CAHS Blog

Last week the House voted to approve what is most commonly called the “Ryan Budget”, titled for its author House Budget Chairman Paul Ryan, Chairman of the House Budget Committee. The official title is The Path to Prosperity. Prosperity for whom, exactly? In the name of deficit reduction, the Ryan plan cuts taxes for the wealthy while slashing Medicare, Medicaid and other spending that helps our most vulnerable citizens. I’m sorry, what was that about deficit reduction? I must have missed that part.

To me, a “path to prosperity” would instead involve investing in our future generations to ensure every child has a strong educational foundation, healthy mind and body, and that opportunities exist for everyone to reach self-sufficiency. Although the economy is starting to recover overall, people in Connecticut are still struggling, and many continue to wander a long way from that path.

A new report by the Coalition on Human Needs and Connecticut Association for Human Services examines the impact of the automatic spending cuts mandated by the Budget Control Act of 2011 on more than 140 programs that serve low-income and struggling families, and the specific impact on Connecticut’s most vulnerable families. Unless Congress chooses another “path” (notice a theme here), these automatic cuts will go into effect January 2013.

The automatic cuts from sequester will be damaging enough, but if the House leadership’s budget proposal (a.k.a the “Ryan budget”) goes into effect, the harm will be much worse. Perhaps most disturbing is that programs that are exempt from the automatic cuts under the Budget Control Act would be reduced under the House blueprint.

“Trying to solve the budget deficit just by cutting spending is neither necessary nor effective” said Weinstein. “We do have choices. We can spend $25 million on one more Trident II nuclear missile or we can provide nearly 100,000 dislocated workers with job training. We can give one millionaire a $187,000 tax cut or pay for programs that benefit an entire community, including seniors, veterans and college students.” I couldn’t have said it better.

The Black and Puerto Rican Caucus of the General Assembly, the Connecticut Commission on Children, Literacy How, Haskins Laboratories, and the Connecticut Association for Human Services are co-sponsoring a policy forum next Thursday, April 5th at the State Capitol from 10AM-12:30PM to discuss what needs to be done to resolve the reading crisis in our schools.

You’ll hear from academic experts, school superintendents, teachers, parents, and students including Dr. Reid Lyon, Ralph Smith and from Montgomery County, Maryland professionals.  We hope you can join us!

A recent Letter to the Editor in the Hartford Courant expressed one couple’s frustrations with the state’s new method of returning tax refunds via debit card, rather than the familiar paper checks to which many had become accustomed.  As coordinator of CAHS’s Volunteer Income Tax Assistance (VITA) program, which provides free tax preparation to households earning less than $50,000 a year, I saw in this letter echoes of similar frustrations passed along to me from some of the volunteer tax centers we partner with around the state. 

Most of the confusion seems to center around how to get the money off of the debit card and either into one’s pocket or into one’s bank account, and many have wondered why taxpayers weren’t at least offered a choice of paper vs. plastic.  Others are concerned with the implications of the state partnering with Chase Bank to offer the card, questions about the kinds of fees that may be associated with using the card, and concerns about why a private bank should have the opportunity to profit off of government tax refunds.

Here are a few ways to keep the confusion to a minimum:

1. If you have a bank account, have your tax refund direct deposited into it.  You will receive your refund much more quickly, the process is safe and secure, and the money will be immediately accessible from your account.  No plastic necessary. 

2. If you do NOT have a bank account, you will have to take the refund on the state debit card.  But by taking a few minutes to understand how the new card works, you should be able to access your money without sending an extra dime to Chase Bank.  The Courant published an extremely helpful article Monday that briefly covers all of the ins and outs, and the CT Dept. of Revenue Services’ website also has a very clear and informative FAQ section on the cards. 

Some of the highlights: the card must be activated before you use it, by calling Chase Customer Service at 1-866-586-1705.   The Courant article provides a great summary of how to activate, and instructions will also come with the card.

Also, two of the quickest ways to get the money off the card are either by (1) visiting a Chase or People’s Bank ATM and withdrawing the funds for free (Chase doesn’t charge a fee for your first 3 visits to other banks’ ATMs, either, but those banks may charge you); or (2) make a small purchase at any retailer that accepts debit cards with your Chase card, then request cash back (this is also free, not counting the purchase). 

If you do have a bank account (again – we recommend avoiding this altogether next year by using direct deposit!), you can go to your bank and request a cash advance from the teller, which is another free option.  You’ll just need to know the available balance on the card (you will hear this amount when you call to activate).    You can then deposit the cash into your own bank account.  Again, both the Courant article and the DRS website provide step-by-step instructions for all of these options.

Although it’s understandable to be concerned about the state’s partnership with Chase,  the state has stated several times that the old method of cutting paper checks – also through a bank, similar to how most of our paychecks are processed - actually cost Connecticut and its taxpayers more money than the plastic option ($300,000 more per year, to be exact, according to DRS).  The debit cards are also more secure than a paper check, and if you follow the advice posted above, you can access your funds without paying any fees, unlike having to pay a check casher (for those without bank accounts).

