It's Not All Bad...

Despite all the negative media attention the City Council garnered last week (check it out at:Post Local, the Examiner, WAMU, and GGW) there were a number of decisions made in the last days before summer recess began that weren't negative at all! So instead of dwelling on the bad, let’s focus on some definite good that came out of the re-shuffling effort.

First off, DCAYA applauds the Council’s decision to put the University of the District of Columbia and the Community College under the Committee on Housing and Workforce Development. This move will go a long way in aligning the city’s efforts around creating and sustaining a workforce that is in- demand and well prepared for a continued presence in our local labor market. Both UDC and CCDC, will have an expanded role in preparing District residents for meaningful employment. By placing the oversight functions for these two educational institutions under the committee that is responsible for the oversight of all employment activities, the Council is taking a step in the right direction.

Second, the emergency legislation passed that establishes a Workforce Intermediary Taskforce is GREAT NEWS for the District! DCFPI, DC Appleseed and a few other workforce advocates did an issue brief earlier this year on the need for a workforce intermediary in the District and DCAYA could not agree more, that creating a city jobs broker is a highly beneficial step for the District. Workforce intermediaries take many forms, but as the above issue brief mentions their function as a "jobs broker" that connects employers with job seekers is absolutely essential in moving District residents towards a lasting presence in the labor market.

An effective intermediary in DC will have a positive effect on all areas of employment, but has especially promising outcomes for youth employment if done correctly. When employers' expectations are reflected in the types of training and educational opportunities that the city offers to District residents, those residents are likely to find long-term success in the labor market. This is an important part of connecting adults to careers that can hopefully be sustained through the rest of their working lives. However, the District has much to gain by ensuring that youth are also well served by the Workforce Intermediary.

Currently only 62% of DC students graduated from High School within four years, and as of 2009, over 14,000 young people in the District (ages of 16 - 24) were neither enrolled in school nor employed. Given these figures, it isn't all that surprising that FY'11 budget data indicated that more than 4,500 of DC TANF recipients were between the ages of 18 and 25. Connecting the city's young people to viable employment options early on in their working lives will increase the likelihood that they maintain consistent employment into adulthood and will secure the District’s overall future economic vitality.

Passing legislation that mandates the creation of an intermediary that will someday help aid in the goal of achieving better youth employment outcomes was a positive decision by the Council.The politics of the District can be an endless of web of confusion, hype and drudgery if we allow them to be, but it’s important to recognize the good things that happen and give credit when credit is due. The Council’s decision to place two of DC's most valuable resources under the Committee on Housing and Workforce Development and the passage of emergency legislation to create a Workforce Intermediary Task Force are decisions that are surelya step in the right direction.

Special Guest Blog from CAAB

This week we have a special guest blog this week from Miriam Savad at Capital Area Asset Builders (CAAB)! Miriam currently works as the Savings Program Manager at CAAB, and as you'll be able to tell after reading her post, she is a passionate advocate for responsible fiscal policies here in the District. CAAB like many of DCAYA's members and allies is not exclusively a "youth-serving organization", but a number of the services they offer effect and benefit young people. Also, while saving for college is not an issue DCAYA traditionally deals with, we certainly agree with Miriam and her colleagues at CAAB that improving college finance options is critical in assuring District youth grow have multiple pathways in which to grow into healthy and productive adults.

College Savings Plans: A Key Tool for College Financing

By Miriam Savad, Savings Program Manager, CAAB

Families raising a child who plays basketball like the next Lebron James have little to worry about in terms of college financing. The next superstar will most likely receive full scholarships to the college of their choice. However, the rest of us aren’t so lucky; most families are forced to finance college entirely on their own. It is estimated that it will cost a child born this year nearly $225,000 to attend a four-year public college when they turn 18. The cost at a private college will be more than double that: $475,000.

As the cost of post-secondary education continues to rise and state budgets constrict, financing college for students in lower-income families will become an increasing challenge. Investments that parents make when their children are young may be a critical component of the decision to attend college when that child turns 18. And yet the opportunities for lower income families to save and prepare for a child’s education are few and far between.

College savings plans, named 529 plans after the section of the IRS code that created them, are one of the best ways to save money for a child’s education. All the earnings on the investment are free from federal and state tax as long as you use your investment proceeds to pay for a college education. On top of that, many states, including those in the Washington, DC metropolitan area, offer residents generous annual tax deductions on their state income taxes for funds invested in their state’s college savings plan.

