Breaking down the three health and human services proposals

Last week, the Senate and House passed their plans for the Health and Human Services (HHS) portion of Minnesota’s budget, which funds critical services that make basic necessities like health care and child care affordable for more Minnesotans.

The Senate HHS Budget Division has proposed a plan that would allocate $129 million in FY 2017 and $409 million in FY 2018-19, strengthening Minnesota’s supports for child care and health care aimed at financially struggling families and individuals. The Senate’s plan has many similarities to Governor Mark Dayton’s budget, though it contains many key differences outlined later in this post.

In contrast, the House HHS Finance Committee’s proposal does very little, opting mainly for policy changes rather than significant investments. The House plan would increase HHS funding for some initiatives by $20 million in FY 2017 and $40 million in FY 2018-19; these spending increases are funded by an equivalent amount of cuts to MNsure.

Two very different approaches towards supporting our state’s most vulnerable children

The House plan for Minnesota’s child care affordability problem draws on feedback heard at community hearings held by the Select Committee on Affordable Child Care. It would form a task force and take other steps to begin streamlining licensing and regulation of child care providers. However, these policy changes don’t address the 7,200-family waiting list for Basic Sliding Fee Child Care Assistance, or the low provider rates in the broader Child Care Assistance Program (CCAP), which limit parental choice.

By contrast, the Senate plan invests $8.1 million in FY 2017 and $40 million in FY 2018-19 to increase child care provider rates. An additional $15 million in FY 2017 and $38 million in FY 2018-19 would be invested in other services for children, including grants to increase access to affordable child care in Greater Minnesota, raising foster parents’ payment rates through Northstar, expanded mental health services in schools, support for homeless youth, and improved care for children with asthma covered through Medical Assistance.

Dayton’s budget funds an increase to the monthly cash grant through the Minnesota Family Investment Program (MFIP). MFIP is intended to provide families experiencing dire financial struggles with the bare necessities; most of the people who benefit are children. However, the MFIP grant has been stuck at $532 for a family of three for 30 years, a failing that neither the House nor the Senate addresses.

Senate builds on Minnesota’s health care successes; House would move in the wrong direction

Health insurance is another area of sharp contrasts between the House and Senate. The Senate focuses on efforts to provide more Minnesotans with access to affordable, high-quality health insurance. Like Dayton’s budget, the Senate would seek a federal waiver to expand eligibility for MinnesotaCare to those earning between 200 and 275 percent of the federal poverty guidelines — or $24,000 to $33,000 for a single adult.

The Senate waiver would also attempt to simplify health care enrollment for families with children, and allow people earning more than 275 percent of the federal poverty guideline to purchase MinnesotaCare coverage. The Senate joins the governor in spending $4.6 million in FY 2017 and $27 million in FY 2018-19 to protect the assets of spouses whose partner applies for home- or community-based services through Medical Assistance. The Senate bill also includes a policy aimed at making it easier for people to obtain prescription drugs.

The governor and Senate include provider rate increases for mental health care, and for preventative medical and dental care. Both would also fund overtime pay for home health care workers. Federal policy changes have resulted in an overtime threshold for these workers of 40 hours; it was previously 48 hours in Minnesota. With funding for the new overtime pay, fewer Minnesotans with disabilities will have their care disrupted.

The Senate HHS proposal funds a portion of Dayton’s proposed investments in direct care for people with mental illness, devoting $47 million in FY 2017 and $71 million in FY 2018-19, compared to the governor’s $89 million in FY 2017 and $165 million in FY 2018-19.

Meanwhile, the House bill provides access to more expensive private health insurance plans for working families with low incomes by allowing them to opt out of MinnesotaCare when shopping on MNsure. The House would also place a $20,000 asset limit on married couples who access affordable health care through MinnesotaCare or Medical Assistance.