It’s never easy adjusting to changes – especially when they have to do with your hard-earned money.  But by spending a little time to become informed this year, hopefully next year we can prevent some of this trouble with plastic.

How can people save when they don’t make enough to support themselves in the first place?

The Hartford Courant reports that Americans, who are living longer, aren’t saving enough for retirement:

“Too many Americans are headed for retirement hell,” LIMRA CEO and President Robert A. Kerzner said in an interview with The Courant. “They are not going to have the retirement of their dreams.”

Small wonder. The Economic Policy Institute estimates that increasing the minimum wage would immediate help 106,000 workers in the state. Seventy-five percent of those are aged 20 or older.

The resulting “retirement hell” will mean people working into their old age, scaling back on quality of life, and struggling to pay for health care, the Courant reports.

And speaking of a secure retirement, for everyone — we need options for people who don’t have an employer, or whose employers don’t offer a savings plan.  This study should prompt action.

Barbara Ehrenreich offers a revealing new afterward to her seminal Nickel and Dimed: On (Not) Getting by in America.

The book recounted her experience getting by as a low-wage worker 10 years ago.  The situation now is even more dire:

“When you read about the hardships I found people enduring while I was researching my book — the skipped meals, the lack of medical care, the occasional need to sleep in cars or vans — you should bear in mind that those occurred in the best of times. The economy was growing, and jobs, if poorly paid, were at least plentiful.

“In 2000, I had been able to walk into a number of jobs pretty much off the street,” she went on. “Less than a decade later, many of these jobs had disappeared and there was stiff competition for those that remained. It would have been impossible to repeat my Nickel and Dimed “experiment,” had I had been so inclined, because I would probably never have found a job.”

After more excellent original reporting, showing us how so many middle-class people are sliding into poverty, she sums up the policy implications.

“Today, the answer seems both more modest and more challenging: if we want to reduce poverty, we have to stop doing the things that make people poor and keep them that way. Stop underpaying people for the jobs they do. Stop treating working people as potential criminals and let them have the right to organize for better wages and working conditions.

“Stop the institutional harassment of those who turn to the government for help or find themselves destitute in the streets. Maybe, as so many Americans seem to believe today, we can’t afford the kinds of public programs that would genuinely alleviate poverty — though I would argue otherwise. But at least we should decide, as a bare minimum principle, to stop kicking people when they’re down.”

The Connecticut Mirror reports that the Labor Committee is looking to study offering a retirement plan for the increasing numbers of people who don’t have one through their employers.

Labor is supportive:

” ‘Much of our membership is fortunate enough to have defined-benefit pensions, largely because we were able to fight for them at the bargaining table,’ Salvatore Luciano, a veteran state employee union leader, told legislators Tuesday. But in the private sector, ‘this is a sacred part of the American dream that we are losing.’

Luciano, the longtime executive director of Council 4 of the American Federation of State, County and Municipal Employees, said, ‘I see family and friends forced to choose between money in their 401(k) and helping their children pay for college. I see family and friends putting off their retirements as the assets in their 401(k) were lost during the stock market crash.’

The traditional American retirement income was based on three tiers: Social Security, employer-sponsored retirement plans and personal savings, said Lauren Schmitz, a research analyst with the Schwartz Center for Economic Policy Analysis in New York.

‘But the employer-sponsored retirement system is on the decline on several fronts,’ Schmitz testified, noting that a majority of employers offer no plan, with small and medium firms the least likely to provide one.

About 61 percent of employers nationwide sponsored plans in 2000, but just 53 percent did by 2010, she said, citing U.S. labor and census statistics. Over the same period in Connecticut, the percentage dropped from 64 percent to 58 percent.

‘However, the retirement security crisis isn’t just limited to the half of workers who don’t participate” in retirement plans,’ said Robert Hiltonsmith, a policy analyst with Demos, a New York-based progressive policy organization. ‘Even many of those who are actively saving for retirement are at risk as well.’

Hiltonsmith testified that many plan participants not only took a hit during the stock crash of the last recession, but also have insufficient savings to cover the rest of their lives.”

Excellent concepts to study and act upon.

Care4Kids is the state’s childcare subsidy program, allowing low-income families the opportunity to work.  An Act Concerning the Care4Kids Program does four very important things:

1. Makes all minor parents eligible to receive care4kids, regardless of their parents income;
2. Allows a recipient of care4kids up to 12 weeks of program eligibility while taking unpaid leave due to the birth or impending birth of a child;
3. Begins to increase provider rates and implements a plan to increase rates to the recommended 75th percentile by 2022; and finally
4. Extends program eligibility to recipients who lose a job for no more than six months while actively looking for new employment.

CAHS testified in support of the bill before the Select Committee on Children at Tuesday’s Public Hearing.  There was a great deal of support from advocates and providers.  The State Department of Social Services testified that they are not philosophically opposed to the concepts raised in the bill, but questioned how we are going to pay for it. 

As this bill moves through the legislative process, we will keep you updated!  If you are interested in more information, please contact Early Care & Education Policy Analyst, Jillian Gilchrest.  Also, if you would like to read more, CTNewsJunkie posted an article about the hearing.