529 plans come in two basic flavors: prepaid plans and investment plans. With a prepaid 529, parents are purchasing tuition credits at today’s prices in return for the promise of an equal amount of free credits when the child turns 18 and attends an in-state college (and out-of-state or private colleges for those purchased in the DC metro area). By reimbursing the parents for the value of the current college credits they’ve purchased (or allowing the child to attend a local college using the credits), the prepaid 529 plan maintains the value of the saver’s purchase against the rapidly increasing cost of higher education.

In an investment plan, parents invest in mutual funds or other financial instruments that have been designated by a state as part of the state’s 529 plan. Generally speaking, parents may only invest in their own state prepaid plan but may invest in any state’s investment plan.Yet, despite the increasing need for assistance in college financing, 529 plans may not be the best option for lower-income families. While a college savings plan may provide an important psychological boost and security for the children in low-income families, it has a number of disadvantages for the parents. 529 plans usually cost more than an investment made in the same mutual funds that aren’t a part of a state college savings plan. The tax savings that middle and high-income families experience from tax-free earnings and state tax deductions often handsomely offset this disadvantage. However, families in lower tax brackets will not receive as much tax savings as middle and high-income families simply because they pay at a lower marginal tax rate. A low-income family does not receive the same, or, in the worst case any, subsidy that a middle or high-income family receives for the same size investment.

Imagine two families, the Smiths and the Jones’, each living in the District of Columbia. The Smiths are a low-income family in the 15% federal tax bracket and the 4% D.C. state tax bracket. The Smiths invests $1,000 into a 529 plan when their child is 10 years old, receiving a $1,000 tax deduction on their D.C. income taxes, saving them $40 in taxes. The savings grows to $2,000 by the time the child is ready for college, and when they withdraw the funds, the Smiths save $190 in taxes.

The Jones are a wealthy family in the 28% federal bracket and have a marginal D.C. tax rate of 8.5%. The Jones copy the Smiths investment exactly. Except that same $1,000 tax deduction saves them $85 in taxes. And they save $365 in taxes when they withdraw the funds – their total tax savings were nearly twice that of the Smiths.

If we look at a third family, the Johnsons, who pay no income taxes because of their low income, the situation is even worse. The Johnsons receive absolutely no incentive to invest in the DC College Savings Plan because it is impossible for them to lower their taxes at all. They already pay $0. Because the DC College Savings Plan deduction is non-refundable, the Johnsons have no tax incentive to invest in the Plan.

Policy Recommendations

One policy proposal to help families like the Smiths and the Johnsons would be to change the 529 tax deduction into a refundable credit. With a refundable credit, all families that save for their children’s college education would receive the same benefit per dollar saved. In the example above, the District could adjust the credit so that families that invested $1,000 in a single year all received a tax credit of $85, regardless of their income. By offering a tax credit of 8.5% of all money invested in the DC College Savings Plan, up to an annual maximum of $4,000 ($8,000 for married couples), the District could ensure that the wealthy Jones’ still received the same tax reduction they had previously while providing fairer incentives for low income families like the Smiths and Johnsons to invest.

On the federal level, the current Saver’s Credit could be adjusted to include college savings. Currently, low-and-moderate income families who contribute to a retirement plan can get a tax credit of up to $1,000 ($2,000 for married couples) for contributions they make to a retirement account. The credit ranges from 10% to 50% of the contribution the family makes to a retirement account. Including college savings in the credit would be an easy way to give families like the Smiths and Johnsons more incentive to save for their children’s future education.

As a college education becomes increasingly essential for job and income security, creating pathways and reducing barriers for everyone to attend post-secondary education is critical. Systemic changes are key in order to create equal opportunities for financing college; these policy recommendations will allow for lower income families to make investments in their children’s futures.

A big thank you to Miriam for writing today's post!

Click HERE for more information on the DC College Savings Plan!

Do We Deserve to Be Number One?

This week's blog post center's on two recent news pieces that highlight children and youth in DC. First, Friday's edition of Post Local featured the first article of the season on the Summer Youth Employment Program (SYEP). Second, if you've been following the news at all, you have probably heard at least SOMETHING about DC's recent ranking by parenting.com as the #1 "Best City for Families". These two articles don't seem to have a ton in common (and one of them isn't even really an article), but from the vantage point of a youth advocate, there is a decent amount of overlap.

For one, Parenting's explanation of why DC is the best city for families seems to center on the easy access the District provides to cultural landmarks and educational opportunities. The blurb their website uses to defend why DC is #1 says "you don't have to be a child to get an amazing education in this city. Our nation's capital is also known for its plenitude of museums—in fact, there are 44,second only to the Big Apple! If your kid enjoys visiting the National Air and Space Museum, imagine fostering his love of airplanes with trips to nearby Gravelly Point Park for front-seat views of the takeoffs and landings at Reagan National Airport."

