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Rising Costs Make Higher Education Harder to Reach For Middle and Low Income Mississippians

October 27, 2011

A recent article and editorial point out the effects of a 7% increase in Mississippi’s university tuition last year. The increase adds to the amount Mississippi’s students take out in student loans or that individuals take out of pocket to cover costs. Tuition at the state’s historically black colleges and universities increased by a greater rate last year than tuition overall. Increases compensate for inadequate state support over the last few years.

Raising the cost of receiving a university education can have a particularly harsh effect on Mississippi’s middle and low income families. Pell grants are a key piece of providing support for students that might not otherwise have the means to attend college and pursue education that provides career opportunities for economic security after college.

In 2009, 24,593 students – or 42.3% of all university undergraduates- received the opportunity to attend and finance a portion of their education through Pell Grants. When tuition rises, Pell Grants cover a smaller portion of the cost for attending school, and calls for limiting the resources put towards funding Pell Grants would have a negative effect on the opportunity to access higher education for almost half of Mississippi’s university students.

Even slight increases in tuition are likely to have a substantial impact on Mississippi’s low income families. And data on Pell Grants for undergraduate students shows the Mississippi’s African American families are more likely than their classmates to access higher education through Pell support. Seventy-four percent (74%) of African American students in Mississippi’s universities required need-based financial aid to access higher education compared to 22% of white students. Of the 24,593 students receiving Pell Grants, 7,138 were white, 16,561 were African American and 894 were of another ethnicity (see chart).

Increases of tuition at Mississippi’s universities impact the cost of college and debt incurred by thousands of Mississippi students regardless of race. However, tuition increases and suggestions to reduce funding for Pell Grants will have a particularly adverse impact on Mississippi’s African American families.

With 42% of Mississippi’s university students receiving Pell support, increases in tuition and limits in Pell Grants limit access to opportunity and upward mobility to a large portion of the state’s youngest residents and future workforce. And when tuition increases at a faster rate than wages, higher education requires a larger portion of all families’ budgets.

It remains absolutely imperative that we restore investments in universities and protect Pell funding for the health of the state’s universities and for ensuring we keep pathways for economic mobility and economic security open for the all of Mississippi’s students.

Author: Sarah Welker, Policy Analyst

 

2011 Annual Policy Conference Recap

October 26, 2011

The 2011 Annual Policy Conference was a great success. Thank you to everyone who attended and the presenters who shared their knowledge and expertise. This year, MEPC expanded our break out session format to allow participants to attend two sessions.

Darrin Webb, opened the conference with an overview of Mississippi’s economy and Bobby Harrison, Capitol Correspondent for the North East Mississippi Daily Journal and Emily Wagster-Pettus, Associated Press political reporter served as respondents to the presentation, offer insight on how the changing political landscape will affect efforts to engage policy makers on issues affecting working families.

Our keynote luncheon address focused on the importance of the role of government in the lives of  all Americans and the need for various constituencies to work together for a more prosperous Mississippi. Video of our Keynote Speaker, Hodding Carter III, Professor of Leadership and Public Policy University of North Carolina at Chapel Hill will also be available soon on our website so check back!

Below are brief descriptions of our 2011 Breakout Sessions:

Taxes fund the public structures that make up the foundation of our economy and make job creation possible.

  • MEPC Senior Policy Analyst Sara Miller and Elaine Mejia Senior Program Associate with Public Works at Demos present tax reform options and how to talk about taxes effectively in the current political landscape.

Understanding the challenges and opportunities of health care reform implementation

  • Corey Wiggins with i-Think Group examine the ongoing efforts of health reform implementation in Mississippi and how those opportunities and challenges affect the lives of working Mississippians.

Measuring basic economic security in Mississippi and building pathways for working families to achieve it

  • Wider Opportunity for Women’s Delese Harvey explores the new benchmark for basic economic security and gives hands on guidance on how organizations can use the Basic Economic Security Tables to advocate for programs that support families in their community or to help adults budget and set goals as they re-enter the workforce.

Steps to help Mississippi’s working families protect and build assets

  • Mississippi Center for Justice Community Organizer, Alicia Netterville and Felicia Lyles, VP Regional Branch Administrator for Hope Credit Union explain the effects of payday lending and how working families can make responsible financial decisions and move toward economic security.

PDF versions of all the PowerPoint presentations given in each break out session at the conference.

