Increasing Access to Healthy Food in Washington State

A report issued today by the Washington State Budget & Policy Center finds that residents in lower income, rural parts of the state face geographic barriers that make it harder to shop at grocery stores. As a result they often turn to corner markets or gas station mini marts for food where there are fewer healthy options. Access to affordable, healthy food is essential for the health and well-being of Washington families.

The report finds that residents who live in rural communities must travel 15 miles or more to reach a full-service grocery store. In contrast, metropolitan area residents frequently live within one mile of a full-service grocery store. In rural parts of the state, more families also live in poverty and struggle to have enough money to buy food. The cost of gas to make a longer trip to a grocery store, as well as the time and reliable transportation it takes to get there, make it harder to support a healthy diet.

In addition to state and federal programs that are designed to help lower income households maintain a healthy diet, marketplace initiatives such as the Healthy Corner Store Network can help increase access to healthy food for Washington families in all areas of the state.

Increased TANF Caseloads Across the Country Linked to Rising Unemployment

Welfare caseloads are on the rise across the country, as they have been here in Washington State. According to a new survey conducted by the Wall Street Journal and the National Conference of State Legislatures, 23 of the 30 largest states in the nation saw caseloads increase over the past year for Temporary Assistance to Needy Families (TANF).

One explanation for the increase in TANF caseloads is the rising unemployment rate. As people’s unemployment benefits run out and the labor market remains constricted, some are turning to welfare as a stopgap until the economy improves.

As the WSJ map below shows, the biggest increases in TANF caseloads are in states with some of the worst joblessness. For example, Oregon’s caseloads were up by 27 percent in May from the previous year. At the same time, the state’s unemployment rate had risen to 12.4 percent. Here in Washington State, TANF caseloads jumped by more than 18 percent between May 2008 and 2009. Unemployment steadily climbed during that time period to 9.4 percent.

Will Basic Health Become Unaffordable?

The budget signed by the Governor last month included a 43 percent cut in Basic Health, a program that provides health insurance to lower income Washingtonians. The Health Care Authority (HCA) was given the unenviable task of figuring out how to make the cuts happen.

The HCA considered a number of approaches that would have directly and dramatically reduced the number of people enrolled in the plan. Finally, they settled on sharp increases in premiums and deductibles.*

This option may have some advantages over the alternatives, but it does not mean that people won't end up uninsured. The cost increases are likely to make enrollment unaffordable for many.

The table below compares the current and proposed premiums for a single enrollee aged 40-55 (premiums are on a sliding scale based on income and age). The highest increases are for those earning between $20,036 and $21,660. Their premium would raise by $780, requiring them to spend 11 percent of their annual income on premiums.* Premiums for individuals under $13,538 would double. In addition to the increases shown in the table, the annual deductible will rise by $100.


If Basic Health is made unaffordable, it will no longer serve its purpose as a source of health insurance for people who lack other options, including the 30,000 people currently on the waiting list. That purpose cannot be maintained under a 43 percent budget cut; it will require bold action by state policymakers.


*The Health Care Authority has also identified 5,000 people on the progam who also receive benefits through Medicaid and another 3,000 who the agency believes may qualify for the federal program. They will be transitioned off Basic Health and onto Medicaid.

New Revenue Forecast Emphasizes Need for Real Solutions

Today, the Economic and Revenue Forecast Council announced that the state general fund will have a $195 million deficit at the end of the 2009-11 biennium. This means that state revenue projections have fallen even further since the Governor signed the budget in May, thanks to the continuing sluggish economy.

The Governor’s budget office has suggested that the executive branch may take quick action to cut the budget in order to cover the gap. This would be consistent with the path the state has taken so far—relying almost completely on cuts to balance the budget.

The state needs a more balanced approach to the problem of inadequate revenue.

In the short term, there is enough money in the rainy day fund to cover the gap. There is no reason not to seek access to this money. This is exactly what the rainy day fund is for.

In addition, we must get serious about expanding revenue. There will be two more revenue projection updates between now and when the next legislative session meets in January. The state of the economy could very well get worse than it is now. It is worth noting that we are also likely looking at a 2011-13 biennium with insufficient revenue and no federal recovery funds to save the day.

