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Federal Shutdown, Waiver Proposals Threaten SNAP, Put Residents at Risk

Third and State - January 8, 2019 - 1:22pm

The following is a guest blog post written by Sheila Christopher, Executive Director of Hunger-Free Pennsylvania.

Two recent developments in the federal government could spell disaster for thousands Pennsylvanians who receive monthly food benefits.

If President Trump keeps the government shut down through February, as he recently suggested, monthly food benefits could stop. The Supplemental Nutrition Assistance Program, or SNAP, is run by the U.S. Department of Agriculture, one of the federal agencies that shut down in late December as part of President Trump’s plan to force the American government to fund a wall along the Mexican border.

The USDA reported that it only has enough leftover money to pay for January’s benefits, and its reserve funds do not cover the total projected cost for February. A report from the Center on Budget and Policy Priorities found that 42 million Americans received SNAP benefits in 2017, 44 percent of whom were part of working families.

Other food programs, such as the Food Distribution Program on Indian Reservations and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) are also in serious danger of losing funding. Staffing for federal food and nutrition services has been cut by 95 percent since the shutdown began.

Starvation hasn’t been a public health problem since the food stamp program was expanded in the 1960s and 1970s, but, according to reports, if this shutdown continues for months or even a year as President Trump said on Friday, that problem could return.

Even if the shutdown standoff somehow before the remaining funding is used up, SNAP recipients are still in danger of losing benefits from the federal government.

A proposal by the Trump Administration would force states like Pennsylvania to stop waiving work requirements for able-bodied adults.  This could impact nearly 100,000 commonwealth residents, according to reports.

Federal rules allow able-bodied adults without work to continue collecting benefits if they live in an area where work is scarce. In late December, the USDA announced plans to tighten these requirements. Only people living in areas with unemployment rates above 7 percent would be exempt from these restrictions.

In October, Forest County’s unemployment rate was 6.4 percent, and 19 additional Pennsylvania counties --- Cambria, Carbon, Clarion, Clearfield, Clinton, Fayette, Greene, Huntingdon, Indiana, Lawrence, Luzerne, Monroe, Northumberland, Philadelphia, Pike, Potter, Schuylkill, Somerset and Tioga --- had unemployment rates between 5 and 6 percent.

Even though a number were dangerously close, none of Pennsylvania’s 67 counties met the 7 percent threshold, meaning the entire state of Pennsylvania would be affected by these restrictions, and that could affect 95,788 Pennsylvanians, according to the Department of Human Services. 

Because of the government shutdown, it is unclear when these restrictions could go into effect. If the shutdown ends and the SNAP program funding resumes, recipients could end up losing benefits regardless because of these requirements.

Governor Tom Wolf has worked to uphold the current work requirement waivers.

A state DHS spokesperson recently commented on the restrictions: “Reducing a person’s access to food does not get them a job—it can only make that more difficult.  Many of these people experience barriers to work such as a lack of family-supporting jobs in their community, transportation access, insufficient education or job training, mental illness and substance use disorders, among others.”

Proponents of work requirements claims programs like SNAP keep Pennsylvanians from working. And that cutting off food assistance to people who aren’t working enough to fully support a family will save taxpayer money. They’re wrong on both accounts.

One in seven Pennsylvanians currently use SNAP, which keeps food on the table for thousands of low-wage and part-time workers who can’t find steady employment, veterans, people who are homeless, and people struggling with addictions, in addition to children, seniors, and people with disabilities. The average monthly SNAP benefit totals just $120 per person, or just $1.34 per meal.

Study after study finds that when people have access to help that puts food on the table and provides health care, they are better able to work and have higher earnings, which is better for our entire commonwealth. No one should go hungry, especially when we have the resources to keep that from happening.

