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Place and the Paul Ryan Poverty Plan

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Cross-posted on Brookings Metro’s blog, The Avenue

Elizabeth Kneebone

The new poverty plan unveiled last week by Rep. Paul Ryan has definitely sparked a conversation, generating a flurry of responses from positive to critical to somewhere in between (call it skeptical). By not engaging in a budget cutting exercise as in the past, Ryan has framed his proposals as an effort to start a conversation in Washington about real policy reforms to more effectively fight poverty and promote economic opportunity.

But for all of Rep. Ryan’s talk about the traveling he did over the past year to learn from people fighting poverty on the “front lines,” his new plan says very little about the importance of place in that fight. Whether it’s increasing access to opportunity or streamlining access to services, place matters.

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Confronting Suburban Poverty in Johnson County, Kansas

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Elizabeth Kneebone

Three years ago, I was invited to Johnson County, Kansas to speak at the county’s annual Human Services Summit about growing poverty in the Kansas City region’s suburbs. Earlier this month, United Community Services of Johnson County (UCS)—the event’s organizer—invited me back to revisit the topic at this year’s summit. I was immediately struck by how much the conversation has evolved in the region in recent years.
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In St. Louis County, Communities Join to Fight Suburban Poverty

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Sarah Jackson

In the St. Louis Region, because of a firm city boundary that was fixed by leaders here in 1876, much of the growth of the last two hundred years has had nowhere to go but into suburban communities that surround St. Louis proper. The region is highly suburban: 89 percent of the region’s residents live in the suburbs.

And although more than half of the poor population lives in suburbs nationally, the St. Louis region is ahead of this curve (or behind, depending on how you look at it) with almost three-quarters of its poor population living in suburban communities. The region saw poverty grow by 75 percent in only 12 years, and almost all of that growth (95 percent) took place in the suburbs. Today, nearly 119,000 poor people live in St. Louis County, almost 30,000 more poor residents than in the city itself.

The suburban county includes over 90 municipalities and more than 20 school districts, making cross-jurisdictional collaboration difficult. Despite these challenges, the region is piloting models that hold promise in combatting growing suburban poverty, thanks to some innovative local leadership here.

“None of this is splitting the atom or curing cancer,” says local leader Chris Krehmeyer. “The challenge is how do we direct resources in an integrated fashion in places, in geographies and then do that at scale.” Krehmeyer is the CEO of Beyond Housing, an organization that leads an innovative partnership among 24 inner-ring suburban communities, some with as few as five hundred or eight hundred people, located within the Normandy School District in St. Louis County.

The comprehensive initiative, called 24:1, began as an effort to address the foreclosure crisis and failing school district, and has since added the coordination of housing, jobs, economic development and health care.

We know how to solve some of these problems by themselves, Krehmeyer said on Stay Tuned, such as rehabbing housing, providing better health care, or improving social services. The challenge, he said, is whether “we have the political will and courage to say: ‘Can we provide enough?’”

For these small communities, like many across the country hit hard by foreclosures, the Great Recession, and growing suburban poverty, the ability to “provide enough” to effectively address these complex and related challenges hinges on capacity.

Unlike inner-city neighborhoods, which have dealt with poverty for decades, outlying suburban areas don’t have the same capacity to respond, both in terms of the local government and the nonprofits with community development expertise.

Some of these communities, Swanstrom said, “barely have a police force, let alone a housing planner.” Yet their collaborative work through Beyond Housing will allow them greater access to resources and comprehensive supports.

A targeted, comprehensive development strategy, 24:1 aims to facilitate collaboration across jurisdictional lines, to fight suburban poverty. Organizers are betting that their coordinated efforts will be more successful than single, fragmented interventions.

And they’ve had some notable successes.

