875,000 Kentuckians to See a Cut in Food Assistance Beginning Today

end of ARRA SNAP cutsBeginning today, 875,000 Kentuckians will see their food assistance benefits cut when a temporary boost to the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) expires.

All of the more than 47 million Americans who receive SNAP will see their food assistance reduced. That’s because a modest boost in SNAP benefits—part of the 2009 American Recovery and Reinvestment Act (ARRA) designed to strengthen the economy and ease hardship—ends today. For a family of three, the cut will mean a reduction of $29 each month. Benefits will now average less than $1.40 per meal.

Recent work from the Center for Budget Policies and Priorities estimates a loss of $94 million in food stamps for Kentuckians between now and September of 2014 (the end of the federal fiscal year). Of the 875,000 Kentuckians affected, the cuts will fall on:

  • 343,000 children who live in households receiving SNAP;
  • 207,000 elderly or people with disabilities;
  • 28,100 veterans.

The end of the small ARRA increase in SNAP benefits will be hard on struggling Kentuckians. The boost has provided an important stepping stone during the deep economic recession and slow recovery, helping families keep food on the table as they look for employment, send their children to school, and try to get back on their feet.

In addition to helping to feed hungry families, SNAP is one of the fastest, most effective ways to stimulate a struggling economy. Every $1 increase in SNAP benefits generates about $1.70 in economic activity.

On top of the cuts going into effect today, the U.S. House of Representatives recently passed legislation cutting $40 billion from SNAP, potentially eliminating assistance for at least 88,000 Kentuckians and nearly 4 million nationwide. The legislation would provide strong financial incentives for states to reduce their caseloads, making it harder for families to put food on the table, and would eliminate assistance for some of the poorest Americans. The House plan for SNAP coupled with today’s cuts would deal a significant blow to millions of Americans.

Contrary to arguments being made for the additional House cuts–that SNAP is bloated with fraud and waste–SNAP’s payment accuracy is at an all-time high. Growth in enrollment and spending is temporary, and proves that SNAP is working as it should to help households in hard economic times. The majority of SNAP recipients who are able to work do so, and for those who can’t find a job, SNAP helps them keep afloat. Congress should not further reduce this already modest assistance to struggling families.

Stimulus Expiration Means Cuts for Food Assistance Program

Budget Cuts Further Widen Education Funding Gaps

Cuts to state and federal funding for education are leading to greater reliance on local revenue sources and exacerbating funding inequity between school districts, as described in a Louisville Courier-Journal story today.

Less reliance on state and federal money means a growing gap in resources due to the way in which schools are funded. Each district relies on a mix of federal, state and local dollars. For Kentucky as a whole, 46 percent of school funding is from the state, 39 percent is from local revenue and 14 percent from the federal government.

But the mix differs greatly depending on local wealth in districts; poorer districts rely more on state and federal funding than do wealthy districts. At the state level, SEEK (the main formula used to allocate monies to local schools) gives greater revenues to those localities less able to generate local dollars given the same tax effort. The table below shows the variation in reliance on local funds. Only 12 percent of the Wolfe County school district’s funding comes from local revenues, whereas 84 percent of funding for Anchorage Independent (located in suburban Jefferson County) comes from local sources.

percent school revenue from local tax effort

Source: KCEP analysis of Kentucky Department of Education data

State funding through the SEEK formula has been basically flat since 2008, but is down 9.9 percent over that time period after accounting for inflation and growth in student enrollment. State funding for other areas like textbooks, professional development and afterschool services are down 39.5 percent even before taking inflation and student population growth into account.

As the Courier-Journal story points out, many districts have responded to the cuts by raising local taxes. But school districts in faster-growing counties can generate more new revenue than those in slow-growing counties for the same tax increase.

Districts also vary widely in their reliance on federal dollars. 36 percent of Owsley County’s funds come from federal sources, whereas only 2 percent of Anchorage Independent’s monies come from the federal government. Poorer districts also get more in per-pupil dollars than richer districts do. Owsley County received $4,978 per student in federal money in 2013 while Beechwood Independent in Kenton County received $400. That’s because a large portion of federal K-12 education monies are for two areas that help poorer districts more: Title 1 programs that serve students from disadvantaged backgrounds and special education.

Federal budget cuts through the Budget Control Act (including sequestration) are slicing funding for those programs. After adjusting for inflation, there’s 12 percent less in Title 1 money in 2013 than there was in 2010 and 11 percent less in special education funds.

