Connecticut Association for Human Services

SB.1 and regional property tax sharing

We have been following SB1 with some interest these past few days, as it introduces some significant long term reforms to our tax system. Although the car tax portion of the bill has received more attention (here is a one pager on the issue. We like it), the really interesting part is the regional property tax sharing.

 Remember, property taxes pay for education in Connecticut, and they are  very regressive .  I know it sounds boring, but bear with me - it is actually really interesting.

 Here is what SB1 does:

A regional property tax revenue sharing system for new commercial and industrial development.  Under this framework each community contributes 40 percent of the growth of its commercial and industrial property tax base after a specific year (2013 under S.B.1) to a regional pool. That is, the new property tax income is split - 60% stays in the town to cover infrastructure and traffic costs, and 40% is shared region-wide.  The funds are redistributed based on a formula that takes into account a jurisdiction's population and fiscal capacity, as defined as per capita real property valuation

Why it is important for low income families:

One thing to keep in mind: right now, the poorer a city is, the higher are their property taxes. Poor cities have smaller grant lists, so they need higher mill rates to cover their costs. Higher mill rates makes them less attractive to business, as they prefer to wealthier towns with lower taxes. The less business you get in, the more you need to tax what you have, so cities end up being left behind. checkbook-pen.jpg

The impact of this reform goes beyond revenue, as it reduces the incentives for municipalities to compete for new development to shore up their tax bases . Under S.B. 1 cities and towns would be able to plan on a regional level. As any new development would benefit the region as a whole, with the town hosting the new development receiving additional revenue to pay for their costs, municipalities can work together to protect open spaces, focus on infill development and placing new projects close to infrastructure hubs.
This legislation would give rural communities and suburbs the tools to stop using their lower mill rates to steer development out of the poor urban cores,  while also enabling cities to attract new development more effectively.  Connecticut metropolitan areas would be able to re-balance their growth patterns between the core and outer areas, avoiding the harmful tax competition that penalizes the poor inner cities with smaller grant lists, or more non-taxable property.  S.B.1, as written, has  the potential to helpreverse decades of under-investment in our cities and urban sprawl while ensuring that no municipality is left behind.

Has anyone else done something similar?

Yes! A very similar law has been in operation in Minnesota with very good results. Property taxes are one of the most regressive taxes in the state, and they are set up in a way that actively penalize development and growth in our poorest cities. This reform is a very good step to reverse that.

Take Action!

SB1 was voted out of Planning, and it is currently sitting on the Finance committee. The bill has very strong support from the leadership, so it is likely to go to the floor, but once there things get dicier.

If you want to get involved in an effort to bring some real, long term change to the state in one of its most dysfunctional policy areas, e-mail me. This is an area where not many people are paying much attention right now, and we can make a big difference.

Mid-session legislative updates

A few days ago CAHS hosted a Family Economic Success Coalition meeting / webinar, 1780628_10100675970865764_6644564155060391429_n.jpg

with a focus on the current legislative session. We had a very good, productive discussion covering what is going on at the legislature right now and talk about the ever-present budget woes and the need for more revenue.

In addition, we talked about a very exciting bill that would bring very significant and positive changes to Connecticut´s property tax system, by far the most regressive tax in the state. The bill in question is S.B.1, and includes some long overdue changes that would reduce the tax burden on low income families by modifying the car tax, and provisions that would promote economic activity in urban centers.

We have prepared a one pager on SB1 and car taxes - You can download it here. You can find the slides on the legislative update after the jump. 



Minority Working Families in Connecticut Falling Behind

A sharp racial/ethnic divide has emerged within the world of low-income working families, posing a critical equity and economic challenge to Connecticut and the nation, a new study concludes

Unless lawmakers in Connecticut are willing to pursue policies that would improve conditions, African-Americans and Latinos will continue to emerge as a larger - but under-prepared and underpaid - segment of the workforce.


The disturbing portrait of America's low-income working families was sketched by the Working Poor Families Project  based on new analysis of the most recent data from the U.S. Census Bureau. The Project's study sheds a fresh light on what's happening inside the world of the working poor, where adults are working hard but find it difficult if not impossible to get ahead. And within this world at the bottom of America's economic spectrum, a stark divide has emerged between white and Asian families compared to black and Latino families.

"In 2013, working families headed by racial/ethnic minorities were twice as likely to be poor or low-income compared with non-Hispanic whites, a gap that has increased since the onset of the Great Recession in 2007," the authors write. "The significant differences among racial/ethnic groups present a critical challenge to ensuring economic growth and bringing opportunities to all workers, families and communities across the United States."

