Balanced approach needed to fight growing poverty in Maryland

In our last blog, we wrote about how more and more people in Maryland are having a hard time putting food on their tables. The news this week is no better, unfortunately. One quarter of Baltimore City now lives in poverty, according to new data released by the Census Bureau. The pain isn’t confined to urban areas, though. The widespread impact of the recent recession can be seen in rising poverty rates across every region of the state.

The growing poverty in our state is an example of why we need to take a balanced approach to Maryland’s state finances that includes revenue rather than a cuts-only approach. Continuing deep cuts to important services would mean our state will face even higher poverty rates as more low- and middle-income people fall below the poverty line. 

For Maryland as a whole, the poverty rate increased to 9.9 percent in 2010, from 9.1 percent in 2009. Poverty rates increased in 9 of the 14 Maryland  counties for which the Census Bureau reports data. The largest jumps occurred in Wicomico, Calvert and Prince George’s Counties and Baltimore City.

There are now 154,000 Baltimore residents officially in poverty compared with 130,000 in 2009. The picture is similarly bleak in parts of rural Maryland, with 17 percent of Allegany County residents and 18 percent of Wicomico County residents below the poverty level.

The spread of poverty is particularly severe for minorities. In 2010, 15.5 percent of Maryland’s African-Americans and 13.7 percent of Latinos earned an income below the poverty level. For non-Hispanic whites, the poverty rate is 6.4 percent.  

For children under 18, the rate of poverty is 13 percent.

The Census Bureau bases its calculations on the Federal Poverty Level, which doesn’t take into account the varying cost of living from state to state. Maryland is more expensive than most states. So many people here, while not below the federal poverty level of $22,000 for a family of four, are still struggling to make ends meet.

Compounding the hardships of low-income Marylanders are the deep cuts the state has made to health care, education and other key services that struggling families need.  Continuing to rely only on cuts in services will make it harder for working families and the poor to keep a roof over their heads and food on the table. With a balanced approach that includes revenues we can invest in our state’s economy and promote job creation.

Congress also must take a balanced approach to deficit reduction that relies on both responsible cuts and ways to increase revenue. We must stop reductions in Medicaid and other critical supports for struggling families so that those most in need can weather this difficult economy. Federal assistance, in the form of unemployment insurance, expanded food stamps, and tax credits for middle- and low-income households are essential lifelines to those living below or near the poverty line.

As bad as poverty is today, these services kept millions more Americans from falling below the poverty line in 2010, accourding to Census data.

New Figures Show Number of Recipients in Maryland’s Food Supplement Program Now Exceeds the Population of Baltimore City

With So Many in Need, Congress Must Protect Anti-Poverty Programs, Such as SNAP from Draconian Cuts

Food insecurity is increasing alarmingly in Maryland, with the Maryland’s Food Supplement Program (and federal Supplemental Nutritional Assistance Program (SNAP)) recipient list now exceeding the size of the state’s largest city.  These programs are the modern version of the old “Food Stamps” program. Baltimore City’s population is approximately 637,000 and Maryland’s Food Supplement Program participation is nearing 700,000—double what it was in January 2008, just one month after the 2007-2009 recession began.

Source: Maryland StateStat Reports & Dept of Human Resources Statistical Reports

Earlier this month, Maryland Hunger Solutions reported that one in eight Maryland households struggled with hunger during the 2008-2010 U.S. Department of Agriculture (USDA) reporting period.  During state Fiscal Years 2008, 2009 and 2010, participation in Maryland’s Food Supplement Program was around 360,000, 401,000 and 534,000, respectively.  State fiscal year 2011 closed out with participation at 645,000. 

Nevertheless, growth in the FSP is continuing into the current fiscal year, 2012. The latest data available from August 2011 shows participation at about 699,000.

Based upon this steady increase and prevailing economic and labor force conditions, it is reasonable to fear that the USDA’s next reporting will show another rise in the number of Maryland households struggling with hunger (i.e. skipping meals, eating cheaper, less nutritious foods, etc.).  On an administrative level, such an increase hampers the ability of the shrinking pool of Local Departments of Social Services staff to process the applications for the Food Supplement Program.  On a human level, the effects of the recession are real and prolonged, as evidenced by high unemployment rates, these food assistance and hunger figures, and the increasing number of Maryland households living in poverty.  