The effort started in 2009 with a very community-driven planning process. Their website notes that they have held more than 52 community meetings as part of this process, with more than four hundred attendees. The partnership brings together mayors of the 24 municipalities, the school district, local nonprofits, UM−St. Louis, Washington University, and many other stakeholders in the region. Their community plan identifies 11 “impact areas” for future work including healthy residents, employment readiness and access, early childhood development, and community capacity building. They’ve helped bring community voice to recent controversies over school district governance and a controversial student transfer law.

Among their successes over the last 4 years include the investment of nearly $50 million in housing stock, the construction of a 16,000 square foot grocery store, and the creation of a youth impact continuum with the local school district including a universal college savings program. In 2014 they will begin construction on a movie theatre, health services facility and a 53 unit senior housing building.

Other models are worth noting in the region, including the work of the integrative workforce development initiatives at the MET Center with support from the Annie E. Casey Foundation’s Centers for Working Families, and the county’s data- and metric-driven strategic plan, which includes a specific focus on concentrated poverty and community development.

“Comprehensive approaches have much better outcomes than if you try to do these projects one at a time,” said the Federal Reserve Bank of San Francisco’s David Erickson, who spoke in St. Louis along with Elizabeth last month.

Systems aren’t set up to work cross-sector, and Erickson says it takes one entity to act in a quarterback role to work with existing systems as they are and “cajole and bring them together so they can provide that type of intervention that’s so effective.”

Elizabeth and Alan borrow the quarterback concept from the 2012 book Investing in What Works for America’s Communities, a joint project of the Low Income Investment Fund (LIIF) and the Federal Reserve Bank of San Francisco. In the book, Erickson and coeditors Ian Galloway and Naomi Cytron envisioned quarterbacks as high-performing local organizations whose job was to “identify and build on . . . areas of leadership and strength, as well as to build capacity in the gaps.”

In St. Louis County, Beyond Housing—which sees its role as that of facilitator, convener, and doer—is an example others should look toward.

Homepage photo credit: Beyond Housing

Public-Private Partnerships Promote Equitable Growth in Minnesota

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Ramsey Cnty Blog SummitBy Sarah Jackson

All eyes are on Ramsey County, MN, as it implements an ambitious 11-point plan that ties reducing inequality to boosting the Minneapolis-St. Paul region’s economy.

In the Twin Cities region, inequality and poverty are on the rise. Wages have stagnated, and the achievement gap between white students and the growing population of students of color is gaining national attention. Between 2001 and 2011, poverty in the region’s suburbs rose by 127 percent.

These are alarming indicators from a region and state known for their models of progressive government with a focus on equity. But now, officials in Ramsey County, have an ambitious plan to do something about it.

Officials have launched an 11-point program to boost prosperity in the region and reduce racial disparities. According to the Minneapolis Star-Tribune, the program includes:

“improving support services for youth so that fewer kids end up in criminal detention; ensuring that county buildings and services are where they easily can be accessed by residents; elevating the visibility of the county’s workforce programs; and using more small local businesses when buying county goods.

There’s also a focus on creating internship opportunities for young people from disadvantaged backgrounds and reviewing the county’s hiring and promotion policies.”

“Disadvantaged” in this case often means black, Latino, Hmong, and African individuals. In Ramsey County, 25 percent of people of color live in poverty compared with 6 percent of the area’s white population. Ramsey County also has a heavy concentration of the region’s federally subsidized housing (32 percent). This coupled with a lack of investments have increased concentrated poverty. Poverty rates in some suburban locations have reached as high as 40 percent.

“The fear,” according to the Star-Tribune, “is that unless something is done to reduce poverty among minorities, the county’s overall poverty rates will grow in step.”

The proposed solution is policy that is multi-jurisdictional, multi-faceted, and collaborative. The county will target public and private investment to community banks, grocery stores, retail development, transportation, and community centers. Public-private partnerships, including those with employers, will be key.

Ramsey County is on the right track, according to researchers at PolicyLink and the USC Program for Environmental and Regional Equity (PERE). In “Minnesota’s Tomorrow,” a new report, they find that programs that promote racial and economic inclusion are critical to a region’s economic success. The authors call for an “equity driven growth model” that helps to connect vulnerable populations to good jobs while strengthening local and regional economies.

