Summer reading: new reports show that policy choices build ladders to economic opportunity

With the legislative session over, we’ve had the opportunity to pick up some of our ideal beach reads: the latest and greatest research demonstrating that policy choices can knock down barriers on the road to economic opportunity. They make a strong case for investing in proven ways to help all boats rise as the economy continues to recover.

When families can afford to live in lower-poverty neighborhoods, their kids succeed. Researchers at Harvard re-visited a policy experiment from the mid-1990s that provided housing assistance to families living in areas of concentrated poverty so that they could move to lower-poverty neighborhoods. They found that the children who relocated grew up to earn significantly more and were more likely to attend college. Their research shows that kids up to age 13 saw a benefit from living in lower-poverty neighborhoods, with each additional year spent in a new, lower-poverty neighborhood leading to higher predicted earnings.

A summary of child care research reveals that mothers receiving child care assistance are more likely to work, and their employment leads to increased levels of social and emotional well-being for their children. Parents with child care assistance also worked more hours, and were more likely to have more stable jobs. This research demonstrates the economic and other benefits from child care assistance, such as Minnesota’s Basic Sliding Fee Child Care Assistance. Basic Sliding Fee brings down the cost of child care for parents with children up to age 12. It allows children to thrive in stable environments while parents go to school or work. This session, policymakers reversed a long-term trend of disinvestment by increasing funding for Basic Sliding Fee. It was a great step in the right direction, but thousands of Minnesota families still remain on a waiting list.

The federal Earned Income Tax Credit (EITC) is a powerful tool for reducing poverty and increasing employment. The nonpartisan Congressional Research Service found that the federal EITC reduces the national poverty rate by 14 to 29 percent for families with children, depending on their household chacteristics. In his 2015 budget proposal, Governor Mark Dayton proposed improvements to the state’s version of the EITC, the Working Family Tax Credit. Both the federal and state government could strengthen this policy even further by ensuring these credits make work pay for all kinds of families.

Policies like the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) and the EITC cut poverty in Minnesota in half in 2012. These policies would have an even greater impact if they reached a higher percentage of eligible families. An overview of participation rates for nutrition assistance shows that Minnesota and the nation are getting better at ensuring eligible families receive the assistance they qualify for – but we still have a way to go. For example, Minnesota’s SNAP participation rate increased from 65 percent in 2000 to 86 percent in 2012.

This research used a diverse array of statistical techniques and comes from the spheres of government, academia and nonprofits. They all point to the same general conclusion: policy choices make a difference. Child care assistance, access to affordable housing, the EITC and SNAP make it easier for struggling Minnesotans to make ends meet.

-Ben Horowitz

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Budget bills passed during special session avert shutdown

By the early hours of June 13, Minnesota’s House and Senate passed the budget bills responsible for education, jobs and energy, and environment and agriculture in a special session. This prevented a shutdown of those portions of state government when the state’s next two-year budget cycle begins on July 1. Legislators also passed a bonding bill authorizing infrastructure projects around the state and a Legacy bill allocating dedicated funds for the arts and environment.

The education bill spells out $526 million in new general fund resources for FY 2016-17, including $346 million to increase funding for school districts on the general education formula by 2 percent in both FY 2016 and FY 2017. Though the education bill does not include the statewide universal pre-kindergarten initiative that was a priority for Governor Mark Dayton, it does devote $96 million to increase funding for initiatives focused on young children, including:

  • $48 million for early learning scholarships;
  • $3.5 million for the state’s early learning and child care rating system;
  • $31 million for School Readiness;
  • $2.8 million for Early Childhood Family Education; and
  • $10 million for Head Start.

The bill also includes $5 million for the Northside Achievement Zone, St. Paul Promise Neighborhood and new education partnership pilots that help children succeed by coordinating support for families at school and in their communities.

Along with the increased funding for Basic Sliding Fee Child Assistance in the health and human services budget, these important investments mean that more Minnesota children will thrive in stable, nurturing care, and fewer parents will need to pass up on jobs or opportunities to go back to school because they can’t afford child care.

The jobs and energy omnibus budget bill increases general fund spending by $33 million. The final version includes an additional $2.5 million to support employment for persons with disabilities or mental illness, and $2.5 million for housing for people with serious mental illnesses.

Combined, the omnibus bills for environment and agriculture result in a $26 million decrease in general fund spending. That includes a $64 million cut from the environmental portion and a $39 million increase in agricultural spending.

