Ideas on Easing Rate of Extreme Poverty Likely to Go Nowhere

May 1, 2012

Charles N. Wheeler III
Credit WUIS/Illinois Issues
Declaring a state goal “that all people be free from poverty,” Illinois four years ago created a special panel charged with developing a strategic plan to reduce extreme poverty in Illinois by 50 percent or more by 2015.

The timing could not have been worse.

Now, more than halfway to the target date, the state’s poverty levels have risen, not declined. The state is still struggling to recover from the Great Recession while dealing with soaring pension and health care costs. And the promising ideas developed by the Commission on the Elimination of Poverty mostly have gone nowhere, stymied by Illinois’ ongoing fiscal woes.

“Illinois is moving in exactly the wrong direction in its goals of cutting extreme poverty,” laments Kimberly Drew, a policy associate with the Heartland Alliance, a Chicago-based nonprofit that’s long been a leader in the effort to help folks escape from poverty.

The statistics are telling: More than 1.7 million Illinoisans were living in poverty last year — defined as an annual income less than the federal poverty level, or slightly more than $17,000 for a family of three — the commission reported, about a third of them children. Perhaps more troubling, some 800,000 were in extreme poverty, with annual household incomes less than half the federal poverty level, or not quite $9,000 for a family of three.

The increase in the poverty ranks — some 200,000 more than four years ago — didn’t happen because no one could figure out how to help low-income families improve their economic lot. Quite the contrary. Late in 2010, the commission offered a variety of specific proposals that have proven effective elsewhere in assisting folks to move up the economic ladder. But Illinois hasn’t been able to afford some of the best.

Consider, for example, just five of the commission’s policy recommendations:

  • Boost the monthly grant under TANF, the Temporary Assistance to Needy Families program, to one-half of the federal poverty level, or about a $300-a-month increase for a mom with two kids living in one of the state’s 14 most populous counties.
  • Increase the TANF participation rate to 50 percent of those eligible. Currently, fewer than one out of five eligible Illinois families receives TANF benefits, according to one analysis, compared with about 40 percent of those eligible nationally.
  • Provide subsidized housing to an additional 2,500 households under the state’s rental housing support program.
  • Offer 2,500 new scholarships a year to help low-income students attend community college.
  • Implement a statewide transitional jobs program, in which the state would subsidize employment for nonworking, extremely poor individuals.

If Illinois were to adopt all five policies, the number of families living in poverty would decline markedly, according to a sophisticated modeling analysis conducted by The Urban Institute for the commission.

In specifics, the number of families with children in extreme poverty would be reduced by more than half, roughly 58 percent, while those in poverty would decline by more than 16 percent, according to the analysis. Overall, 123,000 fewer Illinoisans would be living in poverty, and the ranks of those in extreme poverty would decline by 54,000, according to the institute’s modeling.

So is the state moving forward on the proposals, spurred by the promise of lifting tens of thousands of Illinoisans out of poverty?

“This will be another difficult year,” says the Heartland’s Drew. “There are proposals in the governor’s budget that threaten programs that support the most vulnerable.”

Again, consider TANF. Although Gov. Pat Quinn is seeking some $115 million more in cash assistance for clients, the increase won’t be enough to cover the program’s growing cost as caseloads explode. Almost 50,000 families, more than 128,000 persons, were receiving benefits in January, more than 21 percent higher than the caseload a year ago and almost double that of three years ago.

To hold down costs, Quinn wants to reduce the lifetime benefit cap to three years from five years — a 40 percent cut — and impose a 30-day waiting period before eligible families can receive grants.

As a result, at least 6,000 poor children and their families would lose their benefits, Drew says.

Subsidized housing? The governor’s budget would cut $4.7 million from an existing emergency and transitional housing program, roughly 52 percent of the current $9.1 million allocation.

New scholarships? Already, more than 140,000 financially eligible students have been turned away by the state’s Monetary Assistance Program, which ran out of grant money sooner than usual this year.

Transitional jobs? As part of the 2009 federal stimulus, Illinois got $215 million to subsidize almost 30,000 private- or public-sector jobs for unemployed workers, but the federal money ran out in September 2010. Quinn used state funds to keep the program afloat until January 2011, but there’s been no money since then.

Moreover, the governor’s spending plan would slash spending for subsidized child care by tightening eligibility and requiring higher parent co-pays, potentially forcing some low-income parents out of the workplace.

And Quinn wants to close six adult transitional centers, “halfway houses” intended to help released inmates adjust to life on the outside. 

Facing such harsh realities, Heartland and other groups in a broad-based coalition supporting the commission’s efforts are focusing on ideas that won’t cost the state anything but which could help lift families out of poverty.

The list includes increasing the minimum wage to reflect inflation, discouraging employers and landlords from using criminal background records to deny jobs or rentals to applicants and raising the school dropout age to 18. Most remain mired in committee, though, with little chance of passage as lawmakers press toward a scheduled May 31 adjournment and look ahead to the November election.

So for now, the well-meaning intentions of 2008 seem as far out of reach as the dream of a well-paying job for all too many of our fellow citizens ... and more’s the pity.

Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois Springfield.

Illinois Issues, May 2012