A successful future economy, researchers from Policylink and USC argue, must focus on equitable growth — creating good jobs, preparing workers for those jobs, and expanding economic opportunity for all.

Ramsey County is advancing that goal with its push to connect workforce development programs with private-sector employers who need skilled workers. Currently, according to the Star-Tribune, there’s a gap between what employers need and what workforce development programs are focused on.

St. Paul-based manufacturer J.W. Hulme, featured recently on CNBC, faced such a skills gap. When the company needed more skilled workers, CEO Jennifer Guarino reached out to Minneapolis-based Dunwoody College of Technology to design a six-month curriculum to teach the industrial sewing skills needed to produce high-end leather goods. The school agreed, on one condition: Guarino had to offer jobs to students who finished. The two eventually convinced other companies to join, forming “The Makers Coalition,” which trains and employs people with industrial sewing skills and promotes the trade. The coalition has recently expanded to Michigan.

The PERE report also highlights the work of Summit Academy OIC in Minneapolis, a  community-based vocational training and job placement program that aims to help meet demand for future workers in construction (and other industries) to replace an aging, and mostly white, workforce. The workforce is needed to tackle the backlog of infrastructure projects in the area. The 20-week training program provides hard and soft skills to trainees in low-income communities, including high school dropouts.

These initiatives are promising. However, to be truly effective, they must expand beyond the local area and scale up the models that work.

The Obama administration has proposed several efforts to start that process. As a start, it is urging greater collaboration between local employers and community colleges as training hubs. In September 2013, the Departments of Labor and Education announced nearly $500 million in grants to community colleges for targeted training and workforce development to help dislocated workers change careers. The grants support partnerships between community colleges and employers to develop programs that provide pathways to good jobs and that meet industry needs.

President Obama’s 2015 budget also creates the Opportunity, Growth, and Security Initiative includes a four-year, $6 billion Community College Job-Driven Training Fund to launch new training programs and apprenticeships that will prepare participants for in-demand jobs and careers. The hope is to double the number of apprenticeships over the next five years. The budget also proposes $15 million for grants to states to focus on regional partnerships.

Bold new solutions like these are needed to ensure today’s students and tomorrow’s workers are prepared, and to ensure that economic growth is shared by everyone. Ramsey County is a place to watch.

Photo/edkohler

Building Capacity to Fight Today’s Poverty

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CentroNiaBy Sarah Jackson

Mary’s Center, a D.C. community health center, had always served an urban population. Created in 1988 to provide culturally sensitive prenatal care to young Latinas in the Adams Morgan neighborhood, the small community center grew over the years, becoming a Federally Qualified Health Center in 2005.

But it faced perhaps its biggest challenge in the 2000s, when it began to see large numbers of its patients coming to their health centers from outside of the city.

Some of these families had recently moved to the Maryland suburbs in search of more affordable housing. But suburban patients were also coming to Mary’s Center who had never lived in the city—new immigrants who had settled directly in the suburbs or the newly poor, folks who had recently fell into poverty and didn’t know where else to turn.

Montgomery County was experiencing rapid demographic change. While fewer than one in five county residents were immigrants in 1990, by 2010, according to census data, immigrants made up nearly one-third of the population and almost 40 percent of poor residents. After the recession, poverty in the county grew by two-thirds between 2007 and 2010.

Low-income families in the county were often unable to find organizations that provided the same kinds of support services available to urban residents. Multilingual and multicultural support services, immigrant services, and affordable and quality early childhood education were either limited or not available in areas experiencing rapidly growing need.

To add further strain, existing service providers in the suburban communities were stretched very thin facing the new increased demand.

“There just wasn’t enough money to deal with this upswing in requests for emergency services,” Tim Warner, who works with faith communities in the county executive’s Office of Community Partnerships, told the Washingtonian in 2011. “So we got together and said, ‘What can we do creatively to deal with this?’”