Along with the bills already passed and signed by Dayton, these budget bills will leave $865 million unallocated from the state’s projected FY 2016-17 surplus.

-Ben Horowitz

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Report contains good practices for addressing health care eligibility issues

With thoughtful reforms, the State of Minnesota can better target our resources without decreasing eligible families’ access to vital services. Dorothy Rosenbaum at the Center for Budget and Policy Priorities cites several states’ successes doing so in Lessons Churned: Measuring the Impact of Churn in Health and Human Services Programs on Participants and State and Local Agencies. Minnesota should apply these valuable lessons to a new data-matching initiative passed in the Health and Human Services budget.

In the wonk’s dictionary, “churn” describes participants dropping in and out of public supports like Medical Assistance within short periods of time. Oftentimes, this happens even when nothing occurred in a person’s life that would change their eligibility. Examples of such “procedural churn” include when the state fails to provide clear instructions on how to re-apply, or when a person does not respond with requested information before a renewal deadline.

Regardless of whether this occurs due to an error by the state or a family, eligible people lose their health care or other services that are important for them to meet their most basic needs. Meanwhile, the state pays for the unnecessary work of closing, then re-opening, these cases.

Depending how it’s implemented, a proposal in the Health and Human Services budget could increase the potential for churn. While it differs in important ways from the eligibility audit in the House’s Health and Human Services omnibus bill, it could still echo the bad precedent from Illinois upon which the House based its version. Illinois lawmakers hired a third-party vendor to assist the state’s effort to verify people’s eligibility for public health insurance. Recent reports show that 84 percent of cancelled health insurance cases in 2014 occurred simply because participants did not respond to requests for personal information from this unfamiliar vendor, and that 89 percent of these non-respondents were “likely eligible.”

This was textbook churn, and it could happen in Minnesota if the state isn’t careful. Fortunately, the Health and Human Services omnibus bill instructs the Department of Human Services (DHS) to perform its own data-matching rather than engaging a third-party vendor. That’s especially good because in Illinois the vendor didn’t bring significant new information to the table. The legislation also provides Minnesotans 30 days to respond to the state’s request for information, as compared to a limit of 10 business days in Illinois. However, those extra days won’t make a difference if an eligible person simply misses or misunderstands the request. DHS must take care to ensure that the effort doesn’t cause eligible Minnesotans to lose their health care, as happened in Illinois.

Rosenbaum’s paper supplies many potential strategies for churn reduction that can benefit the budget without harming the people. Successful states typically begin with data collection and analysis. One state, Louisiana, found that in 22 percent of their health insurance renewal cases people lost their coverage for procedural reasons. After identifying the problem, Louisiana was able to reduce this rate to 1 percent in a matter of years by improving the renewal process. For example, the state increased telephone contact with participants, and used existing data to renew eligibility when possible. Because of these reforms, fewer eligible families lost their health care and the state wasted fewer resources on unnecessary cancellations and re-enrollments.

Cycling in and out of health care coverage is ultimately harmful to families and adds unnecessary costs to state agencies. If not implemented carefully, the Health and Human Services re-verification initiative could simply exacerbate this problem. Instead, Minnesota should use it as an opportunity to more efficiently serve families by addressing procedural churn.

-Ben Horowitz

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Health and Human Services budget combines some good investments with harmful changes

The Health and Human Services budget (Senate File 1458) provides more families with options for affordable child care, more resources to protect the young and care for the elderly, and better access to health care for people with disabilities and mental illnesses. Unfortunately, the final agreement also contains several disappointments like $65 million in cuts to MinnesotaCare and a potentially inefficient re-verification proposal. It also fails to include a proposal that would have better supported Minnesota’s most struggling families in the Minnesota Family Investment Program (MFIP).

A $10 million increase in FY 2016-17 for Basic Sliding Fee Child Care Assistance will help about 350 more families afford child care in an average month, and takes an important step in addressing a waiting list that is more than 4,000 families long. With Basic Sliding Fee, parents can afford to go to school or work while their children thrive in consistent care environments and employers can more easily find reliable employees.

At the same time, the Health and Human Services budget also reduces Basic Sliding Fee’s resources by $3 million in FY 2016. These are unspent funds from FY 2015 — however, these funds are held up due to procedural issues, not due to a lack of demand. The Department of Human Services testified that this $3 million would otherwise go towards serving more families.

