Study: Michigan crumbles under outdated tax system

From the Detroit Free Press:

California’s state finances are awful, but Michigan is among nine other states that aren’t far behind the Golden State in economic trauma, according to a new study.

The shock waves of the domestic auto industry’s decline, home foreclosures and persistent state deficits could last for decades, according to the Pew Center on the States.

The report quoted Donald Grimes, a University of Michigan senior research specialist, saying he expects new data this year will show Michigan is among the nation’s 10 poorest states.

If Michigan’s economy suddenly grew at the rate it did during the prosperous 1990s, it would be 2025 or 2030 before it recovered all the jobs it’s lost in the past decade, said Susan Urahn, managing director for the Pew Center on the States.

“Michigan is essentially adjusting to a new normal, where the state may just have to deal with a permanent set of pared-back services,” she said. “It is simply not one of the most prosperous states anymore.”

The report says Michigan’s population is becoming older and less affluent, and its outmoded tax system can’t support state government.

Generous tax exemptions for retirees and businesses, and the exclusion of services from sales taxes, are two reasons for persistent state deficits, according to the report.

Couples can receive up to $110,000 in pension and other retirement income without paying anything to the state.

“In 20 years, we’re going to look like Florida does now if the demographic trends continues and no one’s going to be paying taxes except those that are working,” Mitch Bean, director of the nonpartisan House Fiscal Agency, told Pew researchers.

Last year, the state offered $6.3 billion more in business tax breaks than it collected in taxes.

“Left with few options, Michigan is being forced to diversify its economy and confront long-neglected structural imbalances in its budget under some of the most unfavorable conditions since World War II,” the report says. “The beleaguered state is adjusting to a new normal.”

To balance its budget over the past decade, Michigan has relied on $8 billion in onetime fixes, not including the billions of dollars it received in federal stimulus money this year, the report concluded.

Joining Michigan and California on the Pew Center’s list of fiscally endangered states are Arizona, Florida, Illinois, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

Those states share, to varying degrees, these four troubling traits:

• Economies too reliant on single industries, such as the auto industry for Michigan.

• Persistent gaps between state spending and tax revenues.

• Limited ability to raise taxes or reduce spending.

• Inability to enact long-term fiscal reforms.

The report says the 10 states’ financial woes could result in higher taxes, layoffs, longer waits for public services, crowded classrooms, higher college tuition and less support for unemployed and poor people.

Because those states account for one-third of the U.S. population, their actions to either raise taxes or cut spending could slow the nation’s economic recovery, the report says.

The report comes on the heels of more budget tumult for Michigan. A finished 2009-10 budget is still under debate, with Gov. Jennifer Granholm locked in a bitter feud with Senate Republicans over additional tax revenues to stave off major cuts in state aid to schools.

The Pew assessment is no surprise to state finance officials. A new Senate Fiscal Agency report says tax revenues to run the state and public schools are nearly 13% less than a year ago (from November 2008 to October 2009).

September marked the ninth straight month in which tax collections were lower than previous year levels.

Precipitous drops in state aid to cities and schools have rekindled talk in Lansing of overhauling Michigan’s tax system.

Bean told the Pew researchers: “Even if we can straighten out our tax code some, I see no way around a dramatic change in government at all levels in Michigan. There’s going to be fewer services.”

New neighbors in the Historic Stuart Neighborhood

A particular relevant story was just released that really struck home for me. This Wednesday the ribbon-cutting ceremony for a house on Elm St. will commence at 1pm that will house low-income and (soon-to-be) formerly homeless persons.

Elm St. is one of the several streets that comprise the historic Stuart district, of which I am a resident. I have watched the reconstruction of this home occur over the last half a year and I am excited finally see it in use.

I drive past the house at least once a day, as it is within a couple minute walking distance from my home. It is a constant reminder to me of the successful, positive work that our community can achieve with collaboration.