County officials launched the Neighborhood Opportunity Network in 2009, a cross-sector collaboration with an emphasis on cultural competency that aims to ensure residents receive critical services and helps create support networks in high-need suburbs. The county’s struggles reflect a common problem facing suburban communities across the country – lack of capacity.

Living Cities, a partnership of foundations and financial institutions, is one of a growing group of institutions finding creative ways to help suburban communities respond regionally to the growing demand from new populations. Its Integration Initiative aims to determine what’s needed to help communities “move beyond piecemeal approaches” and toward broader change in systems that shape the lives of low-income people. Through this initiative, one thing they quickly learned is that communities often lack not only the infrastructure to fight poverty, but also the ability to even absorb the funding that comes their way. Building capacity in these communities is critical to helping them effectively address growing need.

In the D.C. region, Venture Philanthropy Partners (VPP) recently has had some important success in finding effective ways to invest in and build capacity region-wide.  VPP supports strong service providers that can blend multiple funding streams.  Through its targeted investments, VPP encourages cross-sector, multijurisdictional partnerships, and has helped a number of high-performing nonprofit organizations to expand into suburban areas with limited capacity.

For example, VPP facilitated a key partnership between Mary’s Center and Washington Adventist hospital in Montgomery County; the hospital, in Takoma Park, now sends low-income immigrant patients needing follow-up care to the Mary’s Center that opened in 2008 in nearby Silver Spring.  Along with a $3.3 investment, VPP helped Mary’s Center build strategic business and government relationships that made this and expansion to other new service areas possible. The Center now runs six sites, four in D.C. and two in Maryland. They also operate mobile units that provide free HIV and pregnancy testing, as well as one providing pediatric dental care in Prince George’s County.

Similarly, VPP helped CentroNia, a youth service organization, make the shift from a Latino neighborhood group serving 322 children in D.C,’s Columbia Heights neighborhood, to a regional leader serving bilingual children from multiple ethnic communities. VPP’s investment of $2.4 million over six years helped support the expansion of programs into Takoma Park, MD to serve the growing immigrant community there, and CentroNia’s internal processes to strengthen its board, restructure management, and develop an “outcomes framework” that could manage significant growth.

Elevating regional solutions over neighborhood-by-neighborhood approaches makes sense. And VPP has found effective ways to invest in and expand high-capacity organizations.

As Elizabeth and Alan argue in Confronting Suburban Poverty in America, these are the models metro regions will increasingly need to look toward to meet the needs of their changing populations.

Changing Suburbs, Poverty, and America’s Political Future

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VotingBlogBy Sarah Jackson

In the vast sprawl east of Los Angeles lie some of the fastest growing communities in the country. The Riverside-San Bernardino metro area grew 32.7 percent from 2000 to 2012. And it’s expected to keep growing, according to California’s Department of Finance.

In fact, if the state’s estimates are on track, Riverside County will have the largest population of any California county by 2060.

Once predominantly white and Republican, the area is now home to a growing population of African Americans and Latino immigrants and non-immigrants, many of whom were lured from Los Angeles by the region’s more affordable housing.

And it looks like these families are more likely to vote Democratic. Voters here elected three Democrats to Congress in 2012 (two Latinos and a gay Asian American), something the region has only done twice in 40 years. As LA Times writer Phil Willon notes, “Contests will be much harder to predict.”

More Americans now live in suburbs than in central cities, and more suburbs are starting to look as diverse as Riverside and San Bernardino counties. Brookings analysis shows that the majority of each of the country’s largest racial minority groups live in the suburbs.

And these new patterns of migration and minority suburbanization, experts say, may also create new voting patterns.

Center for American Progress’ Ruy Teixeira found in a 2008 report that demographic and geographic changes in the electorate may have the potential to alter some of the political polarization we see today.

Increasing suburban diversity may turn these places more “purple” in local and national elections, making them less reliable bases for either Republicans or Democrats who have depended on demographically homogeneous voting blocs.

