September « 2011 « Policy Matters

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Job Watch: A Tale of Two Sectors

September 30, 2011

Filed under: Income & Working Families,Jobs,September Job Watch — admin @ 9:00 AM

In total, Mississippi still has 61,400 fewer jobs than it did at the end of 2007.
The following post focuses in on the last two years and reviews public and private sector employment changes.

Overall, August’s job report showed little improvement in employment across the country. News of limited job growth has been followed by debate over what additional action can be taken to spur job creation and ensure families impacted by periods of unemployment have the resources they need to provide economic security for their families.

Over the last two years, Mississippi’s overall employment has not advanced substantially. However, the state has experienced an uptick in private sector employment- adding 5,400 jobs since July 2009 with growth throughout most of 2010. Private sector growth has occurred in industries like health care, transportation and business services. In contrast, manufacturing employment and construction employment continue to be at lower levels than two years ago.

While private sector employment subtly advances, public sector employment has fallen by an equal amount. Since July 2009, 5,200 jobs in local and state government have been lost as communities are forced to layoff individuals providing key services because of limited resources. Combining private sector and public sector jobs reveals little change in overall employment across the state since July 2009.

MEETING THE DEMANDS OF WORK, TRAINING AND FAMILY

As the private sector adds employment and shows job openings, training at community colleges can be a key vehicle to employment pathways with wages sufficient to keep a family safe and secure financially. However, adults balancing work and school may have to cut back work hours to attend class and find additional resources for added transportation and child care costs. Across Mississippi, many adults enroll and are academically prepared for courses but struggle to meet the costs of taking classes beyond tuition. To ensure adults can return to school to update skills, pursue new careers, and advance in the workforce, colleges need resources specifically targeted for child care, transportation, and broader wrap-around supports.

Beyond training, local governments will need to restore investments in jobs and public services that are now downsized in the wake of the economic downturn. Without adequate local resources for public investments, job loss in the public sector may weaken the state’s ability to recover the 64,100 jobs it still needs to reach pre-recession levels.

Author: Sarah Welker, Policy Analyst

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COMMUNITY COLLEGE BUDGET REQUEST INCLUDES FUNDS TARGETED AT LOW-SKILLED ADULTS

September 28, 2011

Filed under: Budget Hearings FY 2013,Education,FY 2013,Income & Working Families,Workforce — admin @ 8:16 AM

Mississippi’s community and junior colleges provide a wide variety of courses to students of all ages- academic, career tech, basic education and workforce courses. In fall 2010 and 2011, headcount enrollment in academic and career tech classes surpassed 80,000 students. Dr. Clark and the MS Community College Board requested $88.4 million more for FY2013 than the $188 million received last year. In total, the board and 15 colleges are hoping for $267.7 million from the state general fund.

Student tuition represents a substantially larger portion of revenues for the community college system than they did 12 years ago. In 2000, student tuition made up 18% of the resources coming to colleges and in FY2012 35.4% of revenues come through tuition and fees (see chart). Increases in tuition and student enrollment and limited state resources have combined to create the shift.

Over the decade, tuitions have also increased markedly for students and families. In 2000, tuition and fees came in at $1,072 per year compared to $2,117 in 2010, a considerable increase even after adjusting for inflation.

DROPOUT RECOVERY FUNDS

One of the line items in the community college budget request was for $11.5 million in ‘Dropout Recovery Funds’ for adult basic education, GED preparation courses and supports for those adults without a high school degree to return to school. In previous years, the legislature has allocated $1.5 million to the efforts and many colleges have invested in supports for adults trying to gain basic skills such as transportation vouchers or scholarships for GED testing fees. Importantly, some colleges also use funds for an additional staff member who is dedicated to helping students balance their needs outside the classroom, increasing the likelihood they will persist in classes and successfully gain a GED.

Funds dedicated to increasing the success of adults that enter basic education and GED preparation courses make good sense in a state where 388,500 adults over age 25 lack a high school degree, particularly if those investments increase the number of adults transitioning on to career tech and associate’s degree programs at the colleges. Finding additional resources to dedicate to Dropout Recovery efforts should be a priority.

Author: Sarah Welker, Policy Analyst

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American Community Survey Release: More Mississippians Living in Poverty than Ever Before

September 26, 2011

Filed under: American Community Survey,Census Data,Healthcare,Poverty — admin @ 9:59 AM

On September 22, 2011, the Census Bureau released the results of the 2010 American Community Survey. Poverty across all racial groups in Mississippi increased from 20.6% in 2007 to 22.4% in 2010. Additionally, 9.7 % of Mississippians live in “deep poverty” (the share of the population with incomes below half the poverty line). This marks a 1% increase from the 2007 rate.