New Year's Day Minimum Wage Hikes Raise Pay for Millions of US Workers But Not in PA; New Legislature Must Change That

Third and State - December 31, 2018 - 11:10am

As of today, this first day of 2019, 20 U.S. states will raise their minimum wages, lifting pay for 5.3 million workers across the country and 614,000 in four of Pennsylvania's neighboring states. The increases in our neighbors include a $0.25 per hour adjustment for inflation in Ohio and New Jersey, a $0.50 per hour increase in Delaware, and a $0.70 to $2.00 per hour increase in New York State—the biggest increase in New York City.

Pennsylvania workers aren't among those able to toast in the New Year knowing that some of the benefits of a growing economy will be shared with them in 2019. As KRC labor economist Mark Price detailed a year ago, the failure to raise the Pennsylvania minimum wage will mean that Pennsylvania workers in food services and other lower-wage sectors will continue to lag behind their counterparts in neighboring states—especially in rural counties where low-paying service industries are a large part of the local economy.

Pennsylvania's new legislature needs to change this picture. Given the broad bipartisan voter support for a higher state minimum wage and given that an increase would especially benefit workers in rural counties, conservative lawmakers from those areas should be leading the fight for a higher minimum wage.

Rural lawmakers should also be fighting to eliminate the tipped minimum wage because local restaurants are a large part of their economies. Workers at these rural restaurants often struggle to make ends meet, even while they endure sexual harassment from bosses and customers just to earn a meager living.

House Bill 1 and Senate Bill 1 in the new Pennsylvania legislature should be strong proposals to lift the Pennsylvania minimum wage. These bills should also:
  • eliminate the tipped minimum wage,
  • index the minimum wage to the median wage for full-time hourly workers,
  • eliminate state legislative pre-emption that blocks higher wage cities and counties from raising local minimum wages in line with their higher cost of living, and
  • strengthen enforcement against wage theft so that Pennsylvania workers actually get the pay to which minimum wage, overtime, and other laws entitle them.

ANALYSIS: One Year Later, the Tax Cut and [Con] Jobs Act

Third and State - December 20, 2018 - 1:31pm

December 17th marked the one-year anniversary of President Trump’s “Tax Cut and Jobs Act.” While we knew the impact of this legislation would mean more money shifting upwards into the hands of the already wealthy and large corporations, we have new data, thanks to the Americans for Tax Fairness, corroborating that reality.

And surprise! Contrary to the lies the Trump White House and backing Republicans sold the American people prior to the passage of this legislation, the money has not gone to workers or the middle class.

President Trump said the average American would receive a $4,000 pay raise as a result of this legislation. One year out, only 4.4% of workers received a bonus or wage hike, with only 413 out of 5.9 million employers passing the tax cuts down to their employees. See on the pie chart below the slice of blue representing the 413 companies that passed the tax cut down to workers? Neither do I. The fact of the matter is hardly any of the tax cuts were passed down.

The Economic Policy Institute showed that cash bonuses gave workers only a 2 cent increase in hourly compensation, adjusted for inflation. Corporations are getting 11 times as much in tax cuts as they are giving away in bonuses or wage hikes.

Not only that, job cuts have also occurred. Nearly 225,000 private sector job cuts have been announced at 338 companies since the law went into effect, and this estimate is low since some companies did not quantify their job cuts (like Amazon and Wells Fargo).

So, what are companies doing with the money? Money from the tax cut is actually going to stock buybacks, which puts money back into the hands of the wealthy. In fact, corporations across the US spent 128 times as much on buying back stock than they spent on workers’ bonuses and wage increases—$906 billion has been spent on stock buybacks since the law was passed while only $7.1 billion has been spent on wage hikes/bonuses.

 

This legislation has not boosted wages for the average American—it has, in fact, put more money into the hands of corporations and the already rich, worsening income inequality and widening the racial wealth gap. This tax cut will also increase the deficit by about $1.9 trillion in the next ten years, meaning less funding for health care, housing, infrastructure, and other vital services people rely on. Moving forward, we should change the name of the legislation from what it pretended to be: Tax Cut and Jobs Act to what it actually is: Tax Cut and [Con] Jobs Act.

