Skip to Main Content
Printer Friendly

Empire Justice Testimony on the Impact of Poverty on Children & Families

September 17, 2015

 

INTRODUCTION
 
Thank you for the opportunity to testify today.  My name is Saima Akhtar and I am a Senior Attorney in the Albany office of Empire Justice Center.  Empire Justice is a statewide legal services organization with offices in Albany, Rochester, Westchester and Central Islip (Long Island).  Empire Justice provides support and training to legal services and other community-based organizations, undertakes policy research and analysis, and engages in legislative and administrative advocacy.  We also represent low income individuals, as well as classes of New Yorkers, in a wide range of poverty law areas including public assistance, health, consumer, domestic violence, and immigration. 

I’m here today to talk about three pressing issues that impact New York’s low income families and their children.  First I will address the painful inadequacy of the shelter and utility allowances in our public assistance system, and then I will address the desperate need for increased investment in child care assistance for working families. 

New York State has the dubious honor of ranking fourth in the country for the number of people living below the federal poverty line.  In our upstate cities, children fare the worst, with over 50% of children in Rochester, 49% in Syracuse, and 46% in Buffalo living in poverty.  For those families and individuals in need of public assistance, it has long been the case that the public assistance grant in New York does not realistically enable a family to meet even their most rudimentary needs.  The maximum grant in Onondaga and Erie Counties brings a family to 41% of the Federal Poverty Level (FPL); in Nassau County, the grant is equivalent to about 50% of the FPL.  Even with a household’s SNAP benefits included, a family living on public assistance anywhere in New York State must struggle to make do on income that keeps them far below the poverty level. [1]

As inadequate as the public assistance grant may be in general, the two key components of the grant that relate to housing are perhaps the most dramatically disconnected from the real lives of low income New Yorkers.  I refer to the shelter allowance, which theoretically enables households to pay the rent or the mortgage, and the fuel for heating allowance.  These two components of the public assistance grant are so out of date, they create scenarios in which families are often forced to the brink of homelessness, living in crowded, substandard, poorly weatherized, and scarcely heated housing situations, all of which have a detrimental impact on the children in the household. 

Even a brief survey of relevant research amply demonstrates that stable housing is crucial for optimal child development, for educational success, and for the overall mental and physical health of families. [2]  Studies repeatedly show that housing insecurity and chronic residential instability early in life have negative impacts on children’s mental health and vocabulary development.  Such instability during the elementary school years can lead to less parent involvement, and children’s academic and social outcomes may be indirectly affected by these changes.  Adolescents experiencing multiple moves show difficulty adapting, express negative social behaviors, and have a greater chance of dropping out of high school. [3]  All of these factors impact our children’s ability to thrive.  From a public policy perspective, it makes good economic sense to ensure that kids growing up in New York are not negatively impacted by the inadequacy of the public programs their parents must access to make ends meet.  We offer the following details and recommendations to help address this problem.

THE INADEQUACY OF THE FUEL FOR HEATING ALLOWANCE – AN ACUTE PROBLEM OUTSIDE NEW YORK CITY

The inability to keep a home adequately warm, or the need to heat only part of one’s home because of unaffordable heating fuel, is a critical problem for low income individuals living in upstate New York.  Although the public assistance grant provides a small adjustment for heating costs to low income families who receive Temporary Assistance (TA) and pay their own heating costs, the grant has not been revised since its adoption in 1987 - 28 years ago.

The  fuel for heating allowances are county specific, based on a twelve (12) month heating season, the TA household size, and the recipient’s primary heat source.  Data from the Energy Institute of America (EIA) and the New York State Energy Research and Development Authority (NYSERDA) indicate gargantuan price increases during this time.  In the last 28 years, the cost of residential natural gas has more than doubled. [4]  The costs of home heating oil and propane have increased four times over, as well. [5]  Meanwhile, the fuel allowances have not responded to increased energy costs in any way.