Children in Poverty

The rate of children living in poverty remained high with 27.1% of the state’s children now living in families that fall below the poverty line.

Strikingly, 29.1% of families with children below the age of five live below the poverty line— a 4.6% growth from the previous year. For many of the children living in these families, SNAP, Medicaid, and the Child Care Certificate Program provide critical services for their development.

This past week’s budget hearings have shown that these trends are not limited to the national lens. As we move forward in the crafting of the budget and strategies to address high poverty, it is important that Mississippi take a balanced budgeting approach that includes raising revenues to preserve investments in health care, education and asset development.

Francinia McKeithan, Policy Analyst, SFAI Policy Fellow
Source: American Community Survey Release, September 22, 2011

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DAY 4 OF BUDGET HEARINGS: Dept. of Education Asks for $300.3 Million Above Last Year For K-12 Students

September 23, 2011

Filed under: Budget Hearings FY 2013,Education — admin @ 4:11 PM

The Mississippi Department of Education made their FY2013 budget request on Thursday morning for an increase of 13% over their FY2012 allocation. In total, MDE is in need of $300.3 million beyond last year’s contributions from the state.

In total, Mississippi has lost 2,059 teachers and staff in K-12 education over the last year- including 704 teachers and 792 assistants (see chart). Dr. Burnham, the state superintendent for education, highlighted that funding constraints continue to have a negative impact on staff, teachers and materials available to students. He noted that student teacher ratios have increased and that a rise in the number of students in a classroom does limit a teacher’s ability to allocate individual attention needed for each student.

Their additional request included to $250.2 million for the Mississippi Adequate Education Program, $3 million for the transition to new Common Core standards and $2.5 million for a superintendent’s academy as approximately 60 new superintendents assume their duties in the next year (see below for full request).

The loss of hundreds of teachers and teacher assistants across Mississippi is not a forward step for ensuring schools have adequate resources to strengthen academic achievement, increase high school graduation and build college-readiness. The Mississippi Adequate Education Program was underfunded by $237.4 million in FY2012. Without adequate revenue, Mississippi will not meet MAEP needs again in FY2013.

Resources for capacity building among state superintendents and implementing common core curriculums may also be difficult to find. Taking a step backward in K-12 education would be detrimental to the state’s children and generating revenue to advance toward funding the MAEP should be a priority.

Author: Sarah Welker, Policy Analyst

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DAY 4 OF BUDGET HEARINGS: Recession Has Impacted the Public Employees Retirement System, Potentially Affecting Resources Available for Retirement

Filed under: Budget Hearings FY 2013,Public Employee Retirement,Workforce — admin @ 9:04 AM

The final day of the Budget Hearings began with the Public Employees Retirement System (PERS). The post below details key facts about the individuals served by the agency and summarizes a number of concerns about the sustainability of the system that were discussed in the hearing.

KEY FACTS PROVIDED BY PERS

The average annual benefit for retired public employees was $19,256 in FY2011 for individuals with 22 years or more of public service.
The system currently adjusts each retiree’s benefits for cost of living to ensure that they have the ability to maintain basic economic security. Without this cost of living adjustment (COLA), the average benefit would be lower, at $15,000 annually.
Last year retirement benefits allocated by the state totaled $1.8 billion.
New employees contribute 9% of their income to retirement each year, one of the higher rates among states that also contribute to Social Security according to Director Robertson.
In 2011, 85,849 retirees were members of PERS and, 163,335 active members were covered by plans PERS administers. The number of active members has decreased 2 years in a row from 167,901 in 2009, as state and local employment decline during the downturn.

COST OF LIVING

We learned Monday that sixty-two percent of the employees under the State Personnel Board’s purview earn less than $34,279 a year. With average incomes at $34,279, many adults may struggle to save beyond their contributions to retirement plans. As a result, it remains important that the resources provided through their retirement plans are adequate to fulfill their basic needs throughout their retirement. Director Robertson stated that the 3% cost of living adjustment that retirees receive is vital to ensuring public employees receive long-term economic security throughout their lives.

EMPLOYER CONTRIBUTIONS

As the figure below shows, PERS projects that there may be a need for additional employer contributions to retirement plans over the next couple of years. Contributions would grow 1.4% from 12.93% to 14.35%. An upward adjustment in employer contributions would mean that state agencies and local governments would need to set aside additional resources for retirement contributions that may not be included in their budgets.

In the months and years ahead, state and local governments are projected to need additional resources to contribute to the retirement of their employees. Without additional revenue, many agencies may struggle to meet those demands, building on the need for financial resources among state and local government. This underscores that approaches considering pathways to generating revenue can impact the economic security of all residents across all age ranges in Mississippi communities.

