In this issue:
- Gov. Ritter: Education a key investment for economic growth
- Bell to research state funding needs and revenue potential, start “purposeful discussion”
- Proposed federal regulation could cost Colorado hospitals $128 million
- Health Care Day of Action draws hundreds to state Capitol
- Economic snapshot: strong economy, high costs for the poor
- Two reports examine how immigrants affect the U.S. labor force
- Micro-loans help low-income women start businesses
Gov. Ritter: Education a key investment
for economic growth
Governor engages “Voices of Opportunity”
audience in lively conversation
By Heather McGregor
mcgregor@thebell.org
Editor
The key to opportunity for Colorado residents and to growth in Colorado’s economy is education, said Gov. Bill Ritter at the Bell’s latest Voices of Opportunity event.
“I am going to establish by executive order a P-20 council, and we are going to have a statewide conversation about education,” Ritter said. “The focus is going to be on reducing the drop-out rate, closing the achievement gap and educating our kids for the 21st Century.
“The conversation around innovation is about education, and a P-20 council can help us devise the strategic plan. If we fail to do that, it’s at our peril,” he added.
A P-20 council would study the continuum of education from preschool through college.
The Voices of Opportunity event, held March 13 in Denver, is the fourth for the Bell Policy Center lecture series. It drew 176 people who listened to the governor’s 20-minute presentation and then joined in a lively, 30-minute question-and-answer session.
Earlier in the day, Ritter and state Sen. Sue Windels unveiled their proposed Colorado Children’s Amendment. The plan would stabilize property tax mill levies in order to shore up local tax funding for public schools and prevent the state Education Fund from becoming insolvent, which is otherwise predicted to happen by 2010-11.
The amendment is to be attached to the School Finance Bill, SB 07-199.
It would achieve a key opportunity goal the Bell Policy Center has promoted for years — full funding phased in over the next two years for the state’s preschool program — as well as funding for all-day kindergarten statewide.
“These two things are part of our vision for reducing dropouts over the next 10 years,” said Ritter, who noted that research shows at-risk children who attend preschool have a higher graduation rate than the state average, and a much higher rate than at-risk children the program didn’t have room for.
Higher ed, prisons, health care and the EITC
Ritter’s comments, prompted by questions from the audience, also touched on higher education funding, his prison recidivism initiative, health care reform and the Earned Income Tax Credit.
“Under-funding higher education is a big problem,” Ritter said, noting that it is the key investment for propelling Colorado into the new energy economy.
“We want college to remain affordable,” he said. He expects some increases in tuition, but said using tuition increases alone to “dig out” from the present shortfalls in higher education funding would put much of the burden “on the backs of kids in the middle class.”
DeAnne Butterfield of Boulder asked Ritter about his plans for criminal justice reform, since spending for corrections take up so much of the state budget.
“We were taking money from colleges to build prison beds,” Ritter said, noting that Gov. Owens had proposed a nearly 9 percent increase in prison spending for the coming fiscal year. Ritter instead wants to make an $8 million investment in programs aimed at cutting the rate of inmates that return to prison.
“Right now we have a 50 percent return rate in a three-year period. If we can trim that by even 1 percent, we can save millions,” Ritter said.
Kelly Stahlman, policy coordinator for Family Voices of Colorado, asked Ritter about his plans for health care reform.
“We spend two to three times what European countries do on health care. To just say the solution is more funding is the wrong approach,” Ritter said. He said the state must focus on three key points in crafting a solution: access, cost and quality.
“I hope we can get there with a state plan without having to raise taxes,” he said.
Chaer Robert, director of the Denver Women’s Commission, asked Ritter about the potential for restoring the state Earned Income Tax Credit, which is dependent on a TABOR surplus.
Ritter agreed that the credit, $400 for a family with two kids earning $15,000 a year, would mean a lot. But he said the EITC is part of a bigger set of tax policy issues that need to be evaluated. For the time being, he said, restoring the EITC “is not something that’s going to be do-able.”
