"Disconnected youth" are young adults between 16 and 24 years old that are neither working nor studying. This is a population that has been poorly served by the education system, often failing to retain them as students. As a result, they reach the labor force without the academic and soft skills that would enable them to become self-sufficient.
Disconnected youth are twice as likely to live in poverty, three times as likely to have left high school without a diploma, and half as likely to hold a bachelor's degree. Disconnected female youth are more than three times as likely to have a child. Nationwide, the cost to taxpayers was $26.8 billion in 2013 alone, just taking into account increased use of public benefits.Connecticut currently has more than 46,000 disconnected youth, with a disproportionate overrepresentation of racial minorities:
if the numbers for the state as a whole are worrisome, the gap is even large in two of our largest metro areas, New Haven and Hartford. These cities are ranked third and fourth nationwide on percentage of disconnected Latino youth:
CAHS has long worked in programs that support this population (developmental and adult education, apprenticeships). Now with Opportunity Connecticut we will be looking at the structural causes behind theses disparities.
1. The budget: revenue overview
Let´s start with the obvious: new revenue means taxes. The Finance Committee budget brings in more money, so it is taxing more stuff, and they are doing this in a pretty smart way that deserves some attention.
If you look at this numbers, you will immediately see that this is a lot of money - more than the amount the Appropriations budget actually calls for. There are two main reasons for that.
First, some of the new revenue raised will not go to the state coffers, but to municipalities. Paired with the new revenue package, the Committee passed S.B. 1, a fairly ambitious property tax reform bill. This proposal includes some clever ideas on property taxes, and instructs that part of the sales tax money will go to municipalities. More on this below.
Second, because the sales tax will cover more services and products, the state will actually lower the rate.This will leave enough room to cover the additional spending on the Appropriations side while avoiding some of the impact from the tax increase.
To sum up, the total new revenues add up to just shy of one billion. Of that money, $294 million would go to municipalities, and $253 are used to lower the overall sales tax rate. With Appropriations adding $289 million in spending, the budget actually ends up having a small surplus.
Now let´s look at the numbers with some detail.
2. The budget: the sales tax
So let´s take a closer look at the sales tax: what are the exact changes included in the Finance proposal?
The Finance Committee proposal is based on broadening the tax base.
In non-jargon, the current sales tax is far from comprehensive: there are a lot of products that are not taxed (they are exempt), and services are only taxed if included explicitly in legislation. The Finance Committee´s plan eliminates quite a few exemptions (some of them were already included in the Governor´s budget proposal) and adds to the list of taxable services. This is similar to the recommendations offered by CT Voices in their March revenue proposal.
What exemptions are eliminated?
The two big items are clothing and footwear under $50 (raising $137 M) and computer and data processing (raising $162 M).
What services are now taxed?
The list is fairly long - you can find it here. The ones that raise the most revenue are engineering services, public accountants and consulting services. Most of the changes are items that really never made much sense to be tax exempt, like interior designers, golf courses, country clubs and direct mail advertising,
All in all, it does add up to a good amount of money: $322 Million.
What will be the sales tax rate now?
By the end of the year, 5.85% for the state portion of the sales tax; 0.5% for municipalities. The state rate would be reduced to 5.35% in 2016, leaving the combined rate at 5.85% next year.
Are these changes regressive?
The sales tax is indeed fairly regressive, however the slightly lower rate actually should favor lower income households. The services added and most exemptions do not affect poor families all that much, although the clothing exemption does. It is too early to tell how this will impact families without running some numbers.
The municipal .5%, however, will be used to lower another tax that it is really regressive: car taxes. More on that in a bit.
3. Other taxes: income and capital gains
The changes on income and capital gains are a bit more straightforward: just a slight increase in rates.
The top marginal rate (for individuals making more than $500,000 a year or couples filling jointly making more than $1,000,000) will go up from 6.7% to 6.99%. Note this is the marginal rate - that is, for each dollar that an individual makes over $500,000 he would pay about 6.99 cents instead of 6.7. The top tax rate will still be well below New York, New Jersey and Massachusetts, so we are still competitive in this regard.
Although small, the change raises significant amounts of money: $102.4 Million.
Taxpayers in the highest income bracket (more than $500,000 for individuals, $1,000,000 for couples) will pay a 2% additional tax on all capital gains. This will put Connecticut in line with New York for top earners, and still below New Jersey.
The new supplemental tax would raise $167.6 million.
4. Other taxes: odds and ends
There are quite a few minor changes in the Finance proposal, the most relevant being tweaks on the hospital tax, closing some loopholes by introducing combined reporting for corporations (basically preventing businesses from claiming that they made profits in another state), the elimination of the business entity tax and Keno.