Some tidbits from the Kalamazoo Gazette Article:

"VanDam & Krusinga Building and Restoration was the general contractor for the project, which involved essentially gutting the structure and replacing windows, doors, cabinets and interior trim. Work also included painting, landscaping, rebuilding the porch, making the entrance accessible to people with disabilities and providing parking.

The Elm Street project is the first to be completed with the aid of a $500,000 award from the Michigan State Housing Development Authority. That grant supplements housing-trust funds contributed by both the city of Kalamazoo and Kalamazoo County.

Ten of the single-person, efficiency units will be for low-income people with disabilities who will pay no more than 30 percent of their monthly incomes for rent and utilities. The remaining one-bedroom unit was planned to house an on-site, resident manager to provide support for the tenants.

The project is part of Kalamazoo County’s 10-Year Plan to End Homelessness, which calls for “reduced dependence” on shelters and increased emphasis on affordable, permanent housing that comes with appropriate support services."

Michigan DHS Caseworkers overburdened by demand of needy

According the Associated Press:

State social workers struggling with mounting welfare, food stamp and Medicaid caseloads said Wednesday they fear for their lives after being assaulted or threatened by recipients frustrated by delays in state aid.

Employees of the Department of Human Services said at a legislative hearing that they are overwhelmed with bulging caseloads and people seeking help are taking out their frustration on innocent workers. The employees said local DHS offices are packed because there are not enough workers to deal with the influx of cases as Michigan's unemployment rises.

"We need to help these families," said Jan Brown, who works in the Berrien County office. "They are families that need us. There are families who meet us saying, 'I never thought I'd walk into this office.'"

Brown was one of seven caseworkers to testify before the House Appropriations Subcommittee on Human Services.

DHS administrators did not dispute much of the testimony, though they stressed they take employees' safety seriously. They said the state's estimated 8,500 field caseworkers need more help. At least 700 more staffers need to be hired, said Terry Salacina, director of field operations. But that will be a challenge because Michigan has been cutting state government to deal with multibillion-dollar budget deficits.

Wayne County eligibility specialist Colette Gilewicz said she has more than 800 cases and handles 100 phone calls a day. She said a line forms outside her office in northeast Detroit at 7 a.m., an hour before the building opens.

Gilewicz said a client frustrated by the long wait threw a chunk of concrete through a window. The office has been broken into three times. The computer server was stolen for scrap metal.

Gilewicz said she is seeing an increasingly large number of former middle-class workers who were laid off from small auto-related factories and tool and die shops.

"Now at age 55 or 60, they're entering the system for the first time," she said. "They simply don't know what to do and where to turn."

DHS spokesman Edward Woods III said 2.2 million people, or more than 20 percent of Michigan's residents, get some type of government assistance — 400,000 more than a year ago.

Kalamazoo to vote on Metro Transit Tax on Tuesday Nov. 3

For many, the Metro Transit system is the only means of transportation to one's job, services and needs. Please consider the implications of a failed transportation system on our community. If people cannot travel to their jobs, it would only worsen the economic state of our community.

On Tuesday November 3rd, Kalamazoo city voters will decide whether to approve 0.6 mill to pay for Metro Transit for three years. If approved, the property tax would cost the owner of a $150,000 market-value home about $45 per year.

Officials estimate the levy would generate $1 million annually to pay for the Metro Transit service within the city of Kalamazoo. It would allow for continuation of the current level of service; riders would not see bus hours or routes expand, said Bill Schomisch, Metro Transit’s executive director.

City voters are being asked to pay for the remaining portion of the county’s public transportation system: the 18 bus routes that run in the city of Kalamazoo.

So get out there and vote yes tomorrow!

Public Option regaining some momentum

The New York Times recent report about the new public option bill that is being proposed by Senator Harry Reid:

WASHINGTON — The Senate majority leader, Harry Reid, sided with his party’s liberals on Monday and announced that he would include a government-run insurance plan in health care legislation that he plans to take to the Senate floor within a few weeks.

His proposal came with an escape hatch: A state could refuse to participate in the public insurance plan by adopting a law to opt out. Even so, the announcement was a turning point in the debate over how much of a role government should play in an overhauled health care system, and it set the stage for a test of Democratic party unity.

