Still time to get health insurance

Time is running out to make sure members of our communities find their way to affordable health care coverage. February 15 is the last day to enroll in private health insurance through MNsure, the state’s health insurance marketplace. After that, unless an individual or family has a qualifying life event, such as loss of a job or birth of a child, they will not have an opportunity to enroll in private health insurance through MNsure until next year’s open enrollment.

MNsure is Minnesota’s online marketplace where individuals and small businesses can shop for, compare and enroll in insurance. The federal Affordable Care Act requires nearly all U.S. residents to have health insurance or pay a penalty.

No one is required to get health insurance through MNsure. However, MNsure is the only way to access federal tax credits that reduce the cost of private insurance premiums. MNsure is also a way to enroll in public health insurance programs. What health insurance options are available depends primarily on income and family size; for example, a single adult may be eligible for public health insurance with an income up to $23,340 and may qualify for a premium tax credit with an income up to $46,680.

Making health care decisions can be complex, and for those who have yet to obtain health insurance, finding someone to help them through the process is often the missing link. Many nonprofits have trained people, called Navigators, available to help Minnesotans learn about and enroll in health insurance. All of us can play an equally essential role by making referrals to Navigators ready to offer their assistance in our communities.

Directories of Navigators across the state are available online in the Health Care Enrollment Resources section of our website.

There is also more information available on the MNsure website, or through its toll-free hotline at 1-855-3MNSURE (1-855-366-7873).

Don’t delay: spread the word that the time to get health insurance is now!

-Leah Gardner

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Minnesota’s January Economic Update brings good news for right now

Minnesota ended the 2014 calendar year on a high note. State revenues came in higher than expected for November and December, and the U.S.’s near-term economic outlook has improved, according to the January Economic Update from Minnesota Management and Budget.

For the last two months of 2014, revenues came in $212 million, or 6.4 percent, higher than projected in the state’s recent November forecast. Most of this difference came from higher income tax collections. However, MMB warns that this is likely due to early payments, rather than additional improvement in incomes.

News on the economic front shows some improvement from the November forecast. The nation’s GDP grew faster than expected during 2014, and growth was over 4 percent for two quarters in a row for the first time since 2003. Looking forward, the economy is expected to grow faster in 2015 than predicted in the November forecast. This is due in part to lower gas prices, which have freed up more income for other household needs.

Looking further out, predicted economic growth is slightly lower than expected in the November forecast. In 2016, projected growth is very similar to earlier projections, and in 2017 and 2018, while projections are lower, the economy is still expected to grow at 2.7 and 2.4 percent, respectively.

January Update

Forecasters continue to assign a 70 percent probability to their baseline forecast, with a 15 percent chance for more optimistic and pessimistic scenarios. In the pessimistic scenario, a weaker housing market is a drag on economic growth, and in the optimistic scenario, oil prices drop even more than expected and the U.S. economy receives a boost.

Our next look at state revenues and the economy will come in the February forecast. This is the information that legislators will use as their baseline as they set the upcoming budget in the 2015 Legislative Session. This update indicates that we might have a brighter situation in 2015, but this will unlikely significantly impact the state’s projected positive balance in the two upcoming biennia.

-Clark Biegler

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Housing costs stretch budgets across the state

More than 600,000 households in Minnesota face very high housing costs when they pay their mortgages or sign their rent checks. In 63 out of 87 counties, at least one in every four households spends at least 30 percent of their income on their home. This reality is mapped out in our project with Catholic Charities of Saint Paul and Minneapolis, Mapping Minnesota’s Future to Shared Opportunities.

The federal definition of a “cost-burdened” household is one that pays more than 30 percent of their income on their housing. Census data demonstrate that Minnesotans are familiar with this experience, from the Arrowhead to the farmlands of our southwest. In 83 counties, at least one out of every five households struggles with high housing costs.

In every county, renter households are more likely to confront budget-straining housing costs. In 79 counties, at least one in three renting households is cost-burdened.

State policies can ease the pressure of high housing costs on family budgets through policies that increase the supply of affordable housing or help people pay their housing costs.

Policymakers passed a bonding bill with a record $100 million for affordable housing during the 2014 session. Advocates estimate this money, combined with the rest of the state’s 2014 housing investments, can build or rehabilitate affordable homes for 4,000 families. The 2014 bonding bill provides almost three times the $38 million allocated to affordable housing in the 2012 bonding bill.