Limited common ground

Very few policy changes or new expenditures are found in all three proposals. One notable exception is a plan to enhance Minnesota’s mental health system by investing $8.4 million in FY 2018-19 in certified community behavioral health clinics, which would likely be supplemented by $15 million in new federal money. All three plans would also transfer and support some human services to tribal governments, though the Senate and governor allocate $1.5 million in FY 2017 and $3.8 million in FY 2018-19 more than the House.

Many of the investments in the House plan are also found in the Senate’s proposal, though not Dayton’s. Beginning in 2014, people over 55 who enrolled in Medical Assistance had liens placed on their property; both the Senate and House spend about $2 million in FY 2017 and $5 million in FY 2018-19 to limit the services that result in lien placement. The Senate and the House would also both fund a mental health project in Southeast Minnesota, and increase resources for ambulance service providers and Safe Harbor for Sexually Exploited Youth.

What’s next

With every HHS plan now articulated, policymakers will soon begin negotiating a supplemental budget bill, which will combine the HHS budget proposals along with the proposals for education, public safety and other areas of the state budget.

Policymakers should build on Minnesota’s strengths by investing in vital supports that enable Minnesotans to thrive.

-Ben Horowitz

Posted in Budget Proposals | Tagged | Leave a comment

Some Minnesotans continue to struggle in the workforce

The economic recovery has taken hold in Minnesota, but that’s news to the many Minnesotans who are not sharing in the state’s prosperity. And with a tightening labor market, Minnesota needs to better tap into the potential of those currently being left on the sidelines.

Our recent analysis shows that while overall unemployment is low in the state, those groups who faced the highest levels of unemployment during the recession 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 gaps have narrowed, Minnesotans without a high school diploma were more than four times as likely to be unemployed than those with a college degree in the third quarter of 2015. And young Minnesotans were more than twice as likely to be unemployed as 45- to 64-year old Minnesotans.

Unemployment 3q2015 Education-01When Minnesotans cannot find work they often spend less, which reduces consumer spending, and this can impede the state’s economic growth. Fortunately, policymakers can take several steps to help more Minnesotans get good jobs to support themselves and their families, including:

  • Expanding affordable child care so parents can succeed in the workplace and employers can get the reliable workers they need.
  • Expanding earned sick leave so that more Minnesota workers can keep their jobs when illness strikes.
  • Strengthening the Working Family Credit to support working parents and give a boost to younger workers to help them stay in the labor market.

These policies can narrow the gaps in unemployment we see in Minnesota, and we can build the workforce we need by expanding opportunity to those Minnesotans who have been left out.

-Clark Biegler

Posted in Economy | Tagged | Leave a comment

Senate equity proposal strives to create more economic opportunity

Where are workers of color unemployed at over 2.5 times the rate of white workers? Where are households of color living in poverty more than three times the rate of white households? Where are the median full-time weekly earnings for women only 84 percent of men’s?

Minnesota.

This session, the Senate Subcommittee on Equity has put together a clear proposal to help tackle the disparities in economic opportunity that plague our state. Their proposal includes one-time funding totaling $91 million in FY 2017 to expand opportunity so that it is available to Minnesotans regardless of their race, gender, or where they live.

Two-thirds of the bill is dedicated to employment and economic development, including:

  • $9.4 million in grants for the Latino, Somali, Southeast Asian, and American Indian communities to address educational, employment, and workforce disparities, and to support youth;
  • $8 million for a Minnesota Youth at Work grant program to connect at-risk youth with training opportunities, targeted toward youth of color and others who face barriers in the job market;
  • $5.1 million for Pathways to Prosperity, which provides job training and education for high-demand jobs; and
  • $1.5 million to promote high-wage, high-demand, nontraditional jobs for women.

The Senate’s equity proposal also includes increased funding for Adult Basic Education, access to healthy foods through the newly established Good Food Access Program, as well as down-payment and closing cost assistance to help narrow the homeownership rate gap between white households and households of color.