Now to be totally honest, this statement is mostly true. DC's museums (well, more so, the choice venues that offer free admission) afford everyone in the District, from young children to the elderly, a fantastic opportunity for learning and enrichment. Now, lets snap back to reality for a moment shall we? Instead of the quote from Parenting let's look at a quote from the DC FiscalPolicy Institute "The District of Columbia’s poverty rate is far above the national average and has remained high even in periods of strong economic growth. Some 133,000 residents — nearly one-quarter of the population — are low income, which in 2006-2007 corresponded to an income at or below $24,475 a year for a family of three.[i] DC’s low-income population is so large that it would overflow RFK Stadium and the Nationals’ Ballpark combined. " The high percentage of low-income residents certainly need not preclude DC from being a fine place for families to live, however the high rates of unemployment, propensity for low educational attainment and a shrinking stock of affordable housing that have recently plagued the District beg the question "What kind of family would rate DC at the top of its list?"

Arnsdorf's Post article, despite being anecdotal, provides some evidence about the types of people who may NOT find the District to be the most appealing of cities. Foremost among those are certainly low and middle income youth. Young people need and want jobs for the same reason adults want and need jobs. Often times for young people, the jobs they hold as youth form the foundation of workforce skills that makes them successful in the workplace. Access to jobs and workforce development opportunities is an absolutely key factor in evaluating livable cities. The lack of jobs offered by SYEP, as well as by private providers this summer does not help young people think DC is a city rife with opportunity and this goes for the bulk of DC's adult workforce as well.

Furthermore, parents of children and youth who may disagree with DC's top ranking probably would not be too hard to find. The Post article talked to both youth and parents who were upset by the lack of summer employment opportunities, but parents concerns often go beyond finding their kids a job. DCAYA has called the public attention time and time again to the OVERALL lack of structured opportunities for children and youth this summer. Summer school enrollments are severely limited compared to what they were last year, the Children and Youth Investment Trust, Corporation only had 1 million dollars to grant out for traditional summer programming and the City’s DPR sites were until fairly recently, woefully understaffed. The summer learning loss that will occur this summer will have negative academic impacts on students for years to come. The graph below from the National Summer Learning Association, illustrates the losses economically disadvantaged students experience during the summer months. Notice that these students already start school a few rungs below their middle-class counterparts. By divesting in meaningful and structured programming for DC's children and youth we are literally undoing the educational gains made during the school year.

Unfortunately the outlook for the same children and youth who will be the most negatively affected by the lack of programming this summer does not become much rosier during the school year. One need only look the FY’12 Budget to see evidence of this. Despite a relatively steady education budget, students and their families are not receiving adequate supports. Without stability in our families,communities and yes even in our labor market, economically disadvantaged students will always start their educational lives well below their peers.

DC has the potential to truly be the #1 place for families in the nation, but we as a city only deserve this distinction if we are a good place for ALL families. Being able to take advantage of amenities like museums and cultural landmarks is part of what makes DC great, however it is unfair to the thousands of individuals and families who call the District home to assert the EVERYONE finds DC a great place to learn and thrive.

Taking Care of Business (Sorta)

This week's blog post is the last in our series about the effects of last year's budget cuts (FY'11) on youth this summer. This week, our friends at Urban Alliance were kind enough to let their Chief of Staff, Sean Segal have a few spare moments to guest blog for us. Special thanks to Sean for gracing our blog with his writing and sharing his thoughts on this year’s Summer Youth Employment Program (SYEP)!

Year after year, SYEP has been plagued by cost-overruns, poor management, and a lack of youth development principles. While providing jobs for youth is a noble and needed goal for the District government, in the past, SYEP has hurt more than it has helped and done a disservice to District youth – often teaching youth that a “job” means getting paid whether or not you work.

With all this in mind, the changes implemented for the summer of 2011 are both encouraging and long overdue. To make the program more manageable, SYEP is being scaled down by 10,000 youth. Youth are being required to invest their own time and energy in a more detailed application process. All work supervisors have been required to attend training in youth development principles and DOES has talked about being stricter when it comes to placements so that youth have a real opportunity to gain valuable work experience. While there have still been some logistical problems – such as announcing a change in the maximum number of hours youth will be allowed to work just this week (even though it was legislated last year) – SYEP IS moving in the right direction.

With changes, however, always come unintended consequences. This year, 10,000 fewer youth will have the opportunity to participate in SYEP. With the youth unemployment rate currently over 50%, it is not as though young people can easily go seek out alternative employment opportunities. Further, when you consider the new steps youth had to take to register, and the fact that the program was full in less than 5 days, you can easily guess that the youth who did not register were the youth that had no one pushing them, did not have internet access, or had some other extenuating circumstance that prevented them from registering. These disengaged youth are the ones who need programs like SYEP the most. Making SYEP a smaller, more targeted program that offers real job skills is the right move. But this move MUST be paired with strategies, and with appropriate funding, to engage the disconnected youth population.

