The final version of HB 2388 improves upon the original proposal in two fundamental ways.  First, the final version of HB 2388 doesn’t actually require drug-testing as a mandatory condition of receiving TANF benefits.  Instead, it codifies existing drug-screening procedures, explicitly mandating a process the TANF program was already using to identify applicants with substance abuse issues.  For at least a decade, DHS has contracted with the Department of Mental Health and Substance Abuse Services to conduct screenings of TANF applicants through the Substance Abuse Subtle Screening Inventory (SASSI) tool.  The screening tool is administered by substance abuse professionals and is highly accurate in identifying both alcohol and drug abuse.  If, after administering the screen, case workers suspect drug-use, they can request a chemical drug test for the applicant.

Second, the bill provides for the Commission for Human Services to adopt rules to implement the statute.  This leaves significant decisions regarding the handling of applicants who fail a drug screen or test in the hands of the staff and case workers who are best positioned to make those decisions.  If an applicant is denied cash-benefits under this new law, the language leaves open the possibility that the applicant can still potentially access other components of TANF, including referrals and funding for recommended substance abuse treatment programs.  Since many of the program components are designed to better position parents to find and secure stable employment, this is a significant improvement over the original bill.

The bill’s shift away from mandatory suspicionless drug tests for all TANF applicants might avoid some of the constitutional challenges that similar bills have faced (and failed) in other states.  Instead of turning away low-income parents with possible substance abuse issues, the new bill provides parents with a path out of substance abuse, by opening the door to treatment, child care assistance, education and job training.  This bill did not accomplish anything urgent, necessary, or even important in terms of policy reform.  However, it does represent a course correction by the bill’s authors away from an original proposal that was draconian, unconstitutional, and needlessly punitive towards the poor.

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National Assessment of Educational Progress, 2011

It’s no secret that Oklahoma lags behind other states in student achievement. In 2011, Oklahoma fourth graders’ reading scores ranked 40th among all states (plus Washington DC and Department of Defense schools). Among eighth graders, Oklahomans’ reading scores put us at 41st. Math scores were only slightly better, at 38th in the nation for both fourth and eighth graders.

It’s not entirely fair to compare states in this way, since they can be dealing with very different student populations. Oklahoma is a high-poverty state, and a large number of our children face difficult challenges that come with poverty: a less stable home environment, parents who may not have the time or ability to read to their kids, fewer successful role models, inadequate nutrition, and more. Variation in child poverty rates can explain more than 40 percent of the variation in average reading and math scores across states.

Data from the National Assessment of Educational Progress (NAEP) does give us a way to remove this effect and see how similar groups of children are faring across states. Scores on this national test can be sorted into children eligible for the free- or reduced-lunch program and those who are not eligible. This program is available only to families with incomes at or below 185% of the poverty line.

When we separate these two groups of children, the results are surprising. Oklahoma is actually performing at or better than the national average for free/reduced lunch eligible children. Our 2011 rankings on 4th and 8th Grade Math and Reading tests ranged from 20th to 25th.

Those students not eligible for free- or reduced-lunches do perform significantly better on these tests than low-income children. However, their ranking plummets compared to similar kids in other states. On fourth grade math and reading scores, they ranked 45th in the nation. By the eighth grade, math performance rose to 41st, while reading dropped to 46th.

This divide has existed for at least the last decade. To use fourth grade reading scores as an example, free/reduced lunch eligible Oklahomans have consistently performed slightly better than the national average for similar students, while those not eligible have performed below the national average.

Because poverty is so high in Oklahoma and has such a large effect on school performance, reducing poverty remains the best thing we can do to improve our overall test scores. However, Oklahoma seems to be doing as well as the nation as a whole in teaching these kids.

It’s the middle class children who are not getting all that they should from Oklahoma schools. If we continue to increase class sizes and eliminate advanced electives that help good students to excel, that’s unlikely to change.

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‘Asset-tests’ are sometimes used alongside income to determine a household’s eligibility for public assistance.  For instance, a low-income household might otherwise have qualified for the tribal food program because their earnings were below the poverty-level, but because they had over $2,000 in a savings account, they became ineligible for assistance.  CFED explains the original rationale behind asset-limits, and their irrelevance today:

If individuals or families have assets exceeding the state’s limit, they must “spend down” longer-term savings in order to receive what is often short-term public assistance. These asset limits, which were originally created to ensure that public resources did not go to “asset-rich” individuals, are a relic of entitlement policies that in some cases no longer exist. Cash welfare programs, for example, now focus on quickly moving individuals and families to self-sufficiency, rather than allowing them to receive benefits indefinitely.