In parts of the state where heating costs are primarily paid to a utility company separate from rent, increasing the fuel for heating allowance in conjunction with the shelter allowance is critical.  Where heating costs are included with rent, an adjustment in the shelter allowance will necessarily cover volatility in the price of heating fuel.  However, where rent and heat are paid separately, low income New Yorkers will suffer without a fair and reasonable adjustment in both allowances.

Ultimately, families are further impoverished by the system that is supposed to provide a safety net for them as a result of grossly inadequate fuel allowances.  In the vast majority of households, when families are unable to cover the cost of their utility bills, the Department of Social Services pays the utility company on an emergency basis to ensure that there is heat available over the course of the winter, and then recoups the funds paid to the utility company as an overpayment to the family.  If a family has had to do this once, the Department of Social Services may put them in an auto-payment to their utility company that covers their heating costs in full, and then subjects the family to an annual process known as “fuel reconciliation,” where they are assessed with an additional overpayment.  As result of this process, families are placed in a permanent recoupment cycle by the sequential energy related overpayments – generally a 10% reduction of their already abysmally low grant. 

This recoupment is not real money coming into the Department of Social Services; it’s merely a computerized budgeting fiction that serves to reduce the welfare grant of those who are forced to rely on public assistance during a frigid New York winter.  We are seeing a clear connection between this “perma-recoupment” phenomena and families becoming homeless as a result of trying to manage their already slim finances with a 10% reduction in the household grant.

This problem isn’t limited to public assistance recipients.  Public Service Commission Chair Audry Ziebelman reports “[t]he grim reality of the situation is very troubling: more than 1 million residential customers are more than 60 days in arrears, owing nearly $800 million to utilities; and over the past year, nearly 300,000 residential customers had utility service disconnected for nonpayment, with low income customers experiencing a disproportionately high amount of these arrears and service terminations for non-payment.” [6]  Low income tenants bear a particularly large burden for energy costs because their costs nearly equal those of higher income renters, and energy costs take up larger shares of their limited incomes and overall housing costs. [7]  For the lowest income renters, and those who are most likely to be forced to rely on assistance programs, the energy expenses for the household can cost more than 20% of household income because heat is a necessity in New York State, and the housing stock these renters are able to afford is likely to be less energy efficient. [8]

The Home Energy Assistance Program (HEAP) Dynamic

While HEAP provides families with some relief, it is not enough.  In the 2013-14 heating season, the State of New York issued more than $56 million in emergency HEAP heating benefits to 122,303 households who were unable to pay their ongoing heating costs, even after receiving regular HEAP benefits. 

Monthly program statistics from the Office of Temporary & Disability Assistance (OTDA) show that both regular and emergency HEAP utilization is dramatically higher outside of New York City.  In February 2015, 80% of HEAP autopay benefits (those issued to households already known to be eligible without separate application such as TA and SSI recipients) and over 90% of non-autopay benefits were used outside of New York City. [9]  In the same month, 97% of Emergency HEAP funds were spent in counties outside of New York City. [10]  Increasing the fuel for heating allowances will prevent at least some of these heating crises and allow more efficient use of limited federal HEAP funds.

Recommendations:

  1. After 28 years, it’s time for the fuel for heating allowance to be increased.  We urge the legislature to include in their one house budget bills language requiring OTDA to immediately increase the fuel for heating allowance to an amount commensurate with the market rate, and to subsequently reassess the market rates on a regular basis, not to exceed once every five years.
  2. Because of the inadequacy of welfare grant in meeting fuel and utility costs, until such time as it is increased, a moratorium should be placed on the recoupment of energy-related payments from on-going public assistance cases.  Counties should have the option to suspend all public assistance recoupments during the moratorium period for administrative ease.  The State should consider forgiving the outstanding recoupments that resulted from the inadequacy of the fuel for heating allowance and, clarify that any ongoing recoupment be limited to 5% of the grant.