It would be hypocritical not to acknowledge that DOES implemented many of the recommendations that the provider community has given in the past few years. However, the aforementioned externalities of these decisions highlight the fact that despite DOES' attempts to improve services for youth, the larger District government has made no comprehensive plan for youth employment or youth engagement. When you combine the cuts to SYEP, with cuts to funding for youth programming city-wide, thousands of youth will be on the streets with nothing to do this summer.

The DC Council needs to recognize that youth programs are interconnected and are most effective when they are well coordinated. When funding is cut for programs like SYEP and agencies like CYITC (the Trust) and DCPS, earmarks to non-profits are eliminated, and human services funding takes an additional hit, you are cutting services to the same youth over and over again. When youth have nowhere to go this summer, and additionally have nothing to do, no one should be surprised.

Thanks to Sean AGAIN for sharing his thoughts with us! For more info on the numerous cuts to youth programs this summer please look over our previous blog posts. WAMU 88.5's Kavitha Cardoza also did a short piece on the crisis in which DCAYA's Executive Director was interviewed it is available here.

For more information on The Urban Alliance please visit their website.

Individuals interested in being involved with DCAYA's advocacy and policy work around youth workforce development may contact Anne Abbott: anne(at)dc-aya.org

The Heat Goes Up and the Funding Goes Down

Our first two posts centered on the reasons cutting funds for summer school would have such a negative impact on DC’s student population. However, DC summer school has never been funded at a level that would allow it to accommodate anything more than students who needed credit recovery. In short, summer school is meant to prop up students who are already failing or in need of remediation. There is no space for students seeking enrichment, or anything above basic credit recovery.

The Children and Youth Investment Trust Corporation (often simply referred to as the “Trust”) in contrast, funds year-round after school activities, as well as, summer enrichment activities for thousands of DC’s children and youth every year. In FY’10 the “Trust” had an operating budget of 10.6 million that they used to serve approximately 3,300 that summer. However, after last fall’s emergency budget gap closing the “Trust” was left with a total budget of just 4.6 million for FY’11.

The result? For this summer the “Trust” received 6 million dollars worth of requests for funding, but only has 1 million to grant out.

Programs like Beacon House, Asian American LEAD and Kid Power, all long time Trust grantees, will be forced to cut back. Beacon House will serve 30 fewer children ages 5-13 in their main camp and will be unable to employ older youth as junior counselors. In previous years the junior counselor program gave up to 50 older youth viable employment opportunities. Kid Power will have to reduce its elementary summer camp slots from 100 to 35 and Asian American LEAD will be unable to provide services to one of its age brackets. This summer applicants for Trust funds were only allowed to apply for grants in one age range. This means programs that aim to serve children and youth across the age spectrum and provide continuous services as children and youth grow up cannot do so.

Now that FY'12 Budget Hearings have wrapped up, we can only wait and see if the "Trust" will be funded at a level that allows for higher levels of programming next year. This summer, however, will be a tough one. The examples we gave are just a few of the MANY programs that have had to cut back as a result of heavy reductions to the Trust's operating budget. There are programs out there that,thought they have received funds for summer programming in years past will not receive any this year and may not be able to offer services at all.

The lack of summer school opportunities coupled with large budget cuts to the "Trust" force a situation on DC's children and youth that leaves many of them without positive opportunities for summer learning and enrichment. Children and youth from economically disadvantaged families are disproportionately affected by this occurrence because without programs like those funded by the "Trust", parents and guardians will likely not be able to afford to send their children to full-cost camps or enrichment opportunities. The summer learning loss that occurs because of this will be devastating to the long term academic progress and success of these young people.

While drastically changing the government's agenda about funding youth programs for this summer is probably not a tenable goal, there is still time for parents and youth to tell members of the DC Council that summer programming is critically important. DCAYA will be doing a Walk-Around to various Council Member's offices on Monday May 23, 2011 at 3:30pm in the John A. Wilson Building to speak with Council Members and their staff about these issues. If you are interested in participating please contact DCAYA Policy Analyst Maggie Riden by either phone or email. Her contact information is below.

This is one of the last opportunities advocates and concerned community members will have to speak with decision makers before they vote on the budget late next week. Make sure your voice is heard.

Maggie Riden

email: maggie(at)dc-aya.org phone: 202.587.0616 (ext. 36)

For more information on Trust programs that are operating for Summer 2011 click here.

For more information on other summer programs offered by DPR, MPD or other government agencies click here.