Yes, Keno again. It really does not raise that much revenue ($13.6 M in the first year, $30 M in the second), but it is again in there, somehow.
5. Property tax reform: S.B. 1 and the sales tax
We have been talking about property taxes quite a bit for the past few weeks. The current system is not only terribly regressive but steers investment away from poorer cities.This has been an area that the FESC wanted to address.
The Finance Committee is tackling this issue with S.B.1, adding a few very interesting tweaks. We mentioned that the sales tax now has a 0.5% portion that goes to municipalities; this bill actually details how the money would be used. It has four main components:
Motor vehicle tax changes:
The car tax is now capped at a mill rate of 29.36. There are 57 municipalities with taxes above that threshold - part of the money from the sales tax will be used to compensate them for the lost revenue.
This change would limit (but not close completely) the gigantic disparities in rates that the same car can pay if registered in a different town, a very positive reform.
Changes to PILOT grants:
PILOT stands for "payment in lieu of taxes". This is a grant that compensates towns with a lot of non-taxable property (state buildings, non profits hospitals, etc.) for the loss of revenue. S.B.1 tweaks the formula to give priority to the towns with the most non-taxable property. They also happen to be the poorest cities, so it is also a positive change.
Regional revenue sharing:
An idea we have described earlier, although with 20% of new commercial/industrial revenue growth shared instead of the 40% of the original bill. It is a bit less effective, but still a very good reform.
Regional program incentives:
About 10% of the funds coming from the sales tax would be used to establish cooperative regional programs to create efficiencies and reduce costs.
All in all, these are good changes - maybe a bit less ambitious than the bill that came out of the Planning Committee, but positive changes nonetheless. The car tax change will represent a hefty tax cut to city residents and many inner ring suburbs, PILOT will dedicate more resources to poor towns, the revenue sharing will help balance growth and regionalization incentives can help reduce the costs of providing municipal services.
The bill has strong support from the leadership, so it has a good chance to make it to the floor. If you have not talked with your legislators about property tax reform, it is time to start.
6. What´s next?
Still a long way to go until the budget is done. The Finance package includes quite a few big ideas, so once it gets to the floor, expect some back and forth discussion.
What it is important to do now is to contact your legislators in the Finance Committee and thank them for their efforts. This is a very difficult budget that needed some tough budget choices. The budget includes new revenue and some significant reforms on how we pay education (remember- that´s what property taxes are for!) in the state. Our legislators made the hard choices, and they deserve some recognition.
We had some very good news in the budget process this week. We are not done yet, but we are moving the needle - things are going in the right direction. Stay tuned, as there is more to come.
The Annie E. Casey Foundation has released a report focusing on two generation learning and education strategies to improve the lives of children.
CAHS and Connecticut Coalition on Children presented the report at the Legislative Office Building in Hartford on November 12th on a community forum that included community organizations, parents, advocates and legislators to talk about the issues facing low income families in Connecticut and the opportunities and challenges a two generational approach to learning can open. Sarah Griffin, Senior Consultant for the Annie E. Casey Foundation, presented the report, discussing its main points and addressing its policy recommendations.
Have you ever wondered why CAHS´Kids Count Data Book includes information on low birth weight babies? As you probably know, this is an indicator of the health of the mother during pregnancy, and has a strong effect on child development.
How strong? The New York Times published on Sunday a review of a new study linking birth weight and school achievement, and the results are striking. On average a 10 pound baby will score 80 points higher on the 1,600 point SAT than a 6 pound one. This is the difference between being quite a bit below the median (6-pound babies score in the 43rd percentile) or above it (10-pound babies score on average in the 57th).
Poor neonatal health, then, is crucial not just during pregnancy, but has long term cognitive effects. You can find the full study here.
Several media outlets covered the launch of the national Kids Count Data Book on Tuesday, with some interviews and in depth coverage of the data presented.
- For those who missed the event, you can watch the full event on CT-N here, streaming.
- Fox 61 had an extensive piece, as well. You can watch the video here, interviews to CAHS´staff included.
- NPR had a very interesting segment.
- CT News Junkie report on the event, also with some interesting details.
- WFSB interviewed Jim Horan, our executive director, on the data release.
- A good piece by Public News Service, quoting yours truly.
- The New Haven Register, Middletown Press and Register Citizen also ran pieces on the report.
Full video and photo gallery of the event after the jump.
This is a first in a series of posts that CAHS will be doing on the 2014 Annie E. Casey KIDS COUNT National Data Book release. Below is our press release that summarizes the reports findings regarding CT’s kids. Stay tuned for updates – including a recap of today’s release event at the Legislative Office Building (find more information and RSVP here) and posts that take a deeper dive into the 16 indicators that give us insight to the health, education, economic-well being and family and community context of our states’s children. The full report is available now here.
