The ARPA Commission needs to make housing an integral part of Montana’s post-pandemic recovery plan

Montana communities across the state are facing significant housing shortages, particularly for households living on lower and moderate incomes. The pandemic brought more attention to this ever-worsening crisis, as families struggle to find a safe, stable, and affordable place to live, employers struggle to hire and keep workers, and communities grapple with growing issues of homelessness. On Wednesday, July 21, the ARPA Economic Transformation and Stabilization and Workforce Development Advisory Commission will meet to discuss upcoming recommendations by the state administration on the use of flexible state COVID relief funds. The Montana Budget & Policy Center, together with 40 organizations, housing providers, and developers as part of the statewide Montana Housing Coalition, submitted a letter urging the state to invest a minimum of $40 million of flexible state fiscal relief funds into the construction and preservation of affordable housing.

Of this $40 million, we urge the Department of Commerce to dedicate at least $30 million in grants for direct financial assistance to fill funding gaps and reduce total development costs for housing projects. These grants will be similar to Community Development Block Grants (CDBG) and Housing Development Partnerships Program (HOME) administered by the Montana Housing Division. The Department can prioritize grants used to:

  • Purchase existing housing to convert to affordable housing; provide preconstruction technical assistance for affordable housing projects; and comprehensive rehabilitation and preservation of existing affordable housing;
  • Match federal, local, and other funding sources; and
  • Provide equity to housing projects that have applied for federal Low-Income Housing Tax Credits but not awarded due to lack of funds and located in communities disproportionately impacted by the pandemic.

Additionally, we urge the Department of Commerce to dedicate at least $10 million in grants to nonprofit housing partners and service organizations for housing and facilities necessary to provide safe shelters and supportive housing. The Department can prioritize grants used to:

  • Rent, acquire, and renovate existing facilities and convert underused hotels, motels, and other properties to shelters and supportive housing; and
  • Provide families at risk of or experiencing homelessness and for survivors of domestic violence.

Check out the full letter here. Montana’s State Fiscal Recovery Funds gives the Department of Commerce an unprecedented opportunity to tackle our state’s acute shortage of available and affordable housing and, by doing so, build stronger, resilient communities. We hope Montanans will make their voices heard and urge the ARPA Commission to make housing production an integral part of Montana’s post-pandemic recovery plan.

State must act immediately to prevent large SNAP cut from hurting Montanans

At the end of June, Governor Gianforte announced the termination of Montana’s state of emergency. This move effectively ends emergency Supplemental Nutrition Assistance Program (SNAP) benefits for over 46,000 Montana households. Unless the Governor and the Department of Public Health and Human Services takes immediate action, thousands of Montanans living on low incomes are at risk of a substantial cut in their food assistance.

Emergency allotments have helped thousands during uncertain times.

Montana ranks above the national average in numbers of adults and children reporting food insecurity. The health and economic consequences of the COVID-19 pandemic have made affording food substantially more difficult for individuals living on low incomes. An estimated 84,000 adults in Montana report the household did not have enough food to eat in the last week. For families with children, the crisis is even greater – 30,000 adults living with children report the children in the household did not have enough food to eat.

Substantial increases in food prices have made it even more difficult for families and individuals living on low incomes to afford food. Food prices have climbed 5 percent since May 2020 and are expected to continue rising through 2021.

Emergency allotments (EAs) are a temporary increase in SNAP benefits to help households living on low incomes weather the COVID health crisis, a volatile job market, and an unequal economic recovery. This additional benefit raised each household’s SNAP benefits to the maximum benefit for their household size, supporting those hit hardest by the pandemic. For a state to receive emergency allotments, the state must either have a state of emergency in place, or an equivalent declaration approved by the USDA Food and Nutrition Service (FNS).

Montana households will lose nearly $100 a month in benefits. Some will lose even more.

Emergency allotments have been the largest source of pandemic related food assistance for people receiving SNAP benefits. With EAs, every household received at least $95 per month as of April 2021.