In the meantime, the effects of the unprecedented budget cuts already enacted are starting to be felt. These cuts to state investments will do lasting damage to the progress we have made in previous years in creating a just and prosperous state for all.

Near the end of this year’s legislative session, a public conversation began about revenue reform. There was a proposal for a temporary sales tax that would have protected essential health care programs. It would have been paired with a Working Families Tax Rebate to provide a tax cut for lower income families. There was also a proposal for an income tax that would have ensured long-term improvements to our revenue system.

When the session ended, so did the conversation. It’s time to pick it back up because we are not out of the woods yet.

Structural Deficit: The Shift in Consumption from Goods to Services

As mentioned in our previous post on the structural deficit, Washington relies heavily on the retail sales tax to raise revenue for important public investments. The retail sales tax applies primarily to the sale of goods, taxing few services.

The failure to tax services is one of the reasons that our revenue structure cannot keep pace with the natural growth in the economy. As the graph below shows, Americans have shifted their consumption patterns from spending 49% of their total expenditures on goods in 1983 to only 40% in 2008.


In light of this shift to a service economy, Washington should consider expanding the sales tax base to include a broader selection of services. Not only would taxing services yield much-needed income for the state, it could help to reduce the year-to-year volatility of sales tax collections and make the state sales tax system more fair.

Unemployment Rate Understates Problem

The statistic most often used to illustrate weakness in Washington State’s labor market is the unemployment rate, or the share of the labor force that is unsuccessfully looking for work. At the national level, the Bureau of Labor Statistics publishes a more comprehensive measure often called the “underemployment rate.” That measure includes people who have stopped looking for work because they have become discouraged. It also includes people who are working part-time because they can’t find fulltime work. During a recession, the gap between the two rates widens because of the increased difficulty of finding employment.

The Bureau of Labor Statistics doesn’t publish state-level underemployment rates, but a recent post by Joe Turner got me wondering what was happening with underemployment in Washington State. So I dug into the microdata and the results are shown below. (April is the most recent month available.)

Structural Deficit: E-Commerce Sales Tax Revenue Losses Are Growing

Washington relies heavily on the sales tax to raise revenue for important public priorities. The growth of untaxed electronic commerce transactions, known as e-commerce, result in increasing revenue losses for the state.

When a customer purchases a taxable item in a store, sales tax is paid to the retailer who in turn, sends its tax collections to the state or local government. If the purchase is made online through a store that has a physical presence in the state, an equivalent "use tax" is also collected and remitted.

However, if the purchase is made through a vendor that is not located physically in Washington, the customer still owes the use tax, but the vendor is not required to collect the tax. Instead, it is the customer’s responsibility to pay the tax directly to the state or local government. It is estimated that 25 percent of taxes due on e-commerce transactions go uncollected.

As a result, not only does the state lose revenue, but local merchants start out with a pricing disadvantage because they must charge local sales tax while many interstate merchants don't have to. And the sales tax becomes even more unfair to lower income families that pay sales taxes when they shop in stores that more affluent households avoid when they shop online.

In an April report, Donald Bruce and William Fox of the University of Tennessee predict the inability to collect taxes on internet purchases will cost Washington State about $1.3 billion in lost revenue between 2007 and 2012. (See graph) These losses are equal to the estimated value of the taxes due, in this case $5.4 billion, minus the estimated value of those that are collected, $4.1 billion.


This problem is not unique to Washington State – the report forecasts nationwide states will experience up to $13 billion in e-commerce revenue losses annually by 2012.

Washington has joined a national interstate tax compact, called the Streamlined Sales and Use Tax Agreement, to simplify and standardize the way states tax goods. The goal of the Agreement is to demonstrate to Congress that the burden for interstate sellers has been reduced sufficiently so that states ought to be authorized to require all large merchants to collect every state's sales and use taxes. Legislation to provide this authorization is expected to be reintroduced in this session of Congress within the next one to two months.

Basic Health Waiting List Growing by 386 People Per Day

The recently enacted state budget made deep cuts to the Basic Health Plan (BHP), which is the state program that provides affordable managed care health insurance to lower income Washingtonians who do not qualify for Medicaid. Because of the cuts, the number of people receiving health insurance through the plan will be reduced by 36,000.