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DAY 3 OF BUDGET HEARINGS: Human Services: Budget Shortfalls Lead to Long Wait Lists

Filed under: Budget Hearings FY 2013,FY 2013,Healthcare,Human Services,Poverty — admin @ 7:58 AM

The Mississippi Department of Human Services presented their budget request to the Joint Legislative Budget Committee on Wednesday afternoon. The Department has requested $147.5 million for the 2013 Fiscal year, a $21.5 million increase from FY 2012’s budget of $126 million.

The graphic below breaks down the request into 5 areas: Child Support Enforcement ($2.6M), Economic Assistance and Aging and Adult Services ($.5M), Family and Children’s Services ($16.7M), Youth Services ($1.2M), and Support Services ($.5M).

The requested amounts are in response to several challenges faced by the Department:

On average, there are 3,848 children in the custody of the state during any point in the year;
In May, Mississippi was found not in contempt of the Olivia Y settlement;
Funding of child welfare social workers at levels that are competitive in the marketplace remains one of the top priorities for keeping at risk children safe in Mississippi and making progress on the Olivia Y settlement;
The Aging and Adult Services unit served 1,743,698 individual meals and another 358,790 congregate meals in FY11; however another 2,910 individuals remain on the program’s waiting list.
There are currently 12,964 on the waiting list for child care services. The waiting list occurred primarily in response to the expiration of $31 million in American Recovery and Reinvestment Act funds. The funds were used to clear the waiting list in October 2009.

The Department of Human Services engages with some of the most at risk children in the state. With rising rates of poverty and levels of the uninsured, it is increasingly important that budget priorities reflect a balanced approach that includes increasing revenue. A cuts only approach will make lines longer and prevent children from accessing the supports so desperately needed.

Author: Francinia McKeithan, Policy Analyst, SFAI Policy Fellow
Source: Mississippi Department of Human Services Budget Request. September 21, 2011

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DAY 3 OF BUDGET HEARINGS: Department of Health: Poverty and Low Health Outcomes Related; Targeted Investments Work

September 22, 2011

Filed under: Budget Hearings FY 2013,Healthcare — admin @ 4:46 PM

During yesterday’s budget hearing, the State Department of Health provided a snapshot of a number of health indicators for residents of Mississippi. The following table provides an overview of the selected health indicators shared with the Joint Legislative Budget Committee.

Upon being questioned about the reasons for the rankings, poverty was cited as one of the major reasons for low health outcomes by the state health officer. In particular, poverty was cited as a key factor in the state’s obesity rate and infant mortality. The reflections make sense. Low-income communities have less access to health and fresh foods which affects obesity rates for example. Parents with lower incomes are likely to have less access and exposure to parental education (SIDS prevention for example) after a child is born.

At the same time, targeted investments work. In 2010, Mississippi received an award for having the highest rate of childhood vaccinations. Nearly 75% of all children 19-35 months in age have received immunizations compared to a national rate of approximately 70%. The commendation is to be celebrated and offers a valuable lesson. When we invest in the public structures at levels that lead to success, the whole state benefits from the investment in the short term (healthier kids) and in the long term (lower health care costs).

Author: Ed Sivak, MEPC Director

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DAY 2 OF BUDGET HEARINGS: Medicaid Changes on the Horizon

September 21, 2011

Filed under: Budget Hearings FY 2013,FY 2013,Healthcare,Medicaid — admin @ 2:36 PM

Yesterday, the Department of Medicaid shared its budget request with the Joint Legislative Budget Committee. In addition to providing health care financing to over 700,000 adults and children, the program brings in over $4.5 billion in federal dollars to the state’s economy.

Some interesting findings / reflections from the hearing:

Needs are rising in an environment of declining resources;
- On average the number of individual served by Medicaid (not including those served by the Children’s Health Insurance Program [CHIP]) increased from 615,497 to 631,083 over the last year.
- The number of children served through the CHIP program increased from 67,336 to 69,669.
- The enrollment increases are occurring in the context of slow economic growth and associated low expectations for additional revenue.
- Health Care reform offers an incredible opportunity to improve the economic and physical health of Mississippians.

Last week, we posted information that showed a significant increase in the rate of Mississippians that were uninsured. More than 1 in 5 Mississippians live without health insurance. This information comes on the heels of information released by the Department of Health that Mississippi ranks 1^st in heart disease, 3^rd in cancer death rates, 1^st in infant mortality and 1^st in low birth weight babies. We will post more on these numbers in our recap on the hearing from the state department of health.