Governor Mark Dayton emphasized the equity conversation among policymakers in his State of the State address and by allocating $100 million in total for several equity proposals in his budget proposal. The Senate follows suit in striving to making economic opportunity available to more Minnesotans, and beginning to shrink the state’s economic disparities.

-Clark Biegler

Posted in Budget Proposals | Tagged , | Leave a comment

What’s missing in this chart?

It’s time to update a critical support for our state’s poorest kids that has been deteriorating for 30 years: the Minnesota Family Investment Program (MFIP). MFIP is intended to help a family meet their basic needs when they’ve fallen on tough times. It supplies a basic cash grant while parents are working for pay too low to support their family, or when parents are looking for work.

MFIP reaches about 43,000 kids a month. Every year, we see a growing body of research demonstrating that when we invest in financial supports for families with limited resources, the children in those families have a much better shot at future economic success and healthy development. Unfortunately, our investment in MFIP has not kept up with that research.

In 1986, the MFIP grant was set at $532 for a family of three. Back then, that could cover the rent for a two-bedroom apartment with about $50 to spare. Today, it would not cover the cost of fair market rent anywhere in Minnesota. Depending on the county a family lives in, typical rent for a two-bedroom apartment now ranges from $659 to $1,028.

Rent isn’t the only cost that’s risen in the past 30 years. The graph below shows the average increase in gasoline, apparel and household utility prices since 1986, leaving MFIP families falling further and further behind.

Chart displaying growth in the cost of rent, household energy, unleaded gasoline, and apparel

Source: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers, Minneapolis-St. Paul MSA

We were glad Governor Mark Dayton included a $100 increase to the monthly MFIP cash grant in his supplemental budget proposal. Policymakers should follow his lead. In the past 29 years, Minnesota’s poorest kids have already been told “wait ’til next year” 29 times too many.

-Ben Horowitz

Posted in Human Services | Tagged | Leave a comment

Two facts that make the case for restoring MinnesotaCare eligibility levels

Policymakers can build on Minnesota’s historic progress in increasing access to affordable health care by restoring eligibility for MinnesotaCare for a group of workers who are among the most likely to lack coverage.

Making MinnesotaCare once again available to workers earning between 200 and 275 percent of federal poverty guidelines is a win-win: eligible households would save an average of $1,100 per year compared to a typical private option, and federal funding could cover any costs to the state budget. This change is supported by Governor Mark Dayton, the recent Health Care Finance Task Force, and the Senate’s Health and Human Services proposal.

Our analysis of Census data shows that this proposal is well targeted to reach some of the Minnesotans most likely to lack health insurance today.

  • The people who would become eligible for MinnesotaCare are about 3 times more likely to be uninsured than people with higher incomes. Currently, 8.5 percent of people in this income range don’t have health insurance, compared to just 2.9 percent of people earning more.
  • Minnesotans of color who would become eligible are more than twice as likely to be uninsured than their white peers. The uninsurance rate for Minnesotans of color in this income range is 16 percent; for white Minnesotans with the same earnings, it is 6.6 percent.

MinnesotaCare is a homegrown solution to a nationwide problem: lots of people work hard but still can’t afford health insurance. MinnesotaCare provides an affordable, high quality health plan for farmers, entrepreneurs and small business employees across the state. However, policy changes in 2014 made MinnesotaCare available to fewer people, and today, a single person becomes ineligible for MinnesotaCare when their earnings reach about $24,000, instead of about $33,000.

The Affordable Care Act (ACA) provides federally-funded tax credits that bring down the cost of health insurance premiums for moderate- and middle-income people who buy their health insurance on the private market. However, for households with lower earnings, the relief offered by the ACA is often too small to make high quality coverage fit in a family’s budget. Making MinnesotaCare available again to these households would be an important step forward.

If eligibility is restored, an estimated 37,000 Minnesotans would enroll in the more-affordable MinnesotaCare and about 4,200 previously uninsured Minnesotans would get covered. These 41,300 Minnesotans would save an average of $1,100 per year relative to a typical plan offered on MNsure.

