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Sep 29, 2022

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Income & Self-Sufficiency Policy Forum Recap, Part 2: Policy ideation, room for improvement and the challenges ahead

by | Sep 29, 2022

Events, Income, Research and Policy Analysis

How Can We Make Income More Sustainable and Equitable? 

While there are substantial barriers, Ms. Robert provided our audience with some positives about Colorado. Currently, Colorado ranks 2nd to Nebraska in having a high labor force participation at 69.4%, so it’s not a labor force shortage that Colorado is experiencing. Additionally, Colorado has taken advantage of having an automatic adjustment codified in our constitution, so we are not stuck with the $7.25 federal minimum. Today, the Colorado minimum wage is $12.56 and $9.54 for tipped employees. Beginning next year, Denver will join several other cities across the country with a minimum wage of $17 an hour. Currently, the wage sits at $15.87 and will rise to $17.29. Beyond raising minimum wage though, Colorado has more to do to better serve its communities across the state.  

Ms. Robert suggested that Colorado cut expenses on basic needs products and instead give out subsidies or governmental assistance. This could be in the form of Medicaid or Obamacare subsidies, having universal kindergarten, or giving residents access to internet services without cost or hassle. Recently, Colorado has even taken steps to reduce income loss through earned sick days or upcoming paid family and medical leave. Advocates on the call are also anticipating legislation around predictable work schedules, which would provide employees with advance notice of their work schedule to minimize any modifications. 

Ms. Robert also stated Colorado could also supplement earnings for lower wage workers and others living below the Self-Sufficiency Standard by using tax codes. We have seen positive effects of this through the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), which helps low- to moderate- income families and workers get a tax break. Advocates mentioned Colorado could also make a permanent and more progressive approach to TABOR refunds, with this last year being an example of Coloradans receiving a flat $750 check versus those with more money receiving a bigger refund. Only those with an income high enough to owe income taxes tend to benefit; the higher the income, the bigger the benefit. Meanwhile, struggling families get no benefit if their income is too low to owe taxes. 

Many advocates agreed with us in opposing the reduction of income tax rates, which happens to be on the ballot this fall. Colorado Proposition 121, the State Income Tax Rate Reduction Initiative, would decrease the state income tax rate from 4.55% to 4.40%. While proponents of tax cuts believe that cuts would help grow the economy by initiating more spending, we argue it also only benefits the wealthy and reduces the necessary government services for lower-income households; for which the saying goes: the rich get richer, and the poor get poorer.  

Some of the public benefits or government assistance programs Colorado offers include Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF). These programs are supposed to be a pathway to help individuals and families out of poverty, but currently, people must choose between getting a public benefit that falls short of meeting basic needs or risk losing the support an individual needs to work. Our audience supported the idea of increasing eligibility thresholds to benefit a multitude of Coloradan families, where many households who are not eligible for public benefits could really use the help to meet their basic needs. 

 

Guaranteed Income  

In the third part of our forum, we asked the audience to join the conversation and share their concerns, stories, and solutions for how to better income and self-sufficiency in Colorado. Overwhelmingly, the audience wanted to talk about Guaranteed Income. Guaranteed Income, also known as Universal Basic Income, is an unconditional, no strings attached approach to providing an income base to the most vulnerable households. Through direct cash payments, basic income shortens the path to stable housing and employment. 

Ms. Robert shared that in 1967, Martin Luther King Jr. proposed guaranteed income in his speech, “Where Do We Go From Here?” and only two years later did President Richard Nixon propose a negative income tax that would’ve enacted an unconditional income for all poor families. Unfortunately, his rhetoric became twisted, and we saw the country turn away from basic income. Advocates on the call argued opponents of guaranteed income say the approach incentivizes people not to work, the programs are too expensive to fund, the effects of a basic income can be counterproductive, and that these programs would be difficult to replicate nationwide. 

However, Ms. Robert countered this argument, saying the U.S. already has a version of guaranteed income through Social Security—though it’s limited to those who have worked for several years. While this is not universal, individuals over the age of 65 can apply for Supplemental Security Income (SSI) to help those with limited income and assets. One advocate in attendance added the U.S. has also tested a version of universal basic income through the stimulus payments given by the federal government to aid in economic recovery from the devastation of COVID-19. 

Earlier this month, Denver has stated that 260 people living in emergency shelters or motels will receive a $6,500 payment with an additional $500 per month for 11 months, including payments planned for an additional 560 people. The Denver Basic Income project will be piloting their program in a few months.  One resident from Boulder stated that the Boulder City Council has also approved initial funding of $250,000 for guaranteed income. Having a guaranteed income is crucial to achieving racial and economic justice for communities of color. 

