Shriver Center: April 2005

FamilyCare's Final-Year Part of Budget Negotiations Would Extend Health Insurance Options to More Working Families

2006-07-13T16:23:47Z

Gov. Rod Blagojevich has proposed $5.75 million in state funds in his 2006 fiscal year budget for the FamilyCare program to fund fully the third and final year of his promised three-year phase-in plan for the program. The funds will leverage $11 million of federal funding next year for this expansion of health insurance. The budget is being negotiated in Springfield during May.

This budget allocation will increase FamilyCare’s eligibility ceiling, effective January 1, 2006 , from the current 133 percent of the federal poverty level ($25,000 for a family of four) to 185 percent ($35,000 a year for a family of four). Some 74,000 more parents will qualify for health insurance coverage, bringing the total potentially eligible for FamilyCare health insurance to 400,000.

The newly eligible group will also qualify for the “premium subsidy choice.” This group will be able to choose either to be covered by the state’s insurance (Medicaid) or to receive a cash subsidy to help pay the premium to be covered by an employer’s health insurance or private insurance.

FamilyCare offers these health insurance options for parents or caretakers of minor children (the children are already covered under Medicaid or KidCare). The federal government pays 65 percent of the program costs.

This last year of the FamilyCare ramp-up completes a promise made over two years ago, but some legislators are worried about expanding a program during a difficult budget year. However, the General Assembly has supported the governor on FamilyCare in each of the last two years, which were just as difficult budget years. Here are the leading reasons why FamilyCare is a priority deserving support in any kind of budget year:

Children benefit--they are more likely to be insured and more likely to use primary health care when their parents are insured.
Illinois gets unusually high 65 percent federal matching funds for FamilyCare.
The federal funds come from a “use it or lose it” annual allotment earmarked for Illinois but taken away if Illinois does not use it. On September 30, 2002, Illinois lost $159 million of its own money, which was given to other states to insure their families. FamilyCare keeps this federal money in Illinois.
FamilyCare helps working parents access primary and preventive health care, which keeps parents healthy, productive, and employed.It also helps families avoid the stress of debt and bankruptcy from medical bills.
FamilyCare completes welfare reform--without it, low-income working families with health care needs are punished for working by losing their health insurance coverage.
Employers benefit because workers are more productive.
FamilyCare helps control the cost of health insurance for employers. The premium subsidy option will help employees afford to stay in employer health plans. When these on-average healthier employees participate in health plans, those plans have a better actuarial performance, and this helps control premium increases.
FamilyCare decreases the uncompensated care burden on health care providers. With more people insured, more will be able to pay their medical bills.

This is an ideal positive initiative for the budget: smart leverage of federal dollars (which Illinois otherwise loses), help for workers and employers, help for children and families, and help for the stressed medical system.

McLean County Housing Crisis Averted; HUD to Restore $299,000 to Keep 64 Families in Voucher Program

2006-07-13T16:23:47Z

After advocates and Illinois’s congressional delegation campaigned to prevent 64 families from losing their housing in Bloomington-Normal, the U.S. Department of Housing and Urban Development (HUD) announced in midmonth that it would return the $299,000 in unspent reserve funds to the McLean Housing Authority. This should fund each family’s Housing Choice Section 8 Voucher for 2005.

For the past several weeks, the McLean Housing Authority, U.S. Sen. Richard Durbin, U.S. Rep. Tim Johnson, the National Housing Law Project, the Center on Budget and Policy Priorities, the Statewide Housing Action Coalition, and the Sargent Shriver National Center on Poverty Law had been advocating that HUD fully fund all 220 vouchers administered by McLean since 2004.

McLean had been forced to cut funding for 64 families because HUD underfunded McLean’s voucher program for 2005 by $360,000. HUD did not adjust costs when Congress intended it to do so in accord with the 2005 Consolidated Appropriations Act, Public Law No. 108-477.

Before December 2003, McLean administered only 22 vouchers. In late 2003, however, Lancaster Heights, a 198-unit multifamily housing complex subsidized under the Section 236 program, was sold, and the owner prepaid the federally subsidized mortgage. By law HUD was required to issue 198 “tenant protection” vouchers (also known as “enhanced vouchers”) in replacement. HUD asked and McLean agreed to administer the 198 new tenant protection vouchers. On December 15 HUD notified McLean about the funding for these vouchers. McLean’s total voucher level rose to 220 units.

