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Exploring Basic Economic Security In Your County Online

October 19, 2011

Filed under: Basic Economic Security,Education,Income & Working Families,Self-Sufficiency,Workforce — admin @ 8:59 AM

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

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INTRODUCING THE BASIC ECONOMIC SECURITY TABLES FOR MISSISSIPPI, 2011

October 18, 2011

Filed under: Basic Economic Security,Education,Income & Working Families,Jobs,Making Mississippi Competitive: Solutions For Building Assets In Low-Wealth Communities,Self-Sufficiency,Workforce — admin @ 10:59 AM

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

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

October 13, 2011

Filed under: 65 and Older,Income & Working Families,Income Tax,Population,Retirement,Revenue,Shifting Demographics,Taxes,Workforce — admin @ 7:48 AM

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

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

October 6, 2011

Filed under: Economic Outlook Conference,Education,Income & Working Families,Jobs,Workforce — admin @ 8:14 AM

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.

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

September 23, 2011

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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Do Mississippi Universities Have Enough Resources to Build Up the State’s Workforce?

August 26, 2011

Filed under: Budget & Tax,Education,Income & Working Families,Jobs,Workforce — admin @ 10:27 AM

Sid Salter’s column calls attention to a developing funding trend among the state’s public universities. Institutions of Higher Learning like Mississippi State University are increasingly looking to private giving to help address the financial strain that comes when limits in state funding and growing student attendance converge. The column notes that “The troubling part of that budget reality is that the cuts are coming at a time of increased enrollment as students head back to universities to get new skills in the new economy after the prolonged recession.”

More and more students return to university campuses with the hope of increasing skills, earning a degree, and moving into higher wage employment. As high school graduates and adults pursued courses, university enrollment experienced a particularly strong uptick between 2008 and 2010. From the fall of 2008 to the fall of 2010, Mississippi’s public universities enrolled an additional 3,100 undergraduate students, the largest real increase in students among the years charted.

Enrolling more students puts increased demand on a university’s faculty, administrative staff, infrastructure and classroom, library, and dormitory space. Inadequate funding of universities can force schools to pass costs on to students through tuition, over half of which already need to take out student loans to finance their education.[i]

While a challenging funding environment for universities persists, leaders across Mississippi are seeking ways to increase the number of higher wage, higher skill employment opportunities in the state. Increasing such opportunities will mean that employers, workers, and community leaders will depend on the post-secondary education system to meet industry and workforce needs.

The increasing demands set on the state’s university system need to be met with adequate resources. The knowledge that public universities are increasingly turning to private giving to make ends meet underscores the importance of taking a balanced approach that includes raising revenue instead of a cuts only approach that constrains education systems in a time of growing need.

Author: Sarah Welker, Policy Analyst

[i] National Center for Education Statistics. Integrated Postsecondary Education Data System. Financial Aid Data for FY2008-09.

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