Property Taxes: Critical Investment in Montana Schools

This week was a big week for ensuring Montana kids and families have access to a quality K-12 education.

As many of you know, last week the county treasurers across the state sent out property tax assessments. This notice explains how much each property owner will be paying in the upcoming year, factoring in the property’s appraised value and the number of mills the property is subject to.

This is a good opportunity to revisit our Policy Basics piece on property taxes and the role these taxes play in providing critical local TAXES BY JURSDICTION-02services in our communities, like schools, public safety, and infrastructure. Unlike other tax revenue streams, the vast majority – 81 percent – of property tax revenue is directed toward local governments and schools. With these funds, city and county governments provide essential services, like police and fire, and fund critical infrastructure projects. Local school districts receive property tax dollars that go towards providing quality public education for our communities’ children. The remaining 19 percent goes to the state, for additional support to K-12 schools, as well as support for Montana’s universities and colleges.

Additionally, Montana voters across the state had a number of proposals to provide additional property taxes to ensure our local schools can provide quality education for Montana’s children. Voters in the communities of Missoula, Frenchtown, Bozeman, and Belgrade endorsed school bonds or levies to help renovate aging facilities, representing about $183 million investment in Montana’s children.

Our public schools play a critical role in our communities across the state, providing our children with the strong start they need. Congratulations to those districts that saw the support they needed to help improve the lives of children.

Montana families spend more on child care than on housing or college

In a recent study by the Economic Policy Institute, researchers found that child care costs are so high that most moderate-and-low income working families cannot afford quality child care. We wanted to see how Montana stacks up and found that a significant amount of Montana families’ earnings go toward child care. As you can imagine, it is particularly difficult for low-income working parents to balance work and quality child care. We highlight a few comparisons to show just how unaffordable child care is for families in our state.

At the very least, child-care costs account for a quarter of total family earnings in middle income households. Among low-income families though, child care costs can comprise half of total earnings. See the table below.

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As you can see, two working middle-income parents with two children spent an average of $15,792 a year on child care. That is almost one-fourth of the family’s total earnings! For that amount of money, this family would be able to send one of their kids to Montana State University-Billings for almost three years.

If this family lived in Great Falls, they likely spent twice as much on child care than they did on their total housing costs for the year.

While child care is an exorbitant expenditure for middle-class families, it has a greater impact on low-income families, making it nearly impossible for them to earn enough to cover basic family needs. Regardless of whether a household has two parents earning minimum wage or a single-worker earning minimum wage, child care costs comprise almost half of low-income families’ total annual earnings.

To put this into perspective, a single-working mother working full-time at minimum wage would have to dedicate nearly all of her salary for 6 months to pay child care costs for her 4-year old. This amount of money would cover tuition at Missoula College and enable her to complete her Associate Degree. Further, in 2014, this same individual could use the money she put toward child care to pay for 91% of her total housing expenses for the year.

In most circumstances, it is an economic necessity that both parents work in order to make ends meet for their families. However, with child care costs rising and consuming a larger proportion of families’ income, it is becoming harder and harder for families to cover basic household necessities. We need to keep working on policies that improve the quality of child care and make it affordable for all working parents, regardless of income.

Health Care Reform is Working in Montana and Nationwide

Last Wednesday, the Census Bureau released new data on health insurance rates, showing the benefit of health care reform and growing coverage in states that have expanded Medicaid.

Health care reform is working in Montana. The Affordable Care Act has increased the number of people insured by offering people access to health care coverage through the health insurance marketplace. Through the marketplace, people can easily compare prices and benefits of health care plans. For individuals that make too much to get care through Medicaid but don’t make enough to afford private insurance through the market place, federal subsidies help them pay their premiums and reduce their out-of-pocket health costs. As a result, an additional 22,000 Montanans had health insurance in 2014.

Health care reform has also strengthened Medicaid. The 25 states that have expanded Medicaid to include more people collectively had a higher share of people with insurance than the other 26 that did not expand Medicaid, and that gap is growing. Estimates suggest that if the 26 states had expanded Medicaid, an additional 2.6 million Americans would have gained health insurance last year.

Medicaid is good for people, communities, and states. Medicaid has been improving people’s lives by providing affordable health care that boosts state economies for the last 50 years. Once CMS approves Montana’s waiver, an additional 70,000 residents – who previously couldn’t afford health insurance- will finally have access to quality and cost-effective insurance and a greater share of our state’s population will be insured.