At Least Our Gov. Wolf and Other Row Officers Are not Trying to LOWER Wages, CUT Health Coverage, and POISON Residents

Third and State - October 24, 2018 - 11:23am

We at Keystone Research Center and the We the People - Pennsylvania campaign know that a major challenge for Pennsylvania and for the nation is to enact policies that make the economy less rigged against working families.  

A new report shows that, in more than half of U.S. states, stunningly, statewide officials have been trying to rig the economy further against working families by pursuing lawsuits that would lower workers’ pay, reduce health care coverage, and increase the number of state residents with mercury poisoning.

Pennsylvania has not been party to these attacks on working families. That’s thanks in part to Governor Tom Wolf and Attorney General Josh Shapiro…and could change if they were not in office.

Cutting workers’ pay: Twenty-one states, led by Nevada Attorney General Adam Laxalt (now running for governor) brought suit to block an attempt by President Obama to give 12.5 million salaried workers across the country making less than $47,476 overtime pay if they worked more than 40 hours (four other states, led by Missouri Attorney General Josh Hawley, now running for governor, later joined the suit). The suit led a Texas court to overturn the new Obama overtime rule in a highly-questionable ruling. PA did not join the suit: even better, Governor Wolf stepped up raise PA workers’ pay by restoring overtime pay and the 40-hour week for hard-working and underappreciated managers and other salaried workers.

Eliminating health care coverage and protections for people with pre-existing conditions: Prior to the Affordable Care Act (ACA), insurance companies frequently discriminated against people with pre-existing conditions by denying them coverage or charging them outrageous prices. The ACA prohibited discrimination against people with pre-existing conditions. Since its passage, the ACA has been under unrelenting attack from conservative opponents. Although efforts to totally repeal the ACA have failed, Congress did raise premiums and reduce coverage through the 2018 Tax Cuts and Jobs Act (TCJA). And now 20 states are trying to accomplish through the courts what conservatives could not accomplish through the legislative process. The lawsuit has no legal merit but the Trump administration has taken the position that the ACA’s protections for people with pre-existing conditions must be struck down. If this suit wins, the ACA’s protections for people with pre-existing conditions would be eliminated, as would other popular provisions, such as the Medicaid expansion implement in Pennsylvania under Governor Wolf.

Poisoning the air: Under President Obama, a new rule limited power plants’ release of mercury into the air, leading to 11,000 fewer deaths per year according to the EPA, as well as 130,000 fewer asthma attacks and $90 billion in health benefits. In 2016, 15 states brought a suit to overturn the rule, led by Michigan Attorney General Bill Schuette, who is now running for governor (and perhaps wants Michigan’s air quality to match it’s water quality). This led the Trump administration to reconsider the standards.

In these challenging times, Pennsylvanians and Americans need to understand who is for an economy rigged less against working families...and for raising Pennsylvanians’ pay, giving them access to health care, and protecting their health.

Pennsylvania’s Terrible Tax Code Asks More Of You As You Make Less: Hitting Community’s of Color Especially Hard

Third and State - October 23, 2018 - 5:46am

The Commonwealth once again claims its spot in the “Terrible 10” most unfair tax structures in the nation. The lowest 20% of income earners in the state pays more than double (2.3 times) their share of family income on state and local taxes than the top 1%.

Income inequality remains a growing problem in our state, as the top 1% earn on average 21.7 times that of the bottom 99%. While fixing our state’s growing inequality goes beyond tax policy, state tax structures can make things better and at the very least, not make them worse.

However, making inequality worse is just what Pennsylvania’s tax structure does. The Institute for Taxation and Economic Policy (ITEP) came out with their sixth edition of their annual report, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. The primary question researchers at ITEP ask here is whether incomes are more equal, or less equal, after state taxes than before. Pennsylvania not only makes things worse for low- and middle-income earners, we rank 7th worst in the nation.

As the Figure below shows, the lowest 20% (earning less than $19,100 a year) are paying 13.8% of their family income on state and local taxes – more than any other income group. The top 1% (earning $511,000 and above), in contrast, pay only 6.0% of their share of family income on state and local taxes.