Estimates vary on what restoring MinnesotaCare eligibility would cost, ranging from saving Minnesota $26 million annually once the restoration rolls out, to a cost of about $34 million per year. The final bill will depend on the specifics of a federal government waiver that is required to move this policy forward.

This is a policy change we can afford, thanks to resources available in the Health Care Access Fund. Providing more Minnesotans with an option for affordable, high quality health insurance is the right thing to do.

-Ben Horowitz

Posted in Health Care | Tagged , | Leave a comment

Assets and opportunity not reaching all communities in Minnesota

A report from the Corporation for Enterprise Development (CFED) finds Minnesota does well on many aspects of its Assets & Opportunity Scorecard, but too many families face persistent financial insecurity. The situation is often much worse for Minnesota’s households of color.

CFED, a nonprofit that works to improve economic opportunity and financial stability, released its annual scorecard earlier this year. The Steep Climb to Economic Opportunity for Vulnerable Families measures the financial security of Americans and their opportunities to climb the economic ladder in all 50 states and Washington, DC. The Scorecard focuses on five issue areas:

  • Financial assets and income,
  • Businesses and jobs,
  • Housing and homeownership,
  • Health care, and
  • Education.

Minnesota ranks 6th highest for outcomes and 9th for policies among the states in CFED’s Assets & Opportunity Scorecard. Even so, over a quarter of Minnesotans don’t have enough liquid assets, such as savings accounts, to live at the poverty level for three months if they suddenly lost their jobs.

The report also shows that Minnesota has some tremendous gaps in financial security between white residents and people of color. The homeownership rate for households of color is a little more than half of the rate for white households, and is much worse for some communities. For example, only one-quarter of black households own a home.

Additionally, black and Hispanic Minnesotans are three times more likely to forgo a doctor’s visit due to cost than white Minnesotans; this is likely related to the fact that they are much more likely to not have health insurance. And while this insurance gap has shrunk recently, the uninsurance rate for households of color in Minnesota remains three times that of white Minnesotans. The disparity is worst for Hispanic Minnesotans, who are uninsured at five times the rate of white Minnesotans.

The CFED report commends Minnesota for enacting policies that support families in attaining financial stability, but also provides a road map for how to make further progress.

CFED notes the importance of tax policies in families’ ability to earn enough to afford basic needs and to begin to save for a more secure future. But in many states, lower-income people pay a larger share of their incomes in state and local taxes than those with the highest incomes – and Minnesota is no exception. CFED gives Minnesota high marks for having a strong state Earned Income Tax Credit (the Working Family Credit) and property tax refunds for homeowners and renters.

Additionally, low-income families need health insurance like everyone else, yet they may struggle to afford premiums and co-payments. Better access to health insurance through expansion of Medicaid means Minnesotans are more likely to get the medical treatment they need, and a broken arm is less likely to send a family deep into debt.

But we still have a long way to go. That’s why more than 100 organizations from across the state, including the Minnesota Budget Project, have joined together in the Minnesota Asset Building Coalition (MABC). MABC is supporting several proposals this session to improve financial security for families here in the state, such as:

  • Tax time financial assistance, which provides additional funding at Volunteer Income Tax Assistance (VITA) sites so that low-income taxpayers can receive the tax credits for which they qualify, and access financial services that meet their needs, like opening a savings account.
  • Vehicle ownership and repair programs so that nonprofits can better connect low-income workers to working vehicles so they can get to good jobs to support their families.
  • Expanding the Working Family Credit and making targeted increases in the Child and Dependent Care Credit so more Minnesotans can succeed in the workplace and better make ends meet.
  • Improving access to retirement savings plans for workers who don’t currently have an employer-based plan and want to be in better control of their financial futures.

-Clark Biegler

Posted in Economy, Racial Disparities, Taxes | Tagged , | Leave a comment

An entrepreneur’s take on Minnesota’s budget debate

This is the second story in a series that shares why small business owners believe it’s important to reinvest our budget surplus back into our state to build a broader, more durable prosperity for all Minnesotans.

