Notes from the Field...

PUBLIC POLICY & ADVOCACY NEWSLETTER – DECEMBER 2014


New Administration Requires Renewed Engagement

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When Governor-elect Bruce Rauner is sworn into office on January 12, he will become the first Republican elected to lead Illinois in 16 years. The change of parties at the helm of state government creates an opportunity for United Way leaders around the state to forge relationships with Rauner and his Executive Cabinet. We need to impress upon them the vital role of human services in our communities and for the economic renewal of our region.

Even with new leadership in the executive branch, the General Assembly remains controlled by Democrats, who retained their supermajorities in both the House and Senate. In acknowledging divided government in Illinois, Rauner said in his victory speech on Election Night: “Our solutions will be bipartisan. I believe we have a mandate from this election to provide bipartisan solutions. …Our mission is not to bicker. It is not to waste time arguing, finding petty faults. Our mission is to serve the people, all the people of Illinois.”

Now is the time to build and strengthen relationships with your local legislators and those on the transition team that Rauner is forming to develop his blueprint for governing. Take every opportunity to reach out to those involved in both the legislative and executive branches of state government to educate them about the impact your local United Way and partner agencies are having, as well as the need for continued support of their strategies and programs. This way, we can share our message of the collective progress of human services throughout Illinois and the need to ensure adequate funding as the new governor and legislators prepare to tackle difficult questions about the state budget. (See article below.)


January’s Tax-Rate Rollback Will Hurt Human Services

On January 1, Illinois workers and businesses will see their income tax rates drop as the state’s temporary tax hike is rolled back. The increase – from 3% to 5% for individuals and 4.8% to 9.5% for corporations – was passed in 2011 to help address the state’s massive debt. But with legislators unwilling to extend the tax increase during this election year, the state once again faces a massive budget hole, this time largely due to decreased tax revenue as tax rates drop to 3.75% and 7.75% for individuals and corporations, respectively.

The tax rate rollback will be detrimental to human services, education and child welfare. In what’s been termed a “revenue collapse,” the state would have $1.9 billion less for the second half of FY ’15 than it would have if current tax rates were extended. Human services, education and child welfare are not part of the state’s mandatory spending, which includes medical assistance programs, state employee group insurance, pension contributions and debt service. With little room to trim the state budget, human services, education and child welfare all face severe cuts.

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For FY ’16, which begins in July, it’s estimated that the lost revenue will reach $4.8 billion, which mean even deeper spending cuts. “The two-year revenue drain would be greater than the loss of state revenue during the two worst fiscal years of the recession,” according to the Fiscal Policy Center at Voices for Illinois Children.

With less tax revenue coming in, the non-mandated areas of the budget mentioned above will have to be cut by an average of at least 25%. Such a significant hit is deeply concerning. Human services, in particular, have been cut by more than $1 billion since FY ’09. Additionally, community-based providers have been burdened by the state’s backlog of unpaid bills, estimated to reach $6.4 billion by the end of FY ’15 in June.

Here’s a look at the likely impact of the revenue collapse for the remaining part of this fiscal year:

The General Assembly chose not to address the potential revenue shortfall during the fall veto session, opting to wait until Governor-elect Bruce Rauner is sworn into office. As advocates for a strong network of human services throughout Illinois, we must encourage our elected officials to protect the vital programs that improve the lives of our more vulnerable citizens. Ask your local representatives to make sure human services programs receive adequate levels of financial investment to serve our communities.


Deadlines Approaching for Health Insurance Marketplace

Advocates across Illinois are pushing for an increase in enrollment in the second year of the state’s health insurance marketplace, a critical part of health care reform. Last year, about 717,000 Illinoisans purchased health insurance through Get Covered Illinois. The three-month enrollment period ends on Feb. 15 for coverage for 2015.

The Affordable Care Act (ACA) mandates that most Americans buy health insurance or pay a penalty on their income tax returns. The marketplaces are designed to offer an affordable option for uninsured individuals and small businesses that do not offer health insurance to their employees.

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For the second year, the Illinois Department of Public Health selected United Way of Metropolitan Chicago (UWMC) to help implement the state’s In-Person Counselor Grant Program, which assists individuals and families enrolling in health coverage through the marketplace or Medicaid. UWMC has joined with 10 of its nonprofit partners, including Metropolitan Family Services, Chicago Urban League and Near North Health Services Corp., for this effort.

