Study finds low wages will challenge budget initiatives on public assistance

by Policy Matters Ohio on July 22nd, 2014
For immediate release
Contact: Wendy Patton: 614.221.4505
Download press release (1pg)
Full report

The Mid-Biennium Review created five initiatives to help public assistance recipients get jobs and reduce reliance on public assistance, detailed in a new report by Policy Matters Ohio.  “The context of these initiatives is a low-wage economy that leaves many working families in poverty, a worrisome increase in deep poverty and a set of public assistance programs that have already been reduced or narrowed,” said Wendy Patton, Senior Project Director and report author. “Outcomes may help struggling families, or hurt,” Patton said.

The report, Public Assistance Initiatives in 2014 Ohio Budget Bill: Will they help Ohio families? finds that a single parent with an infant and a preschooler who works in almost any one of Ohio’s 12 largest occupational groups – like cashier, food service worker, or home health aide – may live in or close to poverty.  The cost of self-sufficiency for a family like this is twice the poverty level or higher in most Ohio counties.  Public assistance helps close the gap between earnings and need for hundreds of thousands of Ohio families. 

Public assistance programs also help to address the rising level of deep poverty, in which families live at half the poverty level or less.  Ohio saw the third largest jump in such poverty among the states between 2000 and 2012.

The report finds that in key programs of public assistance other than health care, caseloads have been reduced and eligibility narrowed. Enrollment in Ohio Works First – cash assistance – has declined by 71.3 percent for adults and by 40.2 percent for children since January 2011, in spite of the increase in deep poverty.  In 2013, Ohio refused a waiver of federal rules for 72 of 88 counties. The waiver would have allowed more adults to receive food aid.  In the fiscal year 2012-13 state budget, the income eligibility level for childcare assistance was lowered from 150 percent of poverty to 125 percent, one of the lowest eligibility levels in the nation.

“The initiatives on public assistance could help families in the low-wage economy, but such outcomes may be elusive,” said Patton. “We have too few good jobs and we have been too quick to slash the safety net that helps families survive in this economy.”

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Policy Matters Ohio is a nonprofit, nonpartisan state policy research institute

with offices in Cleveland and Columbus.

Amy Hanauer at to speak at City Club July 25th. Register Now.

by Policy Matters Ohio on July 10th, 2014

Let’s create an Ohio economy that works…for all of us.

Policy Matters Ohio director Amy Hanauer to deliver the Friday Forum this July 25th at the City Club of Cleveland.

Join us. Register now.

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New Ohio Tax Cuts Go Mostly to Wealthiest

by Policy Matters Ohio on July 2nd, 2014
For immediate release
Contact: Zach Schiller, 216.361.9801
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Full report

Report also details tax breaks in the Mid-Biennium Review

Most of the more than $400 million in tax cuts this fiscal year in the budget bill recently approved by the Ohio General Assembly will go to affluent Ohioans, according to a report issued today by Policy Matters Ohio. While the lowest-income Ohioans on average will see a tax cut for 2014 of just $4, the top 1 percent will average more than $1,800 each.

An analysis of the major tax changes for Policy Matters by the Institute on Taxation and Economic Policy, a Washington, D.C., nonprofit research group with a sophisticated model of the state and local tax system, found that half of the one-year tax cut will go to the top 5 percent of Ohio earners.

“The Mid-Biennium Review also continues an unfortunate Ohio tradition of permitting or enlarging tax benefits to special, narrow groups of taxpayers,” said Zach Schiller, Policy Matters Ohio research director and author of the report. “We should review the tax breaks we have now.”

Among the provisions in the MBR bills is one that will allow investors to more easily receive tax credits for investments in small companies, which merely have to keep paying existing employees for investors to qualify. Another expands a recently approved property-tax break so it likely covers the Moose fraternal organization.

“Instead of more tax cuts, we should restore and expand funding to local governments, public schools, health and human services, and post-secondary education,” Schiller said.

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Policy Matters Ohio is a nonprofit, nonpartisan state policy research institute

with offices in Cleveland and Columbus.