The gap between rich and poor school districts has been widening gradually in recent years. In 1990, the state greatly narrowed the gap by creating SEEK as part of the Kentucky Education Reform Act (KERA). KERA was the legislature’s response to the 1989 Kentucky Supreme Court decision declaring the entire state school system unconstitutional in part because of funding inequity. As the graph below shows, the gap between rich and poor districts has been slowly growing after dropping dramatically right after SEEK was created. The difference in per pupil state and local spending between the richest 20 percent of school districts and the poorest 20 percent of districts is 40 percent higher in 2010 than it was in 2000.

gap in per pupil state and local revenues

Source: Office of Education Accountability 2011 School Finance Report

Cuts to school funding don’t just harm the adequacy of resources to provide quality education. They also undermine the goal of equal opportunity for every child.


Food Stamps for Kentucky’s Fast Food Workers?

Kentucky School Districts Turn to Local Taxes in Search of Funds

Kentucky Among States with Biggest Coverage Assistance from Health Reform

Kentucky is one of three states in the nation where more than four out of five of the uninsured will be eligible for health coverage assistance under the Affordable Care Act (ACA), according to a recent study by the Robert Wood Johnson Foundation and the Urban Institute.

The report estimates that 81 percent of Kentucky’s uninsured are or will be eligible for assistance through Medicaid and the Children’s Health Insurance Program (CHIP), subsidies to buy coverage on the health exchange or subsidies to small firms to purchase coverage (see graph below for details). That ties Kentucky with Michigan and West Virginia for the biggest assistance eligibility rate in the country.

Governor Beshear’s decision to expand Medicaid plays a big role in the result. Without Medicaid expansion, the report says, only 41 percent of Kentucky’s uninsured would be eligible for assistance.

States like Kentucky that will especially benefit from the ACA have low rates of insurance coverage currently and a large percentage of people whose incomes are low enough to qualify for subsidies when purchasing insurance through the exchange. They also have a relatively small number of non-citizens; undocumented immigrants and some legally-resident immigrants are not eligible for assistance through the ACA.

Overall, the report estimates that Kentucky will experience a 54 percent decrease in its uninsured population because of the ACA, a bigger reduction than all states but West Virginia, North Dakota and Michigan. The report also notes that 75 percent of those who are expected to remain uninsured in Kentucky are actually eligible for either Medicaid/CHIP or subsidies to buy insurance through the exchange. That makes Kentucky among the states with the best potential to increase coverage rates even further through effective outreach and public education efforts.

81 percent of Kentucky's uninsured eligible under ACA_0

Source: Robert Wood Johnson Foundation/Urban Institute

Kentucky Fast Food Workers Struggle with Low Wages While Industry Does Well

Kentucky’s 32,000 frontline fast-food workers make such low wages that 46 percent of them qualify for low-income public assistance programs at a cost of $115 million in 2011, according to a new report released today by researchers at the University of Illinois and University of California-Berkeley.

The report shows that the low wages of non-managerial fast food workers make them twice as likely as all workers to participate in income-based public assistance programs. In Kentucky in 2011, 44 percent of fast food workers received the earned income tax credit, 11 percent participated in Medicaid, 17 percent had children in Medicaid or CHIP and 24 percent received SNAP benefits, formerly known as food stamps.

These programs are a critical part of our safety net, playing a key role in helping those in economic distress meet basic needs and make their lives better. However, costs for these programs are higher when large, profitable corporations who can afford to pay their workers more simply do not do so.

According to another new report, the nation’s seven biggest fast-food companies made a combined $7.4 billion in profits last year, paid $53 million in salaries to top executives and distributed $7.7 billion in dividends and buybacks to shareholders. YUM! Brands, headquartered in Louisville and the nation’s second-largest fast food company, made $1.59 billion in profits last year, and its CEO brought in $14.1 million in total compensation.

The median wage for fast food workers nationally is $8.69 an hour, and many make at or near the minimum wage–the real value of which has eroded over the years. An estimated 87 percent of fast food workers don’t receive health benefits through their employer.

The report notes that the nature of the recovery means many people are struggling in low-wage jobs. While 60 percent of job losses in recent years have been in middle-wage jobs, only 20 percent of post-recession job growth has been in such jobs. Low-wage positions like those in fast food make up nearly three out of five jobs generated in the first three years of the recovery.

Federal Budget and Debt Ceiling

Revenue Forecast for Next Budget Remains Weak

Today the official group charged with forecasting state revenue again approved a very modest General Fund revenue estimate for the upcoming two-year budget. Compared to the draft forecast they chose in August, the new estimate assumes $59.5 million more revenue in 2014 and $29.6 more in 2015, but $23.9 less in 2016.

