by Georgia Center for Opportunity | Aug 25, 2016
Computational model exposes severe problems with the welfare system
Pop quiz: When does $9 + $1 equal –$6,000?
This may look like new math, but it is not.
This seemingly nonsensical equation illustrates the challenges faced by families who receive assistance from means-tested welfare programs.
In fact, these exact numbers come from a computer model I designed, which was sponsored by the Georgia Center for Opportunity. It evaluates financial incentives, or more precisely, disincentives embedded in our nation’s welfare system.
This computer modeling examined the potential case of a single mom with two children in Gwinnett County, Georgia. Using 2015 data, if she were offered the opportunity to earn $10 per hour instead of earning $9 per hour, she would lose nearly $6,000 in welfare benefits within a year’s time.
The reason for the loss is not due to her earned income. By increasing her earnings from $9 per hour to $10, she nets an additional $1,820 a year. The reason for the loss has to do with the way the welfare system is designed, or more accurately, the way it has been haphazardly put together over the past fifty years. At $9 per hour, the single mom would be eligible for the following means-tested programs:
the earned income tax credit ($5,419),
additional child tax credit ($2,000),
food stamps ($2,772),
free or reduced-cost school meals ($502),
WIC food packages ($480),
Section 8 housing choice voucher ($9,805),
subsidized childcare ($8,918), and
Medicaid ($4,570).
When added together, this single mom has a benefits package—courtesy of the taxpayers—estimated at $34,467. So instead of bringing home $17,266, her estimated income is actually $51,733 after government subsidies are included. To state it differently, for every $1 she earns in net income, she is eligible for nearly $2 in welfare benefits.
Now consider the case if she would earn $10 per hour. She would still receive means-tested benefits, but the benefit amounts will change as follows:
earned income tax credit ($4,977),
additional child tax credit ($2,000),
food stamps ($2,352),
free or reduced-cost school meals ($502),
WIC food packages ($480),
subsidized childcare ($8,658),
Medicaid ($4,570), and
Affordable Care Act credits and subsidies ($3,152).
In summary, her benefits drop to an estimated value of $28,938. When combined with her take-home pay, she is worse off by nearly $6,000 from earning $10 per hour than earning $9 per hour.
What this example demonstrates is the infamous welfare cliff, that unintended consequence of the current welfare system whereby an individual or family loses by earning more.
Unfortunately, this example is not an isolated incident. It represents what’s happening everywhere.
by Georgia Center for Opportunity | Aug 12, 2016
A certain desert city’s tourism department hopes you can finish the phrase, “What happens in Vegas…,” a slogan that turns lucky 13 this fall. Yet when it comes to the changing landscape of student learning, what happens in the desert isn’t going to stay there.
At the end of July, the Nevada Supreme Court held hearings on the state’s nascent education savings account law. In 2015, Sen. Scott Hammond sponsored SB 302, and Gov. Brian Sandoval’s signature made all 450,000 Nevada public school students eligible to apply for an account. The ACLU filed a lawsuit to take children’s educational choices away shortly after the law’s passage. The group charges that the accounts violate the state constitution (a group of parents filed another suit taking away parents’ ability to choose how their children learn, saying that the accounts would be illegally funded from a state source dedicated to public schools).
Nevada’s account law is the first such law to allow all public school students the opportunity to use an account to buy a variety of educational products and services. Parental choice in education is no longer rare in the U.S., but many of the laws that give parents options between public and private schools are limited to students that meet select criteria. For example, Tennessee and Mississippi’s education savings accounts, also enacted in 2015, are only available to children with special needs. As many Georgia parents may know, the Peach State has a private school scholarship program exclusively for children with special needs, while Louisiana and Ohio have private school voucher options for children from failing schools. The situation is similar across more than two dozen states.
A ruling in favor of parents and children from Nevada’s Supreme Court would boost efforts in other states, such as Georgia, Texas, Delaware, and Missouri, to name a few, where lawmakers have considered the accounts in recent years. In 2011, Arizona lawmakers enacted the nation’s first education savings account law and have expanded student access to the accounts since its enactment. Arizona children with special needs can apply for an account, along with children from failing schools, adopted children, and children living on Native American reservations, among others. Nevada is the first state to give every public school child this opportunity from day one.