About 120 of the 198 tenant protection vouchers were used by Lancaster residents to remain at Lancaster. With HUD’s approval, the remaining 78 vouchers were issued to very low-income families from the housing authority’s waiting list. By August 2004 McLean had leased all 220 vouchers.

The 2005 Consolidated Appropriations Act directs HUD to renew voucher funding for housing authorities for 2005 based on their leasing and cost data averages for May, June, and July 2004. The Act also directs HUD to adjust, as needed, the costs associated with first-time renewals of tenant protection vouchers. Congress recognized that such vouchers could not be leased and in use by the mandated May–July 2004 “snapshot” period for HUD to determine renewal funding.

McLean’s efforts to lease all of the new vouchers in 2004 were not honored by HUD when HUD determined McLean’s voucher funding for 2005. HUD used only the three-month snapshot formula with no adjustment to renew funding for all the new tenant protection vouchers that McLean leased in 2004. HUD funded only 165 vouchers at a low per-unit cost based on McLean’s leasing data from May–July 2004. McLean requested that HUD adjust the funds to include all the new tenant protection vouchers that McLean leased in 2004. HUD denied McLean’s request. McLean received $30,000 less per month from HUD than McLean needed for the housing assistance payments committed for the families. When McLean asked HUD what to do about the shortfall, HUD told McLean to terminate vouchers.

Nearly ten years ago, Congress established the Enhanced Voucher Program to protect tenants who lose their subsidized housing through no fault of their own and to keep the same number of subsidized housing units in the community. Until advocates intervened, HUD made a sham of tenant protection vouchers, leaving McLean no option but to terminate assistance for the families and expose them to homelessness.

McLean’s funding crisis differed from the funding struggles of other housing authorities across the country. The crisis in McLean came about because HUD refused to adjust funding to account for the tenant protection vouchers that McLean leased for the first time in 2004. HUD subverted Congress’ intent that funding be adjusted for vouchers not taken into account in the May–July snapshot renewal formula.

If McLean leases all of its vouchers in May, June, and July 2005, it should have sufficient funding for all 220 vouchers in 2006.

For more information, contact Kate Walz at 312.263.3830 ext. 232.

Illinois Asset Building Group Debuts with Release of Assets and Opportunities Scorecard

2006-07-13T16:23:47Z

The Illinois Asset Building Group (IABG), a new coalition of community leaders, service providers, researchers, advocates, and labor and business leaders, pursuing policy change to build the financial strength and economic success of families and communities in Illinois, will host, together with the Sargent Shriver National Center on Poverty Law and the CFED, policy briefings in Springfield and Chicago to discuss the results of CFED’s 2005 Assets and Opportunity Scorecard and its implications for Illinois. The Scorecard describes why assets are important, highlights national trends and key findings, grades and ranks states on asset outcomes in five areas (financial security, business development, homeownership, health care, and education), and analyzes state asset-building and tax policies.

The Scorecard is a valuable tool for IABG’s work because it comprehensively measures where Illinois stands in building and maintaining assets. Policymakers and advocates can use the Scorecard results to forge policies that help close the wealth gap between rich and poor and expand opportunities for low-income people to move up the economic ladder.

CFED, a national nonprofit organization working to expand economic opportunity, will release the national results on May 17. Partner organizations in five states, including Illinois, will conduct local Scorecard events to highlight the results in their states. A policy briefing and breakfast for legislators, policymakers, media, foundations, and community groups will be held on May 20 from 7:30 a.m. to 9:00 a.m. at the Executive Mansion in Springfield. The Federal Reserve Bank of Chicago will host a policy briefing on May 23 from 10:30 a.m. to noon as part of its annual MoneySmart Week activities. Both events will feature a new video, Building Savings and Ownership in America, about the history of public policies that help people move up the economic ladder and recent innovations such as Individual Development Accounts (IDAs) and universal children’s savings accounts. Attendance at the Scorecard events is by invitation only. If you would like to receive an invitation, contact Dory Rand at the Shriver Center by April 28 (see contact information below).

IABG identifies the following priority areas for policy advocacy: lifelong education and training; universal health insurance; financial security; affordable housing, homeownership, and utilities; small-business development; transportation; and tax policy. IABG members will cite examples of successful asset-building initiatives and policies in Illinois, analyze the Illinois Scorecard results and implications, highlight pending Illinois legislation and appropriations that would promote IABG goals, and discuss IABG plans as part of the Scorecard policy briefings.

IABG is cochaired by the Shriver Center and Heartland Alliance for Human Needs and Human Rights. For more information or to join IABG, contact Dory Rand.