Todd Mikkelson built his business, Sprayrack, around an invention he patented, which has become the standard in the water and air infiltration testing industry. Reliance on internet sales and the need to ship heavy products across the state’s crumbling infrastructure impact Todd’s business daily.Photo of Todd Mikkelson

“In the past two years, shipping prices have gone up 10 percent. This is largely due to bad roads across the state,” Todd said. “Crumbling roads are costing car owners heavily in car repairs, and small business owners have to spend money on repairing their vehicles that they otherwise could have invested in their business.”

In addition to crumbling roads, access to broadband is essential for Todd’s customers to make product purchases. “We do all of our sales over the internet, which is why most of our cost is in shipping,” Todd said. “But I would not have been able to start my business or maintain it in the way that I am currently able to without strong internet service.”

Todd has benefited from his business’ proximity to the Twin Cities and the strong internet service that affords him. However, Todd believes reliable internet access should be commonly available regardless of geography.

“Last year the Legislature failed to fund broadband for Greater Minnesota,” Todd said. “Why should people living outside of the Twin Cities be denied the same entrepreneurial opportunities that I have?”

Todd, like many small business owners across the state, is worried that some of the current proposals to use the state’s budget surplus for large, poorly targeted tax cuts would primarily benefit large businesses and would do little for his small business.

Instead, Todd and others are calling for policymakers to invest the surplus. “By strategically investing in the state’s infrastructure and broadband, the Legislature would build a broader and more durable prosperity in Minnesota,” Todd said. “Small business owners would save money on shipping costs and entrepreneurs across the state would be on a level playing field when it comes to reliable internet service.”

Join with Todd and other like-minded small business owners to ensure the Legislature enacts budget policies that build a broader, durable prosperity in Minnesota. Sign the petition today.

Then join in a discussion on why state investments matter to you via Facebook or Twitter using the hashtag, #MNProsperity.

Posted in Budget Proposals, Taxes | Tagged , , | Leave a comment

Creating a Durable Prosperity: Why small business owners call for state investments

Holly Hatch-Surisook lives one mile from the successful restaurant she owns with her husband, Joe, in Northeast Minneapolis. Built from the ground up in 2008, Sen Yai Sen Lek Thai rice & noodles employs 25 dedicated workers who cook and serve delicious meals to satisfied customers day in and day out. Photo of Holly Hatch-Surisook

For Holly and Joe, their employees are more than workers. They are family. “Like many small businesses, we care very much about our employees beyond the labor they contribute to our company,” Holly said.

That’s why she is following the budget discussions happening at the state Capitol this spring. Some at the Capitol are proposing large, poorly targeted tax cuts, saying that should be a top priority for policymakers this year.

Holly disagrees.

Instead, Holly believes it’s important to understand that small businesses like her’s rely on state investments to ensure employees have adequate opportunities for a better life. “Unfortunately, our small business doesn’t have the financial capacity — the financial scale — to offer the kinds of employee benefits that large organizations do.”

That, she said, includes affordable child care, which could be expanded with additional state investments.

Holly added that if investments in priorities like more affordable child care are not made using our budget surplus, her employees will have higher expenses. “That could mean one parent needs to stay home to care for his or her family,” she said. “If he or she stays home because they cannot afford child care, that affects their quality of life and it affects the staffing for my restaurant. Neither is a good option.”

Holly thinks strategic investments are needed in our local communities — especially in resources that offer opportunities for more Minnesotans. Not only does Holly believe that state investment will improve her employees’ lives, it will also keep her business strong and growing.

Join Holly and other like-minded small business owners to ensure the Legislature enacts budget policies that build a broader, durable prosperity in Minnesota. Sign the petition today.

Then join in a discussion on why state investments matter to you via Facebook or Twitter using the hashtag, #MNProsperity.