Moving More Mississippi Families Toward Greater Economic Security

October 24, 2011

Last week MEPC’s posts focused on the release of a new report, The Basic Economic Security Tables for Mississippi. In the post below we provide more background on the measure and recommendations for moving more families to greater economic security.

Poverty data from 2010 revealed that 22.4% of Mississippians lived in households facing extreme economic vulnerability. However, the Basic Economic Security Tables underscore that many families across our state are earning wages below what they need to provide basic needs for their families and save for retirement and emergencies such as a job loss or large health care bill.

The graphic above compares the Federal Poverty Threshold for a family of four to basic economic security levels for 1 worker, 1 worker and a school child, and 2 workers with 2 children. Families with 2 workers and 2 school children need $53,808 to provide basic needs for their families and save for their retirement and emergencies, more than double the Federal Poverty Level for a family of 4- $22,314.

Mississippi faces the challenge of enhancing opportunities for working adults to advance towards the income levels set by the Basic Economic Security Tables. Now knowing what families need to reach economic security, MEPC makes the following recommendations for lifting up more pathways to true economic security:

  • Support sector initiatives that train low-skill, low-income individuals for in demand jobs
  • Increase access to capital to start small businesses among historically underserved populations
  • Support early childhood education and reducing costs through workforce support programs

All of these recommendations are not new to MEPC.  We’ve long advocated for the enhanced investment in sector initiatives such as career pathways for low-skilled adults.  We are also housed in a community development finance institution that has over 17 years of experience in lending to minority owned small businesses – especially in rural communities.

What is different today is that there is convergence around these recommendations with strategies that are currently being lifted up by the business community in Blueprint Mississippi.  We must recognize the significance of this moment and work together to build the Mississippi that we all want to see for our children and grand children.

Authors: Sarah Welker, Policy Analyst
Ed Sivak, MEPC Director

 

 

Exploring Basic Economic Security In Your County Online

October 19, 2011

The previous post focused on the release of a new report – Basic Economic Security Tables for Mississippi- that measures how much Mississippi’s families need to cover basic expenses and save for long-term economic security. Across Mississippi, 1 worker needs $26,664 per year to reach this benchmark and a family with 2 workers, 1 preschooler and 1 schoolchild needs $55,586 per year for their basic needs and modest savings for retirement and emergencies.

WHAT ABOUT BASIC ECONOMIC SECURITY IN MY COUNTY?

Families experience different costs for basic needs and different savings targets depending on where they live in the state.  To ensure residents, non-profits, schools, and public agencies have access to county-level information on the income families need for basic economic security, MEPC has printable fact sheets for each county.

To the right is an example of county-level basic economic security tables for Lauderdale County. In Lauderdale County, 1 worker needs $25,956 per year for basic economic security compared to the state average of $26,664. Each fact sheet shows basic expenses and savings for 6 different family types. County fact sheets are available for each of Mississippi’s 82 counties.

UPGRADES TO THE ONLINE CALCULATOR 

The Basic Economic Security Tables build on MEPC’s use of the Self-Sufficiency Standard, and MEPC’s online calculator has been upgraded to include basic needs and savings amounts from the new report.

The new Basic Economic Security Calculator allows individuals to pick their monthly savings targets for emergencies, retirement, homeownership and children’s post-secondary education. The savings are then included in the family’s monthly budget. After an individual gets their basic economic security wage, they can proceed down the page to compare it with the wages different occupations pay in their community. Occupational wages have been updated to 2010 with the help of the Mississippi Department of Employment Security.

The online calculator has been a valuable resource for Mississippi’s high school students, teachers, guidance counselors and adults returning to training. MEPC is excited to launch this upgraded online resource and looks forward to working with individuals and groups across the state to expand awareness of what families need to reach true economic security and advance beyond living pay check to pay check.

To learn about ways to use both the county fact sheets and online calculator in your community and across the state, attend MEPC’s 2011 Annual Policy Conference on October 21, 2011.

Author: Sarah Welker, Policy Analyst

 

INTRODUCING THE BASIC ECONOMIC SECURITY TABLES FOR MISSISSIPPI, 2011

October 18, 2011

In the wake of the 2007 recession, many Mississippi families are still struggling to reach financial stability in their households. A new report –Basic Economic Security Tables for Mississippi- from MEPC and Wider Opportunities for Women redefines how much Mississippi’s families need for true economic security in today’s economy by covering their basic needs but also saving for life-long economic security.