Child Poverty in Connecticut Has Increased Since 1990 despite Education Gains, New National Publication Reports
Number of children living in poverty has increased by 50 percent in the past 25 years according to the Annie E. Casey Foundation’s 2014 KIDS COUNT Data Book
Hartford – The number of children living in poverty in Connecticut has increased by 50 percent since 1990, according to a new report released by the Annie E. Casey Foundation. Nationwide, child poverty numbers are up since the recent recession, with nearly 16.4 million children in families below the federal poverty level. The good news is that both nationally and in Connecticut there have been steady improvements over the past 25 years in the numbers of children attending preschool and a decline in the number of students not proficient in reading and math.
Connecticut is ranked 7th overall on the report’s child well-being indicators that span education, health, economic well-being, and family and community context. The state ranked as high as 3rd in the pre-recession 2006 and 2007 years. The KIDS COUNT Data Book evaluates the latest data on children and families for every state, the District of Columbia, and the nation.
Comparing data collected in 1990, the first year the KIDS COUNT Data Book was released, to the most recent available data, the 25th edition of the national KIDS COUNT Data Book reveals that in Connecticut:
- Housing costs are a burden to children and their families. Over 40 percent of children in Connecticut are living in families that spend 30 percent or more of their income on housing. This places Connecticut near the bottom of all states (43rd).
- More children are living in high poverty neighborhoods. The percentage of children living in neighborhoods with high concentrations of poverty has nearly doubled since 1990. There has also been a significant increase in the number of children living in single parent families. In 1990, it was 1 in 5 children; in 2014 the report finds that it is now 1 in 3 children.
- Children are progressing in the areas of education and health. Connecticut’s children have improved significantly in education since 1990 – graduation rates and test scores have seen double digit percentage increases, and the state ranks 1st in the nation on the number of children who report a preschool experience. Connecticut also has a comparatively low-rate of uninsured children, and the lowest child and teen death rate in the country.
“This newest report shows us that Connecticut, one of the wealthiest states in the country, is falling behind,” said Jim Horan, Executive Director of the Connecticut Association for Human Services (CAHS). “The report also shows that a strong commitment paired with investment can bring about results. In recent years the Governor and the legislature have prioritized universal preschool access, and this year we were ranked number one in children reporting preschool experiences.”
Horan added, “We need to show this same commitment to our state’s poorest families in other areas – we need to allocate our time and resources to proven workforce training and support programs, greater affordable housing options, and outreach to our most vulnerable neighborhoods.
As the KIDS COUNT Data Book is being released in Baltimore, CAHS will be holding a conversation about the findings of the report, and next steps for the state, at a July 22 event at the State’s Legislative Office Building, Room 1C. The event will begin at 11:00 a.m.
The 2014 National KIDS COUNT Data Book is available in the KIDS COUNT Data Center, which also contains the most recent national, state and local data on hundreds of measures of child well-being. Data Center users can create rankings, maps and graphs for use in publications and on websites, and view real-time information on mobile devices.
The Connecticut Association for Human Services (CAHS) is a nonprofit policy and program organization that promotes family economic security strategies to empower low-income working families to achieve financial independence. Our mission is to end poverty and engage, equip, and empower all families in Connecticut to build a secure future.
The Annie E. Casey Foundation creates a brighter future for the nation’s children by developing solutions to strengthen families, build paths to economic opportunity and transform struggling communities into safer and healthier places to live, work and grow. For more information, visit www.aecf.org. KIDS COUNT® is a registered trademark of the Annie E. Casey Foundation.
A new report, released this morning by the Annie E. Casey Foundation, finds that while overall Connecticut's children are doing well compared to national standards, the state's black and Hispanic children remain far behind in important development measures. CAHS is the Casey Foundation's KIDS COUNT grantee for Connecticut.
The KIDS COUNT® policy report, Race for Results: Building a Path to Opportunity for All Children, ranked Connecticut ninth, using a first-of-its-kind index measuring child progress.
The report, which can be viewed here, contains both national and state-level data, and the new Race for Results index has been designed to see how children are progressing on key milestones across racial and ethnic groups. The indicators for the index were chosen based on the goal that all children should grow up in economically successful families, live in supportive communities and meet developmental, health and educational milestones. Examples of the indicators, reported by race, include the percent of babies born at normal birth-weight, the percent of young children enrolled in an early learning program, and the percent of high school students graduating on time. Each state is ranked, from 1 to 50, based on a combined "Race for Results" index score.