Education savings accounts have also attracted national attention. Republicans included education savings accounts in their 2016 platform (as for Democrats, who the Wall Street Journal says has a built-in “get-out-the-vote operation known as teacher unions,” education savings accounts were noticeably missing from their party positions).
In March, Sen. John McCain (R-AZ) introduced a bill to allow all children attending Bureau of Indian Education schools access to education savings accounts. Politico highlighted these students’ need for quality educational options in November 2015 with a feature headlined “How Washington created some of the worst schools in America.” Former presidential candidate and Sen. Ted Cruz (R-TX) introduced a bill in January that would make all Washington, D.C. children eligible for accounts.
As a result, federal and state lawmakers across the country are watching what happens in Carson City, Nevada. Arizona’s Supreme Court ruled in favor of education savings accounts in 2011 after the state teachers union and other associations brought a lawsuit similar to the ACLU’s charges in Nevada (the Goldwater Institute defended the accounts alongside the Institute for Justice, the group defending Nevada’s accounts). A victory for students in Nevada would mark the second victory for the accounts over challenges that the accounts violate state constitutional provisions that block the use of public funds for private or religious schools.
Five states have passed the accounts so far, but the accounts are turning into a movement offering families flexible opportunities in education. The successes of these programs, and the lifelong knowledge and skills gained—won’t just stay in Vegas.
by Georgia Center for Opportunity | Aug 8, 2016
A new report released by The Institute for Family Studies finds that 69 percent of 18-45 year olds in Peachtree Corners and Norcross think single parents can raise children just as well as two parents. Furthermore, 63 percent approve of divorce when married people realize they no longer love each other.
Permissive attitudes towards divorce and unrealistic expectations for single parents, however, do not make for human flourishing. The report cites sociologist Sara McLanahan and economist Isabel Sawhill, who write, “Most scholars now agree that children raised by two biological parents in a stable marriage do better than children in other family forms.” Additionally, economist Raj Chetty found that the foremost indicator of upward mobility among poor children is the percentage of children with single parents.
Still, the study does present positive findings. 71 percent of surveyed residents agree that it is important to wait until marriage to have kids. Overall, marriage continues to enjoy high interest in the area: 47 percent of 18-45 year old residents in Norcross and Peachtree Corners are married, and another 46 percent would like to be married.
Our Healthy Families Initiative (HFI) hopes for more clear thinking on family formation. We want to equip fathers and mothers in Peachtree Corners and Norcross, so they can give what children need: a permanent, stable, and loving home environment. To this end, HFI offers workshops to local residents regarding fatherhood, dating, and relationship building within marriage. Registration for workshops is open for local residents, married and unmarried.
by Georgia Center for Opportunity | Jul 4, 2016
Six years ago, supporters of the national Common Core academic standards thought they had the formula to measure student success. Under the Common Core, states would agree to teach the same material in the same sequence to all students. The ensuing tests would measure all students according to the same material. We would track the results and compare student achievement across the country.
If only teaching children was so simple.
As centrally-planned policies are prone to do, the Common Core unraveled. South Carolina and Oklahoma left the standards citing, among other things, “federal intrusion” and vowed to replace the standards with better content. A group of states that agreed to offer the same test to students lost half of its state members by 2015. Three months ago, New Jersey had to postpone all student testing in grades 3-11 because the Pearson Education’s testing software malfunctioned.
Then came the Gates Foundation’s admission earlier this year that the Common Core isn’t ready and the “foundation underestimated the level of resources and support required.” The foundation’s mea culpa is significant because of the organization’s commitment to national standards and the associated financial support.
Despite this morass, some in Georgia still claim that alternatives to national standards and testing will cause more problems than pressing ahead with the Common Core. Most parents would agree that “whether they come from a civilian or military family, all children deserve to be held to high, consistent academic expectations that fully prepare them to succeed after high school.”
Yet there are other—and better—ways to do this than national standards.
In 2015, the U.S. Department of Education approved New Hampshire’s pilot project to administer the Common Core tests in fewer grades and use the SAT for high schoolers. Students will have ongoing projects during the school year to measure learning. Education leaders in states like Indiana are considering this alternative.