Some households will lose even more. For example, a senior who had been receiving the minimum SNAP benefit prior to the pandemic would now be receiving $234 with emergency allotments (as well as a 15 percent increase in SNAP benefits that USDA issued) each month. If emergency allotments end, they will find their benefits reduced to less than $20.

SNAP benefits have long been inadequate in addressing hunger. Even with the additional benefits the average per-person per-meal benefits is only $2.53. Without emergency allotments, families would be left with only $1.60 per person for each meal.

Emergency allotments strengthen Montana’s economy.

A loss in emergency allotments will create unnecessary hardship for over 46,000 households in Montana. This move will not only make it difficult for families to put food on the table, but will also endanger Montana’s post-pandemic economic recovery as the state loses $8 million a month in federally-funded assistance.

SNAP has long been one of the most effective ways to support the economy during financial crises, with every dollar spent in SNAP generating up to $1.50 in economic activity. Emergency allotments generate up to $12 million in economic activity every month, supporting local stores, businesses, and farmers across the state.

SNAP serves as a vital work support, with four out of five households having one or more individuals who worked within the last year. The majority of those who are not currently employed are children, elderly, or disabled. Nearly half of SNAP households in Montana (48 percent) have children, and 47 percent of households include one or more individuals living with a disability. Nearly one-third of SNAP households have an individual over age 60. These households, who were hard hit by the pandemic, rely on emergency allotments to meet their nutritional needs in the face of spreading COVID variants and rising food costs.

The state has options to preserve expanded SNAP benefits for struggling Montanans.

Several states that have ended their initial state emergency declaration, including Utah, Wisconsin, Oklahoma, Kansas, and Minnesota, are still issuing emergency allotments. FNS has signaled it is willing to work with states who have ended their emergency orders to ensure individuals are still receiving the boosted SNAP benefits. Even though Montana is no longer in its initial state of emergency, the state still has the ability to retain emergency allotments.

Last week, Montana Budget & Policy Center, the Montana Food Bank Network, and 27 other organizations around the state, including food pantries and faith groups, sent a letter to the Governor’s office and the Department of Public Health and Human Services asking the state to work with FNS preserve SNAP benefits for Montanans. As the state moves towards the next phase of pandemic recovery, it is essential to preserve help for those who are most in need of support.

Child Tax Credit Awareness Day

The child tax credit is a federal tax credit that provides relief for nearly all working people with children, lifting many families above the poverty line. For 2021, the child tax credit has been increased from $2,000 per child under 17 to $3,000 for each child between the ages of 6 and 17 and to $3,600 for each child under 6.  The credit has also been expanded to be fully refundable, meaning that children whose parents didn’t have enough earnings in a year to claim the full tax credit previously will receive the full credit in 2021. In Montana, 91 percent of children under 18 (209,000 children) will benefit. These changes are expected to reduce child poverty in Montana by 45 percent, by lifting family income above the poverty line.

Beginning July 15, the IRS will begin sending advanced monthly payments of the child tax credit. While payments will differ for different family situations, in general, for each qualifying child under 6, families will receive $300 monthly. For children ages 6 to 17, each family will receive a monthly payment of $250. The remaining half of the credit will be received when 2021 income tax returns are filed.

Am I eligible for the credit?

If you filed a 2019 or 2020 tax return and claimed the child tax credit on the return, live in the US for at least half the year, and have a qualifying child who is under 18 at the end of 2021 with a valid social security number, you are eligible for the credit.

The child tax credit expansion begins phasing out at incomes of $75,000 for single filers, $112,500 for single filers with dependents, and $150,000 for joint filers.

What should I do to receive advanced payments?

If you have filed your 2019 or 2020 taxes, you don’t need to do anything. If the IRS has your banking information on file, they will automatically deposit your monthly advance of the child tax credit. For filers without banking information on file with the IRS, the IRS will issue checks for advanced payments of the credit.