Both parties may find it increasingly necessary to appeal to different suburban constituencies—white seniors looking to strengthen social security and Medicare, for example, as well as young minorities, who may be more interested in education, affordable housing and jobs programs.

“The views and preferences of the suburban majority,” Teixeira writes, “are driving American politics.’

Writing at Politico, Richard Florida argues that distressed suburbs are “the new swing states.”

“The old dichotomies—red state/blue state, city/suburb—are just too simplistic to capture today’s much more complex picture, which often as not is painted in shades of pink, purple and mauve.”

Another condition likely to play out in the voting booth is the growth of poverty in congressional districts that include suburbs (368 of the nation’s 435 congressional districts contain some portion of the suburbs with the 100 largest metropolitan areas today.)  In an analysis that followed the publication of Confronting Suburban Poverty in America, Elizabeth and Alan and colleague Jane Williams find that many of those traditionally red suburbs now include a growing poor population among their constituents.

Communities in the Riverside-San Bernardino metro area have been hit hard by the Great Recession; the suburban poor population there increased 62.8 percent between 2000 to 2011.

Indeed, districts with the fastest growth in the suburban poor population during the 2000s leaned Republican, according to their analysis. And while Democrats still represent poorer suburbs than Republicans on average, the gap has narrowed.

What these changes mean for consensus politics remains to be seen, particularly as the suburban constituents are typically regarded as allergic to tax increases to fund social programs, but U.S. poverty, Elizabeth and Alan argue, is more than ever “a shared challenge—not just economically and socially, but also politically.”

Photo/ Columbia City Blog

New Public-Private Models for Stabilizing Neighborhoods in the Wake of Foreclosures

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ForeclosureBy Barbara Ray

Six years after the housing market bust, the effects of the foreclosure crisis still linger for thousands of communities hit hard by a spiral of disinvestment that left families facing painful decisions.

A father of three teens in suburban Chicago lost his job as a truck driver and soon began to fall behind on his $1,700 monthly mortgage payments and was on the brink of foreclosure.  A mother, left with child support as her only income after a divorce, was repeatedly denied a modification on her mortgage when it threatened to swamp her. To add insult to injury, she lost $1,500 to a loan modification scam. She too faced foreclosure.

And it’s not over. As a recent CNN story reported, up to 180,000 people will see their mortgage payments increase on average about $200 a month this year, when rates under the Home Affordable Modification Program begin to reset.

In response to the continuing crisis, nonprofits across the country have been developing new approaches to stop the spiral of decline. As Sarah Berke of the Housing Partnership Network and Carolina Reid of the University of California Berkeley write in the latest issue of “Community Development Review,” published by the Federal Reserve Bank of San Francisco:

“It hasn’t been easy—funding for neighborhood stabilization remains small in comparison to need, and the volatile housing market has required quick thinking and the ability to design new solutions on the fly. And although the housing market has finally begun to rebound, nonprofits are working to sustain their work in response to continued historically-high levels of foreclosures and bank-owned inventory.”

One thing is clear: We can no longer address the foreclosure problem with yesterday’s policies. The crisis is too fast-moving and at such a different scale, and budgets are too tight, for siloed approaches to make a dent. Instead, it will be critical to continue creating funding models that blend public and private dollars.

In Confronting Suburban Poverty in America, Elizabeth and Alan point to the Mortgage Resolution Fund as a good example of a collaborative effort to leverage funds. At the height of the crisis, four national organizations, including Housing Partnership Network, joined forces to form the MRF. MRF aims to keep homeowners in their homes, and uses innovative tools and enterprise-level investment to do so. In a novel, market-based approach, the MRF partners tapped into the Treasury Department’s Hardest Hit Fund to negotiate a loan of $100 million with very favorable terms. This allowed them to buy 270 properties in four suburban areas in the Chicago region and work with the owners to keep them in their homes.