In Connecticut, there are 77,161 low-income working families, meaning their total income fell below 200 percent of the official poverty rate. Of that total, 38.6% percent are minorities compared to only 11.5% percent who are white. Some 37% percent of all black working families fall into the low-income category, as do 48.1% percent of all Hispanic working families.

These disparities impact our economy but they also harm the fabric of our communities here in Connecticut. It's past time that we address these problems at the state level.

Latinos are particularly at risk because so many of their low-income working families include at least one immigrant parent, the data show. Despite a high work ethic, Latino immigrants are among the most disadvantaged with lower earnings, less education and little healthcare. Nationally, some 14 million of the 24 million children who live in low-income working families belong to racial or ethnic minorities. This bodes poorly for the nation's future as children who grow up in low-income families face the very real prospect of never escaping poverty, the study found.

Disparities cannot be erased overnight, but policymakers can start to reduce the gaps with a two-pronged approach that simultaneously increases access to education and training while enacting policies that "make work pay," the researchers assert. State governments have demonstrated success with policy initiatives including:

  • Raising the minimum wage.
  • Increasing need-based financial aid for postsecondary education and expanding child care assistance and other supports for students with children.
  • Supporting programs that link education to career opportunities and helping English language learners.
  • Extending Medicaid benefits to all who are eligible.
  • Encouraging employers to provide paid sick leave for all workers.

Providing all low-income families with the tools they need to succeed is critical to the long-term health of our state and nation. said Senserrich. Our state's leaders must take action to ensure the American Dream is once again accessible by all.

Link to full report. More information on the Working Poor Families project is available on their website

Webinar: a quick look at the Governor´s budget proposal

CAHS and CT Voices for Children hosted today a short webinar giving a quick overview of the Govenor´s budget proposal. This was part of our work in the Family Economic Success Coalition; we are looking forward to host more of these events in the future, giving periodical updates during the legislative session.

Here is what we talked about:


You can download the slides here.

We referenced quite a few things during the presentation and during the Q&A. The most important bits are the following:

  • From CT Voices for Children: Impact of the Governor´s budget on children. The figure of 54% of the cuts falling on kids come from this report; a must read. Their budget visualization tool is great, and lets you track how each program has fared since the early nineties.
  • We mentioned two generation education strategies - here is a primer.
  • CT Voices has also published a report on the impact on early care and education programs. Not as bad, but still significant.
  • Tax incidence study: this report from the Department of Revenue Services explains who  bears most of the burden of each tax in the state. This is why I kept talking about tax reform, by the way.
  • Tax expenditure report: this is where we are looking for new revenue - all the taxes the state does not collect due to (sometimes outdated) tax breaks.

For those looking to testify, a few links:

  • Calendar with all Appropriations Committee hearings. To testify, you have to go to the LOB (9 am to 10 am in the atrium, 10.15 until 1 pm on room 2700) to draw a number. The order is decided by lottery, so depending on how many people are speaking and your luck, you might testify very early or very late. More details about the whole process in the link.
  • General Assembly Calendar. Each committee does things a bit differently, so make sure to click on the hearing to check instructions specific to each hearing.
  • Remember: all committees accept written testimony, and legislators do read what is submitted. So if you don´t have time to drive up to Hartford, you can still be part of the process.

Expect more webinars soon, as the session advances. If you have questions, just ask!

Malloy´s budget proposal: quick takes

It is finally here - Governor Malloy just presented his budget proposal. We knew it was going to be a tough budget year, so there are plenty of things to talk about and discuss.  We have a FESC meeting this Friday, 9.30 to 11,30 am, specifically to go over the whole thing and plan ahead. Make sure to come, and there is a lot to talk about.



On to the budget, then. Let´s start with the basics:

That said, some very early, very quick takes on the budget:


General notes:

  • The deficit is still a bit north of $1 billion. To close the gap, the Governor is relying in a mix of spending cuts ($590 million) and revenue increases (not exactly taxes, but close enough), mostly tax cuts promised for this year that will not happen, some tweaks to the sales tax that will increase revenue and money from a settlement with Standard & Poor´s from the financial crisis.
  • No layoffs, but a good deal of attrition in the states labor force; 300 positions, or a 2% workforce reduction in two years.

