NC Budget and Tax Center

Trump Administration aims to take food assistance away from 106,000 low-income North Carolinians

This week, the Trump administration announced a proposed rule change in the way the Supplemental Nutritional Assistance Program (SNAP, formally known as Food Stamps) is administered. This change would take food assistance away from 3.1 million people and threaten the school meals of more than 500,000 children. This includes 106,000 North Carolinians, nearly 38,000 of whom are children.[i]

The administration wants to dramatically change a provision known as “broad-based categorical eligibility” (BBCE). While a majority of SNAP qualifications are set at the federal level, BBCE provides states with more flexibility in who can apply to receive food assistance. North Carolina has been a model on how to use BBCE to reduce hunger and hardship among struggling North Carolinians. This provision has allowed our state to slightly increase the income-eligibility limits so that low-income working families with children who have difficulty paying for necessities like child care or rent can still apply for food assistance. Additionally, the provision allows the state to modify the assets limits so that families, seniors, and people with a disability can have modest savings without losing SNAP.

Broad-based categorical eligibility is so effective because it actually builds the stepping stones families need to move out of poverty. Without this tool, many families find themselves in situations where saving for a car or receiving a raise at work actually makes them worse off, financially when they lose food benefits. According to a Fact Sheet from the Budget & Tax Center:

BBCE is an important tool in reducing the “benefit cliff”
Without BBCE, families who earn a raise at work or see a small increase in income are at risk of losing their SNAP benefits. Often times, the loss in benefits may be greater than the increase in income, effectively reducing the amount of resources in the household despite working hard to earn more. BBCE allows North Carolina to “phase down” benefits as families earn more, ensuring workers aren’t punished for doing well.

BBCE encourages savings and financial planning
Under regular SNAP regulations, most households are not allowed to have assets or savings that exceed $2,250. Under BBCE, North Carolina has eliminated those limits, allowing low-income families to save money in order to avoid debt, weather financial emergencies, and save to better support themselves during retirement.

BBCE reduces the state costs of administering SNAP
In North Carolina, case workers and county DSS offices are often overwhelmed with caseloads. BBCE simplifies the SNAP application process by eliminating the need for case workers to investigate household assets and often reduces the number of documents required to confirm eligibility. Just last month, the Mississippi Department of Human Services estimated eliminating BBCE would cost the state $1.5 million to implement.

In last year’s Farm Bill debate, Congress voted, on bi-partisan lines, to keep categorical eligibility as a part of the SNAP program. Two years ago leaders in North Carolina floated the idea of eliminating BBCE, but the idea was quickly rejected by legislators and constituents. Research has shown that broad-based categorical eligibility does not significantly increase program cost or participation, but rather gives states the tools they need to better implement and deliver food assistance.

To submit public comment and to tell the Trump Administration why categorical eligibility is so important, visit www.HandsOffSNAP.org

Brian Kennedy II is a Public Policy Analyst with the Budget & Tax Center, a project of the North Carolina Justice Center.

[i] Special data request to NC Department of Health and Human Services. Data accessed June 7, 2019.

NC Budget and Tax Center

Governor Cooper’s budget compromise is a reasonable way forward

This morning, Governor Cooper released a proposal seeking a compromise between the budget his office released earlier this year and the conference budget he vetoed last month. The compromise keeps nearly every major component of the General Assembly’s conference bill but includes a clean Medicaid expansion and eliminates tax cuts to corporations, using that revenue to invest in teachers and schools.

Here are some of the major provisions:

Expand Medicaid without reservations

The Governor’s proposal would provide health care for hundreds of thousands of North Carolinians through Medicaid expansion. Cooper has noted that, unlike proposals in the NC House, this proposal is free of harmful provisions like work requirements and premiums that could restrict access for those who need care the most. 

Increase teacher pay and restore Master’s Pay

The compromise proposes an average 8.5 percent increase in teacher pay over two years. This falls between the Governor’s original recommendation of 9.1 percent and the General Assembly’s proposal of 3.8 percent. In addition to increasing base pay, the Governor’s compromise will restore Master’s Pay for teachers, a long-time bonus eliminated by the General Assembly in 2013.