Student-Run Bank Celebrates Grand Opening

2006-07-13T16:23:47Z

Student bankers and community leaders celebrated a new branch of the Park Federal Savings Bank at the Curie Metro High School with a grand opening ceremony on April 12. Arne Duncan, chief executive officer of the Chicago Public Schools, presided over the ribbon cutting.

Students from Curie’s Education To Careers ( ETC) accounting cooperative program operate the full-service branch of the bank, the first time in Illinois that students are running a full-service bank in a public high school. The Sargent Shriver National Center on Poverty Law’s Community Investment Unit initiated the ETC program. The Curie branch is the result of a partnership of the Shriver Center, the Park Federal Savings Bank, the Chicago Public Schools, private donors, the Federal Deposit Insurance Corporation, and the Center for Economic Education of the University of Illinois at Chicago.

Ten students in Curie’s ETC program have been trained and now work at other Park Federal Savings Bank branches as tellers, savings counselors, and teller supervisors. They serve as the Curie branch’s advisory board. The student bankers developed marketing strategies and helped set the branch’s policies, ranging from the hours of operation to the products and services to be offered.

“This is a great example of how schools can offer real-world experience that enables students to move into ‘high tech’ careers and college,” said Duncan. “It is a unique opportunity for those students to learn hands-on about the mainstream financial world.”

For more information, contact Dory Rand at 312.368.2007.

Housing-Related Bills Advance in Springfield

2006-07-13T16:23:47Z

Housing advocates are advancing bills to benefit Illinois families who need affordable housing. This year legislation has been introduced to build new affordable housing, to subsidize additional rental housing for low-income families, and to help improve the access of low-income families to existing housing. While advocates have scored some initial victories, more advocacy is required to ensure that this legislation will continue to move through the Illinois legislature.

Earlier this year the Illinois House Housing and Urban Development Committee passed the Source-of-Income Amendment to the Illinois Human Rights Act (House Bill 45) with a 14-to-1 vote (with one member voting present), and it now awaits a floor vote in the House. At present applicants for rental housing in many areas of the state are routinely rejected from rental housing solely because of the source of their income. The Source-of-Income Amendment would require landlords to consider the application of any tenant who can afford the unit, regardless of the tenant’s legal source of income, including child support, disability payments, and Temporary Assistance for Needy Families, as well as Housing Choice Vouchers and other rent subsidy programs.

The amendment has over eighty endorsing organizations and strong bipartisan support, including thirty-one House cosponsors led by Reps. Karen Yarbrough (D-Maywood) and Paul Froehlich (R-Schaumburg). The deadline for consideration of the amendment has been extended, and housing advocates expect important votes in the House and Senate in May. In the meantime, readers are encouraged to contact their House and Senate legislators and ask that they support H.B. 45 since this legislation is vital to many low-income families and persons with disabilities.

On April 14 the Senate passed the Rental Housing Supportprogram (Senate Bill 75), which would subsidize up to four thousand units of housing for very low-income families throughout the state and would be funded by a nominal $10 state surcharge on all real estate documents filed at offices of the county recorder of deeds. This year the program has been redesigned slightly to exempt state agencies from paying the surcharge. The Senate passed S.B. 75 by a 36-to-22 vote (with one member voting present). Sen. Iris Martinez (D-Chicago) sponsored the bill; Reps. Julie Hamos (D-Evanston) and Terry Parke (R-Schaumburg) are leading the bipartisan support for the bill in the House. S.B. 75 has now been referred to the House Rules Committee, and readers are urged to contact their legislators to ask them to help this bill get to a floor vote.

The Senate also overwhelmingly passed S.B. 966, an amendment to the Affordable Housing Planning and Appeals Act originally passed in 2003 to encourage local municipalities to enact zoning plans to create and preserve affordable housing or to subject their zoning decisions to appellate review by a state board of zoning appeals. The amendment, sponsored by Sen. Susan Garrett (D-Highwood), provides for additional tools for non-home-rule municipalities to meet their affordable-housing production goals, including local housing trust funds and community land trusts. It also enables municipalities to enter intergovernmental agreements with neighbors to pool affordable housing resources. After passing with a 52-to-2 vote in the Senate, S.B. 966 now moves to the House, where Rep. Karen Yarbrough (D-Maywood) becomes its chief sponsor.

