Using Child-Support Payments, Gutting Anti-Terror Funding, & WA's Broken Tax System

Using Child-Support Payments, Gutting Anti-Terror Funding, & WA's Broken Tax System

Thursday, December 6th, 2007


BY Adam Thompson

Using Child-Support Payments to Actually Support Children

Wisconsin is righting a wrong that many state governments are complicit in perpetrating, but is largely due to federal policy. As the New York Times recently reported, child-support payments for children on welfare are being used in almost every state to recoup state and federal welfare expenses. When Congress created the child-support system 30 years ago, recouping welfare costs by siphoning off collected child-support payments was an explicit goal. Yet close to half the states pass along none of the collected child-support while most others pay only $50 per child, even when a non-custodial parent pays several hundred more. Research and experience shows that the policy of withholding payments to recoup state costs discourages non-custodial parents from paying child-support and makes families more dependent on aid. 

In Wisconsin, a federal waiver allowed the state to forward all money collected to families. As a result, more non-custodial parents came forward and paid more of the money they owed, making families less reliant on aid and making up for any short-term loss of government revenue spent on welfare. However, the Bush Administration refused to extend the Wisconsin waiver but the state is keeping its end of the bargain with families. Despite a $27 million cut in federal aid, Wisconsin will continue to forward its entire share of money collected to families.

The previous Congress has a mixed record in trying to see more child-support payments get to the children who deserve them. While the 2006 Deficit Reduction Act will allow states to send $100 for one child beginning in 2009, up from $50, Congress and the Bush Administration also reduced funding for child-support enforcement. States say this will impede enforcement and prevent them from passing on more money to needy families.

At the end of the day, diverting child-support payments from the children they are intended for is a cynical way to recoup welfare expenses and is shown to drive non-custodial parents underground and keep families dependent on welfare.  Wisconsin, by putting up more state money to ensure children get the money they are owed, is taking an important stand that other states and particularly the federal government, which sets these rules, can learn from. 

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BY J. Mijin Cha

Feds Plan to Gut Anti-terror Funding for States

The Bush Administration plans to slash anti-terror funding for police, firefighters and rescue departments at the state and local level by more than half beginning late next year. The Bush plan would reduce funding for security programs and grants from $3.4 billion to just $1.4 billion. In addition, the Administration's plan calls for outright elimination of programs for port security, transit security, and local emergency management operations in the next budget year. 

Considering that transit systems around the country carry 15 times more passengers than airlines, eliminating security funding for them doesn't seem to be a move towards making us more safe. Not to mention that a Government Accountability Office (GAO) report found that ports are "particularly vulnerable because of their size, accessibility and the many sites and facilities that could be targeted" and securing the ports is a "major concern." In Baltimore, MD, for instance, increased port security measures are funded through state and federal grants. Baltimore's efforts to secure their port will be seriously compromised without the federal funding.

Thankfully, Congress has yet to approve the department's 2008 plan. Gov. Eliot Spitzer's spokeswoman, Christine Anderson, dismissed the White House proposal as failing to deal with the anti-terror needs of local communities, calling it a "'bean counter' approach to protecting our homeland when sound policy is what's required."

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BY Adam Thompson

Fixing Washington State's Broken Tax System

Washington State lawmakers adjourned a special session last week after preserving the 1% local property tax cap that voters approved in 2002, called Initiative 747. The tax cap was recently struck down by the State Supreme Court and lawmakers hurriedly convened the special session before cash-strapped local governments could increase property taxes to help pay for services. 

Despite the legislature's action, many blame the measure for crippling local governments' ability to raise necessary revenue to maintain public services like schools, roads and police. The Economic Opportunity Institute recently pointed out that because of the tax cap, which ignores inflation and population growth, local governments have lost $1.6 billion in revenue:

That translates to about 3,500 public health nurses, police, teachers, and firefighters across the state, missing in action every year thanks to Initiative 747.