Programs designed to help the poor should reward those who save.  Asset tests do the exact opposite; they discourage families from saving because recipients risk losing benefits if they begin to accumulate assets – including donations they might receive from relatives, their faith group, or some other charity.  People cannot escape poverty unless they begin to build-up savings to prepare for long-term financial security and protect themselves against unforeseen events – like medical bills, car repairs, or temporary unemployment. Nearly half of Oklahoma households (48.2 percent) and a majority of the state’s minority households (65.5 percent) do not have enough money in the bank to subsist at the poverty level for three months if they lost their income.  Low-income households are particularly vulnerable to financial emergencies, as many have trouble making ends meet and are ill-positioned to save.

Of the three main state programs that assist poor families in meeting basic needs, only the TANF program uses an asset-test to determine eligibility.  Families who are income-eligible for TANF must also have less than $1,000 in ‘assets’ (cash, savings, a vehicle) to qualify for benefits.  Up to $5,000 of a vehicle’s equity is exempt from this requirement.  The state’s Medicaid and food assistance program do not exclude families from eligibility because they’ve accumulated certain basic assets, like a car or a savings account:

Asset limits expose a fundamental tension inherent in providing basic benefits to impoverished families.  Without higher wages, or lower monthly costs, the prospects for low-income people to transition out of poverty are bleak.  Programs that are designed to provide a subsistence level of support should be sensitive to the precarious financial position of their recipients, and work to support those families in every way possible.  By threatening to withdraw the benefits that they may need desperately in the short-term, asset limits prevent program participants from ever escaping poverty by sanctioning those who are fortunate enough to be moving towards long-term financial stability.

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View other clips from OKPolicy’s “Watch This’ video series:

The Economy Bowl

What is an IDA?

Elderly parole

Long term unemployment, 1967-2011

Packed Oklahoma prisons, rising costs

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1. It’s unconstitutional

A Michigan law that is nearly identical to the Oklahoma proposals has already been ruled unconstitutional by the Sixth Circuit Court of Appeals.  The court ruled in 2003 in Marchwinski v. Howard that Michigan’s policy of broadly subjecting all welfare applicants to a drug test violates the Fourth Amendment’s prohibition against unreasonable searches and seizures.  An analysis by the Congressional Research Service concluded in 2008 that state laws requiring drug tests as a condition of benefits, without suspicion of drug use, are susceptible to constitutional challenge.  In fact, this is precisely what just happened to Florida’s new law, which is suspended pending the outcome of a legal challenge.

2. It unfairly targets a tiny subset of public benefits

Do you or anyone you know attend a public school or university?  Receive tax credits or exemptions?  Drive, walk, or bike on a road or highway?  Have you ever called the police for a fender bender or burglary?  We all receive taxpayer-funded public benefits – there’s almost no way to avoid them.  Why should you and I get special treatment, as recipients of public benefits, while others should be subject to mandatory drug screening? Only 9,063 Oklahoma households are currently enrolled in TANF – about one-half of one-percent of households in the state – and the average benefit is just $208 per month.  It’s interesting to note that none of the drug testing bills would apply to legislators, whose entire salaries are paid by the taxpayers of Oklahoma. The assumption that people with low-incomes are more likely than other segments of the population to be drug-users is not only factually incorrect, it’s an unfair and mean-spirited stereotype that has no place in our public policy decisions.

3. Children will bear the brunt

Even if you believe that drug users shouldn’t be allowed to access public benefits – what about their children?  The overwhelming majority of TANF recipients (81.5 percent) in Oklahoma are children.  Around 17,000 children receive food, clothing, shelter, and basic household necessities through the state’s TANF program.  These bills hold children responsible for parents who use drugs and subject children to the consequences.  Oklahoma’s bills also would require TANF applicants to pay for the cost of drug tests, which is likely to deter many who are eligible for and in need of benefits from even applying. So instead of receiving desperately needed food and supplies, those children who are denied benefits will struggle with hunger and want.

4. It will cost more than it saves

The authors of HB 2388 point to data from Florida that calculates the state saved $1.8 million in a single quarter from screening applicants (before the law was suspended).  There are several serious flaws with these calculations.  A Florida judge dismissed the numbers as evidence in court because the study was, “not competent expert opinion.”  For instance, the study classified applicants who declined to submit to testing as “drug-related denials,” an unfair classification given that some conceivably couldn’t afford the $30 upfront fee and/or considered the tests a violation of their rights.  Also, there is no accounting of what Florida will spend on a pending legal challenge that they will likely lose.

Finally, the analysis ignores the inevitable cost shifting that is bound to occur when you deny impoverished parents with probable substance abuse issues access to assistance.  The Center for Law and Social Policy summarizes it well:

[I]f identified drug users are sanctioned and not provided with treatment services and basic cash assistance, these parents are less able to adequately care for their children. Thus, what might appear to be savings in TANF will actually result in increased costs in child welfare and decreased overall child wellbeing.