As part of the grant program, UWMC has employed 38 navigators trained to help residents understand and review their healthcare options, determine if they qualify for financial assistance based on their income, and walk them through the enrollment process. The navigators in Cook County are among the hundreds working across the state.

While marketplace enrollment must be complete by Feb. 15, enrollment in Medicaid can occur anytime and has no deadline. Medicaid expansion also was a key component of the ACA, allowing low-income single adults to get health care coverage. So far, about 500,000 Illinois residents have enrolled in the expanded Medicaid program, which is more than double the state’s initial projections.

Navigators provide free assistance by phone or in person. To connect people in your communities with a navigator, visit the Get Help section of Get Covered Illinois. Remember that everyone who enrolled in marketplace health coverage last year must re-enroll for coverage this year.


Expand the Earned Income Tax Credit to Help Working Families

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Last year, the state’s Earned Income Tax Credit (EITC) put $160 million back into the pockets of more than 900,000 low-income workers in Illinois. The EITC has produced significant benefits: Working families have been lifted out of poverty and businesses have seen increased economic activity. But the EITC has the potential to do more. United Way is joining several organizations in support of increasing the state’s EITC from 10% of the federal EITC to 20%.

Illinois’ EITC has risen gradually since 2012, when it went from 5% to 7.5% of the federal EITC. Then, last year, it was bumped up to 10% of the federal EITC. As a result, between 2009 and 2011, about 294,000 Illinoisans – 146,000 who were children – no longer were living in poverty.

Doubling the state’s EITC would bring more families out of poverty. At the current 10% of the federal EITC, a low-income Illinois family gets an average of $300 more in annual income. At 20%, families would end up with an average of $600 more for the year.

Studies show that low-income families use their EITC money for basic necessities and child expenses. They also pay debts and overdue bills, save for a car or home purchase, and enroll in education or training to expand their job opportunities and increase their earning power.

Annual economic activity from the state’s EITC is currently about $322 million. This amount would grow to about $645 million if the EITC were raised to 20% of the federal credit. Each additional dollar secured from increasing the EITC translates into $1.58 in local economic activity, according to a 2006 Brookings Institute study.

United Way of Illinois is one of 10 statewide organizations to receive a grant to increase access to EITC through free tax preparation and filing services. United Way has partnered with MyFreeTaxes, which offers free online filing at myfreetaxes.com and at VITA sites in Illinois. Individuals or families earning less than $58,000 this year are eligible for these services.

The Center for Economic Progress (CEP) offers free tax preparation for families earning less than $50,000 and individuals earning less than $25,000. CEP has 15 sites offering free tax preparation: Seven are in Chicago and others are in West Chicago, Chicago Heights, Evanston, Waukegan, Aurora, Elgin, Joliet and Springfield.

Similarly, Ladder Up offers free tax preparation for families earning up to $50,000 and individuals earning up to $20,000. Of its 19 sites, 13 are in Chicago and the others are in Aurora, Cicero, Downers Grove, Melrose Park, Plainfield and Waukegan.

With tax season approaching, United Way is asking its members across Illinois to spread the word about free tax preparation offered to low-income workers. Also, read about efforts at the federal level to expand the EITC to low-income workers without children and younger workers.

 

Upcoming Events

Please plan to join us for our Mid-Year Meeting on February 18 at the United Way of McLean County in Bloomington. Also mark your calendar for our annual Lobby Day in Springfield, which will be held on Wednesday, April 15. More details to come.

 

Recent Research

EDUCATION

Education Week, Kindergarteners Benefit from Early-Years Program, Study Finds

CLASP, Helping Low-Income Students Cross the Finish Line: Innovations that Support College Completion

Advance Illinois, The State We're In: 2014, A Report Card on Public Education in Illinois

 

INCOME

Oxfam America and Feeding America, From Paycheck to Pantry: Hunger in Working America

Center on Budget and Policy Priorities, A State-by-State Look at TANF

 

HEALTH

Urban Institute, Immigrant Access to Health and Human Services

Robert Wood Johnson Family Foundation, Marketplace Insurance Premiums in Early Approval States: Most Markets Will Have Reductions or Small Increases in 2015

The Henry J. Kaiser Family Foundation, Recent Trends in Medicaid and CHIP Enrollment: Analysis of CMS Performance Measure Data Through August 2014