This new health insurance coverage data suggests health reform increases opportunities for affordable and quality health care for millions of Americans. We look forward to an additional 70,000 Montanans receiving health insurance coverage once CMS approves the state’s waiver.

Wonky Word Wednesdays: The Census Bureau

This week, the U.S. Census Bureau will release statistics highlighting poverty, income, and health insurance coverage from 2014. But before we dive into the specifics of what this data means for Montana’s economy and working families, let’s take a moment to learn about the U.S. Census Bureau and what it does. So here is today’s wonky word – Census Bureau.

The Census Bureau was created in 1903 and is constitutionally mandated to count the entire U.S population every ten years. This count is used to determine the number of members of each state that are elected to the U.S. House of Representatives. Remember in 1993 when Montana went from two house seats to one? Well, you can thank the census for that.

Since its creation, the role of the Census Bureau has extended and now, many different censuses and surveys are conducted to provide economic, education, employment, health, poverty, and family make-up data at the state and national level. (Note: a survey collects data on a sample of the population and a census collects data about every member of the population).

The Census Bureau conducts some of the following censuses:

  1. The Decennial Census of Population and Housing is conducted every ten years and counts every U.S resident in order to determine the House of Representatives.
  1. The Economic Census is conducted every five years and measures outcomes related to business and the economy nationwide.
  1. The Census of Governments is conducted every five years and is a comprehensive measure of state and local government operations and activities.

Two key surveys from the Census Bureau tell us about income and poverty in our state.

  1. The American Community Survey (ACS) is an ongoing survey that samples a small population of the U.S and releases information about ancestry, educational attainment, income, employment, housing etc. The survey provides detailed characteristics at state and local levels and allows you to compare data between states.
  • The Small Area Income and Poverty Estimates (SAIPE) measures the population of individuals living in poverty by age and income at state and local levels. These estimates are built from ACS data.
  1. The Current Population Survey (CPS) is a joint effort between the Census Bureau and the Bureau of Labor Statistics (BLS). Like the ACS, this is also an ongoing survey that collects information about income, family relationships, and labor force estimates. The BLS uses these estimates to release monthly reports on the employment situation across the U.S. The CPS also provides long-term trends in state poverty.
  • The Annual Social and Economic Supplement (ASEC or March CPS) is based off of the CPS. In March, the CPS includes supplemental questions on income, work experience, poverty, and health insurance coverage. This data is used to create the official source of poverty nationwide, the Official Poverty Measure.

Stay tuned Thursday as the Montana Budget and Policy Center digs into the newly released data and highlights what ACS, CPS, and ASEC figures mean for the economy, those living in poverty, and health coverage in Montana.

Labor Day: Paid Leave Can Help Montana’s Worker Shortage

The Montana Department of Labor and Industry has released its 2015 Labor Day Report, an analysis of how wages and jobs fare in Montana and what trends mean for the economy. We wanted to take a moment to highlight why our economy is strong today, some of the challenges we face in the future, and why paid family leave is one responsible solution to combat these issues.

Since last year, Montana’s economy remained steady, with both wage and job growth. In the past five-years, wages overall have gone up for Montana workers. Since 2009, the statewide average wage grew by $5,100 ($33,762 to $38,874). Further, Montana currently experiences robust job growth and for the first time in state history, the total number of individuals employed has surpassed half a million. Today, almost 525,000 people are in the labor force and 96% of those are employed.

Yet, while our state economy flourishes now, a workforce shortage could hamper Montana’s businesses ability to find skilled workers, as more and more baby boomers reach retirement age. As a result, businesses and policy makers in the state need to consider ways to help increase the number of skilled workers entering the workforce. We believe paid family leave is a great tool to help businesses attract young workers and a way to help workers balance work and family to remain in the workforce.

What is causing Montana’s worker shortage?

Montana’s overall population is aging and as a result, more workers are retiring and leaving the workforce. Over the next ten years, at least 130,000 Montanans will retire, leaving a large amount of job openings. Yet, there are not enough young and skilled individuals positioned to move in and fill these vacant positions. In fact, only 123,000 people in Montana are between the ages of 16 and 24. Not all of these individuals will work or have the skills required.

Because of the worker shortage, there will be an imbalance between workers looking for jobs and businesses searching for employees, which can slow overall economic growth in the state. The Labor Day Report outlines the following solutions to help combat the negative effects of the worker shortage:

  • To encourage work activities despite the shortage, increase workers’ hours. Moving individuals into full-time employment increases labor force participation and could help close the shortage.
  • In order for economic growth to increase during this period, businesses need to be more productive.
  • Employers will struggle to find enough workers to produce their goods or employees with appropriate skills to do the job. Therefore, businesses need to adopt workplace policies that attract the skilled workers and encourage them to stick around for the long haul.