Arizona Gov. Doug Ducey signed HB 2544 this year, which allows public schools to choose from a “menu” of tests to measure student progress. Rep. Paul Boyer, chair of the House Education Committee, and Sen. Sylvia Allen, chair of the Senate Education Committee, led the legislative effort.
Schools should be allowed to choose from existing national norm-referenced achievement tests like the Stanford series of tests or the Iowa Test of Basic Skills. This way, schools could use a test that aligns with what they already teach—not curriculum imposed from somewhere else—and, because the tests are nationally normed, the scores could be compared across schools.
Critically, district and charter schools would have the same autonomy to choose what and how to teach while still measuring achievement in a comparable way across localities. The Common Core didn’t deliver, so Georgia lawmakers should be looking for solutions like those in Arizona and New Hampshire.
by Georgia Center for Opportunity | Jun 3, 2016
A school board member in New Jersey pleaded guilty to wire fraud. A “longtime educator” in Palm Beach County, Florida, resigned from a school board after authorities charged him with fraud and bribery. Nearly a dozen school leaders in Detroit accepted $900,000 in kickbacks in a phony scheme to provide school supplies. A manager of an audio/visual company in Utah pleaded guilty to fraud and theft in his dealings with a local school district.
And that was just in one week.
As we’ve documented on this blog, fraud is an unfortunate reality in our nation’s schools. For that matter, it’s an unfortunate part of providing quality services in across a variety of social needs. The Wall Street Journal recently reported on the indictment of state and local authorities in Flint, Michigan surrounding the locality’s water crisis. Yet the paper lamented that federal officials—those getting their paychecks from Washington, D.C.—at the EPA and in the U.S. Office of Veterans Affairs were not being held to account for ignoring warnings at the Gold King Mine (where a flooded mine ruined a water supply in Colorado last year) and in medical malfeasance, respectively.
Fraud is a serious issue at all levels of government and enforcement is inconsistent, at best.
In 2009, Apple started advertising what was, at the time, breakthrough technology in its latest iPhone by saying, “There’s an app for that,” with “that” being whatever you needed. From finding a restaurant to playing the piano on your phone, developers were building mobile applications that allowed you to access virtually anything you needed at your fingertips. Today, programmers are building applications to help prevent fraudulent use of taxpayer money.
In some states, taxpayers can event submit photos or videos along with anonymous tips about misuse of taxpayer funds. The applications may cost as much as $10,000 to $20,000 to develop, but with the potential losses from fraud totaling in the hundreds of thousands or even millions in taxpayer resources, the upfront cost is worth it.
Furthermore, the next generation of parents and taxpayers, Millennials, are the generation that is most likely to carry and use a mobile device—making these apps a natural fit. The Pew Research Center reports that Millennials are the most likely generation to “use their cellphones in public places for a variety of reasons,” and Nielsen says Millennials “are the largest segment of smartphone owners.” This means the availability of such mobile applications is coming at an excellent time.
Is Your Mobile Phone a Smartphone?
Source: Board of Governors of the Federal Reserve System, “Consumers and Mobile Financial Services, March 2015,” http://www.federalreserve.gov/econresdata/mobile-devices/2015-appendix-3-consumer-responses-to-survey-questionnaire.htm#Cross-tabulationsForConsumersUseOfM-C1548C7E.
While mobile apps won’t prevent fraud, such developments will help to limit the losses that bad actors cause. Research from the Goldwater Institute explains how mobile technology and education savings accounts, spending accounts that give parents choices for a child’s education, are both coming of age at the same time. Approximately 840,000 children across five states are eligible for the savings accounts. Georgia lawmakers considered legislation to create the accounts in the last session.
Millennial parents are the generation that grew up alongside mobile technology and are already using apps to get a ride from the airport or check a bank account. Flexible spending accounts that allow families to pay for online classes, public school services, private school tuition, or save for college should be designed so that parents can report fraudulent use of such accounts, check their child’s account balance, and make a purchase for a textbook, all with their mobile phone. In traditional schools and programs that give parents choices in education, taxpayers should be able to help protect students with easy, reliable ways to report misuse.
There’s no app for the American Dream, but mobile technology can help protect taxpayer resources and make sure education funding is used as it was intended—to help children succeed.