THE INADEQUACY OF THE SHELTER ALLOWANCE

Needy families who receive public assistance experience a perpetual state of crisis when it comes to housing.  We get a sense of this situation comparing the monthly shelter allowance with the HUD-established Fair Market Rents (FMR) for the appropriate apartment size. [11]  In the chart below, we compare the maximum monthly shelter allowance a household of 1, 2, or 3 people can receive from public assistance with the HUD-established FMR for an efficiency, a one-bedroom, and a two-bedroom unit.  This comparison is made for six counties across the state.



  • In Albany County, the Fair Market Rent for a one-bedroom housing unit is $750, but the maximum shelter grant that Albany DSS will provide for a household of two is $279. 
  • In Suffolk County, the FMR for two bedrooms is $1613, while the Suffolk DSS shelter grant for three people is $447.


An analysis of the shelter allowances for a family of three in each county in the state (see Appendix 1) compared with the FMR for a 1 bedroom apartment (chosen to be overly conservative) found that:

  • In only six counties did the shelter allowance reach 50% of FMR (in order, high to low: Chenango, Yates, Oneida, Allegany, Wyoming, and Chautauqua).  The range of shelter allowances in those counties was between $674 and $287.
    the shelter allowance was less than 40% of the FMR (in order high to low: Nassau, Kings, New York, Queens, Richmond, Suffolk, Bronx, Westchester, Tomkins, Jefferson, Rockland, Putnam, Schoharie, Greene, Rensselaer, Columbia, Albany, Schenectady).  The range of shelter allowances in these counties was $276 to $445.
  • In 18 counties the shelter allowance was less than 40% of the FMR (in order high to low: Nassau, Kings, New York, Queens, Richmond, Suffolk, Bronx, Westchester, Tomkins, Jefferson, Rockland, Putnam, Schoharie, Greene, Rensselaer, Columbia, Albany, Schenectady).  The range of shelter allowances in these counties was $276 to $445.


Thus, while housing costs are certainly higher in the New York City Metro area, the shelter allowances for a family of three are adequate to meet 50% of the Fair Market Rent for a one bedroom apartment in only 6 counties in the state. 

The gross inadequacy of the shelter allowances is certainly one reason that, for the 2012-13 school year, the Brentwood, Suffolk County, School District identified 357 homeless children, the Syracuse district identified 957 homeless children, and Rochester found 1,820 children to be homeless. [12]  And these figures do not take into account the many families living in substandard housing, or families doubled up in housing ill-equipped for the number of residents.

A fundamental premise of our advocacy around the inadequacy of the public assistance housing and fuel for heating allowances is the belief that stable and decent housing is of vital importance to the well-being of families and individuals.  But the current housing and fuel for heating allowances not only fail to ensure access to stable housing, but rather vastly increase the risk of unsafe homes,  overcrowding, frequent involuntary moves, and homelessness. 

It is essential that the State of New York address these inadequacies by adjusting benefits to reflect actual costs and to pursue creative solutions that will effectively fight poverty and enable children and families to thrive. 

Recommendation:

  1. Increase the shelter allowance to 50% of regional Fair Market Rents consistent with family size around the state as a down payment, a crucial first step in better meeting the housing needs of families and singles on welfare.  This will proactively avoid the increased costs of homelessness resulting from the inadequacy of the shelter allowance.  The shelter allowance should thereafter be increased in accordance with the results of OTDA’s studies of shelter costs relative to the shelter allowance.



Far too many low income New Yorkers must endure a constant state of crisis in terms of their ability to secure and retain decent housing.  Enactment of these proposals would put us on a path towards alleviating this crisis.

LOW INCOME FAMILIES NEED CHILD CARE

Supporting low income families with child care assistance helps break the cycle of poverty in at least two ways: it allows low income families to work who could not otherwise afford the budget busting cost of quality child care, and provides a high quality learning experience for their children that supports school readiness.  Unless significant new funding is added to child care this year, 13,000 parents are likely to lose their child care slots because new the federal government is requiring states to implement new federal regulations that have a hefty price tag, but is providing no money to do so.

