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Bob, Love, and Taxes

About the time the two ton monument was being rolled into the closet, voting booths were being rolled out across the State of Alabama. Just as Supreme Court Chief Justice Roy Moore had lost his battle to keep the Ten Commandments statue at the center of the Alabama Judicial Building, Governor Bob Riley was putting forth a singular commandment before the citizenry. 

The Governor was making this referendum on increasing taxes a matter of loving one another: "Jesus says one of our missions is to take care of the least among us...we've got to take care of the poor. Alabamians are a faithful people who believe that creating a better world for our children and helping our neighbors are both sacred duties." 

Following Moore's bizarre episode of defiance, many Alabamians may have worried that Governor Bob Riley had also gone bonkers. A supporter of tax cuts during his years in congress, he was suddenly pushing for the largest increase in his state's history and-percentage-wise-of any state this year. 

What possessed this dyed-in-the-wool spending conservative to interject compassion into economics?

For one, he moved from Washington into Montgomery statehouse, presiding there over a state near the bottom of the heap in education, public services, and health care. Alabama has been about the worse in spending per pupil and educational achievement. The state has also neglected other public services such as warehousing 28,000 inmates in a prison system built for 12,000. And due largely to inferior health care, it has the second-highest infant mortality in the nation.

For another, he was smacked in the face with the same largely federally-induced spending squeeze faced in Ohio and most every state this past year.

So what's a gov to do?

That it was impossible to balance Alabama's budget without a significant tax increase led him to reconsider everything. Alabama had been putting a larger tax burden on the poor than many other states. Even families earning less than $5,000 a year pay state income tax and those earning less than $13,000 pay a much larger percentage in state and local taxes than those at the top of the income ladder. Riley proposed a wholesale restructuring of the state's tax system--reducing taxes on the poor and middle class while raising them on corporations and the most wealthy.

However, on that September election day, Alabama voters soundly rejected both Riley's referendum and Jesus as taxman . Now the Governor continues trying to prevent a bad situation from becoming catastrophic by making still more drastic budget cuts which will drop the state at or near the bottom in virtually every national ranking--and adding to the misery index of the least durable.

Before we-as perhaps Alabamians will do in the next election-write off Bob Riley altogether, we would do well to probe beneath that simple commandment he had admonished Alabamians to carry with them into voting booths. Not so much sectarian, perhaps he was trying to buck the tide of popular opinion these days: rather than concerning ourselves with the needs of our less competent neighbors and pooling our resources for common good, our national mood seems seems to be survival of the fittest.

So "what's love have to do with it?" Ultimately everything!

Note: On November 3, Roy Moore's appeal was unanimously rejected by the U.S. Supreme Court. Meanwhile, as Governor Riley's setback is being hailed by national antitax forces as a great victory, Alabama is slipping into a kind of chaos that could forecast future conditions throughout the country if such attitudes prevail (see "Stop the Bleeding").

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25th Anniversary of the Hunger Network

The Hunger Network in Ohio is celebrating its 25th Anniversary. The Event will be held on Wednesday, November 12th from 10 a.m. until 2 p.m. at the St. John's Episcopal Church, 700 North High Street in Worthington, Ohio. 

The agenda will include a presentation of current challenges by the Honorable Merle Kearns, State Representative and longtime champion for the most vulnerable Ohioans. The program will feature reflections upon the long-range hopes and commitments of the Hunger Network, not only to feed hungry people, but to empower people of faith to change condition causing hunger and poverty.

The program will include worship, lunch, and opportunities for gathering with persons who have contributed to the life and impact of the Hunger Network from 1978 to the present. Call the Hunger Network Office for more information and to register.

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Welfare-to-Work $ Bonus

One week after Ohio was informed that it was one of nine state states in the country not receiving a performance bonus from the federal government, it received word of getting the highest amount of any state for the same program. Awarding incentive moneys to states that demonstrate competency in moving persons from welfare to work, the U.S. Department of Health and Human Services was unable to make a judgment about the State's compliance due to inadequate record-keeping in 2001. However, having resolved the problem in 2002 ,Ohio was rated "exceptionally effective" in the second announcement a few days later. This was the first time that Ohio has received anything in the five years that such allotments have been awarded. So from $0 to $21.3 million, Ohio was alone among adjacent states in getting the lowest followed by the highest amount given.

Accolades were given for reducing welfare rolls to the lowest level since 1996. 2/3rds of former welfare recipients in the State still had jobs a year after their cash assistance was discontinued. They increased their average earnings from $6.20 an hour when they left the system to $8.25 a year later.

This additional money will aid the State to help former welfare recipients to stay employed by providing health insurance, food stamps, and subsidized child care - historically critical supports in moving persons into independence from the System.

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"Stop the Bleeding"? 
"Hold the Applause"?