For families that do not file income taxes, the IRS has released a tool to submit your information to receive the automatic payments. Sign up now.

Can I decline the advanced payment?

For families that prefer to wait until they file their 2021 income taxes to receive the additional credit, the IRS plans to release a tool in the coming weeks to unenroll from payments.

How long will the credit expansion last?

The child tax credit expansion is currently only in effect for 2021.

End of Session Tax Bill Round-Up

Montana’s path to economic recovery and future prosperity is dependent upon the state budget, made up with tax revenues. While MBPC helped kill numerous tax cut bills that would have resulting in over $900 million in lost revenue each biennium, once fully phased in, the 2021 legislature passed tax cut bills that will cost over $100 million in lost revenue each biennium.

Individual Income Tax

The largest revenue losers were individual income tax cuts, packaged together as SB 399 and SB 159. SB 159 lowered the top income tax rate from 6.9 to 6.75 percent until tax year 2024. This tax cut primarily benefits the wealthiest, with over 80 percent of the tax cut going to the top 20 percent of Montanans.

SB 399, which goes into effect as SB 159 phases out, drops the top income tax rate even further to 6.5 percent. As a result of this bill, there are over 100,000 Montanans, spread across the income spectrum, who will see tax increases. This bill also opens Montana’s tax system up to additional volatility by increasing the number of provisions in the federal tax code that Montana’s tax system is tied to. In part to these volatility concerns, only 5 states remain that tie into the federal tax code in the same way as SB 399. This bill moves Montana in the wrong direction.

In addition, SB 399 eliminates 17 tax credits with little opportunity for the legislature to consider the merit of each credit. While tax simplification is a laudable goal, more forethought is needed for an efficient tax system.

Business Equipment Tax

Another costly bill was HB 303, which increased the property tax exemption for business equipment tax. Business equipment tax has been cut numerous times in Montana’s recent history.

As a result of these changes, the numbers of businesses paying business equipment tax have dropped from over 36,000 in 2000 to less than 9,000 before the passage of HB 303. Homeowners in Montana have seen their property tax obligation grow in relation to owners of business equipment in the last 20 years.

In the end, the 2021 legislature passed over 20 tax cut bills. Unfortunately, the vast majority of these bills preferentially benefit the wealthy, exacerbating income inequality in this state. Legislators have chosen to prioritize those who already have more than they need over those struggling to get by. Thankfully, Montana saw $100 million in tax cuts this session rather than $900 million. Going forward, MBPC will continue to educate legislators and the public about the effects of tax cuts already passed and any yet to be proposed.

MBPC’s Comment on the Proposed End to Pandemic Unemployment Insurance (UI)

On June 8, 2021, the Montana Budget & Policy Center submitted formal comment to the Montana Department of Labor & Industry, raising concerns with the proposed end to pandemic unemployment insurance (UI) benefits later this month. The Pandemic Emergency Unemployment Compensation, providing an additional $300 in benefits, and the Pandemic Unemployment Assistance program, for self-employed, underemployed, and independent contractors, have been critical programs as many families continue to face barriers to employment. According to the National Employment Law Project, approximately 25,000 Montanans could face the loss of benefits used to support their families. For more information, see our blog Ending Pandemic Unemployment Early Won’t Fix Barriers to Finding Work.

To read our submitted comments, download the PDF here.

Montana’s Recovery Depends on Child Care. Relief Funding Can Make it Affordable and Accessible.

Today, Montana KIDS COUNT released a report detailing data on child care availability, quality, and affordability, “Child Care is Critical to a Modern Economy. Montana Has the Opportunity to Make It Affordable and Accessible.” This report finds that Montana families across the state struggle to find and pay for child care. At the same time, child care businesses operate on narrow margins and often must sacrifice worker pay.

“We know that most parents need child care to keep working, but availability is difficult to find. For every three kids under 6, there is only one licensed slot available,” said Xanna Burg, KIDS COUNT Coordinator with the Montana Budget & Policy Center. “Part of the low supply is because child care businesses struggle to stay open and offer good wages to workers. Providers do not have many options though, as parents already cannot afford child care costs.”