Paid Family Leave Supports Workers and Businesses

A paid family leave program would cover each of the above recommendations. It would encourage individuals working limited hours to work more, especially women. Female workers in Montana (and nationally) have lower labor force participation rates than men, often because women remain the primary caregivers in the home. If women in Montana had access to paid family leave, entering and remaining in the workforce becomes more viable.

Paid family leave can also boost employees’ morale and productivity, which impacts businesses’ bottom line. While access to affordable and quality education and professional development programs will be key to ensuring that Montana’s youth are ready for work, paid family leave is another solution that can increase productivity at work. In states that have enacted paid family leave programs, studies have found that when businesses provide supportive and flexible policies like paid family leave, workers are happier and their productivity levels increase.

Finally, businesses that provide paid family leave have an easier time recruiting and retaining skilled workers. Women that have left work altogether to care for children or family members are an ideal demographic for employers to attract during a worker shortage. These women have worked before, they are educated and trained in specific fields, and have the experience needed to do a job well. Paid family leave would enable these women to re-enter the work force, provide additional income for their households, and have the flexibility they need to continue to care for family members. Research even shows that paid family leave increases the likelihood that women who work but take time off for a newborn are more likely to return to the same employer.

Today our economy is strong, but literally tomorrow (beginning this year) we face a workforce shortage expected to last about ten years and slow our economic growth. Enacting a paid family leave program would support families, workers and businesses, and promises to combat the negative effects of this shortage.

Back to School Series, Part 5: Academic Achievement in Indian Country

Today’s final installment on our back-to-school series will take a closer look at how state policies can support academic achievement in Indian Country. As you may already know, Montana is seen as a leader when it comes to progressive educational policy for American Indian students. According to Northwest Regional Educational Laboratory there are thirteen key policies needed to appropriately address achievement gaps in Indian Country. Based on report findings, Montana is the only state in the northwest region that has established education policies in all thirteen recommended areas. These policies have been in place for several years, and it shows. The Office of Public Instruction has demonstrated that the achievement gap in Indian Country is indeed shrinking. Between 2009 and 2013, American Indian student graduation rates increased by 5%.

There are many things that states can do to promote academic achievement in Indian Country. This includes establishing community advisory committees, increasing Indian parent involvement, providing professional development for teachers who have Indian students in their classrooms, and producing curriculum that includes Indian culture and history in all academic subjects. Montana has done all of these things and more.

Want to know more about the Montana’s efforts to promote academic achievement in Indian Country? Here are some examples of current state policies that help provide the educational environment these students need to be successful:

  • The Montana Indian Language Preservation (MILP) program provides each of Montana’s tribes with support to revitalize their tribal languages through preservation efforts and curriculum development associated with the Indian Education for All statute.
  • Tribal Language Immersion Program provides funding to the Office of Public Instruction to distribute to a select number of schools that implement a tribal language immersion-style program. This program is intended to put to use the material and curriculums created under the MILP program.
  • Schools of Promise Initiative is a federally funded program that assists a small number of schools on reservations to provide additional support to improve student success and increase graduation rates. This program provides each district a school board coach, a wraparound service coordinator, and a graduation coach.
  • Indian Education For All (IEFA) requires integration of American Indian culture, history and contemporary issues into every classroom’s curriculum. This initiative benefits all students in many ways. However it has a particular impact on Native American students. Including culture, language, history, and contemporary issues in the classroom has been shown to contribute to higher success rates of Indian students.
  • American Indian Achievement Gap Program provides additional state funds to schools for each of their American Indian students. This ANB funding is $200 per enrolled student and gives a boost to schools to provide programs and services aimed at closing the existing achievement gap.

The Office of Public Instruction established the Montana Advisory Council on Indian Education. This group of American Indian professionals is tasked with advising anything related to education in Indian Country, such as IEFA curriculum review, promoting state-tribal consultation and partnerships, and identifying best practices for Indian students and their educators.

We hope you’ve enjoyed our back-to-school series. Clearly investing in education is good for kids, families, communities, and our economy. However, as we all learned this week, there are many other polices our state can invest in to help student achievement. Lifting families out of poverty with the EITC, providing good nutrition with SNAP and school meals, funding for pre-K through college, and providing programs to close the achievement gap are all worthy state investments and ones that will benefit our entire state.

