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Economic Status of Milwaukee County Children in the Year 2000 by Lois M. Quinn, University of Wisconsin-Milwaukee Employment and Training Institute, May 2001. This report uses administrative and institutional databases to develop annual measures of the economic well-being of Milwaukee County children and summarizes data on financial supports provided children in employed families. The study provides a model for cities seeking to assess changes in family income and economic support during the national conversion to a work-based welfare system. Findings In spite of their parents' work efforts, at least 54,660 Milwaukee County children are in employed families with earnings below poverty, according to 1999 state tax returns filed in the Year 2000. Without additional public or private support, these families do not earn enough to adequately support their children. Another 56,625 children are in "near poverty" employed families -- with income earnings at 101-185% of the poverty level. Among employed families, the number of children in extreme poverty appears to be declining while the number of children living in "near poverty" is increasing. The estimated number of children in employed families with income earnings below the poverty level declined by 7% (about 4,500 children) from 1998 to 1999, while the number of children living in "near poverty" (with family income at 101-185% of poverty) increased by 9% (about 5,100 children). The "near poverty" families are less likely to obtain public child care, food stamps and medical insurance benefits for which they are eligible. Federal and state earned income tax credits (EITC) helped 53,159 lower- income families and raised about 12,800 Milwaukee County children out of poverty in 1999. Claim rates for the credit have dropped, however, and many families eligible for up to $5,371 in credits did not claim these monies owed them. About 85% of eligible families claimed the credits, bringing $133.2 million to employed families in the county. At least $28 million in federal and state tax credits was unclaimed in 1998. When Milwaukee County families' adjusted gross income and EITC credits are combined, 96% of married filers with children showed 1999 income totals above the poverty level, compared to only 74% of single parent tax filers. When "near poverty" is measured as 185% of the poverty level (e.g., $25,678 for a family of three), married filers showed the majority (about 82%) of families above this level, compared to only 27% of single filers with dependents. Graph 1: The number of children receiving monthly child care subsidies under the "Wisconsin Shares" program increased to 18,856 by December 2000. Efforts to increase the number of children receiving food stamp benefits raised monthly usage to 61,186. This is 2,177 more children served than in December 1999, but is still 26,600 lower than in December 1993. Outreach programs in 2000 helped raise the number of children with state medical insurance coverage (including Medicaid, Healthy Start and BadgerCare) to 78,748 in December 2000. This is a 4,077 increase (5.5%) over last year. Outreach efforts increased the number of children in Healthy Start and BadgerCare while declines continued in the number of children covered by Medicaid. The number of Milwaukee County children receiving public income support has leveled at about 23,300. This is 70,400 fewer Milwaukee County children than received AFDC public income support in December 1993. Monthly income payments to families (including payments for "W-2," kinship care and caretaker supplements) totaled $5.5 million in December 2000, down from the $17.4 million AFDC payment total in December 1993.

Half of Employed Families with Children Are Headed by Single Parents

To assess the economic security of employed Milwaukee County families, the Employment and Training Institute examined data on tax returns filed with the Wisconsin Department of Revenue by families with dependents. Income earnings include "adjusted gross income" but not government payments to families. Federal poverty guidelines were used to estimate numbers of "working poor" families.

• In 1999 half of employed families with children in Milwaukee County were headed by single parents.

• Most two parent families had earnings sufficient to support their children above poverty. However, one out of every three employed single parents had income earnings below the poverty level and two out of every three had income earnings below 185% of poverty.

• The number of "working poor" single parent families (with income earnings below poverty) increased by 31% from 1993 to 1999, but declined by 8% from 1998 to 1999.

State Department of Revenue data showed that many employed families did not earn enough to adequately support their children.

• In spite of their parents' work efforts, about 54,660 Milwaukee County children were in employed families with income below the poverty level in 1999 (before EITC credits).

• More than 113,800 Milwaukee County children were in employed families with income earnings below 185% of the poverty level (before EITC credits).

Table 1:

Fewer Families Claiming Tax Credits for Working Families

The State of Wisconsin and the federal government offer refundable Earned Income Tax Credits to supplement the earnings of low-income employed families with children.

• The EITC helped 53,159 employed families with children in 1999, down from the 53,513 families receiving the credit in 1997. Federal and state EITC payments to Milwaukee County families rose from $49.5 million in 1993 to $128.9 million in 1998 and $133.2 million in 1999.

• The EITC raised family earnings above the poverty level for about 12,800 Milwaukee County children.

• A number of Milwaukee County families eligible for the EITC are not claiming the credit. Claim rates for families earning between $5,000 and $15,000 a year (the income categories eligible for the largest credits) dropped from 91% of estimated single tax filers with children in 1997 to 87% of eligible filers in 1998. This year the credit take-up rate increased slightly to 88%. Meanwhile, claim rates for eligible married filers with children continued to drop.

Graph 3:

Families can request help filing EITC claims from the Internal Revenue Service (1-800-TAX-1040) and the Wisconsin Department of Revenue (414-227-4000) and may file back claims for credits unclaimed in prior years. Employers can help publicize the EITC at their workplace using kits available free from the Center on Budget and Policy Priorities (202-408-1080).