 

Cliff Effect, Business, & Housing 

Our audience brought up additional thoughts and concerns about how the cliff effect, business, and housing has affected income in Colorado.  

The cliff effect occurs when someone receives a pay raise at work that triggers a disproportionate loss of government assistance. As Ms. Robert pointed out, CCLP, alongside the Colorado Children’s Campaign and Clayton Parent Ambassadors, included a provision in the legislation for the Department of Human Services board to adjust the Earned Income Disregard and the TANF Standard of Need to allow people to gain a work footing before being kicked off TANF. It’s an economic model with a legitimate built-in social safety net. 

The Center for Community Wealth Building also mentioned they are thinking outside the box of normal business models, by focusing on a cooperative model that advocates for autonomy and independence; gives education, training, and information to other members; and focuses on the concerns of the community for the businesses involved. Another participant stated that we need to support these local, and often marginalized business owners. One way to do this is through Shop BIPOC, a project supported by over 11 organizations across Colorado with the goal of strengthening racial equity. As their website states, buying from BIPOC-owned businesses helps lift our local economy and commits to an allyship to achieve racial equity; doing business with purpose. 

As we can see from our last policy forum to this one, there is a direct correlation between affordable housing and income. As many advocates on the call mentioned, Coloradans are facing one of the worst affordable housing crises to date with rising rent and interest rates; investors and developers buying up land and buildings taking away the opportunity for individual homeownership; while also not having enough supply of housing for the demand in need. Ms. Robert told our audience that Colorado Homes for All plans to run a bill in 2023 for local authority to implement rent control. In the 2022 legislature, CCLP and our partners brought forth a bill on Protections For Mobile Home Park Residents that was supposed to include rent stabilization for these communities, but Governor Jared Polis stated he would veto the bill entirely if this was included in the final version. This is unfortunate because low-income housing options include mobile park homes. This same bill was, however, able to extend the amount of days mobile home owners have to make an offer to purchase the park. The option for ownership is presented to residents over developers and investors, which is a huge win for affordable housing advocates. 

 

As with any legislation, there needs to be more accountability for implementation and enforcement. Advocates push for equitable solutions but when it comes time to act, we need a bigger effort from agencies, institutions, organizations, advocates, and the like to come together to do more for low-income communities. Income is a necessary component of self-sufficiency. As a society, we need to ensure that lower-income households still have access to services and programs that will lift them out of poverty. As someone from the forum said, “Living in poverty is a quagmire.”  

 

For Part 1: The Self-Sufficiency Standard and barriers to self-sufficiency, read here.

Read more about income & the Self-Sufficiency bills passed in 2022 in our Income Legislation list here.

 

Interested in learning more about affordable housing in Colorado, check out our last three articles and our Housing Legislation list here: 

For Part 1: The Event, ARPA, & more, read here. 

For Part 2: ADUs, mobile homes, rent stabilization, and new development, read here. 

For Part 3: Attendee questions and resources, read here. 

Read more about affordable housing bills passed in 2022 in our Housing Legislation list here. 

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HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

Health First Colorado is the name given to Colorado’s Medicaid program. Medicaid provides public, low-cost health insurance to qualifying adults and children. It is an entitlement program funded by the federal, state, and county governments and is administered by counties in Colorado. Those who are required to pay must pay a small co-pay when receiving certain health care services.

State Department: Department of Health Care Policy and Financing

Eligibility: Most adults 18 to 64 are eligible for Medicaid in Colorado if their household income is at or below 133% of the federal poverty limit (FPL). Pregnant women are eligible with incomes of up to 195% FPL, while children under 18 may be eligible if the live in a household with income at or below 142% FPL. Some adults over 65 may also be eligible for Medicaid.

Program Benefits: Through Medicaid, low-income Coloradans are eligible for a range of health care services at little to not cost. Services provided include doctors visits, prescription drugs, mental health services, and dental care. Co-pays for certain individuals may be needed for certain services.

Program Funding and Access: Colorado funds our Medicaid program through state and federal dollars. Medicaid is an entitlement program, which means that all who are eligible for Medicaid can access the program, regardless of the funding level in a given year. This does not mean that it is always easy to access Medicaid, even when eligible. And since the program is administered by counties, funding levels for county staff and other administrative roles can make it easier or harder for Coloradans to access the program. On top of this, not all medical providers accept Medicaid which limits the ability of Coloradans to seek health services even if enrolled, such as if the nearest provider is a 2+ hour drive away.

Note: This data is from before the pandemic and does not reflect changes in enrollment rules during the COVID-19 pandemic and public health emergency.