The Illinois House also passed legislation (H.B. 603) to extend the state’s Donations Tax Credit program by five years, through 2011. The program, previously set to expire in 2006, provides tax credits (50 cents for each dollar donated) for taxpayers who specifically donate to affordable housing developments. Since 2001 the program has funded 92 proposals totaling over 6,200 units of housing throughout the state. Sen. William Peterson (R-Buffalo Grove) is now sponsoring H.B. 603 in the Senate.

For more information, contact Raj Nayak at 312.263.3830 ext. 243.

Illinois's TANF Caseload Remains Among Lowest in Nation

2006-07-13T16:23:47Z

The National Conference on State Legislatures (NCSL) recently put Illinois on its “TANF watch list” because Illinois is one of only two states to have increased their Temporary Assistance for Needy Families (TANF) caseload over the past year. The NCSL’s designation became a political issue at a recent Illinois Senate Appropriations Committee hearing on the pending request of the Illinois Department of Human Services (IDHS) for a supplemental appropriation to cover, in part, costs arising from the unanticipated growth in the TANF caseload. The Blagojevich administration was criticized for increasing welfare dependency when welfare use is falling virtually everywhere else.

The NCSL had reported in the March 9, 2005 issue of Welfare Caseload Watch that Illinois’s TANF caseload grew by 10.8 percent between January 2004 and January 2005. During this time the number of families on TANF increased by just over 4,000 families, from 38,300 to 42,429 families.

While the NCSL report highlights the recent growth in the Illinois TANF caseload, the report also contains historical data and analysis that put Illinois’s modest recent TANF caseload growth in context. Over the past ten years, Illinois has reduced its TANF caseload by 82.4 percent, from a 1994 average of 241,339 families to 42,429 families in January 2005. Thus the past year’s increase of 4,000 families represents only 2 percent of the past decade’s decrease in the TANF caseload of 200,000 families.

Moreover, Illinois ranks third in the nation in TANF caseload reduction since 1994, even with the past year’s modest increase. Illinois has reduced its TANF caseload far more than comparable states. Among Midwestern states, while Illinois has reduced its TANF caseload by 82 percent since 1994, Indiana has reduced its caseload by 37 percent, Missouri by 49 percent, Michigan by 64 percent, and Wisconsin by 72 percent. Among states of comparable sizes, while Illinois has reduced its TANF caseload by 82 percent since 1994, Pennsylvania has reduced its caseload by 52 percent, Ohio and Texas by 66 percent, and Florida by 73 percent. The NCSL and others compare 1994 caseloads with current caseloads because state TANF block grants are based on 1994 spending levels.

Illinois’s modest caseload growth over the past year is comparable to increases in other states during the worst of the national recession in 2001–2002, when Illinois’s caseload was still falling. According to the NCSL, Illinois is in the middle of the pack when its current TANF caseload is compared with the month when its caseload was at a historic low.

The policies that produced historic TANF caseload reductions remain in effect. There have been no program changes that would account for the recent caseload growth. The only program change of consequence—removal of the family cap on children born after January 1, 2004—accounts for no more than 15 percent of the added TANF funds requested as part of the supplemental appropriation, according to IDHS.

The past year’s modest and historically insignificant increase in the TANF caseload is the product of real, dire need in Illinois, where 373,000 more people live in poverty than in 2000, an increase of 31 percent.

Illinois’s TANF program continues to serve a smaller percentage of the poor than the TANF programs in other Midwestern states. Although Illinois has the highest poverty rate in the Midwest, it has the lowest percentage of poor families that receive TANF. Just 18 percent of Illinois families in poverty receive TANF, compared with Wisconsin with 27 percent, Michigan with 43 percent, Missouri with 46 percent, and Indiana with 60 percent.

As a temporary measure IDHS recently transferred $9.8 million from the child care budget to cover TANF shortfalls. IDHS should uphold its commitment to restore these funds to the child care program. There is no longer a direct correlation between spending on the TANF and child care programs. According to the Illinois Families Study, TANF recipients are as likely as working poor, non-TANF families to receive child care assistance so that they can work or participate in required work-related activities. This is to be expected since the number of families that are in poverty and are neither working nor on welfare has more than doubled in recent years.

Welfare and child care advocacy organizations are calling for increased TANF funding to meet the recent growth in need and for restoration of the funds temporarily transferred from the child care program. These organizations include Action for Children, Chicago Jobs Council, Heartland Alliance for Human Needs and Human Rights, Sargent Shriver National Center on Poverty Law, Voices for Illinois Children, and Work, Welfare, and Families.