The E-12 education bill also includes $62 million for young children through Early Learning Scholarships and school readiness efforts. However, Governor Mark Dayton vetoed this bill because it does not include funding for some of his other education-related priorities. While all of these programs can work together for families with young children, Basic Sliding Fee is the only tool that serves kids from infancy through age 12 and covers the amount of hours and range of times parents need to work.

The Health and Human Services investments targeted to children and the young total $78 million, and include:

  • $52 million for child protection reforms,
  • $7.9 million to increase resources for some of Minnesota’s most struggling families by changing the way child support payments are handled in MFIP, and
  • $2 million for the Homeless Youth Act and $3 million for Safe Harbor for Sexually Exploited Youth.

The Health and Human Services budget also includes proposals to make health care more affordable for seniors and adults with disabilities. It provides $4.8 million to reduce Medical Assistance premiums for employed Minnesotans with disabilities. The agreement also contains $3.4 million to reduce the cost of Medical Assistance for working seniors and people with disabilities who also have high medical costs.

Cuts to MinnesotaCare in the Health and Human Services budget will also make it harder for some Minnesotans to afford health care. The $65 million in reduced funding will raise premiums and triple out-of-pocket costs for working Minnesotans. MinnesotaCare offers affordable health insurance for households earning 133 to 200 percent of the federal poverty guideline ($15,654 to $23,540 for an individual). These cuts are unnecessary because both the general fund and the main funding source for MinnesotaCare have projected surpluses in the FY 2016-17 biennium. Because the changes result in higher costs that add up with each visit to the doctor, chronically ill Minnesotans will be hit the hardest.

The Health and Human Services agreement contains an eligibility re-verification proposal that could create a procedural barrier for families eligible for health care. The House Health and Human Services omnibus bill (House File 1638) contained a similar version that would have hired a third-party vendor to re-verify the eligibility of participants in services for families. The Health and Human Services budget will instead have the Department of Human Services perform a similar task within slightly different parameters. We were glad the conference committee moved away from Illinois’ harmful approach. However, the state must be sure that its audit focuses on Minnesota’s ability to determine eligibility rather than creating a new layer of red tape that causes eligible families to lose their health care.

The Health and Human Services conference committee did not include a proposal from the Senate and Dayton that would have raised the cash grant in MFIP for the first time in 29 years. Since 1986, a very low-income family of three participating in MFIP has received $532 per month. That amount does not cover a family’s basic needs. A strong body of research connects increased family resources to better outcomes for kids. Policymakers missed an opportunity to help thousands of Minnesota children take a step away from living in deep poverty.

Other significant Health and Human Services expenditures include:

  • $138 million for higher payments to nursing homes,
  • $76 million for mental health and chemical dependency, including efforts to expand access, build new facilities, and provide innovative services, and
  • $3.3 million to increase access to dental services through higher payments to dental providers.

The Health and Human Services budget contains praiseworthy investments in Minnesota’s children, seniors and people with disabilities or mental illnesses. However, real damage will be done by cuts to MinnesotaCare, and the state’s eligibility audit could install a new barrier to affordable health care. This “some steps forward, some steps back” approach was not necessary in a year with a nearly $2 billion surplus.

-Ben Horowitz

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Policymakers put budget together, but it’s not a done deal

Legislators ended this session with a flurry of late-night conference committees and marathon floor sessions. “Global targets” were established just a few days before session ended, so legislators raced against the clock Monday night to pass budget bills for FY 2016-17. However, policymakers are expected to come back for a special session.

That’s because Governor Mark Dayton has said he will veto the E-12 Education bill, as he believes it does not provide adequate funding for several of his priorities. As a result, a special session is needed to set the education budget before the new budget cycle starts on July 1.

The House, Senate and governor were unable to come to an agreement on two major budget bills, tax and transportation, which resulted in no tax bill and a small, relatively status quo transportation bill. The status of these bills will not trigger a special session.