Highlights from the report findings for Montana include:

  • The current licensed child care supply provides one slot for every three children under age 6.
  • Six counties do not have even one licensed child care business.
  • Child care often costs more than in-state tuition at UM or MSU.
  • Child care workers earn $22,900 per year if working full time, barely hovering above the minimum wage.

“Child care is essential as Montana reopens because businesses need workers that have a safe and reliable place for their children during the day. Investing in child care is a win for children, families, and businesses,” said Stephanie Morton, Program Manager with Healthy Mothers, Healthy Babies. “When child care works, our state can get back to work.”

Montana received more than $200 million in federal relief money to support child care. Montana KIDS COUNT provides ten recommendations for utilizing these funds to build a better child care system for children, parents, and businesses that can help now and in the future. The portion of federal money set aside for child care businesses should focus on areas with significant shortage including rural areas, care for infants and toddlers, and providers with non-traditional hours. Capacity grants to encourage new child care businesses can help bolster supply while additional support for Head Start is a ready-built solution to reach more children in Montana.

Montana KIDS COUNT also created an interactive visualization to explore available data on child care in our state. County-level data on access, quality, and affordability can be found at montanakidscount.org/child-care-in-montana

About Montana KIDS COUNT

Montana KIDS COUNT is a leading resource for data on child and family well-being in the state and is dedicated to providing current, relevant, and reliable data to shape the issues affecting Montana children and families. More information can be found at montanakidscount.org/. Montana KIDS COUNT is a project of the Montana Budget & Policy Center, a nonprofit, nonpartisan organization providing in-depth research and analysis on budget, tax, and economic issues. More information can be found at www.montanabudget.org.

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Montana’s Recovery Depends on Child Care. Relief Funding Can Make it Affordable and Accessible.

Montana KIDS COUNT released a report detailing data on child care availability, quality, and affordability, “Child Care is Critical to a Modern Economy. Montana Has the Opportunity to Make It Affordable and Accessible.” This report finds that Montana families across the state struggle to find and pay for child care. At the same time, child care businesses operate on narrow margins and often must sacrifice worker pay.

“We know that most parents need child care to keep working, but availability is difficult to find. For every three kids under 6, there is only one licensed slot available,” said Xanna Burg, KIDS COUNT Coordinator with the Montana Budget & Policy Center. “Part of the low supply is because child care businesses struggle to stay open and offer good wages to workers. Providers do not have many options though, as parents already cannot afford child care costs.”

Highlights from the report findings for Montana include:

  • The current licensed child care supply provides one slot for every three children under age 6.
  • Six counties do not have even one licensed child care business.
  • Child care often costs more than in-state tuition at UM or MSU.
  • Child care workers earn $22,900 per year if working full time, barely hovering above the minimum wage.

“Child care is essential as Montana reopens because businesses need workers that have a safe and reliable place for their children during the day. Investing in child care is a win for children, families, and businesses,” said Stephanie Morton, Program Manager with Healthy Mothers, Healthy Babies. “When child care works, our state can get back to work.”

Montana received more than $200 million in federal relief money to support child care. Montana KIDS COUNT provides ten recommendations for utilizing these funds to build a better child care system for children, parents, and businesses that can help now and in the future. The portion of federal money set aside for child care businesses should focus on areas with significant shortage including rural areas, care for infants and toddlers, and providers with non-traditional hours. Capacity grants to encourage new child care businesses can help bolster supply while additional support for Head Start is a ready-built solution to reach more children in Montana.