Pennsylvania’s tax structure is playing a role in worsening the racial wealth gap as well. As the figure below shows, Black Pennsylvanians are twice as likely to be in the highest-taxed/lowest-income fifth than white Pennsylvanians – 35% of Blacks fall within the lowest 20% compared to 17% of whites. Latinx Pennsylvanians also have a higher likelihood (28%) of falling within this category and therefore facing higher effective tax rates.

ITEP includes state personal income taxes, property taxes and sales and excise taxes in their calculations for each state. Sales and excise taxes are very regressive, meaning these taxes take a greater share from those with lower incomes, because poor families spend a greater proportion of their income on goods that are taxed. Property taxes are typically somewhat regressive as well. The way that states typically make up for this regressivity is having an intentionally progressive personal income tax structure (those with higher incomes are taxed at a higher rate), so that the tax burden doesn’t fall so heavily on low-income individuals. Pennsylvania does not, and actually is one of only nine states that does not have a progressive personal income tax. Pennsylvania has a flat personal income tax rate of 3.07%, meaning all income of people are taxed at this same rate. We also offer no deduction or personal exemptions to reduce taxable income, nor do we provide refundable tax credits.

The major challenge to changing this in Pennsylvania is our Constitution’s uniformity clause, which states that any class of income must be taxed at one rate, meaning a graduated or progressive personal income tax is not allowed.

However, the We the People campaign and we at the Pennsylvania Budget and Policy Center have a solution to this problem. The Fair Share Tax would divide our personal income tax into two separate taxes (so the uniformity clause is no longer an issue) – income on wealth  which includes dividends, royalties, capital gains, business profits, etc. and income on wages and interest. Taxes on income from wages and interest would decrease from 3.07% to 2.8%, reducing taxes for 60% of Pennsylvanians who feel the impacts of our current upside-down tax structure. Taxes on income from wealth would increase from 3.07% to 6.5%, with 60% of the tax revenue coming from the top 1%. This tax would raise $2.22 billion in new revenue in 2019-20 that can be invested in things like education, human services and protecting the environment – things that benefit all of us, not just the wealthy few.

Our state taxes should be structured in a way that raises needed revenue in the state and ideally decreases inequality. Instead our current system exacerbates existing income and racial disparities. There is a better way.

Tax Cuts and Jobs Act Will Supercharge Racial Wealth Divide, Finds First-Time Analysis

Third and State - October 11, 2018 - 12:43pm

Pennsylvanians, even more than other Americans, strongly support fair taxation—because Pennsylvania’s tax system is one of the most unfair in the nation, taxing middle- and low-income families at much higher rates than the richest 1%. Yet when Congress passed huge tax cuts on a party line vote last year, it made the U.S. tax system much less fair, with most of the benefits going to the richest Americans—72% of the individual tax cuts go to the top 20% of families, with the corporate tax cuts also tilted towards the richest Americans.

new report from the Institute on Taxation and Economic Policy released today highlights another way that the Tax Cut and Jobs Act increases economic inequality: it rewards existing White wealthy families at the expense of the economic security of households of color as well as at the expense of the middle class and poor. On average white households will receive over $2,000 in cuts compared to less than $1,000 for white Latino and Black households. The struggles families of color have accumulating wealth is one of the powerful ways that racial inequality in America gets transmitted across generations (because families cannot afford college, a house, retirement savings or to save enough to stop living paycheck to paycheck). In the future, the huge deficits resulting from this tax cut could also lead to reductions in spending that hurt middle- and lower-income families of all races and ethnicities, while also reducing economic growth.

Members of Congress who supported this tax cut revealed through their action a preference for an economy that works for the mostly-white 1% rather than an economy that works for all Americans. The PA representatives who voted for the tax cut  who are running for reelection or—in the case of Lou Barletta, for U.S. Senate—include Barletta, Brian Fitzpatrick, Mike Kelly, Tom Marino, Keith Rothfus, Lloyd Smucker, Scott Perry and Glenn Thompson.

Go here for more  information on the new ITEP report and here to access the social media toolkit so that you can help spread the word.

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