During the 1990s Wisconsin changed its AFDC (Aid to Families with Dependent Children) program into "W-2" ("Wisconsin Works"), which requires parents of children over twelve weeks of age to find employment or participate in work activities. Income support, when provided, is subject to time limits. After that time all parents (except those caring for relatives or with SSI disabilities) are expected to support their families without income supplements. As fewer families receive income payments, access to other economic "safety nets" (including the state and federal earned income tax credits, "Wisconsin Shares" child care subsidies, food stamps, and government health insurance) becomes increasingly important. Analysis of public assistance trends is based on data from the Wisconsin Department of Workforce Development and Department of Health and Family Services.

• The number of Milwaukee County children receiving income assistance dropped by 70,422 from December 1993 to December 2000.

• A total of 23,346 children received income support in December 2000. This included 11,103 children in "W-2" cases with payments, 6,407 children in kinship care cases, and 5,836 children in Caretaker Supplement cases headed by a parent on SSI.

• Monthly income payments to Milwaukee County families dropped from $17.4 million in December 1993 to $5.5 million in December 2000. The December 2000 total included $3,011,950 in W-2 payments, $1,377,505 for kinship care, and $1,157,200 for Caretaker Supplement payments. ("W-2" community service jobs pay up $673 per month and transition activities pay $628 per month -- both with hourly sanctions for missed activities. "Kinship care" payments of $215 per month per child are offered to eligible caretaker relatives -- e.g. grandparents, aunts, uncles -- of minor children. Income-eligible parents on SSI may receive income support payments of $250 a month for their first eligible child and $150 for each additional eligible child.)

Graph 4:

The State of Wisconsin and Milwaukee County have worked together to increase the number of families receiving support for child care while their parents work. Employed parents with earnings less than 185% of poverty and meeting the "W-2" asset standard are eligible for support, which can continue until the family reaches 200% of poverty. Parent options for care include licensed day care centers, licensed family day care homes, and certified family care.

• The number of children receiving child care support increased from 6,489 in September 1997 to 18,859 in December 2000. (These totals, from the state Office of Child Care, include children served by the Wisconsin Shares Child Care Payment System and do not include child care paid under contract or for foster and kinship care cases.)

• Monthly "Wisconsin Shares" child care payments increased from $2.7 million in September 1997 to $12 million in December 2000.

• Annual "Wisconsin Shares" child care payments to Milwaukee County families totaled $101.6 million in 2000, up 27% from the 1999 total of $79.8 million.

• While 9,939 families received "Wisconsin Shares" child care support in December 2000, many more families may be eligible for assistance. For example, a total of 53,159 families claimed the Earned Income Tax Credit last year, another worker support program for employed families with children.

Graph 5:

After several years of large declines in the numbers of children served, in 1999 and 2000 the State increased its outreach programs to inform Milwaukee County families of the availability of food stamps benefits.

• Outreach efforts during 2000 helped increase the number of children receiving monthly food stamp benefits by 2,177 (3.7%), from 59,009 in December 1999 to 61,186 in December 2000.

• The number of children helped still remains lower than in the period before the "Pay for Performance" welfare policies were initiated. The number of children receiving monthly food stamp benefits in December 2000 was 26,672 lower than in December 1993, in spite of substantial increases in the number of "working poor" employed families during that period.

Graph 6:

Wisconsin has three medical insurance programs available to children in low-income households. Medicaid (MA) is available for families who meet the eligibility qualifications which were in place for AFDC in July 1996. Healthy Start includes coverage for pregnant women and children under age 6 in families with income up to 185% of the federal poverty level and for children ages 6 through 19 in households with income up to 100% of the poverty level. The state's BadgerCare program is designed to provide health care coverage for uninsured children and parents who do not qualify for MA or Healthy Start but who have income below 185% of the poverty level. (Once enrolled, families can maintain coverage with income up to 200% of poverty with monthly premium requirements increasing with the family's income.)

• In December 2000 a total of 78,748 Milwaukee County children had medical coverage, including 25,776 children enrolled in Healthy Start, 7,033 children in BadgerCare, and 45,939 children covered under the state's medical assistance program. Outreach efforts in 2000 helped raise the number of children with state medical coverage by 4,077 (5.5%) over last year.

• Enrollments in BadgerCare doubled (up by 3,759 children from December 1999 to December 2000) and enrollments in Healthy Start increased 20% (up by 4,224 children). At the same time Medicaid enrollments dropped by 3,926.F

Graph 7:

This report was prepared with funding assistance from the Helen Bader Foundation. Portions of the analysis are included in the "State of Milwaukee's Children Report 2001" published by Start Smart Milwaukee. For further information, contact the Employment and Training Institute, University of Wisconsin-Milwaukee, 161 W. Wisconsin Avenue, Suite 6000, Milwaukee, WI 53203. Phone (414) 227-3388. The neighborhood indicators reports include analysis of families in poverty and worker benefit usage in each of nine central city Milwaukee zipcode areas.