But disenrolling participants is only one part of the picture. The budget cuts are coming at a time when the need for the BHP is growing dramatically. As shown below, between the end of the legislative session and yesterday, the number of people on the waiting list for BHP has grown by over 14,000 people. That’s an average of 386 per day.


This year the state will take an enormous step backwards in our commitment to ensuring quality and affordable health insurance for all. It is a step that could have been ameliorated by a modest sales tax increase.

The Final Budget Cuts, Part Four: Economic Security

State investments in economic security ensure that people can survive difficult financial times and take steps to improve their quality of life. Families succeed when parents are secure in their ability to provide basic necessities for their children. Workers prosper when workplaces are safe and financial protections exist in cases of injury or job loss. And everyone in state benefits when people can meet their basic needs and find meaningful employment.

Even in times of prosperity, we all face the risk of job loss, disability, or family crisis. When the economy is strained, public investments in economic security matter even more.


WorkFirst: Federal funding is expected to pay for the growing need for WorkFirst, which provides temporary assistance for lower income families. There will be a reduction in state funding of $69 million through administrative reductions and "caseload management."

General Assistance-Unemployable: GA-U is a program that helps adults who are temporarily unable to work due to disability. The Governor's budget proposed eliminating GA-U altogether, but the enacted budget makes only a $25 million cut that will be achieved by aggressively facilitating transfers to federal programs and a change in how earned income is calculated.

Policy Analyst Job Opening

The Budget & Policy Center has an opening for a Policy Analyst/Senior Policy Analyst. This fulltime position is temporary through the end of 2009 with the possibility of becoming a permanent position contingent on funding.

Responsibilities
Responsibilities include but are not limited to the following:

• Monitor and analyze state policy developments and economic trends.
• Contribute to research, writing, and project management of the Progress Index, a long-term project to measure the state’s progress toward broadly-shared goals.
• Write policy briefs, blog posts, and longer research reports that include original quantitative analysis.
• Work in a team to formulate progressive policy alternatives and solutions.
• Build and maintain databases of fiscal and economic data.
• Represent the Budget & Policy Center in speaking engagements, stakeholder meetings, and in the media.
• Assist in coordination and planning of meetings and events.

Requirements

• Expertise in an area such as health care, tax policy, housing, or education; ability and willingness to develop broad expertise in other areas.
• Advanced degree in public policy, economics, or other relevant field.
• 3+ years of academic or professional experience involving quantitative analysis. Proficiency with Microsoft Excel required, experience with statistical software such as Stata or SPSS preferred.
• A commitment to accuracy and attention to detail; ability to work independently and as part of a team.
• Excellent written and oral communications skills, including the ability to communicate technical information clearly to non-policy oriented audiences both in writing and through oral presentations.
• Dedication to the mission of the Budget & Policy Center.

Compensation
WSBPC offers a competitive salary commensurate with experience and a benefits package that includes employee and dependent health and dental coverage, a 403(b) retirement plan, and personal, vacation, sick, and parental leave.

Apply
Send a cover letter, resume, relevant writing sample, and three references to analysis@budgetandpolicy.org. Writing samples should demonstrate an ability to write concisely and clearly and should be appropriate for publication. Please refer to our website for examples. The position is open until filled. Candidates are encouraged to apply as soon as possible. Applications will be accepted until June 17, 2009.

The Washington State Budget & Policy Center is an equal opportunity employer.

The Final Budget Cuts, Part Three: Thriving Communities

Thriving communities rely on public investments that maintain our state infrastructure and protect our natural resources. Public structures such as transportation, communications, justice, and the arts keep our state economy in motion, our neighborhoods safe, and our cultural life vibrant. To create thriving communities, we need to do more than address short-term needs. We need thoughtful, long-term planning and the sustainable use of resources.

The state can promote economic growth and the wise use of resources while also ensuring that business, education, and the arts serve the interests of all Washingtonians.

This year's budget process resulted in significant budget cuts in areas that contribute to thriving communities, particularly natural resources and public safety. (Click on the table below to see a larger version).