In summer 2013, MRF expanded to northeast Ohio, where the mortgage pool was riskier, according to Danielle Samalin in “Community Development Review.” Despite these odds, initial results from the loan pool purchases “have been extremely encouraging,” she says.

With the help of MRF, the suburban father of three was able to reduce his monthly mortgage to an affordable payment (and he found a new job). The young woman who had struggled after her divorce was able to move forward with her life by voluntarily entering into a deed in lieu of foreclosure. Communities were stabilized instead of depleted.

The Review showcases several other fresh approaches to the crisis. Boston Community Capital’s (BCC’s) Stabilizing Urban Neighborhoods (SUN) Initiative, for example, purchases foreclosed homes and then turns around and helps owners repurchase them at a lower price, bringing down housing expenses by an average of 40 percent. The program recently expanded to Maryland, which had the highest foreclosure “starts” in the country in the fourth quarter of 2013. And it’s not just in inner-city Baltimore. According to an NBC news report in January, “Montgomery, Frederick and Howard counties each suffered from 100 percent increases in home foreclosures between autumn 2012 and autumn 2013. There was a 50 percent increase in Prince George’s County. In Anne Arundel County, the spike is much larger: 400 percent.”

In the end, even these innovative models only begin to scratch the surface of a problem that has affected, and will continue to affect, metropolitan communities of all kinds. But they demonstrate that public-private partnerships must become more the norm, given the scale of the challenge.

Photo/ BBC World Service

With More Poor Students, Suburban Districts Look to Expand Public Pre-K

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PreKBy Sarah Jackson

Several years back, Ed Leman, then superintendent of District 33 in West Chicago, began searching for funding to expand preschool services to students in his school district, 30 miles outside of Chicago.

Like many communities in suburban DuPage County, Illinois’ District 33 was experiencing dramatic jumps in the number of low-income students. Educators in the early grades were struggling to meet the needs of this changing population, more and more of whom were arriving on the first day of kindergarten far behind their higher-income peers.

These challenges were new to some suburban educators in the area, who as recently as 10 years ago had almost no low-income students in their classrooms. “We can’t begin the academic work,” Leman told the Chicago Tribune in 2010, “because they’ve taken such a step back in such rudimentary things as entering a classroom, handling their materials, interacting with tablemates and orienting a book right side up.”

District 33 ran a pre-K program, but slots at the publicly funded preschool were hard to come by. In most states, preschool falls outside the funding structure for K-12 education. So when public preschools programs do exist, they are often susceptible to politicking and budget shortfalls, which has been the case in Illinois. The state’s Preschool For All program has never been fully funded and the Early Childhood Block Grant, which pays for preschool, has suffered $80 million in cuts over the past few years.

For District 33, the solution came through a partnership with the Ounce of Prevention Fund, which worked with the district to build Educare of West DuPage. Today, the center offers year-round preschool to 102 at-risk children ages 6 weeks to 5 years, with funding from private foundations. Educare’s model, which is now being expanded, is in many ways similar to other programs being implemented in cities and states around the country and to Obama’s Preschool for All proposal: year-round full day services, low staff ratios, well-trained teachers, rigorous curricula, and health care and family support programs.

Early results from Educare’s model show that low-income children who attended Educare preschools entered kindergarten with vocabulary and school-readiness scores that were near national norms. On average, low-income children enter school with significant shortfalls in these and other skill sets. These results mirror national research that has found that investments in high-quality pre-K can help prevent achievement deficits between low-income students and their more advantaged peers. And Economist James Heckman has found that investments in high quality pre-K eventually pay off in longer-term benefits to society as a whole, like lower social welfare costs, decreased crime rates, and increased tax revenue.

Big cities, of course, have traditionally been home to more of the nation’s low-income school children. And it’s here that lawmakers have been taking the lead in finding innovative ways to fund universal pre-K programs. In San Antonio, mayor Julian Castro led a successful campaign in 2012 to institute an eighth of a cent sales tax increase to expand preschool to more than 22,000 four-year-olds over the next eight years. New York City Mayor Bill DeBlasio has proposed an increase in taxes on higher-income residents to help fund public preschool for all four-year-olds (though now state financing seems likely). And Seattle’s city council has proposed providing free preschool to three- and four-year-olds living in households earning less than 200 percent of the federal poverty level.