However, two state legislators, Rep. John Kefalas, D-Fort Collins, and Sen. Betty Boyd, D-Lakewood, are considering a late bill to establish a state rebate of 5 percent of the federal EITC.
In the news:
The Rocky Mountain News, March 14, 2007
Plan tackles ed funding
The Denver Post, March 14, 2007
Property-tax freeze gets cold shoulder
The Fort Collins Coloradoan, March 14, 2007
Ritter plan for school funding might aid PSD
Bell to research state funding needs and
revenue potential, start “purposeful discussion”
By Heather McGregor
mcgregor@thebell.org
Editor
The Bell Policy Center is joining with the Colorado Children’s Campaign and the Colorado Fiscal Policy Institute to size up the state’s needs for funding in key budget areas, according to Bell President Wade Buchanan.
“We want to do good quality research first, and then use that information to lead a purposeful discussion, similar to the work we did building toward the passage of Referendum C,” Buchanan said.
Buchanan discussed the fiscal project effort on March 13, following a presentation by Gov. Bill Ritter at the Bell’s latest Voices of Opportunity event.
Ritter agreed that while Colorado must continue to be conservative in spending, “there is a real reason to have this conversation.”
The governor cited the budget constraints imposed by the Arveschoug-Bird 6 percent limit, TABOR, Gallagher and Amendment 23, and asked, “Is there the political will to undo those constitutional restraints so you can get to the place where you can have a vision?”
The Colorado Promise spelled out in Ritter’s campaign, similar to the Bell’s Blueprint for Opportunity, can’t be fully enacted under Colorado’s current budget limits, Ritter said. “How do we do all the things we promised?” he asked.
Buchanan said, “What Colorado faces is not necessarily a crisis of funding for health care, or a crisis of funding for education, or a crisis of funding for higher education or transportation.
“What Colorado faces is a crisis of funding, period,” he said.
“We are very interested in starting a conversation across the state of what our needs are, where the trends are taking us, and where we are headed with revenue. When we look at funding needs and revenue, do the two match up? If they don’t, what are our options?”
Buchanan said Colorado faces only two options at present:
- Make do with what we’ve got, which we fear may mean growing mediocrity for higher education, K-12 and the growing unmet needs in health and transportation.
- A race to the ballot by a variety of interest groups wanting to claim a dedicated funding stream for their own preferred programs.
“We hope our work will point the state toward that more comprehensive solution. Whether it means changing the constitution or even raising revenues, it should be a comprehensive approach,” Buchanan said.
Gateways to Opportunity
The Bell Policy Center is focused on making Colorado a state of opportunity for all.
Opportunity does not arise from a single action. To succeed in life, people must pass through a series of gateways. They are:
- A healthy birth
- A safe and stimulating childhood
- Building a solid base for literacy
- Establishing a healthy lifestyle
- Graduating from high school with a diploma and the skills to succeed
- Access to education and training for adults
- Living a healthy adult life
- Earning a decent living and building wealth
- A financially secure and healthy retirement
Together, these gateways constitute the Cycle of Opportunity, the mix of experiences and events that make it possible to realize our economic, social and personal potential.
Each month in The Opportunity News, the Bell Policy Center reports on the latest research, public policies, legislation and events that promote or undermine opportunity for Colorado residents, gateway by gateway.
Gateway 7. A Healthy Adult Life
Proposed federal regulation could
cost Colorado hospitals $128 million
By Blair Woodbury
woodbury@thebell.org
Public Policy Fellow
Colorado’s safety-net hospitals stand to lose over $128 million in federal funds if a proposed rule is approved by the Centers for Medicare and Medicaid Services, according to state officials who testified before the legislature’s Joint Budget Committee on March 12.
The proposed regulation would change the definition of a public hospital, excluding Denver Health, University Hospital and Memorial Hospital in Colorado Springs from this category and making them ineligible for many of the Medicaid funds that they currently receive from the federal government.