Also gaining approval by the Legislature was a property tax deferral bill allowing homeowners with incomes below $57,000 to put off paying half their yearly property tax bill until they sell their house and have the cash to pay the bills

Washington's antiquated tax structure, which has no income tax and relies heavily on sales, property, and business gross income taxes, will get another close look when the legislature reconvenes for the shortened 2008 session. There is emphasis on tax relief but some lawmakers want to examine ways to spread responsibility and give local governments the ability to keep up with inflation.

As the Economic Opportunity Institute demonstrates, Washington "has the most regressive tax system in the United States."  The lowest income residents pay 18% of their income in state and local taxes while the richest 1% pay just 3% of their income. The middle class pays 11%. The state's reliance on regressive taxes like the sales tax places undue burden on low and middle income families and lets high-income residents off the hook, and the business gross income tax, which does not consider profits, hinders new and expanding companies. 

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Research Roundup

When cities see a construction boom, workers in the industry should benefit as much as the developers. But in New York City, according to a new report by the Fiscal Policy Institute, Building Up New York, Tearing Down Job Quality, at least 50,000 construction workers are employed off the books or misclassified as independent contractors to cheat them out of fair wages. On top of lost wages, all levels of government lost out on an estimated $489 million in unpaid taxes in 2005 alone.

Conservatives may try to paint Canada's state-run health care system as a horror we wouldn't want to subject our children to, but the reality, as the Economic Policy Institute emphasized in a brief this week, even as US health costs per person rose 90% between 1993 and 2005, Canada's costs rose only 65%.   And despite spending only half as much per person on health care costs as the US, infant mortality rates are lower and life expectancy is higher in Canada. 

In State Rankings on the Well-Being of Children in Low-Income Families: Some Preliminary Findings, the Casey Foundation's Kids Count project ranks all 50 states in terms of the condition of children living in low-income families.  There were wide disparities in the conditions of children, both between states and within them, with the best conditions for low-income children clustered in the upper Great Plains and the worst clustered in the mid-Atlantic region.

An early leader in health care reform, Maine's Dirigo Health initiative has succeeded in expanding coverage to over 16,000 low and middle income workers, parents, sole proprietors and small businesses. A new report on Maine's initiative, funded by The Commonwealth Fund and Robert Wood JohnsonLeading the way? Maine's Initial Experience in Expanding Coverage Through Dirigo Health Reforms, details the successes and challenges in expanding coverage and financing health care by capturing savings in the health care system achieved by reducing uncompensated care and controlling costs.  

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Using Child-Support Payments to Actually Support Children

Institute for Research on Poverty at the University of Wisconsin-Madison - Testing New Ways to Increase the Economic Well-Being of Single-Parent Families: The Effects of Child Support Policies on Welfare Participants

Center for Law and Social Policy - State Policy Regarding Pass-Through and Disregard of Current Month's Child Support Collected for Families Receiving TANF-Funded Cash Assistance

Wisconsin Department of Workforce Development - Pass Through Changes

Feds Plan to Gut Anti-terror Funding for States

GAO - Maritime Security: Better Planning Needed to Help Ensure an Effective Port Security Assessment Program

New York Times - Plan to Cut Antiterror Spending is Criticized by the State's Leaders

San Jose Mercury - White House Target Anti-Terror Funding, Cuts Could Hit Local Agencies

Fixing Washington State's Broken Tax System

Economic Opportunity Institute - Washington State Budget and Tax System Overview

Washington Community Action Network - Make Washington's Tax System Fair for Everyone

Washington State Budget and Policy Center - The Ill Effects of Property Tax Caps


The Stateside Dispatch is written and edited by:

Nathan Newman, Policy Director
J. Mijin Cha, Policy Specialist
Adam Thompson, Policy Specialist
John Bacino, Communications Associate

Please shoot us an email at if you have feedback, tips, suggestions, criticisms, or nominations for any of our sidebar features.

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