The race for governor seems to be heating up, even with several years remaining in the Taft administration. Cracks are beginning to appear within a previously harmonious and tranquil cabinet. State Auditor Betty Montgomery recently became testy over what she sensed were unscrupulous intrusions into her early fund-raising efforts by staff of Attorney General Jim Petro (with whom she had switched positions in the last election). Then there is Secretary of State Ken Blackwell’s campaign to repeal the tax increase his boss recently labored to gain, stirring up the ire of his two likely competitors for governor. His new initiative came as a surprise to legislators who only five months ago had honed out a broad consensus around the need for generating new sources of income. 

Blackwell’s main contention is that taxpayers--if the Administration and legislators are unwilling--must “stop the bleeding” in Ohio’s economy resulting from the additional penny added to the previous 5% sales tax. Saying that Ohio had led the nation by adding 11% in spending this year, Blackwell believes these excesses are chasing away Ohio graduates, skilled workers, and high paying jobs to the refuge of other, more accommodating states.

The problem with his rhetoric is that it is not matched by a strategy either for coming up with replacement revenues or specific programmatic cuts.

Responding to a recent editorial in Crain’s Cleveland Business publication lauding Blackwell’s “tax attack,” David Ellis of the Federation for Community Planning cautioned, “hold your applause.” After an exhaustive analysis of the current dire economic situation in Ohio Ellis concludes: “Simply stated, Ohio must invest in its people for future economic success. This can only be accomplished through leveraging public spending supported by a stable and sufficient tax base.”

For much of this past year, the Hunger Network in Ohio joined with an unprecedented gathering of health and human service organizations under the leadership of “Have a Heart Ohio” to launch an Emergency Campaign on behalf of the most vulnerable Ohioans. The impact of this supremely effective effort sensitized legislators to the precariousness of the most needy. We will continue to combine our efforts with those groups and individuals working daily on behalf of those who depend upon the State to maintain their basic levels of survival. We will also object to any extraction of moneys from the current State budget which does not include solid alternatives for generating support elsewhere.

While aspirants for governor have the right to jump-start their candidacies, their platforms for office will ultimately be scrutinized by their contribution to the overall health and well being of the State, not for advancing their political ambitions.

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Tidbits

Revenue Lag. The first quarter of the State fiscal year which ended in September gives reason for concern. Tax revenues to sustain barebones spending are behind by $82.8 million or 1.6%. Although tax collections are up 5.4%, $198 million above last year's figures, they are less than estimated and needed to meet the budget. While voicing long-term optimism, Budget Director Thomas W. Johnson is apprehensive about the lag in sales tax on items other than motor vehicles. With the enactment of an additional 1% to the previous 5% sales tax, revenues from motor vehicles sales are up by 16% over last year and 5.1 above projections. While this is one of the bright spots in this report, Johnson expressed concern with Ohio 5.8% rate of unemployment that "jobs are not coming back like we want them to come back."
Columbus Dispatch 10.3.03 Lee Leonard. 

Hunger Increasing. More and more American families are hungry or unsure whether they can afford to buy food according to Agriculture Department. About 12 million families last year worried that they did not have enough money for food and 32 percent of them experienced someone going hungry at one time or another. Nearly 3.8 million families were hungry last year to the point that at least one person in the household skipped meals because the family could not afford them. That is 8.6 percent more families than in 2001, when 3.5 million were hungry, and a 13 percent increase from 2000.

The report was based on a Census Bureau survey of 50,000 households. It was the third year in a row the department found an increase in the number of people who were hungry or uncertain whether they could afford their next meal. The survey also found more families who were unsure if they could buy food or did not have enough food in their cupboards. Last year, 11 percent of 108 million families were in that situation. That is up 5 percent from 2001 and 8 percent from 2000.

Most poor families struggling with hunger tried to ensure that at least their children were fed, the report said. Nonetheless, one or more children in an estimated 265,000 families occasionally missed meals last year because the families either could not afford to eat or did not have enough food at home. The report estimated 567,000 hungry children in all.

Margaret Andrews, an economist with the agency and an author of the annual survey, said the prevalence of hunger and food insecurity is clearly tied to the poverty rate. The latest estimates by the Census Bureau show that more people are poor with some 34.6 million Americans living in poverty last year, 1.7 million more than in 2001, according to the Census Bureau.

The Report concludes, "Many families will spend their incomes on fixed expenses before buying food. Food is the most elastic part of the budget, meaning that's what households will compromise on when they have fixed payments such as their rent and their utilities." 
The Associated Press, 11.2.03

A Roof Over Your Head. On average, a family of four would need to earn more than $30,000 to afford housing at 30% of its income.
The National Low Income Housing Coalition

Death and Taxes. Amid countless deceptive efforts to reduce taxes for the wealthiest Americans, one of the most blatant is to permanently repeal the federal estate tax, a tax that only falls on millionaire estates. It is estimated this tax will cost the nation $982 billion over the next 20 years. With the federal government's mounting deficits, this nearly trillion dollar price tag means either more cuts in public services or new tax hikes.