Estimates based on federal funds received in 2005 indicate that Denver Health stands to lose more than $75 million dollars in federal funds, about 16 percent of its budget. University Hospital could lose more than $35 million, about 8 percent of its budget, and Memorial Hospital could lose almost $10 million, about 1.4 percent of its budget.
The Colorado Department of Health Care Policy and Financing reported the estimates in a document presented to the JBC, “Updated Impact Overview on Draft Rule from the Centers for Medicare and Medicaid Services.”
Private hospitals across the state could also lose almost 80 percent of their funding from the Colorado Indigent Care Program (CICP), which is partially funded by Medicaid payments. That’s because their funding would be disbursed among hospitals that are currently considered public providers, according to the HCPF report.
The proposed Medicaid rule requires public hospitals to have “generally applicable taxing authority” or to be able to “access funding as an integral part of a governmental unit with taxing authority.” Both Denver Health and University Hospital became independent entities in the 1990s. While they still have contracts with state government to provide certain services, independence gave them more flexibility to set staffing levels and join purchasing cooperatives to buy medical supplies at lower costs.
In the March 12 hearing, JBC members expressed concern that if Denver Health and University Hospital were to be given taxing authority, TABOR would require them to go to the ballot to seek voter approval. Since the federal rule is slated to go into effect this September, federal funds would be cut off before an election could take place.
The regulation could also hamper the efforts of the Blue Ribbon Task Force on Health Care Reform, a commission established by the legislature in 2006 to evaluate proposals for comprehensive health care reform. Since the new federal regulation would impact all Medicaid programs, the state would be limited in the degree to which it could reallocate existing funds under any new program.
Following the hearing, the JBC sent a letter to the federal agency expressing opposition to the rule. U.S. Sen. Mel Martinez, R-Florida, introduced legislation to freeze implementation of the proposed rule. Florida could lose almost $1 billion under the new rules. The comment period for the rule closed on Monday, March 19.
In the news:
The Denver Post, March 11, 2007
Rule would cut up safety net, By Karen Augé
Health Care Day of Action
draws hundreds to state Capitol
By Blair Woodbury
woodbury@thebell.org
Public Policy Fellow
Nathan Wilkes, a computer programmer, has a family health benefit plan through his employer. He also has a son with hemophilia, a rare inherited bleeding disorder in which the blood does not clot normally.
Wilkes’s son is about to reach his health insurance company’s lifetime payout limit of $1 million. Once he reaches that limit, the family’s expensive health insurance plan will no longer cover any of his son’s health care needs.
Wilkes and his son joined a crowd of about 200 people at the state Capitol Monday, Feb. 26, for the Health Care Day of Action to lobby legislators for comprehensive health care reform.
The event, co-sponsored by the Bell Policy Center, Service Employees International Union, Colorado Consumer Health Initiative, Colorado Progressive Coalition and the Front Range Economic Strategy Center, brought together a broad coalition of 51 business groups, unions, churches, advocacy organizations and health care providers. Members of these diverse organizations talked with their legislators, shared stories about personal struggles with the current health care system and discussed health care bills introduced during this legislative session.
Members of the Blue Ribbon Commission for Health Care Reform, a group appointed by legislative leaders last year to investigate options for comprehensive health care reform in Colorado, also talked with participants. The task force is currently soliciting proposals for comprehensive health care reform in the state. After proposals are received and evaluated, the task force will meet with people across the state to develop a final plan.
After participants in the Health Care Day of Action lobbied their legislators and talked with members of the Blue Ribbon Health Care Task Force, members of the House and Senate health and human services committees hosted a question and answer session.
In addition to the events at the Capitol, ProgressNowAction, a liberal online advocacy group, hosted a virtual Health Care Day of Action, encouraging members to submit their health care stories online. These personal testimonials were then delivered to legislators.
More than 770,000 people in Colorado have no health care coverage, including 180,000 children. Without health insurance, people must pay for their own health care, and have little protection from financial devastation in the event of a health care emergency. An estimated 11,800 bankruptcies filed in Colorado in 2005 were due to medical bills. Many of these people had health insurance at the time their illness or injury occurred.