Empire Justice Center joins Winning Beginning New York in asking for an investment that will allow the state to implement federal regulations without a loss of slots, and which will add new slots for unserved children:

At least $90M Needed for New Federally-Mandated Regulations in 2016

The Child Care and Development Block Grant Act (CCDBG), signed into law by President Obama last year, re-authorizes the Child Care and Development Fund (CCDF) through FY 2020 and contains health, safety, and quality initiatives.  These regulations protect children and increase the safety and quality of New York’s child care for working families and their children, but there is a cost.  According to the Office of Children and Family Services’ (OCFS) own estimates, the costs of implementing these federally required health and safety changes are likely to exceed $90 million in the early years of implementation.  Without increased funding, this could translate into a loss of care for 21,000 children statewide who are currently being served.   In particular, the federal law:
       

  • Requires that all licensed and legally-exempt providers submit to criminal background checks from the FBI, National Sex Offender Registry, state criminal and sex offender registry (in each state the applicant has resided in for the past five years), the child abuse and neglect registry (in each state the applicant has resided in for the past five years), and the National Crime Center.  This new requirement is a significant expansion on current law, as New York State currently only requires background checks for licensed providers.  FBI fingerprinting checks are not currently required for providers in New York State.  An additional 265,000 people will need to submit to background checks from New York State’s sex offender registry alone, not including other checks now required. 
  • Requires that New York State conduct annual, unannounced full inspections of all providers, including legally exempt providers.  Currently, only 20% of the 47,000 legally exempt providers who receive subsidies are inspected every year.  Taking effect no later than November 19, 2016, the law also requires that the ratio of licensing inspectors must be maintained at sufficient levels to support regular inspections.
  • Imposes new professional development requirements for all child care providers.  The law requires a mandatory pre-service health and safety training for all child care staff, and ongoing, annual training and progression of professional development, which may include post-secondary education.


$100M Needed to serve an additional 10% of eligible children

The vast majority of children in working families in New York who are eligible for childcare subsidies are going un-served due to insufficient funding.  Current funding serves 130,000 children, 22% of those eligible for subsidies. [13]  Without an increase in the state’s investment, parents’ ability to provide financial stability for their family and a supportive learning environment for their children is being seriously undermined.  New York State was named the second least affordable state for Center-Based Infant Care in 2014, with an average cost of high quality infant care at $14,009 per year. [14]  By investing additional dollars each year, New York State can meet the goal of serving all eligible children by 2020 which:

  • Helps employers & working parents now: Employers report that parents who have access to dependable child care have fewer employee absences by 20-30%, and a 17.8% decrease in disciplinary actions on the job. [15]  When a parent on the job loses their subsidy, employers report an increase in tardiness and a decrease in productivity by 35%. [16]  Turnover decreases by 37-60% when subsidies are available. [17]
  • Supports the New York economy: Every dollar in New York invested in early care and education generates a total of $1.86 in sales of local goods and services throughout the state, generating as much or more economic activity than investments in all other economic sectors, including manufacturing, construction, or transportation. [18]
  • Supports child development and school readiness: Children often suffer when they cannot participate in regular, quality child care and early education.  75% of brain growth and 85% of intellect, personality, and social skills develop before age five. [19] 
  • Supports the future workforce and community at large: When vulnerable children have access to quality early learning experiences, there are life changing positive impacts: they are less likely to drop out of high school, less likely to require welfare and financial assistance, and less likely to become a teen parent. [20]  This leads to a more prepared workforce, while reaping cost savings for taxpayers. 


The price tag: To serve all eligible New York State children, at least $1 billion more dollars are needed for child care.  Take the next step to serving all children by investing $190M in 2016.

