the coverage gap. If you haven’t had a chance to listen to her story, please do. Medicaid expansion is about more than the numbers – it affects real people.

This week, we want to share with you a Montana physician’s perspective on how Medicaid expansion would benefit his patients, his business, and the health of our state and our communities. 

I take care of people every day. That’s my business. The fact that we’re going to turn our backs on these 70,000 Montanas – it doesn’t make a lot of sense. That’s not how we do things in Montana.

Please take a moment to watch and share this important video. 

Business Leaders’ Summit on Early Childhood Education meets in Missoula

“Business Leaders’ Summit on Early Childhood Education meets in Missoula,” Missoulian, May 28, 2014.

A report by the Montana Budget and Policy Center found that a universal program would begin paying for itself in nine years and cost $88 million a year to run once fully phased in. By 2050, the costs are estimated at $212 million, far less than the $1.7 billion in anticipated benefits.

Wonky Word Wednesdays: Tax Credits and Tax Deductions

Tax credit or tax deduction? Do you know the difference?

I decided to pick this issue because at MBPC, we talk a lot about the Earned Income Tax Credit (EITC) and how it is one of the most effective ways to help working, low-income families. Don’t worry, the EITC will be explained in a future post – one step at a time, folks.

Every year when we do our taxes, people have to decide if they will use the standard deduction or the itemized deduction, which includes home mortgage interest and charity donations. Then we also have to factor in our tax credits. But do you know what’s what?

Here’s a quick comparison of what a tax deduction is versus what a tax credit is.

Tax deductions reduce your taxable income, that is, the amount of income the government will use to calculate your income taxes. One example is the charity deduction. Let’s say you make a $1,000 donation to a worthwhile charity, say the Montana Budget and Policy Center (hint, hint). This deduction reduces your taxable income by $1,000. The amount of actual tax savings will depend on what tax bracket you are in. If you are in a 15% tax bracket, a $1,000 tax deduction will save you $150 in taxes.  If you are in a 40% tax bracket, this same $1,000 tax deduction will save you $400 in taxes.

On the other hand, tax credits are applied directly to your tax liability – in other words – what you owe. So if you have a tax credit like adopting a child, buying a first home, or home office expenses, those reduce your tax bill, dollar for dollar. For example, if you qualify for the full child tax credit of $1,000, you will save $1,000 in taxes.  

A tax credit has a bigger impact on your tax liability than a tax deduction of the same amount.

But wait, there is more. deduction

Since this is a Wonky Word post, I thought I would wonk out (yes I am using it as a verb) on this a bit more.

Did you know that a child can be a tax credit and a tax deduction? If your income is low enough to qualify you for the Child Tax Credit – your new bundle of joy is a credit. If it does not, then you can still claim little Bobby or Sally as a dependent, which is a tax deduction!

Also, some tax credits are refundable. That means if the amount of taxes you owe is less than the credit, you will get a refund. As I mentioned earlier, the Earned Income Tax Credit is an example of a refundable tax credit. But we’ll save that for another week.

Wow, I could go on and on.  Thanks for checking into this week’s Wonky Word Wednesday. Tax credits and deductions impact all of us. I’m glad we all know the difference now.

I hope you will check back each Wednesday for more wonky words. If you have suggestions, email me at tjensen@montanabudget.org or post something to our Facebook page.

Honoring Montana’s Veterans

Yesterday, we honored and remembered the veterans who have given so much to protect our freedom. We would like to extend a whole-hearted thank you to those who have served.

One of the ways we can honor our Montana veterans is by ensuring they always have access to quality, affordable health care by expanding Medicaid.

Did you know?

  • Montana has the highest percentage of uninsured veterans in the nation – 17.3%.
  • 4,400 uninsured veterans plus 2,500 of their family members in Montana would qualify for Medicaid expansion.
  • 2,600 underinsured veterans (those who only have access to VA care) would also qualify.
  • There is only one Veterans Affairs (VA) hospital in Montana, making it difficult for many Montana veterans to receive health care at one.
  • Uninsured veterans often have significant health issues that need treatment – one-third have at least one chronic health condition.

Montanans have always been proud to serve those who have honorably served us. Ensuring that these men and women who have worn our country’s uniform can receive the health care they need, while also bringing jobs to the state and boosting our economy, is the right choice for Montana.

To learn more about how Medicaid expansion would benefit Montana’s veterans, be sure to read MBPC’s report here: Medicaid Expansion Would Benefit Montana Veterans.

Wonky Word Wednesdays: Mills

You might have heard us mention the term “mills” a few times lately. Between local school mill levies, and the Charter Communications ballot initiative that could dramatically impact local mills and taxes, property taxes are an important topic right now. This week we are undertaking our first by request Wonky Word: mill.

If you are a homeowner, you are probably familiar with mills because they are a type of property tax. From there, most of us know they have something to do with schools and other local needs like fire departments. We know we are asked to vote on mill levies occasionally, and usually there is a number associated with it, say a 5 mill levy. When we vote, the ballot typically informs us about much it would cost us if our house was worth $100,000. After that, I would assume that is where the knowledge ends.  At least that is where mine ends.

So what is a mill? A mill, from the Latin mille meaning thousand, is 1/1000 of a dollar or 1/10 of a penny. One mill generates $1 in revenue for every $1,000 in taxable value. Seems simple right?

Well, the big trick is the “taxable value” part. In order to get “taxable value”, the Department of Revenue determines the market value of the property (how much the home is worth). For residential property, a portion of this value is then exempt (called the homestead exemption), and remaining amount is called the taxable market value.  Then, the state legislature determines what portion of the taxable market value will be subject to tax. This tax rate is applied to that taxable market value. That gets us the taxable value of the property. For example, let’s say my home has a taxable market value of $100,000, and the state legislature has set my property tax rate at 3%. The taxable value of my home is $3,000.

When my local school board asks me to vote for a mill levy, one mill would be 1/1000 of the $3,000 of taxable value. Let’s say the school board is asking for a 6 mill levy to help build a new elementary school. The levy is applied to the taxable value of property at a rate of 6/1000,  or .6%. The calculation for this would in our example be:

$100,000 x 3% = $3000 (taxable value)

$3,000 x .6%= $18 (cost of the 6 mill levy)

In total, the state imposes five different mill levies totaling 101 mills. In addition to the state mills, local cities and counties apply mill levies to the property within their jurisdiction to help fund local government operations. The legislature sets the maximum millage authority for these local taxing jurisdictions. In 2012, an average of 548 mills was applied to all classes of property in the state. In sum, property taxes comprise about 12% of our state and local revenue.

Phew! That might have had a few wonky words in it. But this is what I hope you will take away: local levies are an important part of our tax code, and critical to providing essential public services like education inour communities. 

I hope you will check back each Wednesday for more wonky words. If you have suggestions, email me at tjensen@montanabudget.org or post something to our Facebook page.