Statewide Program Access 2015-19: Over the study period of this report, an average of 89.0% of the population at or below 133% of FPL (i.e., the population who is likely to be eligible for Medicaid) were enrolled in Medicaid in Colorado.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

The Supplemental Nutrition Assistance Program or SNAP helps low-income Coloradans purchase food by providing individuals and families with a monthly cash benefit that can be used to buy certain foods. SNAP is an entitlement program that is funded by the federal and state governments and administered by counties in Colorado.

State Department: Department of Human Services

Eligibility: Currently, Coloradans qualify for SNAP if they have incomes below 200% FPL, are unemployed or work part-time or receive other forms of assistance such as TANF, among other eligibility criteria. Income eligibility for SNAP was different during the study period of this report than today—it was 130% FPL back in 2019 for example. The US Department of Agriculture uses the population at or below 125% FPL when calculating the Program Access Index (or PAI) for SNAP. We follow this practice in our analysis despite Colorado currently having a higher income eligibility threshold.

Program Benefits: SNAP participants receive a monthly SNAP benefit that is determined by the number of people in their household and their income. Benefit amounts decrease as income increases, helping households avoid a sudden loss of SNAP when their incomes increase, even by a minor amount. Benefits are provided to an Electronic Benefit Transfer (EBT) card that can be used to purchase eligible food items, such as fruits and vegetables; meat, poultry, and fish; dairy products; and breads and cereals. Other items, such as foods that are hot at their point of sale, are not allowable purchases under current SNAP rules.

Program Funding and Access: SNAP, like Medicaid, is a federal entitlement program. This means that Colorado must serve any Coloradan who is eligible for the program. As such, funding should not be a limit to how many Coloradans can be served by the program. However, funding for administration of SNAP at the state and county level can limit the ability of county human service departments to enroll those who are eligible. Other program rules and administrative barriers can make it difficult for Coloradans to receive the benefits they are legally entitled to receive.

Statewide Program Access 2015-19: Over the study period of this report, an average of 61.1% of the population at or below 125% of FPL (i.e., the population who is likely to be eligible for SNAP) were enrolled.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

The Special Supplemental Nutrition Program for Women, Infants, and Children, also know as WIC, provides healthcare and nutritional support to low-income Coloradans who are pregnant, recently pregnant, breastfeeding, and to children under 5 who are nutritionally at risk based on a nutrition assessment.

State Department: Department of Public Health and Environment

Eligibility: To participate in WIC you must be pregnant, pregnant in the last six months, breastfeeding a baby under 1 year of age, or a child under the age of 5. Coloradans do not need to be U.S. citizens to be eligible for WIC. In terms of income, households cannot have incomes that exceed 185% FPL. Families who are enrolled in SNAP, TANF, Food Distribution Program on Indian Reservations (FDPIR), or Medicaid are automatically eligible for WIC. Regardless of gender, any parents, foster parents, or caregivers are able to apply for and use WIC services for eligible children.

Program Benefits: WIC provides a range of services to young children and their parents. These include funds to purchase healthy, fresh foods; breastfeeding support; personalized nutrition education and shopping tips; and referrals to health care and other services participants may be eligible for.

Program Funding and Access: WIC is funded by the US Department of Agriculture. The state uses these federal funds to contract with local providers, known as WIC Clinics. In most cases, these are county public health agencies, but that is not the case in all Colorado counties. Some WIC Clinics cover multiple counties, while others are served by multiple clinics. Private non-profit providers are also eligible to be selected as a WIC Clinic.

Statewide Program Access 2015-17: Between 2015 and 2017, an average of 52.2% of the population eligible for WIC were enrolled in the program in Colorado.

Financial Security:
Colorado Works

Colorado Works is the name given to Colorado’s program for Temporary Assistance to Needy Families or TANF. It is an employment program that supports families with dependent children on their path to self-sufficiency. Participants can receive cash assistance, schooling, workforce development and skills training depending on the services available in their county.

State Department: Department of Human Services

Eligibility: In general, Coloradans are eligible to enroll in TANF if they are a resident of Colorado, have one or more children under the age of 18 or pregnant, and have very low or no income. For example, to be eligible to receive a basic cash assistance grant through TANF, a single-parent of one child could not earn more than $331 per month, with some exclusions—and would only receive $440 per month (as of 2022). That said, there are other services provided by counties through TANF that those with incomes as high as $75,000 may be eligible for. In addition to these, participants in TANF are required to work or be pursuing an eligible “work activity” or work-related activity. Any eligible individual can only receive assistance if they have not previously been enrolled in TANF for a cumulative amount of time of more than 60 months—this is a lifetime limit that does not reset. Counties may have additional requirements and offer benefits that are not available in other counties in Colorado.

Program Benefits:  While the exact benefits that one is eligible for under TANF can vary, all qualified participants are eligible to receive a monthly cash payment, call basic cash assistance. Other than cash assistance, counties are have a lot of choice in how to use their TANF funding; generally a use of TANF funds is appropriate so long as it advances one or more of the four purposes of the program: (1) provide assistance to needy families so that children can be cared for in their own homes or in the homes of their relatives; (2) end the dependence of needy families on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families.