With Republicans united for now in opposition to any bill including a public option, Mr. Reid needs support from all members of his caucus — 58 Democrats and two independents — to take up the legislation. Aides said Monday that he appeared to be short of that goal, lacking firm commitments from several members of the caucus.

The idea of state's electing to accept or deny the option is an interesting concept. Would it push some of these "Blue Dogs" to vote for the bill? I am not sure I am completely convinced yet.

Blogger Nate Silver of fivethirtyeight.com offers some insight on the recent developments around the Health Care bill:

The first surprise is that Reid is showing some backbone. I don't think this move is quite as risky as it looks, because Reid has some wiggle room before he passes the point of no return. But Harry Reid does not generally have a reputation as a risk-taker, even in small doses. A nontrivial factor is that he's literally gone overnight from being a goat to a hero in the progressive blogger/activist community, something that could pay dividends when he's seeking cash and volunteers for what will be a very tough re-election campaign. Save perhaps for Alex Rodriguez, nobody has done more in the last month to resuscitate their image with their fan base.

The second surprise is that this happened without much explicit support from the White House.

The third surprise is the way that Democrats regrouped after the turmoil of August. The President's speech on September 9th was a major and -- in my opinion -- still somewhat underrated factor in this. But also: the tea party/town hall movement that dominated the headlines in August is at this stage somewhat immature, with a lot of sound and fury but not so much focus -- sort of where liberals were at in 2002/03 before the failures of the Bush administration became more manifest. Whereas liberal activists have been focused on a laser like the public option, conservative activists have been distracted by ACORN, Van Jones, the NFL's conspiracy against Rush Limbaugh, and who-knows-what. Usually it's liberals who have amorphous, omnibus critiques of the government, and conservatives who bear down on specific policies; the polarity seems somewhat to have reversed.

The fourth surprise, less important than the first three, is that the usually very footsure insurance lobby undermined its credibility by putting out the wrong study at the wrong time, giving a gift to Democrats by making it easier for centrist Senators to distance themselves from them.

The fifth surprise is that the usually very prepared Olympia Snowe didn't do her homework on triggers, failing to flesh out the proposal to the point where it was ready for a floor vote, much less had gained credibility with the Democratic caucus. If Snowe had done more legwork on the trigger -- at least theoretically, there are manifestations of it that ought to have been relatively acceptable to progressives -- then we'd almost certainly be talking about a "hard" trigger versus a "soft" trigger, instead of opt-ins versus opt-outs.

With all that said, again, it is not yet time for progressives to be breaking out the champagne. The momentum for the public option could unravel, and could conceivably even take the whole project of health care reform with it. And the public option, particularly in its compromised form, is less of a game-changer than either wing seems to think.

But none of this would have been possible without the yeoman effort of a relatively small number of bloggers and activists -- they know who they are -- who were tired of taking "no" for an answer. They wanted this fight because of the paradigm-shifting implications it could have for how business gets done in the Democratic Party. And, somewhat to my surprise, they're having it.

It seems the next few months will determine whether the public option is included in a the bill for reforming healthcare. For many reform supporters, it is the essential piece in assuring that all American's have equal access to the medical supports they need.

Kalamazoo Gazette covers poverty simulation workshop

Western Michigan University simulation workshops raise awareness of poverty's ill effects on community

Kalamazoo Gazette - October 26th, 2009

Five Western Michigan University social-work students were put in the shoes of the fictional poverty-stricken Aber family on Oct. 19.

With one unemployed parent, a pregnant 16-year-old daughter and a nearly drained bank account, the family members had to figure out how to pay their bills, get to work and feed their other two small children, an 8-year-old and a 10-year-old, with their limited resources.

The students, along with about 40 other social-work students, were taking part in the Poverty Reduction Initiative’s Poverty Simulation Workshop to see what it is like to be an average family living in poverty.

The students were given packets of information about their new identities and had to make their way through a month of dealing with banks, social services and the police, among other agencies. The students dealt with volunteers playing the roles of people working at such sites.