For more information, contact Dan Lesser at 312.368.2005.

U.S. Senate Introduces Legislation to Provide Long-Term Savings Account for Every Child

2006-07-13T16:23:47Z

Legislation that would provide every American child with a long-term savings account was introduced in the U.S. Senate this month by Senators Rick Santorum (R-PA), Jon Corzine (D-NJ), Chuck Schumer (D-NY), and Jim DeMint (R-SC). The America Saving for Personal Investment, Retirement, and Education (Aspire) Act would provide a $500 savings account for every child who is born after December 31, 2006, and who is issued a social security number. Children whose families earn less than the national median income would have their “Kids Accounts” supplemented with up to an additional $500 and would receive a dollar-for-dollar match on private contributions, up to $500 per year until they turn 18 years old.

The bill was praised by CFED, the national nonprofit organization working to expand economic opportunity, as a bold strategy for combating childhood poverty. CFED is currently managing a program of experimental children’s accounts in communities across the country. CFED and its partners are testing similar accounts through the SEED (Savings for Education, Entrepreneurship, and Downpayment) program, a matched savings program for children at 12 sites in various states and Puerto Rico. The SEED program is working to give information on how children will be able to save through a program such as Aspire and how these programs can best be administered.

The Sargent Shriver National Center on Poverty Law is one of the 12 SEED partners that are offering an incentive for parents to save for their children. Now in its second year in SEED, the William M. and Charles H. Mayo Elementary School in Chicago educates 75 elementary school students between 6 and 10 years old in addition to their parents.

“As members of Congress look at Aspire as a serious proposal to provide opportunity for America’s next generation, they will rely on SEED to provide insight into how such a program can work and what impact it can have on individual children, their families, and entire communities,” said Andrea Levere, president of CFED. “The Aspire Act is the best proposal in years to give every child the chance for economic security,” she added.

For more information and related links regarding the Aspire Act, see www.assetbuilding.org and www.cfed.org. For more information on the Shriver Center’s SEED program, contact Nancy Wilson at 312.368.1073.

Comments Needed on Proposed Community Reinvestment Act Rules

2006-07-13T16:23:48Z

New rules for banks with assets between $250 million and $1 billion would weaken the Community Reinvestment Act ( CRA). The regulators proposing the rules—the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of Currency—must hear that you are against the weakening of the CRA. For contact information on the regulators as well as sample comment letters for community organizations and concerned citizens, see www.ncrc.org/policy/analysis/policy/FDICOCCFED_proposal.php. The comment period ends on May 10.

While the changes in the CRA are significantly better than those proposed in the fall, serious issues remain. One concern is that the number and location of bank branches will no longer be a criterion for compliance with the CRA. This would reduce the number of mainstream financial institutions in low-income communities. Another problem is that bank services will be evaluated under an examination that will not measure how often products and services targeted toward low-income people actually reach their intended clientele. Also, the new rules include reductions in publicly available data; this would make it difficult to discover if institutions are meeting the needs of small businesses, farmers, or affordable-housing and community development lending. The proposed elimination of the separate investment test would most likely result in lower levels of investment in underserved communities.

The CRA is a vital tool for organizations trying to expand economic opportunities in low-income communities. Community organizations often use the CRA as leverage to get the much-needed support of financial institutions.

For more information on the CRA, go to www.ncrc.org or contact Hannah Avellone at 312.368.8575.

Nonprofit Organizations Invited to Conduct FLLIP's Financial Education Program

2006-07-13T16:23:48Z

Nonprofit organizations located in northern Illinois and interested in offering a financial education program should attend the Sargent Shriver National Center on Poverty Law’s free capacity-building seminar in Sycamore, Illinois, on May 3. The daylong seminar will teach organizations how to write quality grant proposals, discover untapped resources, develop relationships with banks, and become the Shriver Center’s partners in delivering the Financial Links for Low-Income People (FLLIP) financial education program to low-income adults. The seminar will be held in the auditorium at the Center for Agriculture, University of Illinois Extension DeKalb Office, at 1350 West Prairie Drive in Sycamore.

At a bankers’ luncheon the next day financial institutions in northern Illinois will learn about how to support local financial education programs. Sponsored by National City, the luncheon will be held at Johnny’s Charhouse at 1950 DeKalb Avenue in Sycamore.

The FLLIP coalition aims to expand access to financial education and asset-building opportunities for low-income people. For more information, contact Hannah Avellone at 312.263.3830 ext. 239.