The Good:

  • Full day kindergarten for all children in the state.
  • If you like transportation (and you should) the budget has some very good news; the New Haven-Hartford-Springfield rail line is still on track, and there is quite a lot of investment fixing up Metro North, as well as some road projects. More information here and here.
  • Second Chance Society Initiative: some significant changes in criminal justice, including eliminating minimum sentences in some areas, reducing penalties for simple drug possession to misdemeanour and streamlined parole proceedings for non violent offenders.

The Bad:

  • The State EITC is not restored to 30% of the federal credit, and remains at 27.5%
  • Many important line items remain frozen: municipal aid and ECS funding, for instance, have not seen a nominal increase for the past few budgets, what amounts to a fairly real cut in the past few years.
  • Significant program cuts in the department of labor: STRIVE, Jobs Funnel and youth employment, among others, lose more than $5 million in funding.
  • The Department of Social Services got hit with big cuts:
    • Husky A adults earning above 138% of the Federal Poverty Line will be shifted to Health Access CT, and will have to pay premiums with federal subsidies (a $44.6 million cut).
    • The biggest hit, however, was on Medicaid reimbursement rates: $43 million to providers, $5.1 million to low cost hospitals, $4.3 million to ambulance services.
    • Healthy Start got zeroed out, among other programs, cutting $8.1 million.
    • The overall budget cut looks smaller because they are getting $55 million from new revenue: an update on the Hospital Provider Tax.
  • The Office of Early Childhood saw a slew of programs cut, including Help Me Grow, the Community Plans for Early Childhood and Family School Connection (about $2 million)
  • Some cuts on higher education: the Uconn block was reduced by $27 million, and Board of Regents saw cuts both on Transform CSCU ($12 million) and their block grant ($4 million). Remedial education pilots and funding are also being cut; we are trying to see exactly by how much.

The Ugly:

  • The budget really does not add up unless one assumes an increase in revenue to appear in the April budget report. It might be there (the economy is actually doing fairly well), but still. We will see.
Even more budget stuff:
The CT Mirrror has a lot more on where the cuts fall, the transportation projects, and where does the new revenue come from. More information in the Courant and CT News Junkie.  If you want budget numbers, we will keep you busy!

Connecticut doing worse on financial security

Despite an improving national and state economy, new data released today by the Corporation for Enterprise Development (CFED) show many Connecticut residents are still struggling to afford the state’s high cost of living. CFED’s 2015 Assets & Opportunity Scorecard ranked the state among the lowest across various measures of housing affordability, including homeownership by income (47th), housing cost burden for renters (44th), housing cost burden for homeowners (43rd) and overall affordability of homes (39th).

Additionally, the Scorecard found that limited savings and unstable employment make it 6793826885_d3b6befb99_z.jpg

harder for many Connecticut residents to keep up. It ranked Connecticut dead last (51st) among all states and the District of Columbia for average credit card debt and 36th for its high rate of underemployed residents, defined as part-time workers who want full-time jobs and discouraged workers who have stopped searching for employment. The report also found that 14.9% of jobs were in occupations with low wages.

These findings are included in the 2015 Asset and Opportunity Scorecard from CFED, part of a comprehensive nationwide analysis on American´s ability to save, build wealth, and become financially secure. Connecticut is ranked 27th in the nation, down from 25th last year.

All this is despite some very strong state policies on the areas covered by the report, many  of them very recent. The state was ranked in the top ten of all states in policies designed to promote Financial Assets & Income (3rd), Health Care (6th) and Education (5th). On the remaining two issue areas, Businesses & Jobs and Housing & Homeownership, Connecticut remained in the top half of states, ranking 17th and 13th, respectively.

The full scorecard for Connecticut is available here. You can also download the full press release from CFED here.


Behavioral Economics and Asset Building: Some ideas

The Connecticut Asset Building Collaborative´s Peer Learning Network second workshop hosted its second workshop last Thursday. We had a very good, lively debate, with many good comments, suggestions and ideas. Julia Brown gave a truly excellent presentation that really opened up the discussion, with plenty of things to talk about and revisit.

As promised, here you have a link to her presentation, as well as many of the studies and projects that were referenced during the workshop:

We are also looking into posting the video later this week, if possible. In any case, this should be a good start. For the next session, we are looking for ideas of possible subject to cover. If you have any ideas for the the spring workshop, please e-mail us!
You can find the Powerpoint slides after the jump:



Today is EITC awareness day!

Every year, millions of eligible workers miss out on the Earned Income Tax Credit (EITC). money1.jpg

That’s why the IRS started EITC Awareness Day, a day dedicated to encouraging organizations to bring attention to the EITC and free tax filing assistance. This year, EITC Awareness Day will take place on Friday, January 30.