Posted in Budget Proposals, Taxes | Leave a comment

Economic opportunity for unauthorized immigrants on trial today

Today the U.S. Supreme Court will hear oral arguments on the lawsuit concerning President Barack Obama’s 2014 executive action which, if implemented, would expand economic opportunity for millions of unauthorized immigrants across the nation, including 30,000 in Minnesota.

In November 2014, Obama introduced an executive action that included the expansion of Deferred Action for Childhood Arrivals (DACA) and the creation of the new Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). These allow undocumented immigrants who came into the country as children, as well as parents of U.S. citizens or lawful permanent residents, to request relief from deportation and receive work permits that would last for three years.

The executive action recognizes the contributions these residents make to their local communities and economies, and would keep families together who already call the United States their home. His action also would provide an economic boost by strengthening the country’s workforce, as young people who grew up here could further their educations and careers, and workers could increase their earnings through jobs that better match their skills. As a result, it’s estimated that full implementation of DACA and DAPA could improve the Minnesota economy by $1.7 billion over ten years.

The lawsuit involving 26 states that delayed implementation of this executive action nationwide will be heard by the U.S. Supreme Court today. A decision is expected to be made by June.

Obama’s executive action is a common-sense way to provide a more stable status to immigrants living in our communities. Our communities and our economy would benefit.

-Clark Biegler

Posted in Immigration | Tagged , , | Leave a comment

Senate targets prioritize sustainable tax changes, broader opportunity

The Minnesota Senate released its budget targets on Wednesday, which describe how they propose using the state’s projected surplus to make changes to the state’s two-year budget passed last year. The Senate targets allocate $300 million of the surplus to taxes, $489 million to net general fund spending, and leave $111 million unallocated.

In contrast, the Minnesota House of Representatives’ targets released last week allocated the vast majority of the surplus to taxes and transportation (but did not specify how that figure would be divided between the two areas), and allocated only $2 million of the surplus to new investments in other areas of the budget.

Senate General Fund Targets (Net)
Tax Cuts and Aids to Local Governments $300 million
Equity $91 million
Broadband $85 million
Natural Resources, Economic Development and Agriculture $60 million
E-12 Education $48 million
Higher Education $48 million
Judiciary and Public Safety $45 million
Health and Human Services $43 million
Transportation and Public Safety $32 million
State Departments and Veterans $30 million
Environment and Energy $8 million
Net Changes (FY 2016-17)
$789 million

Minnesota has a projected $900 million surplus for the remainder of the current FY 2016-17 biennium and $1.2 billion for FY 2018-19. In a press conference, Senate DFL leadership emphasized much of the new spending in this biennium will be “one-time” and not continue on into the next biennium in order to keep in line with the more limited surplus available in FY 2018-19.

The Senate targets indicate that addressing equity issues and the lack of broadband in Greater Minnesota are priorities for the Senate this session. For broadband, the Senate targets allocated $85 million compared to the House’s $13 million in FY 2017.

While the net general fund target for E-12 education is $48 million, the Senate targets note there will be a total of $101 million in new education spending. This is made possible through a loan refinancing option for some school districts, included in both the House and Senate E-12 Education targets, which raises additional state resources.

The Senate targets do not include bonding, and some of the $111 million that is currently unallocated will be directed toward capital projects.

The targets are an important milestone in the budgeting process, and they set the size of the budget provisions that the Senate finance divisions are starting to put together. The Senate will combine most of the finance provisions – except for taxes, transportation and capital investment – into one supplemental budget bill next week.

Taxes and transportation will take a little different path. These are the two areas where little action was taken in 2015, and where reconvened conference committees will negotiate based on last year’s bills plus some new items raised this year.

As policymakers decide how to allocate the state’s current surplus, we’ve argued they should make sustainable tax reductions focused on working families and invest in broader economic opportunity. We will be watching closely as the details are filled in, but the Senate targets certainly create the opportunity to reach those goals.

-Clark Biegler

Posted in Budget Process, Taxes | Tagged | Leave a comment