FY 2016-17 General Fund Budget Priorities
 Budget Bill Governor House Senate Conference Agreement
E-12 Education $695 million $158 million $365 million $400 million
Higher Education $283 million $57 million $205 million $166 million
Health and Human Services $341 million -$1.2 billion $340 million -$302 million
Jobs and Economic Development $53 million -$11 million $66 million  $30 million
Environment and Agriculture $29 million $8.8 million -$9.4 million -$23 million
State Government and Veterans $50 million -$67 million $40 million $11 million
Transportation and Public Safety $30 million -$108 million $30 million $30 million 
Judiciary and Public Safety $149 million $82 million $117 million $111 million
Tax Cuts and Aids to Local Governments $136 million $2.3 billion $461 million $0 

The final budget bills include some provisions to expand prosperity to more Minnesotans by making higher education more affordable and increasing access to affordable child care. However, there were also many lost opportunities. For example, policymakers failed to expand earned sick time to more Minnesota workers, to allow all Minnesotans to have the economic opportunities that come with a driver’s license regardless of their immigration status, or to expand the Child and Dependent Care Tax Credit or the Working Family Credit.

The E-12 Education bill increases funding for schools through the basic student formula by 1.5 percent in FY 2016 and 2.0 percent in FY 2017, an increase of $87 and $118 per student each year. It also includes $31 million for early learning scholarships and $31 million for school readiness. As mentioned above, Dayton plans to veto this bill.

In Higher Education, policymakers agreed to keep the cost of tuition down at the University of Minnesota and Minnesota State Colleges and Universities, but the funding is not enough to fully freeze tuition. The final bill also improves financial aid through the Minnesota State Grant program and reduces the waiting list for American Indian scholarships.

In the Health and Human Services budget, policymakers cut general fund appropriations by $302 million, despite the state’s projected $1.9 billion surplus. The budget rejects the House proposal to eliminate MinnesotaCare, which provides health insurance for about 100,000 working Minnesotans, but it does raise health care costs for MinnesotaCare participants. Policymakers included $10 million for more families to have affordable child care through Basic Sliding Fee Child Care Assistance, which had a waiting list of 4,400 families as of March. The bill also includes a number of investments in mental health, nursing homes, and services for children and youth.

An Economic Development and Housing budget bill passed minutes before the end of session largely includes only base funding for affordable housing and economic development. It does not include a harmful “local interference” measure proposed by the House, which would have prevented local governments from setting higher wage and job quality standards than state law.

The governor, House and Senate had all proposed substantial new money for Transportation, but could not bridge their differences about how to pay for them – by increasing existing dedicated funding sources (such as the gas tax) or using current general resources. A Senate proposal to expand access to driver’s licenses for Minnesotans regardless of immigration status was not included. Having a driver’s license can open a door to greater economic opportunity for immigrants, which also has a positive ripple effect on the state’s economy and ensures the state’s roads are safer by requiring everyone to take a driving test before they’re behind the wheel.

The lack of a Tax bill means that policymakers did not move forward the House’s proposal for more than $2 billion in tax cuts, several of which grew larger over time, such as eliminating the statewide property tax paid by businesses and cabins, fully exempting Social Security income and deeply cutting the estate tax. Several of the House tax proposals also would have reversed the state’s recent progress in making the tax system more equitable, so it’s a good thing they were not enacted into law. The flip side is that the state also did not move forward with more positive tax proposals focused on the needs of lower- and middle-income Minnesotans, such as expanding the Child and Dependent Care Tax Credit or the Working Family Credit. Policymakers linked the tax and transportation issues together in end-of-session negotiations, and these issues may well remain intertwined into the future.

The Legacy budget bill, which is an important funding source for arts and cultural heritage and environmental organizations, was not passed as well. However, the governor has said he would like to address this in a special session.

With a projected $1.9 billion surplus for FY 2016-17, policymakers had substantial opportunity to invest in more Minnesotans sharing in our state’s economic success. Policymakers made some progress in making education more affordable and increasing access to affordable child care. However, they also missed many opportunities to invest in Minnesotans, such as failing to expand access to driver’s licenses or the Child and Dependent Care Tax Credit or Working Family Credit.

-Clark Biegler

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Budget deal on MinnesotaCare triples out-of-pocket costs, raises premiums for working Minnesotans

The Health and Human Services budget passed by Minnesota’s Senate and House of Representatives will increase health care costs for the working Minnesotans covered by MinnesotaCare. The Health and Human Services budget (Senate File 1458) stops well short of the House’s attempt to repeal MinnesotaCare, but it raises out-of-pocket costs and premiums. Lawmakers made these changes to a time-tested, proven tool for affordable health care despite a projected surplus in the fund that pays for it.