Unfortunately, much of the hearing focused on the state costs for health care reform over the next decade. Conveniently omitted from this discussion were the federal resources that will be brought into the state as a result of health care reform. A study by the Center for Mississippi Health Policy shows that state expenditures for new Medicaid recipients resulting from health care reform will cost $11.4 billion from 2014 to 2019. Of those costs, 97% will be covered by the federal government. Essentially, Mississippi will receive over $11 billion from 2014 to 2019 to implement the policy.

The bottom line is that Mississippians need better access to health care and the reform will both improve health outcomes and create jobs. It’s a policy to be embraced for the opportunity that it presents.

Author: Ed Sivak, MEPC Director

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DAY 2 OF BUDGET HEARINGS: State’s Fragile Economic Recovery is Slowing, State Economist Reports

Filed under: Budget Hearings FY 2013,FY 2013,Jobs,Mississippi Economic Recovery Resources — admin @ 7:46 AM

Tuesday at the Joint Legislative Budget Committee budget hearings, the committee heard from Dr. Darrin Webb, the State Economist from the Institutions of Higher Learning’s University Research Center.

He reported that while the state and nation are still technically in a recovery (not a recession), growth has slowed. Growth in the economy has especially deteriorated over the last six months with employment falling in four of the last five months. Prominent economic forecasting analysts say the chance that the nation will see another recession in the near future is about 40%.

While the state is seeing slight economic growth, factors such as employment numbers and the stagnation in consumer confidence are making it “feel like” we are still in a recession. In Mississippi, jobs are still down by 69,000 from the peak in February 2008.

Average growth in state GDP over the last 20 years in Mississippi, during periods of expansion, has been 2.7 percent. The growth for 2011 is expected to be a modest 0.7 percent which is below the 1.5 percent growth expected for national growth. The state is not expected to meet the state’s 20 year average until at least 2014.

Estimated State Gross Domestic Product Growth Compared to MS Average Growth

All of these economic indicators (and more) will be taken into account as the State Economist and others prepare the Revenue Estimate that will serve as the basis for the creation of a balanced state budget for FY 2013. By all accounts, FY 2013 is expected to be another lean budget year for the state as the fledgling recovery is slowing and federal stimulus funds have ended.

During the remainder of the budget hearings we will likely hear how the cuts-only approach to the state’s revenue problem has threatened vital public services. A balanced approach that includes raising new revenue is required to maintain our investments like education, public safety, and workforce development that ensure our future economic growth.

Author: Sara Miler, Senior Policy Analyst
Source: Joint Legislative Budget Committee, Revenue Discussion, presentation from Dr. Darrin Webb, State Economist, September 20, 2011.

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DAY 1 OF BUDGET HEARINGS: Many State Workers Earn Wages Below Self-Sufficiency Levels

September 20, 2011

Filed under: Budget & Tax,Budget Hearings FY 2013,FY 2013,Income & Working Families,Jobs,Self-Sufficiency — admin @ 10:40 AM

Yesterday, the FY 2013 budget hearings commenced with an overview by the Mississippi State Personnel Board (MSPB). Currently 34% of the state’s workforce is under the purview of the MSPB with the remaining workers including K-12 teachers, IHL, the community colleges and the Governor’s Office / Legislative Branch.

During the hearing, the MSPB highlighted a number of challenges facing the state in the support and recruitment of a competitive workforce:

As of June 30, 2011, state employment experienced the largest decrease in employee numbers in the last decade.
The average salary of our state employees is $34,279—however, 62% of all state employees earn less than the average salary.

With 62% of state employees earning less than $34,279, many state workers are earning wages below self sufficiency levels.
Mississippi’s state employees covered under the MSPB earn significantly less than state employees in each of its border states (between 14.7% less than AR and 31.5% less than workers in LA).
Despite population increases, there are fewer state workers covered by the MSPB than there were ten years ago.

The information shared by the MSPB illustrates that many of Mississippi’s state workers are not earning high wages. In fact – many are not even earning wages that bring their families to self-sufficiency. The wage information on state workers comes in light of two additional and important facts at both ends of career life cycle for state employees:

Over the past 5 years 72% of employee resignations came from individuals that were employed for 5 years or less.
Over the next 5 years, nearly 33% of the workforce will be eligible to retire.

Appropriately, much attention has been paid to the Public Employee Retirement System Study Commission. Any policy changes considered regarding the changing of the Public Employee Retirement System should be reviewed in the context of the total compensation package available to state workers. If Mississippi continues to provide very low wages and cannot offset the low wages with a competitive benefit package, how will it attract the talent needed to provide high quality services to its citizens?

Authors:
Francinia McKeithan, Policy Analyst, SFAI Policy Fellow
Ed Sivak, MEPC Director

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