State employees

The Governor’s compromise includes pay raises for state employees at a level significantly higher than the conference budget. Additionally, the compromise doubles the cost-of-living adjustment for state employee retirees to 2 percent. 

Funding for school infrastructure projects

The Governor proposes a compromise on how to pay for needed school construction and repairs across North Carolina, while also supporting state capital infrastructure needs on an ongoing basis. Legislative leaders in the Senate have resisted the Governor’s call for a bond and pushed instead for a pay-as-you-go model using General Fund revenues each year. Analysis of proposals made earlier this year show that the bond would be a larger net positive for education funding, and a bond would also allow schools to plan for large, multi-year projects, without worrying that future legislatures would cut the funds available. The Governor’s proposal today would reduce the overall size of the bond from $3.9 to $3.5 billion, keeping all of the capital projects currently funded in the Legislature’s budget. At the end of the day, the Governor’s proposal would devote $2 billion for school construction and repairs, more than the amount projected in the Legislature’s Conference Budget.  Read more

NC Budget and Tax Center

Under flawed House health bill, hundreds of thousands will remain without health care

The NC General Assembly has scheduled House Bill 655 known as NC Health Care for Working Families for a committee hearing this morning. This extremely flawed attempt at closing the coverage gap contains harmful provisions such as work reporting requirements and premiums that have been proven to be ineffective in other states. In the case of work requirements a federal court has deemed this provision illegal. Rather than pursuing a proposal that contains these provisions, the full benefits of Medicaid expansion could be achieved immediately and improve the health and well-being of those North Carolinians currently without affordable, quality health insurance.

Here is what the research tells us:

A recent study on Arkansas work requirements found that work reporting requirements prevented people from accessing health care while doing nothing to boost employment.

  • The percentage of uninsured adults ages 30 to 49 increased from 10.5 percent to 15 percent. During roughly that same time period employment for that same group declined from 42.4 percent to 38.9 percent.
  • Due to massive amounts of red tape and administrative burdens, many working Arkansans were unjustly denied health insurance.
  • Although 97 percent of people subject to the requirements were already meeting the work and community engagement requirements prior to the policy taking effect. Meanwhile, 100 percent of people who failed to report because they thought they had not satisfied the requirements had, in fact, satisfied the requirements.

A study by The Kaiser Family Foundation found that premiums in Medicaid created barriers for low-income families accessing care, especially those living below the poverty line who need help the most.

Estimates of the impact of these two provisions in North Carolina demonstrate that they will block efforts to close the coverage gap.  Specifically, our report released earlier this year conservatively estimated that 88,000 North Carolinians would not be able to meet the work reporting requirements while 145,000 would either lose access to health care coverage or not enroll due to the premiums.  These losses would hold back the health, fiscal and economic benefits of expansion for the state as a whole.

From fiscal policy to administrative efficiency, there are a plethora of reasons why work requirements and premiums are a bad idea. But ultimately, these provisions undermine the goal of closing the coverage gap and creating healthy communities.

Brian Kennedy II is a Public Policy Analyst for the Budget & Tax Center at the N.C. Justice Center.

NC Budget and Tax Center

Evidence from Arkansas: Medicaid work requirements don’t work

Last week, Governor Cooper vetoed the General Assembly’s conference budget, pointing to harmful corporate tax cuts, a failure to fully fund the needs of teachers and their classrooms, and a failure to include Medicaid Expansion. Both the Governor and Secretary of Health and Human Services Mandy Cohen have noted that any Medicaid Expansion bill will likely include compromises.