In 2013, policymakers also sought to increase the supply of affordable housing by adding $4 million to the Housing Challenge Fund and $10 million to the Housing and Job Growth Initiative. Both programs aim to link affordable housing construction and repairs to economic development. Providing affordable housing in growth areas makes it easier for workers to access job opportunities, and for employers to find the employees they need. Policymakers also increased funding for rental assistance for people who often have a particularly hard time finding stable housing, like individuals with mental illnesses.

These recent investments opened the door to a future in which Minnesotans aren’t a missed paycheck or two away from eviction or foreclosure. We’re hoping the welcome mat stays out in 2015.

-Ben Horowitz

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Mapping Minnesota’s Future to Shared Opportunities

In some parts of our state, 1 in 3 children live in poverty, more than 1 in 3 households have high housing costs, or 1 in 8 adults are unemployed.

While Minnesota has one of the strongest economies in the nation, too many are not sharing in the state’s overall success. Minnesota’s economic future depends on all of Minnesota’s workforce reaching their full potential and being able to make ends meet.

The Minnesota Budget Project partnered with Catholic Charities to create Mapping Minnesota’s Future to Shared Opportunities - a portfolio of maps that show where our state’s strengths lie and where we have the most work to do to create a state of shared opportunity.

The maps in this portfolio contain information by county on poverty, unemployment and other indicators. Be on the lookout for upcoming blogs on specific maps in this series.

-Clark Biegler

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Budget surplus should be used to keep Minnesota moving forward

The state’s November 2014 Economic Forecast released today has positive news over three budget cycles.

The forecast projects a $556 million positive balance for the remainder of the FY 2014-15 biennium. Because of a policy change passed last year, up to one-third of a positive balance in the November Forecast goes to strengthen the state’s budget reserve. In this case, that means $183 million has been added to the reserve, bringing total general fund reserves up to $1.3 billion.

In the 2015 Legislative Session, policymakers will need to pass the budget for the upcoming FY 2016-17 biennium. The forecast measures a $1.0 billion positive balance for FY 2016-17 biennium. Taking into account the impact of inflation reduces this figure to $121 million.

This forecast also gives us a first glimpse at the FY 2018-19 biennium. A $2.8 billion positive balance is projected. When the impact of inflation is taken into account, this becomes a slight deficit of $143 million.

The positive balance in today’s forecast is due to a few factors. Revenues in FY 2014-15 have come in higher than previous projections, primarily in the income tax.

There is also a reduction in spending, with the largest driver being a drop in Medical Assistance spending resulting from changes in the projected caseload. Overall enrollment is expected to stay the same, but with a different mix. Fewer children, families, elderly people and people with disabilities are expected to participate in Medical Assistance, which results in a cost savings. More childless adults are enrolling in Medical Assistance, but this has no additional cost to the state, as the federal government fully funds health care for this population until 2017, and covers most of the cost after that.

The forecast shows that Minnesota’s economy has continued to improve. This fall, Minnesota had the fifth lowest jobless rate in the nation at 3.9 percent. Importantly, this economic improvement has been broad: unemployment has fallen for workers across races, genders and ages. However, even though the U.S. economy continues to improve, growth is projected to be slower than in the February Forecast. This contributes to slightly lower revenue projections for FY 2016-17 than those from February.

Minnesota has been on the right path for the past several years, making public investments in shared prosperity and making our tax system fairer and more sustainable. However, too many Minnesotans still find financial security is out of reach. Minnesota should continue to make smart investments that help Minnesotans get ahead. In the upcoming legislative session, policymakers should increase funding for Basic Sliding Fee child care assistance and expand the dependent care tax credit so that more Minnesota parents can find affordable child care that meets their needs.

While this forecast shows some good news for the state, policymakers need to make sure their choices are sustainable. For example, history shows that when we cut taxes too far in good times, it makes things worse in the next downturn. Any tax cuts passed in 2015 should be limited in size and focused on making our tax system more fair.

The forecasters are confident in their projections. Global Insight, Minnesota’s economic consulting firm, assigns a 70 percent probability to their baseline economic forecast, and a 15 percent probability to their more pessimistic and optimistic scenarios. In the pessimistic scenario, the U.S. just avoids a recession due to a weaker housing market. In the optimistic scenario, oil prices drop more than expected and foreign growth is higher than anticipated.

Governor Dayton will use the numbers in this forecast to form his budget, which is expected by late January.

-Clark Biegler

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Give to the Max for Economic Security

For nearly 20 years, you’ve trusted us at the Minnesota Budget Project to provide research and analysis to fight for economic security and prosperity for all Minnesotans. Your support has helped us pass nation-leading legislation that makes the state’s tax system more fair, increases the ability of Minnesota workers to make ends meet, and protects affordable health care for working Minnesotans.

