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On May 30, Governor Mark Dayton signed a two-year, $46 billion budget into law along with a $650 million tax cut package. The final agreement included a $463 million cut to Health and Human Services. Here's our review of the key issues covered in this agreement (or left out) that affect children, families, and the future prosperity of our state.
Lawmakers passed and funded a key change to the Child Care Assistance Program, allowing most families to stay continuously enrolled for 12 months at a time ($18.6 million in FY2018-19). This was a top priority for CDF-MN. Along with new licensing standards that also passed as part of the Health and Human Services budget, this change was federally required. The legislature still needs to pass additional family-friendly changes to the program (including a provider rate increase) to be in full compliance with the reauthorized Child Care and Development Block Grant and ensure continued federal funding. Though some of the funding is reinvested in CCAP, the budget makes cuts to the program through $15 million in program integrity changes and a one-time use of $18 million in federal child care funds. No new funding was included to serve families on the CCAP wait list. Lawmakers also passed $519K for community grants to increase the supply of quality child care providers, along with other changes to the provider regulatory framework. While child care investments were included this session that will greatly benefit children and families, far fewer changes were made than might be expected given heightened attention to this issue at the capitol, including through last year's formation of a House select committee on affordable child care, an interim child care task force, and this year's House child care subcommittee.
The budget makes important new investments in early learning, including $20 million for Early Learning Scholarships and $50 million for School Readiness Plus, a new pre-k program prioritizing low-income students. While Early Learning Scholarships remain under-funded and are generally restricted to 3- and 4-year olds and their younger siblings, the budget makes children who have experienced homelessness, are in foster care or in need of protective services, or who have a parent under 21 pursuing a diploma or GED a priority category and expands their access from birth through age two. The budget caps funding for Pathway II Early Learning Scholarships and delays a requirement that providers accepting early learning scholarships be 3- or 4-Star Parent Aware-Rated to 2020. In addition, the budget increases Nurse Home Visiting reimbursements by $614K in FY2018-19 and provides $12 million for targeted home visiting for pregnant and parenting teens, nearly $3 million for Early Childhood Family Education, nearly $14 million for Reading Corps, and just over a million for the Parent-Child Home Program.
The Minnesota Family Investment Program (MFIP) cash grant did not go up in this year's budget, marking 31 years without an increase in assistance for our state's poorest children and families. Lawmakers did include a change to how MFIP income is calculated, and will now disregard for 12 calendar months the earned or unearned income of a new spouse provided that household income remains below 275% of federal poverty guidelines.
Despite passing off the Senate floor last year, this year's legislature did not hear the bill supported by CDF-MN and others that would have created a paid family and medical leave insurance program. However, efforts to block local municipalities from enacting higher wage and benefit standards for workers, including paid sick time, were staved off.
CDF-MN advocated this year for two targeted tax credits: the Working Family Credit and the Child and Dependent Care Tax Credit. The tax bill signed into law does not include a broad expansion of the Working Family Credit as advocated by organizations like CDF-MN, but does include a provision that will now allow individuals earning money on and living on Indian Reservations to claim the credit, along with another provision that reduces the eligibility age from 25 to 21 for adults without dependent children. The eligibility threshold for the Child and Dependent Care Tax Credit will rise from just over $39K to $62K and $74K for families with one and two dependents (or more), respectively. The maximum credit for families with one dependent will increase from $720 to $1,050, and for those with two or more dependents, from $1,440 to $2,100. CDF-MN also advocated for a modest tax bill to ensure available resources for investing in other important areas of the budget, a position made stronger by uncertainty at the federal level around health care and public program policy and funding. We are disappointed that given these new circumstances, and with all the work we have left to do before every child in every corner of our state has the opportunity to thrive, that lawmakers chose to designate state resources for tax breaks for the wealthiest Minnesotans and tobacco companies.
In conclusion, this budget and tax package yields gains for Minnesota children and families that we hope will continue to make our state one of the best places for children to grow up healthy and strong. But we also conclude this legislative session having left work on the table, including the additional federal requirements for the Child Care Assistance Program, and with concern for our state's future resources and what they mean for our ability to continue to serve children and families in the years to come. As data from the recently released 2017 National KIDS COUNT Data Book reveals, investing in children and families pays dividends. We look forward to working with you in the coming months as we prepare to make the needs of children and families heard and a focal point of the 2018 legislative session.