MinnesotaCare is a path to affordable health insurance for households earning 133 to 200 percent of the federal poverty guidelines, or $15,654 to $23,540 per year for an individual. It also covers certain Minnesotans earning less. Eligible individuals and families pay income-based sliding scale premiums. MinnesotaCare reaches people like entrepreneurs, farmers and others who would otherwise lack access to quality, affordable health insurance coverage through their work.

The cuts to MinnesotaCare amount to $65 million in FY 2016-17 and $96 million in FY 2018-19. Coverage through MinnesotaCare will have higher premiums, and the maximum out-of-pocket costs will be three times as high. While some important details are left to be determined, the average impact would be around $370 per adult in 2016. That’s more than a week’s paycheck for many Minnesotans participating in MinnesotaCare. Individual experiences will vary based on a person’s income and use of medical care.

The changes will be hardest on Minnesotans who are dealing with chronic illnesses. That’s because the higher out-of-pocket costs will add up each time Minnesotans use their health insurance coverage. For example, someone who needs to see the doctor regularly to treat diabetes or mental health issues will see their already-tight budgets stretched even further. Increased out-of-pocket costs could also discourage sick people from seeking care.

Raising health care costs for working Minnesotans is unnecessary given the state’s current resources. MinnesotaCare is primarily funded by the Health Care Access Fund. This year’s February forecast projected that the fund will remain balanced through FY 2019. That’s in addition to the projected $1.9 billion surplus in the general fund.

MinnesotaCare has provided affordable health insurance to working Minnesotans for two decades. The Health and Human Services budget undercuts this critical gateway to affordable health care for people who can ill afford it.

-Ben Horowitz

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What’s at stake in final budget negotiations: three different approaches to Minnesota’s future

As policymakers work to set the budget for the upcoming FY 2016-17 biennium, they bring very different visions to the table.

Governor Mark Dayton proposes to use much of the state’s projected $1.9 billion surplus for expanded educational opportunities, improving transportation, reducing the cost of college and other investments that expand economic success in Minnesota. The Senate proposes investments in education and health and human services, and a tax bill that focuses on reversing accounting shifts and boosting funding for local governments. The House’s tax bill includes large tax cuts and is even bigger than the surplus, and as a result, the House has the smallest targets for their budget bills. While they provide new spending in areas such as nursing homes, the House also makes dramatic cuts in affordable health care.

Soon, “global targets” will be set that determine the size of the final tax and budget bills. Here’s a recap of where things stand.

FY 2016-17 General Fund Budget Priorities
  Governor Senate House
E-12 Education $695 million $365 million $158 million
Health and Human Services $341 million $340 million -$1.2 billion
Higher Education $283 million $205 million $57 million
Transportation and Public Safety $179 million $144 million -$26 million
Environment, Agriculture and Economic Development $84 million $57 million -$2.2 million
State Department and Veterans $64 million $40 million -$67 million
Budget Reserve $0 $250 million $150 million
Tax Cuts and Aids to Local Governments $138 million $458 million $2.3 billion

Dayton proposes to invest in schools, affordable college tuition, a safe and modern transportation system and other building blocks of a prosperous state. He largely focuses on Minnesota’s students by expanding free pre-kindergarten, freezing tuition at the University of Minnesota and Minnesota State Colleges and Universities (MnSCU), and improving financial aid. More Minnesota families would also have affordable child care through Basic Sliding Fee Child Care Assistance. Dayton’s tax proposal continues to prioritize a sustainable tax system and meeting the needs of Minnesota families, and would expand the Child and Dependent Care Tax Credit and Working Family Credit. Dayton also proposes a broad plan to repair and improve the state’s transportation system, which includes several investments in transit in both the Twin Cities and Greater Minnesota. This plan is paid for through a package of revenue-raisers, including the gas tax and local sales taxes.

The Senate prioritizes investments in education and health and human services, and building the budget reserve. The Senate’s budget bills include many of the governor’s priorities to expand economic opportunity, including tuition relief at public colleges and universities, and reducing the waiting list for Basic Sliding Fee. The Senate proposes a larger tax bill than the governor, but at $458 million, their tax bill is only one-fifth the size of the House’s. The Senate tax bill puts a priority on reversing payment timing shifts and increasing funding to cities, counties and townships, as well as a tax credit for employers who hire veterans, an expansion of the K-12 Education Credit and a college savings tax credit. The Senate transportation bill includes similar priorities and funding mechanisms as the governor’s budget. The Senate also devotes $250 million to the state’s budget reserve.