The students posing as the Abers budgeted as they could with the information given to them. They went to a loan center where they had to take out a $50 loan with a 30 percent interest rate.

When Mrs. Aber was late getting to work because she was getting a transportation pass, her employer put her on probation. Meanwhile, Mr. Aber could get only $25 for a $100 stereo at a pawnshop and was given a notice that he had $500 in outstanding loans from a bank. The Aber children all came home from school that day with school-supply needs, and the family received a malnutrition warning because it had failed to get groceries.

“At the end, some are left in the hole and some maintain,” said Barbara Barton, assistant professor of social work at WMU.

Barton said this is the second time that social-work students have participated in the simulation at WMU, which helps them gain empathy and understanding.

“The people who think they know about poverty” are the ones who should take part in the simulation, Barton said.

Barton was asked by the Poverty Reduction Initiative to research the effects of the simulation.
She talked to 144 participants for six to nine months after their simulation experiences to see what impact the experiences had on them. Barton has finished the first phase of the evaluation — studying attitude change — and is in the process of evaluating the behavioral impact.

Barton had six groups of participants take questionnaires, before and after the simulation. The groups were asked whether they agree or disagree with statements including “People living in poverty do not value education” and “Poor people participate in illegal activities.”

Barton found that many of the participants had different opinions after the simulation and that virtually no people felt “undecided” about any of the statements after the simulation.

Maggie Hiatt, event coordinator for the Poverty Reduction Initiative, said the organization has conducted about 40 workshops during the past four years involving more than 2,000 people.

The volunteers who play roles such as the pawnshop owner, a police officer and Department of Human Services agents are all living in poverty or have experienced poverty, adding some realism to the workshop, Hiatt said.

“The most common outcomes are feelings of empathy and realizing that poverty isn’t something that happens to someone else. It can happen to anyone,” Hiatt said.

The Ark shelter programs offer youngsters and families hope

A recent article was published in the Kalamazoo Gazette about the Ark's programs for youngsters and teens.

The Ark is a program of Catholic Family Services but is not restricted to children of any particular religious belief. The facility is open to any troubled child, and it provides a safe shelter for runaway children in danger of becoming homeless.

The program assists youths through periods of transition and difficulty, perhaps when families are separated. It helps them develop independent-living skills and eventually become integrated into the community as productive participants.

Some snippets:

“I’ve been at The Ark for 14 days, and it has really helped me already,” said Ronee CQ Lee, 12, who credits the shelter’s counseling services for helping her to control anger and “not get an attitude so fast.”

“I get in fights with my mom, and I’m learning how to quit doing that so much. We get in big fights, and The Ark is helping me not to run away or to think I can’t fix the problem.”

“It’s a chance for kids to share positive thoughts about The Ark,” said Theresa Krieger, supervisor of the shelter. “We want them to have a good time, but this also is a chance for some exposure, to let other kids who may need our services or know kids who might need our services know that we are available and what kind of impact The Ark can make.”

“It is all about reunification of the families,” said Fran Denny, Catholic Family Services executive director. “It is so important for families and children going through tough times that there are options that can help them.

“Sometimes families feel as if there’s no place to turn. But there is a place. The Ark is that place.”

“Catholic Family Services is the only reason I’m where I am today,” said PepaCQ Smith, 20, who was on the streets at 14 and was pregnant with her second child before she was 18. “My caseworker still checks on me to this day, and I remember all the programs and counseling that helped me so much. ...

“I’m 17 credits short of an associate’s degree in psychology at KVCC, I have a clerical certificate and a business administrative certificate,” she said. “Things seemed so hopeless when I was a teenager, but now my mom and I have come to understand each other better. I have kids to raise, and I’m getting better-equipped to raise them.”

The Ark is one of the organizations featured in this year's Hunger and Homelessness Awareness Week. They will be providing a tour of their shelter on Friday, November 20th from 12pm - 3pm. To see PDF featuring a full calendar of events, click here.