Basic Economic Security Tables for Mississippi determines how much families need for daily necessities and includes monthly savings targets for emergencies and retirement. These savings targets insulate families from poverty and increase economic security across generations. In Mississippi, a family with 2 workers, a preschooler and a school child needs each adult to work full time and earn $13.16 per hour to reach basic economic security.
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BASIC ECONOMIC SECURITY LINE BY LINE FOR 2 MISSISSIPPI FAMILY TYPES

The tables show monthly basic expenses and savings targets for 2 family types. The table on the left shows average monthly targets for 1 worker in Mississippi. The worker needs $443 for housing, $138 for utilities and $246 for food and so on. In total, a single working adult in Mississippi needs $26,664 per year or $12.63 per month to cover basics and have modest savings for emergencies and retirement.

The table on the right shows similar expenses and savings for family with 2 working adults, 1 preschooler and 1 schoolchild. For this family to reach basic economic security, each adult needs to earn $13.16 per hour for a combined income of $4,632 per month to cover their basic needs and save for retirement and emergencies like job loss or an unexpected medical bill.

The tables assume workers receive employment-based benefits like health insurance through their employer and unemployment insurance. Without these additional employment-based benefits families will need to save more for emergencies and increase their monthly healthcare budget substantially. For example, the average 2-adult, 2-child family which cannot participate in an employer-sponsored health insurance plan pays $634 more per month -$7,608 per year- more than those who do participate in employer health plans.

Want to know more? Keep reading, tomorrow’s post will drill down and look at basic economic security in different counties and we’ll walk through updated online resources for members of communities across the state.

Author: Sarah Welker, Policy Analyst

 

New Report Seeks to Help Mississippi’s Working Families Understand and Achieve Economic Security

October 17, 2011

Filed under: Basic Economic Security — admin @ 12:03 PM

New Report Seeks to Help Mississippi’s Working Families Understand and Achieve Economic Security

Wider Opportunities for Women (WOW) in partnership with the Mississippi Economic Policy Center (MEPC) will release The Basic Economic Security Tables™ for Mississippi tomorrow.

The report provides county level data on how much it costs to live to cover all basic expenses and save for long-term economic security which includes emergencies and retirement.  It also includes information on how much a family needs to earn to save over time for asset purchases such as homeownership.

MEPC will use the release to promote strategies that build economic security such as:

  • The pursuit of sector initiatives that train individuals for in demand jobs;
  • Increasing access to capital to start small businesses among historically underserved populations;
  • Supporting early childhood education as a workforce support program.

Finally, the new report, available at www.mepconline.org, will also feature a new Basic Economic Security Calculator and Wage Tool.

The new tool will update the current Self–Sufficiency Calculator and provide information on how much a family needs to earn to cover basic living expenses such as housing, utilities, food, transportation, child care and health care – while saving for emergencies, a home, post secondary education and /or retirement.

The Basic Economic Security Tables™ for Mississippi report, county-level fact sheets for all 82 Mississippi counties and the new Basic Economic Security Calculator and Wage Tool will be available at mepconline.org by late morning tomorrow.

 

 

As Population Ages Mississippi’s Retirement Income Exemption Will Threaten State Revenue

October 13, 2011

Over the next twenty years, the US population of people over 65 is expected to increase.  In Mississippi that it is projected to increase so that in 2030, one in five Mississippians will be over 65.  The US Census Bureau data in the figure below shows the projected percentage of the population over 65 in five year increments from 2000-2030.

Percent of Population 65 and Older in United States and Mississippi 2000-2013

This population shift will affect Mississippi’s income tax revenue due to an exemption for retirement income.  The exemption was added to the tax code in 1994 and exempts all retirement income (both public and private).  The exemption applies regardless of the amount of retirement income a taxpayer receives.  The exemption currently costs the state over $300 million annually.  If it remains in effect, it could put a significant strain on the state budget in the years to come.  It may cause revenue increases in other areas or detrimental cuts due to the loss of revenue.  The loss in revenue may be amplified by any increases in the costs of providing services to an aging population.

In order to mitigate the loss in revenue without putting a burden on low-income seniors, the exemption could be phased out at higher income levels.

Over the next several months, we will be profiling potential threats to the state’s revenue collections.  Stay tuned for more areas that are in need of updating to keep up with the changing environment.