Give to the Max Day logoWith the help of our allies and policymakers this past year, we fought for and got an increase in the state’s minimum wage and a 25 percent increase in the Working Family Tax Credit. We also boosted the Renters’ Credit and reined in proposed dramatic cuts to the estate tax.

Our work advances our vision for the future: greater opportunity and economic well-being for all Minnesotans. And the hard work continues. In the coming year, we’ll partner with allies to expand access to affordable child care; improve job quality through earned paid sick time; and continue steps toward a fairer tax system.

With a change in the political landscape we’re also ready for potential rolling back of these recent successes. We need to be prepared to fight against regressive tax cuts, efforts to prevent scheduled minimum wage increases and the cutting of key public investments, especially health care.

You trust our work. You’ve worked with us. Now we’re asking for support through a special donation on Give to the Max Day, Thursday, November 13. Your tax-deductible donation will help us continue the fight for equity and fairness for all Minnesotans.

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Policy choices cut poverty nearly in half

Public policies like Social Security, refundable tax credits and the Supplemental Nutrition Assistance Program (SNAP) cut poverty in the U.S. nearly in half in 2013.

This finding comes from the Center on Budget and Policy Priorities, which took a look at Supplemental Poverty Measure (SPM) data released last week by the U.S. Census Bureau. The Center on Budget and Policy Priorities found that federal policies lifted 39 million people, including 8 million children, out of poverty last year.

The Supplemental Poverty Measure is a more comprehensive way to measure poverty that better takes into account the costs faced by today’s families, as well as support families may receive to meet their basic needs.

The official poverty measure was originally developed in the early 1960s. It is often criticized for being overly simplistic and outdated, because it is only based on cash income and the cost of food. The Supplemental Poverty Measure (SPM) takes a more sophisticated look at household economic well-being, taking into account expenses like child care, medical bills and taxes; as well as other resources, like housing subsidies, heating assistance and food support. The SPM gives a more complete picture of who is unable to meet basic needs.

State policy choices have a role to play as well. Minnesota policymakers took important steps in the 2014 Legislative Session so that people who work can support themselves and their families. Hundreds of thousands of Minnesotans will better be able to make ends meet because of policy decisions to strengthen the Working Family Tax Credit and increase the minimum wage.

Policymakers can make further progress this coming session by addressing the challenge of affordable child care. Increasing funding for Basic Sliding Fee Child Care – which today has a waiting list of about 6,600 families – and expanding the Dependent Care Tax Credit would be two important steps in this direction.

-Clark Biegler

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October Economic Update brings mixed news for the state budget

Minnesota’s most recent revenue collections are about 1 percent below projections, but the overall picture isn’t so bad, according to information in the Minnesota Management and Budget’s October Economic Update.

The economic update looks at state revenues for July to September 2014, which make up the first quarter of Fiscal Year 2015, and compares them to what was projected in the February Forecast, adjusted for actions taken in the 2014 Legislative Session. It finds that state revenues came in $46 million lower than earlier projections. This was mostly due to lower income tax and cigarette and tobacco tax collections and the timing of a health care surcharge. The health care surcharge accounted for a $31 million shortfall, which is expected to be reversed in the future. Corporate tax collections came in higher than projections.

While revenues for the first quarter of Fiscal Year 2015 are down, Minnesota finished the prior budget year even better than originally reported. State revenues for the 2014 fiscal year came in $186 million higher than previously projected. And that’s even an improvement from what was originally reported in the July Economic Update.

While there’s mixed news for state revenues, the national economy shows signs for “solid growth in the second half of 2014,” and this growth is expected to continue until at least next year. While this is good news, current projections for economic growth are lower than projected in the February forecast. The current outlook for the economy is dependent on several factors, including improving labor force growth and smooth policy changes by the Federal Reserve.

The economic forecasters are relatively confident in their projections, and they assign a 70 percent probability to their baseline economic forecast. They give a 15 percent chance for a more pessimistic scenario in which the national economy stalls and the U.S. barely avoids a recession, and a 15 percent chance that the economy will be stronger than the baseline prediction.

This update reminds us that the economy can take unexpected turns. It’s important for the state to prepare for the inevitable ups and downs, and the increase to the budget reserve made in the 2014 Legislative Session is an example of the kind of sound planning that policymakers can undertake so that Minnesota can best meet the needs of its residents in good times and in bad.

These quarterly economic updates are helpful in tracking our state’s revenues, but they give only part of the story. For the full picture, we’ll have to wait for the November Economic Forecast to be released on December 4, which will include estimates for both state revenues and spending. We will see then how the combination of higher than expected revenues in FY 2014 and slower economic growth projections may affect the state’s forecasted surplus for the coming biennium. Those November forecast figures will be the baseline against which the Governor will create his recommendations for the next two-year budget.