The House takes a very different approach. The House’s tax bill includes large tax cuts that grow over time and includes provisions that would reverse the state’s recent progress towards a fairer tax system. Because the tax bill is larger than the state’s projected surplus, it is paid for in part by cuts in health care, affordable housing and other critical services. The House targets for other budget bills are significantly smaller than the Senate’s. Their health and human services bill in particular raises concerns. While it includes increases in a few areas, such as nursing homes, the bill also eliminates MinnesotaCare and dramatically increases health care costs for more than 100,000 working Minnesotans. The House transportation bill is smaller than the governor’s and Senate proposals, and relies on dedicating existing funding sources that currently go the general fund. This puts transportation funding in greater competition with funding for schools, health care, public safety and other areas of the budget. The House also devotes $150 million to the state’s budget reserve.

There is still work to do so that all Minnesotans have the chance to share in the state’s prosperity. As policymakers create the next two-year budget, they should prioritize policies that meet that goal, such as funding Basic Sliding Fee Child Care Assistance, maintaining affordable health care through MinnesotaCare and increasing access to education and training opportunities that build Minnesota’s workforce. Policymakers should also keep in mind the role that transportation plays in access to jobs and economic opportunity, and make funding and investment choices that meet the transportation needs of low-income persons and economically struggling communities. Policymakers should keep tax cuts limited and sustainable, and continue to make progress on a tax system that is more equitable through expanding the Working Family Credit and Child and Dependent Care Credit.

-Clark Biegler

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Undocumented immigrants contribute $87 million in Minnesota taxes, more expected with immigration reform

Undocumented immigrants play a vital role in Minnesota’s economy and paid $87 million in state and local taxes in 2012, according to a new report from the Institute for Taxation and Economic Policy (ITEP). Under immigration reform, ITEP estimates these contributions would substantially increase.

The estimated 91,000 undocumented immigrants currently living in communities throughout Minnesota pay taxes in a variety of ways. For example, they pay sales tax when they buy school supplies, property taxes through their rents, and income taxes when it is deducted from their paychecks and when they file taxes in the spring. Even though undocumented immigrants are ineligible for many services that taxes pay for, they are doing their part to support the state’s schools, roads and bridges, and other public services.

ITEP’s report highlights that one of the benefits of immigration reform is likely to be increased tax revenues for the state. President Barack Obama’s executive actions in 2012 and 2014 expand relief from deportation for an estimated 42,000 undocumented immigrants in Minnesota, including youth who have lived in the United States since 2010 and are either in school or have a high school degree, as well as parents of U.S. citizens or lawful permanent residents who have been in the country for over five years.

Immigrant tax contributions-01

These executive actions also allow these immigrants to apply for work authorization and a Social Security Number, which in many states, including Minnesota, means they can also apply for a driver’s license. With these tools, immigrants will be able to obtain jobs better in line with their skills, and to get to and from their jobs more reliably. For many immigrants, ITEP expects that this will result in increased earnings. And this isn’t just good for immigrants, it results in increased economic activity in our communities and increased tax revenues in Minnesota. The executive actions are expected to result in approximately $7 million in additional state and local taxes paid by undocumented immigrants. Alternatively, ITEP estimates that granting legal status to all undocumented immigrants would mean $17 million in increased tax revenues in Minnesota.

Undocumented immigrants already play important roles in communities across the state. Obama’s executive actions can expand opportunity for undocumented immigrants who are living and working here, and could bring increased economic activity and tax revenues to Minnesota.

-Clark Biegler

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Senate HHS omnibus bill focuses on economic opportunity, health care and vulnerable youth

The Senate Health and Human Services omnibus bill (Senate File 1458) uses the committee’s $341 million target to expand access to economic opportunity and mental and physical well-being. It includes $146 million to protect and support the young and $72 million to expand access to health care. The Senate’s new investments are in sharp contrast to the House proposal, which ends affordable health care for more than 100,000 Minnesotans.