 

Cuts and Breaks

by Policy Matters Ohio on July 2nd, 2014

Most of the $400 million-plus in tax cuts for Fiscal Year 2015 will go the affluent. The Mid-Biennium Review also continues with an unfortunate Ohio tradition of permitting or enlarging tax benefits to special, narrow groups of taxpayers.

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June 2014 Ohio CASH E-news

by Policy Matters Ohio on July 1st, 2014

Ohio CASH 2nd Quarter Meeting Follow-up

The June 19 Ohio CASH quarterly meeting discussed crucial advances and setbacks in county, state, and Supreme Court action related to helping low-income families save. Ken Surratt of the Cuyahoga County Savings Plan discussed the county’s groundbreaking work in starting a college savings plan and described some challenges and best practices for implementation.  Linda Cook of the Ohio Poverty Law Center presented a brief history of payday lending in Ohio and discussed the recent extremely troubling Ohio Supreme Court decision on payday lending.  Kalitha Williams of Policy Matters Ohio spoke briefly about the expansion of Ohio’s state earned income tax credit from 5%  to 10% — while expansion is positive, because the credit is still not refundable,  it will do little to help the poorest working Ohioans. 

Download Ken Surratt’s college savings plan presentation slides

Download Linda Cook’s history of payday lending presentation slides

Follow up on Employment Credit Checks

On June 10, Ohio CASH hosted Discredited: Employment Credit Checks,  a webinar focused on a growing hiring practice that keeps qualified workers from getting jobs. Amy Traub of the national think tank Demos shared research discussing this growing problem.  Melissa Broome of the Job Opportunities Task Force discussed how advocates passed legislation to eliminate the practice in Maryland. Kalitha Williams of Policy Matters asked participants to join an effort to address the issue through pending legislation in Ohio.

Download Ohio CASH’s Discredited webinar presentation slides

News from CFED

CFED, a national organization focused on asset building and financial stability, hosted The Nuts & Bolts of a Financial Coaching Program,  a webinar on financial coaching as a strategy for helping low- and moderate-income individuals build financial capability. The presenters talked about what financial coaching is, described the options for training financial coaches, conducted a live demonstration, and answered some great questions from participants.  You can view the webinar here and the slides here.

CFED and the Assets & Opportunity Network are hiring! There are two positions open and they are both based in  Washington, DC:   

The Senior State & Local Policy Manager will lead a new multi-state policy advocacy initiative.  

×          The State & Local Policy Manager will research and analyze existing policies and practices, and explore policy innovations.            

The 2014 Assets Learning Conference, Platforms for Prosperity, will take place September 17-19, 2014 in Washington, DC. Mark your calendars and stay tuned for details.  The conference is sponsored by the Corporation for Enterprise Development (CFED), a multi-faceted organization working at the local, state and federal levels to create economic opportunity that alleviates poverty.  CFED is the leading national asset building organization.  The conference will convene asset building practitioners from all over the country. 

Scammer gets $1.5 million in tax refunds 

A federal judge sentenced a Columbus man to 11 years in prison for setting up fake charities to steal identities and using those identities to steal $1.5 million in tax refunds.  The judge found that the suspect stole the identities to file more than 500 fake income-tax returns online between January 2010 and February 2013 and then kept the refunds.

The scam started with an advertisement for a fake charity that offered to provide financial help to people in need.  Those who contacted the charity were asked for  names and Social Security numbers, which were used to file the illegal returns without their knowledge.  

Read the full article here 

Share Your News with Ohio CASH

If you have any news you would like to share with the Ohio CASH network for release in a future E-news, please send it to Kalitha Williams at kwilliams@policymattersohio.org

 

Severance Tax Changes Don’t Meet Ohio’s Needs

by Policy Matters Ohio on June 17th, 2014

Fracking costs local communities big, and HB 375 severance taxes are too small; to allay public expenses, implement a five percent plus severance tax on the value of all oil and gas drilled, close the loopholes, add a 2.5% fee for community redevelopment and a backstop against possible environmental damage.