Overall, Connecticut ranks 9th in the nation. This high-rank masks the persistent and large disparities between races here in the state. Connecticut's white children ranked third compared to their peers across the 50 states, just behind New Jersey and Massachusetts. Black children ranked 16 out of 46 states in the index, and Connecticut's Hispanic children ranked 24 out of 47 states (in some states the population of black and Hispanic children was too small to provide enough data for comparison).
So while the main driver behind our high ranking is from white children doing very well, black and Hispanic children contribute by doing better than one-half to two-thirds of the rest of the country. The good news, however, is tempered when we look internally and compare the scores between white and minority children, to reveal a stark inequality in Connecticut. The differences in scores places Connecticut 39th (out of 46) when comparing white children to black children , and nearly last (46 out of 47) in the difference between white and Hispanic children.
We believe that the findings of this report highlights a troubling reality in the state -- that children of color are not receiving the same opportunities as their white peers. We also believe that the findings are a call to action, and that the index underscores the need to invest in high quality early childhood education, workforce development programs, and wrap-around supports for low-income and vulnerable parents.
We have prepared a short document that uses the report's indicators to compare Connecticut's children with children nationwide - the chart can be viewed here.
The latest KIDS COUNT policy report from the Annie E. Casey Foundation presents a strong case for investing in the early years of a child´s life. Decades of brain and child development research show that kids who enter kindergarten with below-average language and cognitive skills can catch up - but only if they are physically healthy and have strong social and emotional skills.
The report includes plenty of evidence to back up this assertion. A newly released analysis from the Early Childhood Longitudinal Study shows that just 19 percent of third-graders in families with income below 200 percent of the poverty level and 50 percent of those in families with incomes above that level had developed age-appropriate cognitive skills. This picture is particularly troubling for children of color, with 14 percent of black children and 19 percent of Hispanic children on track in cognitive development.
Children who don't meet these key developmental milestones often struggle to catch up in school and graduate on time and are less likely to achieve the kind of economic success and stability necessary to support a family themselves.
For children to succeed they need both great schools and positive integration of their classroom experience on their daily lives. The need social, emotional and physical stability that enables them to learn in a nurturing environment. The report makes the following policy recommendations:
- Support parents so they can effectively care and provide for their children.
- Increase access to high-quality birth-through-age-8 programs, beginning with investments that target low-income children.
- Develop comprehensive, integrated programs and data systems to address all aspects of children's development and support their transition to elementary school and related programs for school-age children.
CAHS, as a KIDS COUNT member organization, has advocated and will continue advocating for these programs and policies. You can find the full report here; we will soon publish a companion report focusing on how these issues affect Connecticut, and the targeted investments the state needs to achieve these goals.
CAHS was proud to be one of the presenters at the 2013 Stone Soup conference hosted by Discovery Communities and the Graustein Memorial Fund this week. Our workshop focused on how and why childhood poverty undermines opportunity in our state, and how despite the apparently good indicators in this field.
Connecticut is wealthy state, and we usually rank pretty high on many child poverty indicators. Our state, however, has some pockets of concentrated poverty, as we are one the most unequal places in the nation. How to break this cycle and move these communities forward is one of the crucial policy questions facing our state, and our presentation tried to address them.
You can find the slides from the presentation here (PDF): CAHS Stone Soup - childhood poverty and opportunity. A lot of the data comes from two previous reports from CAHS, our 2013 Kids Count Data Book and our previous work about racial disparities and urban jobs, as well as national Kids Count data.
A bill before the Legislature will create a task force to study Family Medical Leave Insurance (FMLI), a wage replacement program that Connecticut’s workers can access when they need time away from work to care for themselves during an illness, for a sick or aging loved one, or a new baby. HB #6553, “AN ACT ESTABLISHING A TASK FORCE TO STUDY FAMILY MEDICAL LEAVE INSURANCE has been voted out of the Legislature’s Labor Committee and is now on the “GO list” for the House of Representatives.
We know that people are taking leave from work to deal with their own illness or because they are in a caregiving role to an aging parent, sick child or newborn. We also know that families cannot afford unpaid leaves and that many people actually call the Department of Labor in search of compensation while out on an unpaid medical leave.
However, before Connecticut creates an FMLI program, a thoughtful study and discussion must take place in order to understand how a program will be administered, who will be eligible, and how it will be paid for. The task force calls for the appointment of a diverse group of people, including representatives of large and small business, the insurance industry, advocates for individuals with chronic illness and caregiving responsibilities, and state departments and agencies to name a few charged with studying how Connecticut can make FMLI happen.
Anyone who would benefit or could benefit from FMLI is urged to visit the Connecticut FMLI Coalition's website and to contact their legislator. You can find information about the task force and how to contact your elected officials on the website.
People are always going to need to take time away from work, it’s a problem that isn’t going away. Elected officials need to hear that people are interested in FMLI and want the State to start planning.