But disadvantaged young children live outside of cities, too. As poverty continues to rise in suburban communities, it’s the youngest children who are most likely to be poor. (A child under age five in DuPage County, for example, is about twice as likely to be poor as a senior citizen.) These imbalances, some are proposing, set the stage for nasty face-offs between young and old over scarce resources. To avert these no-win showdowns, communities around the country will need new regional models and funding structures to support their youngest children. Doing so is critical to these communities’ futures.

In suburban Oak Park, Illinois, for example, six government bodies have come together to create the Collaboration for Early Childhood, a public-private partnership designed to better meet the needs of the area’s youngest children and their families through high-quality preschool, parent information and support, and developmental screening. All governmental agencies participate and contribute financially and the group works to overcome fragmentation by leveraging all available community resources.

Confronting Suburban Poverty in America points out that low-income students in the suburbs are going to schools where students are performing only slightly better than their counterparts in urban schools and not nearly as well as students in typical middle- or higher-income suburban schools. Publicly funded pre-K may help more students in low-income suburbs do better in school over the long haul, increasing the school’s share of students meeting standards and lowering the burdens educators and schools in these communities face.

“In preschool, you never know if you’ll be here the next year,” preschool teacher Christina Stangarone told the Chicago Tribune. “You’re just praying that the state will be generous and that the school district and board believe in the program.”

Low-income children in the suburbs deserve more than a prayer.

Photo/White House

New Analysis Shows EITC Expansion Would Strengthen Credit for Childless Workers

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By Jane Williams and Elizabeth Kneebone

For low-income working families, the Earned Income Tax Credit (EITC) is one of the nation’s most effective tools for reducing inequality and alleviating poverty. However, for low-income childless workers, the EITC is a weak or unavailable resource.

Recognizing the need to reform the EITC to better benefit childless workers, the Obama administration recently released details for how it would go about expanding the EITC. The administration’s proposal joins others from officials in both the House of Representatives and the Senate including Representative Richard Neal’s Earned Income Tax Credit Improvement and Simplification Act of 2013 and the Working Families Tax Relief Act of 2013 introduced by Senators Sherrod Brown and Richard Durbin.

Yesterday we released a new analysis estimating the impact of each of these proposals’ on low-wage workers at the state level and across the nation’s 100 largest metro areas using our MetroTax model for Tax Year 2012.

We found that:

  • Each proposal would significantly strengthen the credit for millions of workers.
  • At least 15 states would double the number of filers eligible for the childless worker credit.
  • Every major metro area would see thousands of workers benefit from an expanded EITC.

Our findings illustrate that the proposed EITC expansion would contribute a significant federal investment in low-wage workers as well as the communities in which they live. This is particularly important for our suburban poverty work.

For part of what makes the EITC effective as a poverty alleviation tool is its responsiveness to changes in the economic cycle (bolstered in recent years by targeted expansions) and to the changing geography of poverty in the United States.  As the low-income population rapidly suburbanized in recent years, so, too, did the geography of EITC recipients. Between Tax Year 1999 and Tax Year 2011, the number of filers claiming the EITC in the suburbs of the 100 largest metropolitan areas increased by 61 percent, compared to an increase of just 32 percent in the largest cities. In Tax Year 2011, 10.2 million suburban filers claimed the EITC for a total of $22.9 billion.

Modernizing the EITC by enacting the proposed expansions would ensure the credit is an effective work incentive and poverty alleviation tool for childless workers, many of whom reside in suburban communities that are otherwise ill-equipped to address growing need.

Resources

Learn about suburban poverty in your community, how innovators around the country are addressing it, and what you can do locally and nationally to take action.