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Ohio Supreme Court Drops the Ball on Payday Lending

by Policy Matters Ohio on June 16th, 2014

Ohio’s Supreme Court voted last week to allow payday lenders to skirt legislation capping interest rates at 28% APR, and continue charging triple digit rates, trapping borrowers in a cycle of debt.

Policy liaison Hannah Halbert had this to say about the ruling:

“Payday lending creates a vicious cycle of debt that threatens the financial security of Ohioans and our communities. Today, the Ohio Supreme Court failed to put Ohio consumers first by allowing payday lenders to continue to skirt protections of the Short-Term Lender Act. Policymakers must act to fix the law.”

Read similar concerns voiced by consumer advocates here.

Over the past seven years, Policy Matters Ohio has conducted studies showcasing the adverse impact of the industry on Ohioans.  Check out our research and testimony:

Kalitha Williams’ Testimony: Enforce payday-lender laws and let communities protect residents, May 2014

Keys for Collateral: How auto-title loans have become another vehicle for payday lending in Ohio, December, 2012

Trapped in Debt: The Growth of Payday Lending in Ohio, February 2007

 

 

 

 

 

Flawed Cuts

by Policy Matters Ohio on June 5th, 2014

In this eNews:  Some good in HB 483, but flawed cuts divert millions from crucial services to Ohio’s hightest earners and the expanded EITC won’t reach those who need it most; Policy Matters explores the potential EITC impact on Cleveland’s Promise Neighborhood;   we make the news; like us on facebook and follow us on twitter; and join Executive Director Amy Hanauer at the City Club for a talk on making Ohio’s economy work…for everyone.

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Federal EITC boosts Cleveland’s Promise neighborhood

by Policy Matters Ohio on May 30th, 2014

 

For immediate release
Contact Hannah Halbert, 614.221.4505
Download press release
Full report

Report makes proposals to fix Ohio’s earned income credit

 The Central Promise neighborhood is $5.7 million more prosperous thanks to the federal Earned Income Tax Credit, which helped an estimated 1,900 low-wage working families and individuals in the community make ends meet, according to a new report from Policy Matters Ohio.

But many families in the neighborhood will see no benefit from Ohio’s Earned Income Tax Credit (EITC) because of its significant shortcomings. Ohio lawmakers can help Central Promise’s effort to create a community where every child can have college and career success by making improvements to the state EITC, which supplements the federal credit.

“The federal EITC supports the mission of the Promise Initiative,” said Hannah Halbert, report author and researcher with Policy Matters Ohio. “Kids in EITC families that receive larger EITC credits tend to have higher test scores, higher graduations rates, and higher college attendance rates.”

Policy Matters’ report looks at the impact of the federal and state EITCs on the Promise neighborhood. Tax filers who claimed the federal EITC in the neighborhood got an average credit of $3,001, which will help them afford necessities like childcare and transportation.

The Ohio EITC will have a much more limited benefit for the neighborhood. One of the main reasons is that unlike the federal credit, Ohio’s isn’t “refundable,” which allows those qualifying for the EITC to claim a modest refund if the credit exceeds what they owe in taxes. The median gross income of the Promise neighborhood is barely above the threshold for qualifying for Ohio’s low-income tax credit, which eliminates tax liability for taxpayers with taxable income less than $10,000. Because the Ohio EITC isn’t refundable, many of these families will see no benefit from it.

In addition, Ohio’s EITC is capped for those with taxable income over $20,000 and set at only 5 percent of the federal credit. Making it one of the weakest credits in the nation.

“The state credit should be better targeted to reach low-income working families,” said Halbert. “Making the credit refundable, increasing the amount, and dropping the cap would help keep more kids out of poverty.”

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Policy Matters Ohio is a non-partisan, non-profit policy research institute,

on the web at www.policymattersohio.org.

The EITC in the Promise Neighborhood

by Policy Matters Ohio on May 30th, 2014

To help families in Cleveland’s Central Promise Neighborhood, make Ohio’s EITC refundable and provide free tax prep infrastructure, which helps families keep all of their refund and begin saving.

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