Read the Bell’s two-page Health Care Day of Action fact sheet, distributed at the event.
In the news:
The Rocky Mountain News, Feb. 26, 2007
Dozens rally for lower health-care costs, by Stuart Steers
The Denver Business Journal, Feb. 26, 2007
Health care reform rally held, by Amy Fletcher
El Seminario, March 1, 2007
Community taking action on healthcare issues, by Cristina Frésquez
Gateway 8. Earning a Decent Living and Building Wealth
Economic snapshot shows
strong Colorado economy, high costs for the poor
By Blair Woodbury
woodbury@thebell.org
Public Policy Fellow
Coloradans make more than the average American, but they are more likely to spend a larger portion of their income on housing and to lack health care coverage. Child care is 26 percent more expensive in Colorado than the national average, but health insurance is slightly less expensive.
These findings are among those published in the most recent Colorado Economic Snapshot released March 13 by the Joint Economic Committee of the U.S. House and Senate.
State-by-state economic snapshots, updated monthly, list the most current statistics available to illustrate each state’s economic conditions. Here are some of the findings about Colorado from the March report:
- Colorado’s unemployment rate, 4.1 percent in January, has consistently been lower than the national average over the past year. Median income in Colorado, $50,449 in 2005, is 9 percent higher than the national median income of $46,326. Poverty is slightly lower, with 11.4 percent of Coloradans living below the federal poverty level ($20,000 for a family of four in 2007) compared to 12.6 percent of all Americans.
- Despite Colorado’s high median income and high rate of private health care coverage, the state has a higher rate of people without insurance than much of the rest of the country. Even more troubling, 14 percent of Colorado’s kids lack health care coverage, compared to 12 percent nationally. This is largely due to the state’s more strict Medicaid eligibility, which leaves many low-income families in need of affordable health care coverage.
- Colorado’s rate of home ownership is slightly higher than the national average, but 36 percent of Coloradans spend 30 percent or more of their incomes on housing costs. The median home value in Colorado is 33 percent higher than the national median home value, and median housing costs for home owners with a mortgage is 11 percent higher in Colorado.
- Colorado’s public colleges, despite drastic budget cuts in recent years, still charge less for in-state tuition than the national average, and in-state tuition has increased more slowly here than in other states.
- An affordable education has become even more crucial for the economic security of Colorado’s families as the state’s economy adapts to a global economy. In the last five years, the state lost jobs in the manufacturing sector and added jobs in financial services, business services, health services and education.
Two reports examine how immigrants
affect the U.S. labor force
By Rich Jones
jones@thebell.org
Director of Policy and Research
The number of documented and undocumented immigrants in the U.S. labor force has been growing rapidly in recent decades. Foreign-born workers now make up 15 percent of the U.S. workforce. That’s a 250 percent increase since 1960, when they were 6 percent of the workforce.
Many recent immigrants, particularly the unauthorized, work in low-skilled and low-wage jobs. Two new reports examine how the rise in immigration affects native workers.
How Immigrants Affect California Jobs and Wages
Public Policy Institute of California, February 2007
Between 1990 and 2004, immigration, both documented and undocumented, boosted wages for the average native worker in California by 4 percent, according to a study conducted by University of California at Davis economist Giovanni Peri.
Peri found immigration’s effects ranged from close to zero on the wages of native workers without high school degrees, up to a 3 to 7 percent gain for those who graduated high school.
Peri asserts that the wage gain occurs because immigrants tend to complement most native workers rather than directly compete with them for jobs. An increased supply of immigrants allows native workers to specialize in more productive work such as managerial tasks. In addition, the increase in new workers adds to economic activity and pumps up demand without hurting wages.
Peri also found no evidence that the influx of immigrants between 1960 and 2004 took jobs from native workers who had similar education and experience levels as the immigrants. Nor were native workers forced to leave the state to find work.
Because California has the largest share of foreign-born people in its workforce, the findings of this study may provide useful insights about how immigration affects wages nationally.