Back-to-School Series, Part 4: Educational Attainment in Montana

In part 4 of our back-to-school series, we’re taking an overall look at educational attainment in Montana and what the results mean for our families, businesses, and the economy.

The most recent statistics (2013) indicate that the majority of individuals 25 years or older have at least some college education or have obtained a higher education degree (see table below). Clearly, these individuals experience higher earnings throughout the course of their working careers and as a result, are less likely to experience poverty. For example, only 5% of those with a Bachelor’s or Professional degree reported living in poverty in 2013.

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Career opportunities are limited for those who obtain a high school diploma, GED, or even leave school before the 12th grade, resulting in far lower income and a greater likelihood of experiencing into poverty. About 260,000 individuals in Montana have a high school diploma, GED, or did not graduate in 2013.

These statistics aren’t new. We all know that education is an essential ingredient to achieving economic security throughout one’s life. Access to a quality and affordable education provides you with the training and skills you need to obtain a secure career, which helps you support your family, and provides you with the means to contribute back to your local economy.

In 2015, more and more Montanans are reaching the age of retirement and considering leaving the workforce. As a result, our state faces a worker shortage of about 137,000 individuals, but there are not enough young adults entering the workforce with the necessary education and training  required to fill these projected job vacancies.

With this shortage looming, there is a great need for policies that support students in school and make it more affordable for them to attend higher education institutions throughout the state. As mentioned in past blogs, during the past legislative session we saw increased funding to K-12 public schools, tuition freezes in the Montana University system, and a slight increase to the reimbursement amount for tribal colleges with non-Indian students.

More can be done to make college more affordable though. Tuition freezes reduce the cost of attending a 2-or-4-year campus for resident students now, but this freeze only lasts through to 2018. The 2017 legislature is the perfect opportunity to enact long-lasting policies that give all Montana students the opportunity to attend college and university. Additionally, policies that address sky-rocketing student-loan debt or provide loan forgiveness options will ensure that even with a higher education degree, fewer individuals will enter the workforce with extreme debt and will be able to establish economic security sooner.

Back-to-School Series, Part 3: Access to healthy school meals is key to better behavior and learning

Over the past few days we’ve examined investments in education, like Pre-K, and improving school performance through the earned income tax credit. In Part 3 of our back-to-school series, let’s take a closer look at two important parts of the school day – breakfast and lunch!, and see just how access to school meals and nutrition play a role in a child’s ability to excel in the classroom.

Having access to healthy meal options throughout the school day is key to children’s health and learning. For years, researchers have pointed to the link between hunger and poor behavior, attendance, and performance throughout the day. Currently, the average cost of a school lunch is about $2.25. Unfortunately, many children living in low-income households cannot afford this cost day in and day out. This means they forgo meals during the day, are hungry during class, and do not have the fuel they need to concentrate and learn. While the latest figures show about 60,000 Montana households receive access to quality and affordable food through the Supplemental Nutrition Assistance Program (SNAP), for many low-income children, breakfast and lunch provided through schools may be the only meal they have access to.

To help provide students with a healthy start that enables them to do well in school, Congress passed the National School Lunch Act in 1946, what we now refer to as the National School Lunch Program (NSLP). Today, the NSLP provides federal subsidies to cover the cost of free and reduced priced breakfasts, lunches, milk, after-school snacks, and even summer meals for 30 million students each year. To date, among schools participating in the NSLP, 43% of public school students are eligible to receive free or reduced meals in Montana.

While more schools should adopt higher nutrition standards to ensure that meals are healthy, Congress gave the NSLP a nutrition overhaul in 2010, which increased nutrition requirements and outlined specific foods that need to be offered in schools participating in the NSLP. Because of these requirements, school meals resemble less-and-less the pizzas, burgers, and fries we ate back in the day. Children now have healthier options to choose from, including more fruits and vegetables, whole grains, fat free or low-fat milks, and cafeterias with fewer sodium and sugar dense snacks. Further, as a part of the 2010 reform, the Community Eligibility Provision was enacted to give schools located in high-income areas the ability to provide all children in the school breakfast and lunch for free. This provision relieves high-poverty schools from the administrative burden of collecting and processing individual meal applications and enables faculty more time to attend to children’s nutritional needs.

With school meals increasingly becoming healthier and access to breakfast and lunch options becoming affordable through the NSLP, students will literally have the “brain-food” they need to concentrate and perform better throughout the school day.