Montana KIDS COUNT also created an interactive visualization to explore available data on child care in our state. County-level data on access, quality, and affordability can be found at montanakidscount.org/child-care-in-montana

About Montana KIDS COUNT

Montana KIDS COUNT is a leading resource for data on child and family well-being in the state and is dedicated to providing current, relevant, and reliable data to shape the issues affecting Montana children and families. More information can be found at montanakidscount.org/. Montana KIDS COUNT is a project of the Montana Budget & Policy Center, a nonprofit, nonpartisan organization providing in-depth research and analysis on budget, tax, and economic issues. More information can be found at www.montanabudget.org.

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HB 632 – ARPA Funding

The link below is a short summary of House Bill 632 that appropriates $2.1 billion in federal American Rescue Plan Act (ARPA) funds. Appropriations made in HB 632 are authorized to continue through the biennium starting July 1, 2023. This summary is as of April 13, 2021 as passed by the Senate Finance and Claims Committee.

Summary of HB 632 as passed and signed into law.

Mothers need our continued support this Mother’s Day:

Every year, we take a moment to honor the support our mothers give to our families and communities. The task of raising children has never been easy, and for too long, parents have done so with not enough support.

But this past year has provided families with an entirely new set of challenges, and mothers have born a disproportionate part of the burdens caused by the COVID-19 pandemic.

While the job market is beginning to recover, women and especially mothers, were hit harder by the recession over the past year. School and childcare closures meant that many parents quit jobs that required them to work outside the home. Women lost more jobs than men, partially due to the fact they are overrepresented in the service sector which was particularly hard hit by business closures. Mothers lost proportionally more jobs than their counterparts without children.

But as pandemic eases and schools are reopening, more and more women are returning to the workforce. But while the situation may not be as desperate as it was six months ago, many of the challenges that women faced during, and even before the pandemic began, are still present.

So as we send mothers across the state a heart-felt “Thank you” this week, let’s pause and consider what mothers really need in order to take care of themselves and their families.

The Problem: A Lack of Affordable Child Care

A lack of affordable childcare has driven countless women out of the workforce for decades. With a shortage of safe and available options this year, women felt the lack of childcare more than ever.

A lack of safe, affordable childcare is a crisis in Montana. Across the state, 48 out of 56 counties fail to meet even 50 percent of demand with licensed childcare providers. The state ranks 40th for childcare availability nationwide. For more information, read our report: The Coronavirus and Child Care: Montana Must Do More for Workers and Families.

Next Steps: Adequately Fund Childcare and Early Education

The American Rescue Plan Act (ARPA) provides Montana with funds to help ease both the social and health effects of the pandemic.  House Bill 632, passed by the legislature, will provide $112.5 million for childcare stabilization and block grants. These funds will be provided to childcare desert for one-time equipment and necessary infrastructure, property improvements, worksite childcare, and employee training.

But Montana is still one of only a handful of states without any investment in early education. Montana lawmakers should pre-K programs in order to support parents and families.

The Problem: Paid Leave

The coronavirus pandemic highlighted the importance of access to paid leave when an employee was sick or needed to care for a loved one. But for years prior to the pandemic, women have been expected to return to work soon after giving birth or take unpaid leave to stay with their child. Likewise, if a family is met with an injury or illness, mothers have often had to choose between caring for themselves or a loved one and keeping their job.

Next Steps: The Family and Medical Leave Insurance Act

 Unfortunately, the legislature passed on an opportunity to support not only mothers, but all workers in Montana by failing to pass the Family and Medical Leave Insurance (FAMLI Act).  To read more about the how paid leave could benefit Montanans, read our post here: Time for Montana to Provide Paid Family and Medical Leave.

The Problem: Food Insecurity

School closures, rising food costs, and higher-than-normal rates of unemployment all contributed to rising rates of food insecurity over the past year. Feeding America projects that in 2021, 17 percent of children in Montana will experience food insecurity. While 2021 is likely to see lower rates of food insecurity than 2020 did, there are still far too many mothers in the state who do not know how they will feed children their next meal.