The EITC is a refundable federal tax benefit for lower- and moderate-come workers that can be worth up to $5,143. To find out how much money a worker might receive, check out this quick EITC estimator.

To claim the credit, one must file a tax return. Free tax filing assistance is available through the IRS sponsored programs VITA (Volunteer Income Tax Assistance) and TCE (Tax Counseling for the Elderly). Click here to find a site in your area.

No sites nearby? There’s another option! MyFreeTaxes allows taxpayers with household income less than $60,000 to file federal and state tax returns online for free. Visit to learn more.

CAHS´workshop: Behavioral Economics and asset building

On January 29th join the Connecticut Asset Building Collaborative in New Haven for the second event in our peer learning series:

Behavioral Economics:  Practical Strategies for Financial Successmoney1.jpg

Join us on  Thursday January 29rd, from 9 am to 12.00 pm,  at the United Way of Greater New Haven for an open discussion on best practices on program work.

We will hear from Julia Brown, from Innovations for Poverty Action and Yale´s Household Finance Initiative on how behavioral economics can inform and improve asset building programs, and learn how front line staff can apply these lessons to become more effective. We will cover:

  • What is Behavioral Economics, and how hidden incentives can help or hamper our work.
  • How to take into account loss aversion, selection bias and information overload to make our programs more effective.
  • How to pursue successful outreach strategies to  attract clients each year, responding to their perceived needs and providing the right incentives.
  • How to track and monitor data and outcomes in asset building, and use the data to inform our strategies and improve outcomes.
  • How to use VITA and other gateway services as a launchpad for financial education and asset building programs, building a successful referral network.

We will discuss these issues, and many more, in an open , freewheeling discussion with economists and program managers, all expert on this field. They will give an open, comprehensive look at best practices, good ideas and the (occasional) missteps running an asset building program.

Seating is limited, and filling up rapidly - please RSVP here  as soon as possible if you want to attend.

About Julia Brown:

Julia Brown is Initiative Manager at Innovations for Poverty Action (IPA)'s US Household Finance Initiative.  She works to oversee the initiative and provide strategic direction as well as project-specific guidance on design, implementation, partnership development, and fundraising.  Prior to joining IPA, her work focused on evaluating business training and microinsurance services for low-income Latino immigrants in San Francisco and New York City.  She has also worked on the design and analysis of multiple randomized evaluations, in areas ranging from education to sanitation.  She holds a B.A. in Economics and Women's and Gender Studies from Williams College, and a Master of International Affairs with a concentration in Economic and Political Development from Columbia University's School of International and Public Affairs.

About Innovations for Poverty Action:

Innovations for Poverty Action (IPA) is a non-profit organization dedicated to discovering and promoting effective solutions to global poverty problems. In close partnership with decisionmakers -- the policymakers, practitioners, investors, and donors working with the poor around the world -- we design and evaluate potential solutions to poverty problems using randomized evaluations, the most rigorous evaluation method available. We also mobilize and support these decisionmakers to use these solutions to build better programs and policies at scale.

About the Household Finance Initiative:

Established in 2009, the US Household Finance Initiative (USHFI) leads IPA's US research. Led by researchers Jonathan Zinman (Dartmouth College) and Dean Karlan (Yale University), the initiative uses insights from behavioral economics to develop, rigorously evaluate, and scale cost-effective financial products and product innovations that help low- to moderate-income households lead healthier financial lives.

 Growing Up in Poor Neighborhoods


A recent study by Jonathan Rothwell and Douglas Massey analyzes the impact of growing up in poor neighborhoods and its impact on the future of the kids living there. We know a lot about how growing up in a low income family affects future earnings, but there is less research on how growing up on the wrong side of the tracks can impact future opportunities. The authors´ main objective was, as a result, comparing how a kid from poor parents would fare compared to the same kid if he had lived in a bad neighborhood. At the same time, they looked at how the the children of wealthy parents do when growing up in a poor corner of town.

The results are pretty staggering. Leaving all other things equal, moving a kid from an area in the bottom 25% of the income distribution to one at the top 25% yields $635,000 in additional lifetime earnings. As a matter of comparison, the lifetime premium of a college education is $1.1 million - so just moving a family from Hartford to Avon will yield about half of that return at no cost, even if the kids do not go to college. You can read more on this research here.

The implications for Connecticut, by the way, are considerable. Income segregation is, after all, one of defining features of our state. Mixed income neighborhoods are great at promoting social mobility; unfortunately, our state does not have many.

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