Author: Sara Miller, Senior Policy Analyst
Source: MEPC analysis of data from the US Census Bureau and US Administration on Aging

 

A Little Mississippi Tax History

October 11, 2011

Filed under: Budget & Tax — admin @ 8:53 AM

One refrain you keep hearing is that you can’t raise revenue while the economy is struggling.  However, Mississippi has often turned to raising taxes to address revenue shortfalls from economic downturns.  Many of Mississippi’s income or sales tax increases have occurred during or just following an economic downturn.

The table below shows the periods of recession over the last century and the state’s sales and income tax changes.  The state’s sales tax was created during the Great Depression and the income tax was reformed just following it.  After the recession of the early 1980s the sales tax was increased to 6% and the income tax was increased to its current levels.  The sales tax was increased to 7% following the recession of the early 1990s.

Periods of Recession and Mississippi Sales and Income Tax Changes 1910 to Present

The cuts only approach to dealing with the current budget crisis is affecting jobs and our state’s recovery.  This is happening while income tax rates and brackets have not been updated in over 25 years.   Throughout the state’s history, a balanced approach that includes raising revenue when needed has helped the state weather these challenges and become stronger. New revenue is called for to maintain the state’s progress and promote prosperity in the future.

Author: Sara Miller, Senior Policy Analyst
Source: National Bureau of Economic Analysis and Mississippi Department of Revenue

Investments in Education and Research Critical to State’s Future Economic Progress

October 6, 2011

MEPC’s previous post focused on projections for job growth by sector presented in last week’s IHL Economic Outlook Conference. The conference also looked at projections for growth in Mississippi’s employment, personal income, inflation and output for next year.

As the chart below shows, growth rates in output, employment and inflation are all similar for the US and Mississippi with differences of only 0.1% for 2012. However, Mississippi’s personal income, already among the nation’s lowest, is projected to grow slower than the nation’s in 2012. In 2012, personal income is projected to grow 3.1% across the state.

Growth in personal income may be needed among many Mississippi households. As noted in a previous post, median household income across the state has fallen over the decade. Adjusting for inflation, median incomes declined $6,142 from $42,963 in 1999/2000 to $36,821 at the end of the decade

Dr. Marianne Hill with IHL noted that 2012 will likely have larger growth than 2011 assuming Mississippi and the nation avoid another economic recession. The nation and Mississippi are currently at a 40% probability of entering another recession.¹

In the longer term, investments in education and research were both listed as critical to the state’s future economic progress by state and national experts. Industry leaders regularly emphasized that innovation across sectors was key to future competitiveness.

They stated that this innovation could be fueled by investments in education that lead to the training of a more skilled workforce. However, budget hearings last week underscored that many of the needs across Mississippi’s education and training spectrum are at risk of being unmet without approaches that consider pathways to increasing state funding for K-12, community colleges and universities.

Author: Sarah Welker, Policy Analyst
¹Daco, Gregory. IHS Global Insight. Presentation on the U.S. Economic Outlook.

 

State Not Projected to Surpass Employment Levels from 2000 Until 2016

October 4, 2011

On September 28th, the Mississippi Institutions of Higher Learning held their Annual Economic Outlook Conference. Presentations detailed that employment across Mississippi is projected to grow slowly through 2016, at 1.3% annually. Last year, projections were that Mississippi would regain the number of jobs that existed in 2000 by 2014. Slowing growth led IHL to revise their projection, indicating that the state will not surpass 2000 levels of employment until 2016.

Business services, health care and social assistance, and construction employment are expected to average strong employment growth between 2011 and 2016. In contrast, employment in hospitality & leisure, government and finance are each projected to average annual growth at less than one percent (see below).

JOB CONCENTRATION BY INDUSTRY MAY IMPACT STRENGTH OF RECOVERY

Jobs in government make up 23% of total employment in Mississippi, a larger concentration than the national average of 17%. On the other side of the spectrum, business services represented 9% of employment in the state compared to 13% nationally. The concentration of jobs in business services and health care is lower in Mississippi than across the nation, signaling that the state has a lower portion of jobs in sectors that will have relatively strong growth in the next 5 years.

With almost a quarter of Mississippi’s employment in government, economists with the Institutions of Higher Learning suggested that the state may experience a weaker recovery than other parts of the country through 2016.

Posts throughout the week will feature additional findings from the IHL’s Economic Outlook Conference.

Author: Sarah Welker, Policy Analyst