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Improving State Revenue Forecasting: Best Practices for a More Trusted and Reliable Revenue Estimate

August 27, 2014 Comments off

Improving State Revenue Forecasting: Best Practices for a More Trusted and Reliable Revenue Estimate
Source: Center on Budget and Policy Priorities

Every state estimates how much revenue it will collect in the upcoming fiscal year. A reliable estimate is essential to building a fiscally responsible budget and sets a benchmark for how much funding the state will be able to provide to schools and other public services. Yet some states forecast revenues using faulty processes that leave out key players and lack transparency.

While there is no one right way to forecast revenues, research and experience suggest that states benefit from including both the legislature, the governor, and independent experts in the process from the start, giving the public, media, and advocates access to the deliberations and the data that go into the estimates, and regularly revisiting estimates during the budget session.

These components together create a strong, reliable revenue estimate. For example, a professional and open revenue estimating process makes revenue forecasts more transparent and accessible to the public and a broader group of legislators, which can lead to a healthier and more democratic debate and greater fiscal discipline.

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New Policy Makes It Easier for Community Eligibility Schools to Participate in E-Rate Program

August 19, 2014 Comments off

New Policy Makes It Easier for Community Eligibility Schools to Participate in E-Rate Program
Source: Center on Budget and Policy Priorities

A new Federal Communications Commission (FCC) policy will make it easier for school districts adopting the Community Eligibility Provision — through which they can serve meals at no charge to all students — to apply for discounted telecommunications services and Internet access through the E-rate program. The new E-rate policy streamlines the discount calculation process for community eligibility schools so that they do not face any additional burdens relative to other schools.

The Community Eligibility Provision, a relatively new option within the federal school meal programs, eliminates school meal applications. Schools are eligible to adopt the Community Eligibility Provision based on the share of their students who are low-income, as assessed by other programs. Schools that adopt community eligibility must serve all meals at no charge. Community eligibility has been implemented a few states at a time over the past three years and is available nationwide for the 2014-2015 school year.

Since community eligibility schools do not determine which individual children are eligible for free or reduced-price meals, the E-rate program has developed ways for them to calculate their E-rate discount level. For school years 2011-2012 through 2014-2015, the FCC (which sets E-rate policy) directed community eligibility schools to continue using the share of students approved for free or reduced-price meals in the year prior to implementing community eligibility for purposes of determining their E-rate discount. Schools with 75 percent or more of their students approved for free or reduced-price meals receive a 90 percent discount; most schools that adopt community eligibility likely fall into this category.

Chart Book: Social Security Disability Insurance

July 22, 2014 Comments off

Chart Book: Social Security Disability Insurance
Source: Center on Budget and Policy Priorities

Disability Insurance (DI) is an integral part of Social Security. It provides modest but vital benefits to workers who can no longer support themselves on account of a serious and long-lasting medical impairment. The Social Security Administration (SSA) administers the DI program.

In December 2013, 8.9 million people received disabled-worker benefits from Social Security. Payments also went to some of their family members: 160,000 spouses and 1.9 million children.

DI benefits are financed primarily by a portion of the Social Security payroll tax and totaled about $140 billion in 2013. That’s 4 percent of the federal budget and less than 1 percent of the gross domestic product (GDP). Employers and employees each pay a DI tax of 0.9 percent on earnings up to a specified amount, currently $117,000. Financial transactions are handled through a DI trust fund, which receives payroll tax revenues and pays out benefits and which is legally separate from the much larger Social Security retirement fund. Under current projections, the DI trust fund will need replenishment in 2016.

SNAP Error Rates at All-Time Lows; Steady Improvement in Payment Accuracy Reflects Program’s Extensive Quality Control System

July 21, 2014 Comments off

SNAP Error Rates at All-Time Lows; Steady Improvement in Payment Accuracy Reflects Program’s Extensive Quality Control System
Source: Center on Budget and Policy Priorities

The percentage of SNAP (formerly food stamp) benefit dollars issued to ineligible households or to eligible households in excessive amounts fell for the seventh consecutive year in 2013 to 2.61 percent, newly released U.S. Department of Agriculture (USDA) data show. That’s the lowest national overpayment rate since USDA began the current system of measuring error rates in 1981. The underpayment error rate fell to 0.6 percent, also the lowest on record. (See Figure 1.) The combined payment error rate — that is, the sum of the overpayment and underpayment error rates — fell to an all-time low of 3.2 percent.[1] Less than 1 percent of SNAP benefits go to households that are ineligible. In other words, more than 99 percent of SNAP benefits are issued to eligible households.

Congress Should End – Not Extend – the Ban on State and Local Taxation of Internet Access Subscriptions

July 16, 2014 Comments off

Congress Should End – Not Extend – the Ban on State and Local Taxation of Internet Access Subscriptions
Source: Center on Budget and Policy Priorities

The Internet Tax Freedom Act (ITFA), enacted in 1998 and temporarily renewed in 2001, 2004, and 2007, imposed a moratorium on new state and local taxes on monthly Internet access fees while preserving (“grandfathering”) existing Internet access taxes. The House Judiciary Committee recently approved a bill to eliminate the grandfather provision and permanently ban all state and local taxation of Internet access subscriptions. This represents the first time that Congress has seriously considered a permanent ban on taxing Internet service for all states, including those now using these taxes to help support public services. Rather than extend ITFA indefinitely, Congress should lift the ban and let states decide whether they and their local governments will impose their sales and telecommunications taxes on Internet access charges.

Repatriation Tax Holiday Would Lose Revenue And Is a Proven Policy Failure

July 9, 2014 Comments off

Repatriation Tax Holiday Would Lose Revenue And Is a Proven Policy Failure
Source: Center on Budget and Policy Priorities

Some policymakers are promoting another “repatriation tax holiday” to encourage multinational corporations to bring overseas profits back to the United States by offering them a temporary, very low tax rate on those profits. In particular, some have described a repatriation holiday as a “win-win” that would boost corporate investment and create jobs in the United States and also generate a tax windfall to help finance needed infrastructure spending. In reality, a repatriation tax holiday would accomplish neither goal and instead would worsen the nation’s fiscal and economic problems over time.

The Community Eligibility Provision: Alternatives to School Meal Applications

June 23, 2014 Comments off

The Community Eligibility Provision: Alternatives to School Meal Applications
Source: Center on Budget and Policy Priorities

“Community eligibility” is a powerful new tool to ensure that low-income children in high-poverty neighborhoods have access to healthy meals at school. Established in the Healthy, Hunger-Free Kids Act of 2010, community eligibility streamlines school meal operations and allows schools in high-poverty areas to offer nutritious breakfasts and lunches to all students at no charge.[1] One of the key simplifications of community eligibility is that participating schools no longer collect school meal applications. Eliminating applications reduces the administrative burden on school districts and reduces paperwork for parents struggling to put food on the table.

Without applications, schools need an alternative method to determine meal reimbursements. Under community eligibility, reimbursements are determined by a formula based on the percentage of “Identified Students” who are approved to receive free meals by means other than a household application, primarily children in households participating in the Supplemental Nutrition Assistance Program (SNAP) who are “directly certified” through data matching. This simplification eliminates the numerous hours that school administrators spend processing and verifying school meal applications. When school districts implement community eligibility, however, they no longer have the individual income data from those meal applications for the students attending community eligibility schools — data that programs outside of the school meal programs often use.

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