It is highly likely that requirements to report work are being considered as a form of a compromise, but evidence shows that these requirements fundamentally undermine the expressed purpose of Medicaid itself and will result in struggling North Carolinians jumping through hoops to prove that they are working as a condition of receiving medical coverage. A recent report in the New England Journal of Medicine evaluates the impacts of Arkansas’s work requirement provisions. The report finds that:

Work reporting requirements prevented people from accessing health care while doing nothing to boost employment:

  • From 2016 to 2018, the percentage of 30-49-year-olds with ACA marketplace coverage dropped from 70.5 percent to 63.7 percent, much more than groups not subject to work requirements.
  • The percentage of uninsured adults ages 30 to 49 increased from 10.5 percent to 15 percent while other groups remained unchanged – in control states, the uninsured rates were unchanged for this same population.
  • From 2017 to 2018, employment among groups subject to work requirements declined from 42.4 percent to 38.9 percent.

Due to massive amounts of red tape and administrative burdens, many working Arkansans were unjustly denied health insurance:

  • 97 percent of people subject to the requirements were already meeting the work and community engagement requirements prior to the policy taking effect.
  • 9 percent of people subject had not heard anything about the policy change.
  • More than 44 percent of people were unsure about whether the requirements applied to them.
  • 100 percent of people who failed to report because they thought they had not satisfied the requirements had, in fact, satisfied the requirements.

You can read the entire report HERE.

Brian Kennedy II is a Public Policy Analyst for the Budget & Tax Center at the N.C. Justice Center.

NC Budget and Tax Center

Senate bill will take food assistance away from families while costing N.C. millions

Today, the North Carolina Senate will vote on a bill aimed at punishing parents who struggle to keep up with child support payments by taking away their food assistance. Senate Bill 551, the Child Support Cooperation Act, is based off of myths and stereotypes rather than an actual understanding of what families with low-incomes actually need.

Here are some realities about the negative impacts of child support enforcement in SNAP:

  1. Taking away food from struggling parents will not result in increased payments.

Under this policy, North Carolina can choose to punish custodial parents who choose not to open a child support case or modify or enforce an existing support order, in addition to parents not keeping up with payments. Child support enforcement for SNAP families is already fairly strong. In fact, over the past 20 years, the amount of financial support paid by parents has increased by 22 percent.  Additionally, the program already provides incentives for parents who do cooperate.

  1. This policy risks increasing food insecurity among survivors of abuse and the children they care for.

The reality is that many non-custodial parents are providing informal support. Parents who earn low wages and have inconsistent schedules may pay when they are able. Other parents may support their children in other ways by co-parenting or buying supplies. Parents who choose not to participate in the child support system often do so for good reason. For example, a study from Texas found that more than 4 in 10 mothers who did not receive any type of child support were survivors of abuse.

Senate Bill 551 doesn’t acknowledge that people’s lives, circumstances, and needs are complex. Instead, this blanket policy threatens to remove food from people already struggling to make ends meet who are caring for children.

  1. This policy is costly and complex to administer.

Similar to other policies that seek to limit who can access federally funded social support programs, Senate Bill 551 will cost the state money to administer and will result in zero savings. A study done in 2017 estimated implementing this policy would cost North Carolina more than $5.6 million. In addition to the costs, attempting to enforce this would add additional paperwork and red tape for families seeking food assistance as well as the DSS offices and case workers charges with helping them.

Just last year, North Carolina ran a similar pilot program requiring families receiving child-care subsidies to participate in the child support enforcement program. The study found that only 90 percent of families were not already participating or exempt. In the end, forcing families to participate resulted in $7,000 in increased child support payments in 12 families while costing the state $2 million to implement.

There are better ways to support struggling families.

This is not the first time a bill like this has been seen. In fact, a 2014 study found that out of 10 states that had adopted this very same policy, seven states had rescinded because they discovered it was costly, burdensome, and did not help families.

There are ways to encourage cooperation in the child support enforcement system that do not put people at risk of food insecurity. Rather than taking away food support, lawmakers should seek to understand the needs of struggling families and remove the real and primary barriers to putting food on the table.

Brian Kennedy II is a Public Policy Analyst for the Budget & Tax Center at the N.C. Justice Center.