Back-to-School Series, Part 2: The EITC improves school performance among recipients’ children

We talk a lot about the earned income tax credit (EITC) and how enacting a state credit could help the economic security of low-income families here in Montana. In Part 2 of our back-to-school series, we’re taking a closer look at how the EITC improves the educational achievement and college attendance of recipients’ children.

New research finds that experiencing poverty earlier in a child’s life can be especially harmful to his or her achievement skills and cognitive development. Therefore, policies that encourage work and boost income for families (like the EITC), can alleviate poverty and have a positive impact on children, now and in the future.

The EITC improves school performance. Researchers studied the receipt and effects of the EITC over several decades. They found that for every $1,000 a family received from the credit, test scores in reading, and particularly math, significantly increased among children in elementary and middle school years.

The EITC increases the likelihood of graduating from high school or completing a GED. When a child has better performance earlier in his or her educational career, they are better equipped to keep up with their peers, excel, and do well in high school, which translates to higher graduation rates. One study found that for every $1,000 a family received through the EITC, a child’s probability of graduating high school or completing a GED increased 5 percentage points, compared to a similar child whose parents did not receive the EITC. Among the population studied, 75% of students were expected to graduate or receive a GED. Results suggest that receipt of the EITC had the potential to boost graduation rates to 80% among low-income students.

The EITC increases the likelihood of attending college and makes tuition more affordable for low-income families. The same study that revealed the EITC’s affect on graduation rates also found that the credit increased the probability that a student was more likely to complete one or more years of college by age 19. And, because EITC boosts income particularly in spring (during tax season), low-income parents are in a better position to afford college for their child the following fall. For example, a high school senior whose parents receive an EITC of $1,000 in spring is 10% more likely to enroll in college in fall. As you may have guessed, enrollment rates were higher in states that have enacted state EITCs.

Aside from Social Security, the federal EITC is the most effective anti-poverty policy in the country. We know it encourages work among low-income families by boosting their income and helping them rise out of poverty and become financially secure. But now, new research reveals that the benefits of the EITC extend to the next generation and set children up to do better school and beyond. Extending a state EITC in Montana would further support low-income families and help increase the likelihood that their children will excel in secondary school, graduate on time with their peers, and attend college.

Back-to-School Series, Part 1: Investments in Education Drive Economic Security for Families and Businesses

As students across the state of Montana start the new school year, we decided to start a five part back-to-school series. In each post, we will discuss a policy that helps students increase their achievement – some policies will be obvious, others may not, For our first we will start with the most obvious and basic – state investment in public schools and specifically pre-Kindergarten.

Over the next two years, Montana will spend $2,082 million dollars (50% of the state’s general fund) on education systems throughout the state, including K-12 and higher-education institutions. These investments will pay for things like maintaining and improving K-12 public schools, hiring skilled teachers, providing programs that offer supplemental education opportunities outside of traditional classroom settings, and helping students afford college tuition. Other investments during the past legislative session include:

  • A 12% increase in state aid to K-12 schools, which will help fund quality educator payments, Indian Education for All, and American Indian Achievement Gap Payments.
  • Legislators approved an increase of almost $27 million to help fund the Montana University System, which will result in a tuition freeze for resident students attending 2 and 4 year campuses during 2016 and 2017.
  • Providing $1.5 million in the state budget to continue support for the preservation efforts of tribal languages.

Unfortunately, when it came down to the wire, legislators did not appropriate funding to support Montana’s youngest learners by investing in pre-k. Governor Bullock’s Early Edge proposal would have provided funding to establish a statewide and public pre-kindergarten program. However, because funding for the program was not approved, Montana remains only one of a handful of states that does not fund an early childhood education program.

Pre-k is a relatively inexpensive investment with high returns. In fact, for every dollar one invests in high quality early childhood education programs, like statewide pre-k, there is a seven dollar return on investment. This return on investment comes in the form of improved academic performance once children age out of pre-k and into the K-12 system, reduced special education costs, reduced crime rates, and higher lifetime earnings. In Montana, pre-k could potentially provide up to $113 million in economic returns.

But most importantly – and why we include it in our back-to-school series – children would be better prepared to succeed in kindergarten, less likely to need special education, perform better in high school, graduate at higher rates, and be more likely to go to college. In addition, parents would have access to affordable childcare and would be more likely to remain in the workforce. And we know that kids do better in school when there is less financial stress at home.

Our K-12 public education system is a great example of a shared public investment that impacts us all. Not only is it good for families and individuals, but it is also important to our economy, as businesses of all kinds need skilled workers. Stay tuned for four more installments of our back-to-school series.