Next Steps: Protect Safety Net Programs

As long as both Montana and the federal government have emergency orders in place, Montanans who receive Supplemental Nutrition Assistance Program (SNAP) benefits are also receiving Emergency Allotments. The relief package last spring left out SNAP participants on the lowest incomes, however, these households and individuals will begin receiving $95 in emergency allotment benefits. Over six months, Montana will receive $15.9 million in SNAP benefits, unless the governor decides to end the emergency declaration prematurely.

Flowers and cards are nice ways to show our appreciation, but if we truly wish to support the mothers in our state, we should pay attention to what their needs are. Adequately funding childcare, providing access to paid leave, and ensuring food security are some of the most important ways we can show mothers we care.

Ending Pandemic Unemployment Early Won’t Fix Barriers to Finding Work

On May 4th, Governor Gianforte announced he would end temporary pandemic unemployment assistance. This includes the $300 a week in federal Pandemic Emergency Unemployment Compensation (PEUC) benefits and Pandemic Unemployment Assistance (PUA) benefits for self-employed people, underemployed, independent contractors, and those who cannot work due to health or COVID-19 related reasons. These expanded benefits are slated to end September 6th, but Montana will be the first state to end them early. According to the National Employment Law Project (NELP), approximately 25,000 Montanans could face the loss of these critical benefits used to support their families.

Instead, the governor proposed a one-time $1,200 “return to work” bonus, which someone would receive after being hired and employed for four weeks. The program is capped at 12,500 individuals and is on a first-come, first-serve basis. The governor argues Montana’s unemployment rate is back at pre-pandemic levels, and this bonus will encourage individuals to return to the labor market. 

But the governor’s carrot-and-stick plan to end pandemic unemployment benefits, and pay workers a one-time “bonus” after they retain employment for a month, is severely misguided and fails to address the root of the worker shortage problem. 

The governor’s plan will disproportionately harm those who already face barriers to accessing work. The COVID-19 pandemic disproportionately impacted American Indian communities, who already faced barriers to employment. The pervasive legacy of racist policies, coupled with current-day discrimination in education and employment, result in American Indians facing much higher unemployment rates. 

Social and economic barriers, including a lack of state investment in tribal colleges, lack of broadband internet availability, and fewer job opportunities, have resulted in unemployment rates on reservations up to four times the statewide average. Because unemployment insurance is typically reported statewide, the governor’s early end to pandemic benefits is another instance of depriving tribal nations and indigenous people an opportunity to access critical resources. 

The world isn’t the same as it was 15 months ago. Workers, especially those in retail or food service, face a new variety of challenges – the risk of infection, enforcing mask and social distancing mandates, school and childcare closures, as well as quarantine orders. 

Even without these new (and significant) reasons, people may be reluctant to reenter a challenging and potentially unsafe work environment because the structural impediments to finding a suitable job that existed before the pandemic remain. Multiple studies have shown that the enhanced benefits did not discourage people from reentering the workforce. But for many workers, a lack of affordable housing and child care makes regular employment simply unworkable.

The current child care supply only provides one slot for every two children under age 6 with working parents. A lack of affordable housing across the state can also make it difficult for businesses to fill open jobs. A single parent raising two children and earning Montana minimum wage would need to work 78 hours a week to afford a modest 2-bedroom rental home at fair market rent ($878). 

A one-time $1,200 benefit will not cover more than one or two months of rent or a few weeks of childcare. After the benefit runs dry, Montana workers will be left facing the same challenges that had forced them out of the workforce in the first place. 

The Return-to-Work Bonus Initiative will cost Montana $15 million in federal American Relief Plan Act (ARPA) funds. These funds could have been used to address the root of the problems keeping people out of the workforce, like expanding affordable housing options, increasing childcare availability, or providing job training or education opportunities. 

Instead, Montana will turn down $150 million in federal funds between July and September according The Century Foundation and put 25,000 thousand people at risk of losing their expanded benefits. These benefits will no longer be spent at Montana businesses and help boost the state’s economy. But most importantly, they will no longer help those who are unable to find suitable employment make ends meet.