Permanent repeal of the estate tax threatens Ohio with future cuts in already besieged social programs. If the next 20 years of estate tax revenues were spent on the programs instead of benefiting millionaires, Ohio's share would average, $1.5 billion each year.

Only the portion of estates above $1 million for individuals and $2 million for couples is taxed. But under current law, these minimum levels will increase to $3.5 million and $7 million, respectively, by 2009. That will mean that only about 257 estates will be subject to the tax each year.

Here is a case for keeping the estate tax:

It's a progressive tax: Only the very wealthiest Americans pay the federal estate tax. The vast majority - about 98% - pass on their estates without paying any federal estate tax. It ensures that all income is taxed. If assets with capital gains are transferred through inheritance, those capital gains will have escaped taxes altogether. 

The estate tax reduces the concentration of wealth and power: If the estate tax were repealed, about $100 billion worth of stocks, real estate, cash and other assets each year would be transferred tax free to the heirs of the wealthiest families, undermining American values such as equality of opportunity and democracy.

Charities would lose: The estate tax gives the wealthy an incentive to leave some of their money to charities. Currently, charities in Ohio receive $626.6 million in annual bequests, and an estimated $369.7 million would be lost each year if the estate tax repeal becomes permanent.
United for a Fair Economy, 617.423.2148, www.faireconomy.org

Lethal Living. 11 Million children die each year before their 5th birthday. "Where Living Is Lethal," a Newsweek magazine article recently reported that around the world millions of kids die needlessly each year. What exactly is killing all these kids? After revealing the "biggest scourges" of birth complications and neonatal infections (3.2 million) along with diarrhea, pneumonia (2.1 million) followed by malaria, AIDS, and measles, the report focuses upon underlying reasons: "none of the conditions kills at random. In a sense, everyone of them is a symptom of poverty...poor kids, wherever they live, encounter more than their share of health hazards-more crowding, more vermin, more contaminated water-and inadequate diets leave them vulnerable. What finally kills the child may be pneumonia, but it the child were well nourished, he never would have developed it in the first place. 
Newsweek, 9.22.03, p. 78

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TANF Postponed ... Again

Congressional leaders have recently postponed until next year re-authorization of a critical program impacting the most economically vulnerable Americans. For the third time in a year, Temporary Assistance for Needy Families (TANF) has been moved to the backburner. 

TANF (as prescribed in the House reauthorization bill) appears to be headed toward tougher work standards, i.e. more required work hours, fewer allowable work activities, less training, and little additional child care support for working families.

Low-income single mothers are especially precarious in the current labor market - struggling to find employment, maintaining work and making ends meet. As the labor market has weakened, particularly in lower wage jobs, the amount of real annual earnings has also decreased. One result is that the amount of their federal Earned Income Tax Credit, a vital low-income earnings supplement, has also decreased. Even though willing to work hard, low-income single mothers have substantially higher unemployment rates than the general population. 

Advocates for hungry and poor people are encouraged to spend the intervening time urging members of Congress to make improvements when TANF comes to the floor next year. We need to continue to emphasize making poverty reduction, not simply caseload reduction, the goal. The bill could be strengthen by improving participants' access to education and training and providing the supportive services that make it possible for low-income parents to keep their jobs. 
Midwest Partners, 630.810-9885, www.midwestpartners.org and 
Bread for the World, 1.800.82Bread, www.bread.org

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Walking "The Line"

Hunger in Ohio was the topic of a CBS-TV program, 60 Minutes II. "The Line" featured the lives of families who were forced to turn to charitable handouts in Marietta and McArthur last Winter. The video, dramatically portraying the depth of economic desperation in this State, is available from the Hunger Network and its member judicatories.

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NE Ohio Workshop

The Hunger Network sponsored a workshop, "Food Security: A Gospel Right?" on October 18th in Warren. Under the leadership of Board Chairman Lloyd O'Keefe, the program included scriptural reflections on hunger and ministry by Bryan Gillooly, a deacon and Assistant to the Bishop for Peace & Justice Ministries. A panel discussion featured Mr. Pat Lowry, assistant to Representative Tim Ryan of the 17th US Congressional District along with Second Harvest Foodbank Director Mike Iberis and Christy Wahrer of the Protestant Family Services food pantry. State Representative Kathleen Chandler from Kent addressed the question, "What can the General Assembly do about food insecurity?" And Bob Erickson, Director of the Hunger Network in Ohio discussed how to mobilize congregations for public policy advocacy. The overall Event was chaired by Judy Canan, a faithful member of Grace Episcopal Church, Ravenna, chair of the Hunger Action Committee of the diocesan Peace & Justice Commission, volunteer coordinator of the diocesan 2-Cents-A-Meal program, and long-term board member of the Hunger Network in Ohio.