Trends in the Low-Wage Immigrant Labor Force, 2002-2005
The Urban Institute and Migration Policy Institute, March 2007
Researchers Randy Capps and Karina Fortuny of The Urban Institute and Michael Fix of the Migration Policy Institute found that the number of low-wage workers is declining nationally, but immigrants are offsetting some of this decline.
Between 2000 and 2005, the number of native-born low-wage workers, defined as those earning less than 200 percent of the minimum wage or $10.30 per hour, fell by 1.8 million. These jobs were filled by 620,000 immigrants, including an estimated 420,000 undocumented.
Women accounted for much of the drop in the native-born low-wage. The number of women working in low-wage jobs declined by 1.86 million, an 8 percent drop, while the number of native-born men working in these jobs grew by 50,000, or a 0.3 percent increase. Overall, women accounted for 40 percent of all low-wage workers in 2005, down from 44 percent in 2000.
The researchers found that native-born women increasing their education and moving into higher paying jobs accounted for a large part of the decline. However, women without high school degrees who dropped out of the workforce also drove down the numbers.
Because of these interactions, the researchers conclude that demographic evidence concerning the impact of immigrants on low-wage, native-born workers is mixed.
However, they also assert that native workers in higher-skilled jobs benefit indirectly from the effects of immigration on economic growth and job creation. Native-born women appear to have benefited more than men because they experienced greater growth in educational attainment.
Micro-loans help low-income women
start businesses
By Rich Jones
jones@thebell.org
Director of Policy and Research
Starting and running a business embodies the American dream for many people. For many women, particularly those working in low-wage jobs, owning a business may provide the schedule flexibility they need to care for children or income to supplement wages from another job. However, many women face significant obstacles to starting a business, such as limited savings or poor credit.
In a detailed assessment of nearly 100 programs and 59 initiatives undertaken by banks to help women access the capital needed to start, maintain and expand their businesses, researchers at the Urban Institute identified 13 strong performers.
The assessment, Capital Access for Women: Profile and Analysis of U.S. Best Practice Programs, identified four micro-enterprise programs that provide low-income women entrepreneurs with small loans and training to start what the researchers describe as “subsistence businesses.” These tend to be home-based businesses or companies that produce small batches of products, such as baked goods or boutique soap. The entrepreneurs gain flexible employment and some can expand their venture into medium-sized businesses that employ others.
The best micro-enterprise programs help low-income women gain self-sufficiency by starting businesses financed with small loans. Best practices programs provide a range of technical and education services that help would-be entrepreneurs manage their finances and realistically assess their businesses prospects. Sometimes this can mean advising them not to start a particular business. These programs also partner or associate with larger business organizations so they can serve many women over a broad geographic area.
One of the four top micro-enterprise programs cited by the Urban Institute is the Women’s Business Center, operated by the Rural Enterprise Assistance Project of Lyons, Nebraska.
The center provides services to a largely rural part of Nebraska by matching would-be entrepreneurs with business specialists, who offer one-on-one assistance in helping the women develop business plans.
Micro Business Development of Denver was not among the 13 cited in the report, but the agency has a strong track record of helping low-income entrepreneurs start businesses. Many of MBD’s clients are women. As part of a MBD-hosted press conference held March 1 to highlight Entrepreneurship Week, the Bell Policy Center released a statement describing how state grants to MBD helped promote low-income entrepreneurs in Colorado.
In 2005 and 2006, MBD received a total of $80,000 in grants from the Colorado Economic Development Commission, which it used to leverage more than $800,000 in funding from other sources.
MBD loaned these funds to 47 entrepreneurs, mostly along the Front Range. Of the 47 loans, 30 went to women and 36 went to low-income borrowers. MBD calculates that 43 full-time positions were retained or created as a result of the loans, at a cost to the state of $1,860 per job.
The Opportunity News is compiled by the policy and research staff at the Bell Policy Center. If you have feedback on the items in the newsletter, suggestions for links to other research or just want to comment on the issues presented, please e-mail Rich Jones, director of policy and research, at jones@thebell.org
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