The Senate bill includes two important provisions to help Minnesota families achieve economic success. It includes $19 million in FY 2016-17 to expand access to affordable child care through Basic Sliding Fee Child Care Assistance. Thanks to this proposal, 700 more families in an average month would pay less for child care. Basic Sliding Fee enables parents to get to work and support their families. Their children can thrive in consistent care environments, and employers can more easily find the workers they need. Another $1.6 million would simplify the broader Child Care Assistance Program, making it easier for parents to participate and for providers to serve low-income families.

The Senate bill also spends $68 million to increase assistance to families through the Minnesota Family Investment Program (MFIP). The bill would increase the maximum cash assistance through MFIP by about $100 per month. For the past 29 years, a family of three has received $532 monthly, which is not enough to cover a family’s basic needs and leaves many Minnesota children living in deep poverty. The MFIP increase builds on solid evidence that boosting family income is an effective way to improve children’s well-being.

The Senate bill also includes most of Governor Mark Dayton’s proposal for $57 million in FY 2016-17 to improve child protection and to expand Minnesota’s services for homeless and sexually exploited youth. The House does too, although it includes $700,000 less than the Senate for these initiatives.

On the health care front, the Senate includes $48 million in FY 2016-17 for several initiatives to improve and expand access to mental health services. For example, the Senate plan includes Dayton’s $6.9 million proposal for behavioral health homes. This approach is based on a promising model that improves health outcomes for mental health patients through better care coordination. It also reduces the use of more expensive services, like the emergency room.

The Senate’s proposal would also provide $15 million in FY 2016-17 to improve access to preventive dental care. The bill increases dental provider rates, starts an outreach effort about preventive dental care and would cover more dental services. Untreated dental problems can escalate into painful, costly trips to the emergency room. The Senate’s dental funding is significantly more than the House or Governor Dayton’s proposals, which devote $4.3 and $10 million, respectively.

The Senate and House HHS bills contain provisions to make it easier for elderly Minnesotans and people with disabilities to work without losing affordable health care. They both include:

  • $5.3 million to reduce premiums for Medical Assistance for Employed Persons with Disabilities (MA-EPD). MA-EPD has premiums that increase with income. A person with a disability could see their income from working swallowed up by higher medical costs. Lowering premiums would allow more Minnesotans with disabilities to work without risking their medical coverage.
  • Funding to decrease the Medical Assistance “spend down” for elderly Minnesotans and people with disabilities. Medical Assistance spend down allows coverage for people with high medical costs whose incomes are higher than the eligibility limits. If a senior or adult with a disability earns more than $973 per month, Medical Assistance kicks in once their medical bills reduce their income below the spend down amount of $730, or 75 percent of the federal poverty guideline. The Senate proposes $3.5 million beginning in FY 2017 and $18 million in FY 2018-19 to gradually raise the limit to 95 percent of the poverty guideline. The House would spend slightly less in FY 2017 and change the spend down to 80 percent of the poverty guideline.

Senate File 1458 protects and expands affordable health care, increases access to economic opportunities and strengthens important protections for vulnerable young Minnesotans. The bill also maintains our existing efforts to make Minnesota a place where a run of bad luck does not make it harder to stay healthy or impossible to make ends meet.

-Ben Horowitz

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Senate transportation omnibus bill expands access to driver’s licenses

The Senate transportation omnibus budget bill (House File 4) would expand economic opportunity for Minnesotans by allowing them to apply for a driver’s license, regardless of immigration status.

For many Minnesotans, the daily activities we do to support our families, like getting to work safely, dropping children off at school, or buying groceries, requires driving. But too many of our neighbors cannot apply for a driver’s license.

Having a driver’s license can open a door to greater economic opportunity for immigrants that has a positive ripple effect on the state’s economy. Workers are able to get to their jobs safely and reliably, and can get to more job opportunities. With a large share of the population aging out of the workforce, Minnesota can’t afford to leave qualified workers on the sidelines because they are unable to get to work. As these Minnesotans are able to increase their earnings, that also creates a boost in consumer spending that’s good for our state economy. This provision also keeps our roads safer by requiring everyone to take a driving test before they’re behind the wheel.

The provision in the Senate transportation omnibus bill would allow immigrants to show a valid passport accompanied by a birth certificate as acceptable identification to apply for a driver’s license.

The House and Senate transportation bills are being discussed in a conference committee where their differences will be worked out. Policymakers should include policies in their final transportation budget that expand economic opportunity, and increasing access to driver’s licenses is one policy that meets that criteria.

-Clark Biegler

Posted in Budget Proposals, Economy | Leave a comment