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Jan 14, 2020

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Charles serves as CCLP's Income and Housing Policy Director using data and research to support our efforts to stand with diverse communities across Colorado in the fight against poverty. Staff page ›

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Poverty decreased statewide, but increased in parts of Colorado

by | Jan 14, 2020

Family Economic Security, Health

You may have missed it with the end-of-the-year hustle and bustle, but the U.S. Census Bureau released its latest county-level estimates for 2018 on Dec. 19, 2019. The data, which provides a socio-economic snapshot of the state and its counties, allows us to see how the economic security of Coloradans has changed between 2017 and 2018.

The poverty rate is one of the primary indicators that CCLP considers for its semiannual State of Working Colorado compendium (a 2020 version of the report is in the works). While the number changes depending on which survey you reference, the data released in December show that 10.9 percent of Colorado residents lived below the poverty level in 2018. This is lower than 2017 when 11.5 percent of Coloradans lived in poverty. Overall, the Census Bureau estimates over 21,600 fewer Coloradans lived in poverty in 2018 compared to 2017 — a decrease of 3.5 percent. This is a great achievement that should be celebrated.

There’s more to the story…
However, as with most statistics one sees in the news about the economy, this headline does not tell the full story of who is struggling to get by in our state. To understand why this is the case, it is important understand what we mean when we talk about the poverty rate. In the United States, poverty is defined by the federal government as the income needed to cover three-times the costs of a minimum food diet in 1963, adjusted for inflation and family size. In other words, poverty is measured based on a methodology that has not fundamentally changed in over 50 years, other than to account for changes in the cost of living. This approach to measuring poverty assumes that three times the cost of a minimum food diet in 1963 is enough income for a family or household to be economically secure and self-sufficient in 2018. Furthermore, the poverty level set by the federal government is the same across all 48 states in the contiguous United States and does not adjust to reflect variations in the cost of living across the country, let alone within a state.

In order to create a more accurate picture of who is struggling economically in our state, CCLP works with the University of Washington to publish the Self-Sufficiency Standard report that measures a household’s income needs by looking at the actual costs of housing, food, health care, transportation, child care and other expenses in every county in Colorado. This “budget” is further adjusted by family type, so that it can accurately account for how expenses vary among Colorado’s diverse families. For example, a family of two would have had to have earned at least $16,460 in 2018 to be considered above the poverty level. Depending on the county, a family consisting of one adult and one preschooler would have needed to earn anywhere between $24,499 (if living in Baca County) and $71,274 (if living in Pitkin County) in 2018 to cover their basic needs according to the Standard. This broad range of needed income illustrates the importance of taking local cost of living into account when discussing Coloradans’ economic security.

The Self-Sufficiency Standard also shows a very different picture of economic need in Colorado. For instance, 8.4 percent of working-age families in Colorado (households with at least one member between the ages of 18 and 64 with no work-limiting disability) were below the poverty level in 2016, compared to 27.4 percent who were below the Self-Sufficiency Standard (2016 incomes were inflated to 2018 dollars in order to compare them to the Self-Sufficiency Standard). In other words, nearly 300,000 households in the state earn enough income to be above the poverty level, but still do not earn enough to cover the essential goods and services they need to get by. Why does the poverty measure used by the federal government undercount economic need by so much? Looking across all the family budgets calculated for the Self-Sufficiency Standard (719 family types x 64 counties), food accounts for an average of 17.3 percent of the total monthly costs faced by families, not 33 percent as assumed in the official poverty measure. In other words, the official poverty measure over-estimates the share of money in a family’s monthly budget that goes towards food while under-estimating the share that goes to other expenses, such as housing or health care.

Poverty increases in many counties
When talking about poverty in Colorado, it is also important to remember that economic opportunity is not equally distributed across our state. This latest release from the U.S. Census Bureau allows us to examine how poverty rates have changed in each of Colorado’s 64 counties. According to the American Community Survey, poverty rates varied tremendously across Colorado in 2018. Douglas County had the lowest rate (3.5 percent) while Costilla County had the highest rate (at 30.1 percent). In all, 38 counties had poverty rates higher than the rate for the state (10.9 percent).

While the state’s poverty rate declined between 2017 and 2018, this decline was not uniform across all counties. 23 counties saw their poverty rate increase. In addition, 25 counties saw an increase in the total number of people living below the poverty level. But it’s not all bad news: 26 counties saw their poverty rates decline by more than the decline seen in the state. These county-level statistics demonstrate why we need to be cautious when looking at state-level economic data, which often masks these local trends.

As we move into the 2020 legislative session, this data reminds us of two crucial points:

  1. While some might argue that the booming state economy means we don’t need to expand social safety net programs or that we can cut them altogether, there are parts of Colorado where the need for these programs remains or has grown.
  2. The poverty threshold does not accurately reflect the cost of living in our state. As health care, housing and child care costs, among many others, continue to rise, there will be an increasing number of families living above the poverty level but unable to cover the costs of the goods and services they need to get by.

As a state, we must continue to support programs and policies that provide relief to these families as they work to become self-sufficient and economically secure.

Note on data: While it’s common to see data from the five-year American Community Survey presented as a data point for a single year (2018 for example), it is important to keep in mind that the data represent a 5-year average of survey samples. The data for 2018 was collected between 2014-2018. This is done to ensure there is a large enough sample size for statistically valid results for geographic places (counties, cities/towns, etc.) with fewer than 65,000 residents. Effectively, this averaging results in a number that is more “smooth” than data reported in other Census Bureau surveys, as year-to-year changes are moderated by the results from the previous four years when the numbers are averaged. However, for ease of understanding we refer to the five-year estimates as data for 2018.


– By Charlie Brennan

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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.