Targeted Neighborhood Outreach for Food Stamps, BadgerCare, "W-2," and EIC

2. Differences in numbers of Milwaukee families receiving family and worker benefits within neighborhoods suggest that neighborhood block areas should be identified where outreach could be targeted to increase eligible families' receipt of EIC, food stamps, medical assistance, and/or "W-2" benefits programs. In the past, the Employment and Training Institute has identified Milwaukee blocks where numbers of families appeared eligible for specific benefits programs (e.g., food stamps) but were not currently claiming them.

Additional Home Ownership Supports for Single-Parent Buyers

3. Home ownership rates have remained steady in the central city, in spite of the economic downturns, with 82 percent of single family homes owner-occupied and 53 percent of duplexes owner-occupied. The indicators suggest that the most likely populations of new homeowners for the affordable housing available are single-parent female-headed households who have increased their level of employment. In addition to financial assistance for the home purchase and monthly mortgage payments, many single parent home buyers need continuing assistance and advice regarding home maintenance and repair work.

Reducing Driver's License Suspensions for Failure to Pay Fines and Forfeitures

4. The number of central city residents with driver's license suspensions for failure to pay fines and civil forfeitures ("driving while poor") continued to show all-time increases, with 4 times as many central city residents losing their licenses over fines (51,135 in 2002) than for traffic violations, driving while intoxicated, and drug convictions combined (12,432). The UWM Employment and Training Institute's most recent job openings survey in October 2003 showed 21 active job seekers for every one full-time job in the CDBG neighborhoods. Yet, the lack of a valid driver's license continues to prevent many central city workers from accessing available jobs in the suburban and exurban areas and draws residents (and particularly African American males) into the court system. Further initiatives are needed to restore valid driver's licenses to city residents and to enforce municipal fine collections through means that do not restrict workers' access to jobs.

Loss of EIC Payments to "Refund Anticipation Loans"

5. The federal and state earned income tax credits (EIC) brought about $82.7 million into the community for 2002 tax returns (filed in 2003). However, over half (about 57 percent) of those receiving the EIC borrowed against their tax returns through "refund anticipation loans," meaning that significant portions of the EIC returns are siphoned off to tax preparation and financing companies rather than the families in need. State legislation appears needed to regulate RAL loans (at least for the state EIC) and to require more stringent reporting to families of the money they lost through the short-term borrowing. For example, lender tax firms might be required to provide a "truth in RAL" form reporting the dates that the lender received the family's IRS and DOR refund checks, the total EIC amount the family would have received had they not borrowed against their tax returns, and the total charges (and interest rate) to the family for receiving EIC funds a week or two early.

Addressing the Loss of EIC for Immigrant Families

6. Take-up rates for the EIC are very low in ZIP code 53204, where only 41 percent of married filers who appear income-eligible for the credit receive it. The lower take-up rates appear to be directly related to the adverse terms of the federal tax law for immigrant families. Legislation could address the specific needs of immigrant families for earned income tax credit support, currently denied them under IRS rules, and provide funding support to the UWM Low-Income Taxpayer Clinic and other agencies to aid additional immigrant families with eligibility issues.

Adjusting the Top of the State EIC Payment Schedule

7. Given the plateau used for the federal EIC, and consequently the state EIC which piggybacks on the federal, the EIC generally provides high support for families in part- time or part-year work. While this is a great help for the single parents identified above, it leaves two-parent and full-time employed single parents with less income than they need to support their families. The state and federal government should consider extending the top EIC plateau to the $20,000 or $25,000 level of earnings, rather than at the $13,000-14,000 levels where EIC payments begin to drop currently. Even without federal legislation, in order to help more of the working poor in Wisconsin, the state EIC could continue to piggyback on the federal tax form for eligibility but with changes in the payment schedule for incomes above $13,000.