Make no mistake about it—without cash and noncash income programs, like FSP among other programs; even more people would be living in poverty. In fact, the Center on Budget & Policy Priorities points out in a major new study from the National Bureau of Economic Research (NBER) that public programs (namely SNAP,  the Earned Income Tax Credit and Social Security) keep one in six Americans out of poverty — primarily the elderly, disabled, and working poor — and that the poverty rate would double without these programs.  Unfortunately, the budget passed by the U.S House of Representatives would impose draconian cuts on programs for low- and moderate-income families, ranging from SNAP and Medicaid to rental assistance, Pell Grants, and Head Start. Such cuts in programs would amplify the severity of poverty in Maryland, as well as in other states.  An all-cuts approach is not a tenable route to economic recovery, and would leave many families in dire straits indeed.

-Branden McLeod

New census numbers show the American Dream is threatened in Maryland

The Great Recession has stalled the American dream. The wrong decisions about future budgets could make it a total wreck. A newly released census report shows the effect of the national recession and the weak recovery on Maryland.

Maryland remains a prosperous state. Maryland’s income, at over $64,000, ranks third in the nation (measured as median household income, half of Maryland households earn more and half earn less).  It’s almost 15k above the national average.

Marylanders share American values about a strong middle class and access to opportunities. We have come to expect that the average family in each generation will live better than the last. But, the growth has stalled in last decades. Adjusted for inflation, the median income is $5000 below its 2006 level.  The median household’s buying power is now back to 1988 levels. The middle class has lost the gains it made over the last 22 years.

Marylanders share the American value that everyone deserves a chance at a decent living. The poverty level is about $22,000 for a family of four, and $11,000 for an individual. In 2010, 620,000 Marylanders lived in poverty. That is an increase of 129,000 since the onset of the recession in 2007. Maryland’s poverty rate is now 10.8 percent: our highest rate since 1992.

Marylanders, like most Americans, believe that everyone deserves access to healthcare when they need it. But, the census data shows that 747,000 Marylanders have no health insurance coverage. That’s more than one of every eight of us. This number is essentially unchanged from last year, and it’s a near record. And without government coverage, such as Medicare and Medicaid, it would be much worse. 1.4 million Marylanders are insured through government plans.

The recession hurt families in Maryland and across the country. Government programs like food stamps and the earned income tax credit are keeping thousands of us afloat, and preventing more of us from falling into poverty. Medicare and Medicaid are providing critical access to medical care, especially for children, senior citizens and people with disabilities.

Our representatives are getting down to the tough work of balancing the federal and state budgets and promoting new jobs. We need to make sure they protect the programs that help keep us in good health and out of poverty when we are hit by economic setbacks.

A Field Guide to Maryland Surpluses and Deficits

Following Comptroller Franchot's recent announcement of the state's fiscal year close-out, there are lots of numbers flying around purporting to be a surplus or a deficit. There's a billion-dollar surplus, a billion-dollar deficit, and several numbers in between.

Which one is right?

Well ... all of them.

Each of these figures can be called a “surplus” or “shortfall.” One of the reasons discussions about the state’s budget become confusing and frustrating is that different people use different measures of the “surplus” or “shortfall” or “deficit,” often depending on the message they want to convey.

$990 million – this is the amount of the general fund balance on June 30, 2011, the end of the previous fiscal year. It is like the state’s checking account balance on that day. It reflects a point in time in the past, and so it is a certain number.

$314 million – this is the amount the 2011 general fund revenues exceeded the estimate in the final budget. The actual collections were $13,537 million. The latest official estimate was $13,223 million. It also measures past revenues and is not subject to change.

$344 million – this is the total amount by which the state’s general fund balance exceeded the amount previously budgeted on June 30, 2011. In addition to the $314 million revenue surplus, it includes $24 million in final expenditures below the budgeted amounts and $6 million in additional transfers from other funds to the general fund.

$400 million – this is the amount that would be the general fund balance on June 30, 2012 if nothing else changes. This gives us a picture of the state’s projected fiscal path. In particular, it shows that the state plans to spend down part of its account balance during the current year. However, this figure will change several times over the upcoming months as we get new revenue estimates and new information on expenditures.

$1 billion - this is the estimated shortfall for the 2013 fiscal year, the budget the governor must present to the legislature next January. This number will also change over the upcoming months. Since it’s based on many assumptions about future finances and policy decisions you may see this shortfall estimated as anywhere from $700 million to $1.1 billion.

Maryland’s revenue surplus is good news. See our complete report here. But, the surplus does not come close to solving Maryland’s long-run revenue shortfall. It is only a thin cushion.

Looking into the future, revenues are not adequate to meet the current  service levels for education, health care, public safety and the needs of a still-fragile state economy. Many risks are in play, from the state of the national economy to the ill effects of federal budget actions.

 Maryland needs to be ready to respond with a balanced approach that includes sensible revenue measures.