It is important to note that those eligible for TANF are also eligible for many of the other programs we’ve included in this report, such as SNAP, Medicaid, and CCCAP.

Program Funding and Access: Colorado funds its TANF program through funds received from the federal government through the Temporary Assistance for Needy Families block grant. Most of the federal funds are allocated by the state to counties, which are required to provide a 20% match of state funding. Federal and state rules allow the state and counties to retain a portion of unspent funds in a TANF reserve.

Statewide Program Access 2015-19: Over the study period of this report, an average of 50.7% of the population at or below 100% of FPL (i.e., the population who is likely to be eligible for TANF) were enrolled in TANF in Colorado.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

The Colorado Child Care Assistance Program provides child care assistance to low-income families and caregivers living in Colorado in the form of reduced payments for child care. It is a program funded by the federal, state, and county governments and is administered by counties in Colorado. The share owed by parents/caregivers is determined on a sliding scale based on the family’s income.

State Department: Department of Early Childhood Education

Eligibility: Counties set eligibility for families separately, but must serve families with incomes at or below 185% of the Federal Poverty Limit. Families accepted to the program are no longer eligible once their income exceeds 85% of the state median income. Parents or caregivers must be employed, searching for work, or engaged in another approved activity to be eligible for CCCAP. Parents and caregivers enrolled in Colorado Works (Temporary Assistance to Needy Families or TANF) or in the child welfare system are also eligible to participate in CCCAP. Generally, CCCAP serves families with children under 13, although children as old as 19 may be eligible under certain circumstances.

Program Benefits: If a family is eligible for CCCAP and has income, they may likely have to pay a portion of their child’s or children’s child care costs each month. The amount that families owe is based on their gross income, number of household members, and the number of children in child care in the household. As such, households tend not to experience a benefit cliff with CCCAP when they see their incomes increase

Program Funding and Access: Colorado funds the CCCAP program using federal dollars it receives from the Child Care and Development Block Grant program. The state allocates federal and state funds to counties using a formula that takes into account factors like current caseloads and the number of eligible residents. Assistance is available until the county’s funds are spent, so the number of families that can be served is often a function of how much funding is available and the income and composition of the household that applies. It is not uncommon for counties to overspend or underspend their allocations of funds. The state reallocates unspent funds from counties who underspent to those who overspent. While underspending could indicate a problem with the way a county administers its CCCAP program, it could just as likely be a sign that there are few providers in the county who participate in CCCAP—or a lack of providers generally.

Statewide Program Access 2015-19: Over the study period of this report, an average of 10.8% of the population at or below 165% of FPL and younger than age 13 (i.e., the population who is likely to be eligible for CCCAP) were enrolled in CCCAP.

Housing:
HUD rental assistance programs

The US Department of Housing and Urban Development (HUD) has three housing assistance programs that we look at together: Housing Choice Vouchers (Section 8), Project-based Section 8, and Public Housing. In Colorado, these programs provided assistance to over 90% of the households who received federal housing assistance from all HUD programs. Through federally funded, local or regional public housing agencies (PHAs) are the agencies that administer these programs, through not all are available in all counties. These are not the only programs available in Colorado that assist households afford the cost of housing, such as units funded through federal and state tax credit programs.

State Department: Department of Local Affairs

Eligibility: Generally, households with incomes under 50% of the area median income (AMI) of the county they live in are eligible for these rental assistance programs, although PHAs have discretion to select households with incomes at higher percentages of AMI. That said, HUD requires that 75% of new vouchers issued through the Housing Choice Voucher/Section 8 program in a given year are targeted to households with incomes at or below 30% of AMI. PHAs are also able to create criteria that give priority to certain types of households who are on waiting lists for these programs.

Program Benefits: These rental assistance programs help households afford the cost of housing by reducing their housing costs to around 30% of their household income. In the case of the Housing Choice Voucher program, the PHA pays the voucher holder’s landlord the remaining portion of the rent.

Program Funding and Access: Funding and access are both challenges for these rental assistance programs. In addition to limitations on the number of public housing units or housing vouchers a PHA can manage or issue, lack of funding compared to the need constrains the ability of PHAs to assist low-income households. In 2020, Coloradans were on waitlists for Housing Choice Vouchers for an average of 17 months. Waitlists also exist for the other rental assistance programs.

Statewide Program Access 2015-19: Over the study period of this report, an average of 21.1% of renter households with incomes at or below 50% AMI (i.e., the population who is likely to be eligible for HUD rental assistance programs) were living in subsidized housing.