Read the full article from the Kalamazoo Gazette here.

Half West Michigan's 13,332 homeless residents are without housing for the first time

An article from the Grand Rapids Press focuses on the increasing growing homeless population in West Michigan, of which at least 50% are completely new to the experience.

Some highlights:

• According to the GR Press, Nearly half of those seeking help are homeless for the first time, records show. And most work at steady jobs — often at two or three.

• Last year’s count was up nearly 11 percent from the year before, including a startling 50 percent rise in the lakeshore counties, according to the Michigan State Homeless Management Information System, a program aimed at better assessing how many are without a residence.

• In a state ranked fifth last year in homelessness, affecting 86,000 people, a coming wave of expiring unemployment benefits could compound that amount.

• Studies show it costs about $1,000 per person per month to keep people in temporary shelters. Subsudizing rent for a few months — or even helping with a single rent or mortgage payment— can be enough to turn the tide.

Really when it comes to these new homeless affected by the recent recession, it is not so much about mental problems or substance issues issues, as it is about simply not having the means to afford a rent each month. Housing is simply too expensive for those who must also fill a plethora of daily needs.

It is EXTREMELY EXPENSIVE to shelter people and often it can make them dependent on the services. Don't take that the wrong way - sheltering is necessary and very important. However, if we simply took more action to subsidize housing and rent for the low-income population, studies show that these recipients are more likely to remain in their homes and less likely to enter a shelter.

It's really makes businesses sense from a cost and moral point. Lets give people better lives, while reducing costs to the welfare system at the same time.

Stay tuned as we shift to Hunger and Homelessness Awareness Week in Kalamazoo as well as other communities. Learn more at www.haltpoverty.org.

Read the full article here

Goodwill to host free career makeover seminars

Goodwill Industries of Southwestern Michigan – The Goodwill Career Academy is hosting the second of four FREE workshops its offering to job seekers in this community. “Beat the Odds and Get the Job - Presentation Counts” is a workshop designed around packaging yourself to impress an employer.

In this workshop job seekers will work on resume writing, cover letters, dressing to impress and proven techniques for an effective job search in this present economy. Attendees are asked to bring their current resume if available. The workshop, sponsored in part by the Radisson, will be held on Monday, October 19th. Both a morning and evening session are offered. The morning session will be from 9 AM – 12 Noon and the evening session will run from 6 PM – 9 PM.

“Beat the Odds and Get the Job” is the second of four independent workshops. Attendees of the first workshop gave rave reviews. One attendee said, “This was wonderful. I already feel my self esteem improving”. Other upcoming workshops are as follows:

Marketing “You” – Networking for Success!:

• October 26th - Learn how to leverage your personal and professional contacts to find a job.

The Art of the Interview:

• November 2nd - This workshop will focus on overcoming interview pitfalls and blunders.

Attendees are welcome to come to all the sessions or to the ones of most interest to them. Space is limited so those planning to attend are urged to reserve their space by calling (269) 382-0490 Ext. 286. Both morning and evening sessions will be held at the same times each Monday at the Radisson Plaza Hotel in downtown Kalamazoo.

Goodwill Industries of SWMI, a not-for-profit organization, provides education, training and employment services in Kalamazoo and the 8 counties in Southwestern Michigan. The revenue from its retail outlets and United Way funding assist in providing these services to the community.

Revisiting the Economic Bill of Rights

How close are we to achieving the rights that FDR outlined 65 years ago?



There are times in which to understand the present, we must look back into the past. In this video, Roosevelt outlines a second bill of economic rights:

"In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

Among these are:

• The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
• The right to earn enough to provide adequate food and clothing and recreation;
• The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
• The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
• The right of every family to a decent home;
• The right to adequate medical care and the opportunity to achieve and enjoy good health;
• The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
• The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens."

We must ask ourselves after hearing this a few questions after hearing this:

1. How far have we come to securing these rights for our own people?
2. Are we plagued by the same forces that existed before?
3. What steps do we need to take to ensure every American has these rights guaranteed to them?