Thank you once again for the opportunity to testify today.  Please feel free to contact me at 518-935-2851 or sakhtar (at) empirejustice.org should you have any questions.

APPENDIX 1: Public Assistance Shelter Allowances as a Percentage of Fair Market Rents (FMR)

APPENDIX 2: Shrinking Access to Child Care- Child Care in the NYS Budget 2009-2016


End Notes:
 [1] Even use of the Federal Poverty Level fails to capture the reality of surviving on the public assistance grant.  The FPL is often viewed as a highly flawed measure of poverty, one of the reasons being that there is one standard for the entire 48 contiguous states, thereby severely understating what poverty means in high cost states like New York.
 [2] See, for example, Hannah Emple, Stable Housing is Unequivocally Good for Children and Families, Children Health Watch, 2012; Maya Brennan, Patrick Reed, and Lisa A. Sturtevant, The Impacts of Affordable Housing on Education: A Research Summary, Center for Housing Policy, November 2014; Rebecca Cohen, The Impacts of Affordable Housing on Health: A Research Summary, Center for Housing Policy, May 2011.
 [3] “The Negative Effects of Instability on Child Development”, Urban Institute Low-Income Families FactSheet, Heather Sandstrom and Sandra Huerta, September, 2013
 [4] Data available at http://www.eia.gov/dnav/ng/hist/n3010dc3a.htm
 [5] Data available at www.eia.gov/dnav/pet/hist/LeafHandler.ashxn=PET&s=M_EPD2F_PRS_NUS_DPG&f=M
 [6] “PSC Looks to Strengthen, Improve Utility Assistance for Low-Income Families—Plan Proposes Ways to Make Energy More Affordable for Financially Struggling Customers,” June 2, 2015. Available online at http://www3.dps.ny.gov/pscweb/WebFileRoom.nsf/Web/530891D61AE9D95785257E58005143A3/$File/pr15040.pdf?OpenElement
 [7] Michael Carliner, “Reducing Energy Costs in Rental Housing: The Need and Potential,” Joint Center for Housing Studies of Harvard University, Research Brief 13-2, December 2013.  Available online at http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/carliner_research_brief_0.pdf
 [8] Id.
 [9] See Table 26 at https://otda.ny.gov/resources/caseload/2015/2015-02-stats.pdf
 [10] See Table 27 at https://otda.ny.gov/resources/caseload/2015/2015-02-stats.pdf
 [11] The Federal Department of Housing and Urban Development sets the FMR at the 40th percentile of rents being paid in a given area.  This is seen as a reasonable measure of the cost of decent, but modest housing.
 [12] This information was collected by the New York State Education Department in the Student Information Repository System.
 [13] More than one-third of New York’s 58 Social Services Districts have lowered eligibility levels to below 200% of the federal poverty level ($39,580 for a family of three), creating a desperate situation for many working families. For more on child care across the state, see  http://www.empirejustice.org/assets/pdf/publications/reports/still-mending-the-patchwork/still-mending-the-patchwork.pdf
 [14] Child Care Aware. 2014 Child Care in the State of New York.  http://www.naccrra.org/sites/default/files/new_york_fact_sheet_.pdf
 [15] Karen Shellenback, Child Care & Parent Productivity (Ithaca: Cornell Cooperative Extension, December 2004). http://government.cce.cornell.edu/doc/pdf/ChildCareParentProductivity.pdf
 [16] Ibid
 [17] Karen Shellenback, Child Care & Parent Productivity (Ithaca: Cornell Cooperative Extension, December 2004). http://government.cce.cornell.edu/doc/pdf/ChildCareParentProductivity.pdf
 [18] http://readynation.s3.amazonaws.com/wp-content/uploads/NY-Early-Edu-Quality-Report.pdf
 [19] http://childdevelopmentcouncil.org/files/all/eclc_public_policy.pdf
 [20] http://evidencebasedprograms.org/1366-2/abecedarian-project, & http://evidencebasedprograms.org/1366-2/65-2