-Clark Biegler

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Some groups of Minnesotans struggle more to find jobs

As Minnesota’s job market continues to improve after the recession, not all Minnesotans are sharing in the state’s progress.

Our recent analysis shows that while overall unemployment is low in the state, those groups who faced the highest levels of unemployment in the rough economy are still having the most difficulty finding jobs. These include workers with less education, single parents, the young and people of color. For example, while the gap has narrowed, Minnesotans without a high school diploma were more than 3.5 times as likely to be unemployed than those with a college degree. One in nine of these Minnesotans were unemployed during the first quarter of 2014.

Minnesotans with Less Education Have Higher UnemploymentWhen too many Minnesotans cannot find work, it impedes the state’s economic growth. Fortunately, policymakers took several steps in the 2014 Legislative Session to help more Minnesotans get good jobs to support themselves and their families, including:

  • Increasing the minimum wage, which will boost wages for around 325,000 Minnesota workers and could reduce turnover in low-wage jobs.
  • Provisions in the Women’s Economic Security Act to help female workers get into high-wage fields and meet their family obligations without threatening their jobs.
  • Improving education and training opportunities for Minnesotans through the Minnesota Family Investment Program (MFIP) and Adult Basic Education.

These policies can contribute to narrowing the gaps in unemployment we see in Minnesota, and expand opportunity to more of those Minnesotans who currently are being left out of the state’s economic recovery.

-Clark Biegler

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Minnesota beats national figures, but prosperity still out of reach for many

Minnesota is among the top ten states in terms of incomes, but that above average performance is not reaching all communities. That’s according to new data from the U.S. Census Bureau. Today’s Census data confirms that incomes are substantially lower and poverty more prevalent in Minnesota’s communities of color. While the economic gap between white Minnesotans and communities of color is wide, there has been some improvement in poverty among black and American Indian Minnesotans.

We mentioned on Tuesday that while the nation’s economic recovery has been slow, the national poverty rate finally started to decline in 2013. Minnesota continues to do better than the rest of the nation. In 2013, our median household income increased to $60,702 and our poverty rate was 11.2 percent, both substantially better than the U.S. figures of $52,250 and 15.8 percent.

Minnesota’s continued economic strength depends on all Minnesotans having the opportunity to support themselves and their families. However, some communities have not shared in the state’s success. Black, American Indian and Latino Minnesotans earned significantly less than white Minnesotans in 2013.

Communities of color also experienced much higher poverty rates than white Minnesotans. In 2013, one in twelve white Minnesotans lived in poverty, while one in three black and American Indian Minnesotans, one in four Hispanic Minnesotans and about one in six Asian Minnesotans lived in poverty. To put that into perspective: a family of four was considered living in poverty in 2013 if their income was below $23,834.

This picture is grim, but the new numbers show that Minnesota’s reality can change. While still very high, the poverty rate for black Minnesotans decreased by five percentage points from 2012 to 2013. Analysis from our State Demographer shows that poverty also decreased for American Indian Minnesotans since 2011.

2014 acs blog table

Today’s data is helpful in understanding the different experiences of racial and ethnic groups broadly defined. But when substantial numbers of people are grouped together, the variety of individual experiences can be lost. For example, Asian Minnesotans as a whole have a median income that’s about the same as white Minnesotans, but they also have a higher poverty rate. Some Asian Americans are doing extremely well, but many aren’t earning enough to make ends meet.

To build the strongest economic future, we’ll need all Minnesotans to be able to reach their fullest potential in the workplace. Wise policy choices can make a difference in moving towards this future.

In the 2014 Legislative Session, policymakers improved the Working Family Credit, providing an important boost for people working at lower wages, as we mentioned on Tuesday. Policymakers also responded to years of stagnant wages by increasing the minimum wage, which will reach $9.50 by 2016. As a result, 325,000 Minnesotans will see a boost in their earnings. The minimum wage increase can make a dent in the wide income gap between white Minnesotans and people of color. The JOBS NOW Coalition found that almost one in three Hispanic workers in Minnesota and about one in five black workers would see higher wages when they studied a minimum wage increase similar to what passed this year.

Today’s new information tells a familiar story. Minnesota continues to exceed the national averages, but too many Minnesotans are still falling behind. As Minnesota enjoys greater diversity, it is even more important for our state’s future to take the steps needed to close our racial economic gaps. By expanding opportunity and building ladders into the middle class, our state will truly beat the averages.

-Clark Biegler

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