Higher than expected growth in the sales and corporate income tax in the last couple of months contributed to the slight improvement in expected revenue this fiscal year and next year. Recovery in the housing market and high corporate profits are factors likely causing this growth. But the tone of today’s conversation was far from optimistic—general uncertainty about the economy and the coal severance tax in particular led the group to express caution. Today’s estimates are preliminary, and the Consensus Forecasting Group will meet again in December to come up with final estimates lawmakers will use in crafting the new budget.

The weak forecast means that the serious gap remains between the resources the state will have and the basic costs it will face in the next budget. In fiscal year 2015, the state will need more than $400 million in new dollars to make the full payment toward its pension liability, replace one-time funds used to balance the current budget and cover inflation in health care prices. Plus it will need substantially more revenue to address new needs and begin restoring some of the $1.6 billion in cuts that have been made to education, health and other essential public services over the past seven years.

But today’s forecast predicts just $229.5 million in new revenue in 2015, growth of 2.4 percent. It projects $221 million more in 2016, growth of 2.3 percent.

Continued slow recovery from the Great Recession and federal budget cuts enacted under the Budget Control Act of 2011 (including sequestration) are setting back economic growth and thus constraining revenue.

But a slow-growing economy is not the only reason revenue will be short in the coming biennium. Due to structural problems with Kentucky’s tax system, the state’s General Fund is continuing to erode as a share of the economy. That means even in good economic times, revenue is not keeping up with the cost of sustaining current investments in schools, roads, police and the other public services that we all depend on.

Without good tax reform that brings in more revenue, the state will have to cut even more deeply the investments that grow our economy and improve our quality of life. The Blue Ribbon Commission recommended a set of reforms that, taken as a whole, would generate $659 million in new revenue a year and make future revenue growth more sustainable. But the legislature is yet to make a commitment of whether or how it will consider such ideas in the upcoming legislative session.

Kentucky Scores Poorly in Report on Women’s Well-Being

women make 76 cents-250x172Kentucky gets a D+ and ranks behind two-thirds of other states in terms of women’s status, according to a recent report by the Center for American Progress. The detailed report card breaks down indicators of women’s well-being in the areas of economic security, health and leadership. It also points to key policies and priorities that would benefit women, their families and Kentucky’s economy at large.

Economic Security (grade D)

  • For every dollar that a white man makes in Kentucky, women make 76 cents (the national wage gap is one cent narrower). With many women as sole- or joint-breadwinners in their households, suppressed earnings have tangible effects on families’ ability to make ends meet.
  • 20.9 percent of women and girls in Kentucky live in poverty, giving our state the fifth highest poverty rate for women in the nation. Even worse, 38.6 percent of African American women in Kentucky live in poverty.

State and federal policy changes could lift the economic status of women. The 2013 Fair Minimum Wage Act—which proposes to raise the minimum wage to $10.10 an hour—would especially benefit women since more than half (56.5 percent) of the Kentucky workers affected are women. Likewise, while few states mandate paid family, disability and sick leave, enacting such policies in Kentucky would allow all workers but particularly women to deal with major personal and family occurrences without risking economic insecurity. Access to high-quality, affordable childcare also directly impacts women’s economic security and their children’s success. On the other hand, cuts to programs like Kentucky’s Child Care Assistance harm women’s ability to obtain and hold jobs that provide family-sustaining wages.

Health (grade C+)

  • 16.2 percent of nonelderly women in Kentucky do not have health insurance.
  • TRAP laws (Targeted Restrictions on Abortion Providers) regulate women’s health centers to the point of forcing their closure, limiting women’s constitutionally mandated access to safe, legal abortion.
  • There is one OB-GYN for every 4,095 women in Kentucky (better than four out of five states).
  • There are 6.8 deaths for every 1,000 infants born in Kentucky (worse than three out of five states).

While many low-income pregnant women in Kentucky are eligible for Medicaid during pregnancy and for two months after, research shows that women who have health insurance prior to and between pregnancies are healthier during pregnancy, and so are their babies. Kentucky is already taking a significant step towards better health—and therefore better economic security—for women with and without children by expanding Medicaid.

Leadership (grade F)

  • Kentucky ranks 48th in the nation in terms of women’s representation in leadership roles. None of our US congressional seats, only 12.5 percent of statewide elected executive seats, and 18.1 percent of seats in our state legislature are held by women.
  • None of the aforementioned seats are held by minority women.
  • Women make up about 52 percent of Kentucky’s population, but hold just over 38 percent of management positions.

While women are not legally barred from elected office or management positions, institutional and cultural sexism—as well as the economic and health factors explored in the report—limit women’s ability to climb the ladder.

Kentucky has progress to make in improving the status of women. Poor economic security, limited access to the kinds of care that women need and underrepresentation in leadership roles comprise a vicious cycle that keeps women from greater well-being. But good policies can help transform a vicious into a virtuous cycle that benefits women and our state.