5. Drug addiction is a disease

A final compelling reason we shouldn’t drug-test TANF applicants is that drug addiction is a disease.  While not all people who use drugs are addicts, studies show that TANF recipients with substance abuse problems have a high incidence of mental and social disorders and turn to drugs and alcohol to cope with their symptoms.  Mandatory drug testing of welfare recipients is opposed by the American Public Health Association, the National Association of Social Workers, and the National Association of Alcoholism and Drug Abuse Counselors. Denying access to public benefits is especially devastating for people who’ve sought help for their addiction but must wait for several months for a spot to open up in a state treatment facility.

Oklahoma already screens TANF applicants for substance abuse.  DHS contracts with the Department of Mental Health and Substance Abuse Services to administer the screen and those who present with potential problems may be referred for a drug test.  The screening tool has an accuracy rate of over 90 percent in assessing the presence or absence of substance abuse or dependence. Unlike drug tests, the screening instrument can also identify alcohol-related issues in addition to narcotics. We should stick to the current system for assessing TANF applicants for possible substance abuse and not adopt a new system of mandatory tests that would be punitive, expensive, and unconstitutional.

 To contact your elected officials about HB 2388 and SB 1073, click here to enter your address and locate your legislators.

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What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week OK Policy and the Corporation for Enterprise Development (CFED) co-released the 2012 Assets and Opportunity Scorecard, which showed that more than one in four Oklahoma households are “asset poor,” meaning they have little or no financial cushion to rely on in an emergency.  The Tulsa World and the Oklahoman covered Oklahoma’s Scorecard results in depth.

We pointed out that if legislators make the choice to prioritize tax cuts, they cannot pretend to be blameless when funds aren’t available for crucial services.  We hosted a debate about whether or not to require a prescription for pseudoephedrine, featuring Jessica Hawkins, the Director of Prevention Services for the Oklahoma Department of Mental Health and Substance Abuse Services, and former state Senator Ed Long.

Finally this week, the Associated Press quoted us in an article on a regional trend of GOP action to axe state income taxes. The Tulsa World presented a summary of our issue brief defending the income tax. The Journal Record cited our work on worsening poverty in Oklahoma and legislative proposals that would make it even harder to be poor. The OK Policy Blog featured a short video about ‘community schools,’ a comprehensive approach to education that makes the school the hub of the community.

Numbers of the Day

• $136 – Average tax increase on elderly Oklahoma couples with $35,000 in income under a legislative proposal to eliminate a slate of broad-based tax credits and exemptions.
• 8,100 – Number of manufacturing jobs added in Oklahoma from January to December of 2011, up 8.4 percent for the year.
• 178, 020 – Number of Oklahoma children under age 6 who need daily child care during the week because their primary caregiver/s participate in the labor force, 2009
• 6,592 – Number of Oklahomans who tested for their GED in 2009; 70.1 percent received their GED, just above the average national pass rate of 69.4 percent.
• 11^th – Oklahoma’s rank among the states in percentage of households with no computer in their home, 2010

In The Know, Policy Notes

• The Foundation for Child Development finds that states with higher taxes and greater investment in public programs score highest for Child Well-Being.
• The Economic Policy Institute points out that the massive tax cuts propose by GOP presidential candidates don’t square with professed concerns about public debt.
• Demos shows that the pay premium gained by joining the federal workforce is reserved largely for less-skilled workers, and rather than disparaging public sector pay levels, we should embrace them as standards from which the private sector has shamefully deviated over the last three decades.
• The Shriver Center examines the trend of states issuing public benefits through bankcards and the implications of card fees for low-income people.
• Bloomberg Businessweek reports on falling premiums for Medicare Advantage, a private health insurance option for Medicare beneficiaries.

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Growing numbers of Americans have almost no savings or other assets to fall back on if they lose their jobs or face a medical crisis.  Without those savings, few will be able to invest in a more economically secure future, including buying a home, saving for their children’s college educations or building a retirement nest egg.

The 2012 Assets & Opportunity Scorecard offers a comprehensive look at Oklahomans’ ability to build wealth, fend off poverty, and create a more prosperous future. The Scorecard compares states along 52 different measures of how residents fare in five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education.

Oklahoma ranks 33rd overall and earns a “D” in Financial Assets & Income, with above-average income poverty and an over-reliance on predatory lenders and subprime credit. In Health Care, the state ranks 46th in the overall uninsured rate and 47th in uninsured low-income parents. We rank 43rd in residents with two- or four-year college degrees. The one bright spot among the five issue areas for Oklahoma is in housing and homeownership. The state earned a “B” on the Scorecard and ranks 14th in overall homeownership and housing affordability.

The Scorecard also highlights a dozen policy solutions that can help Oklahoma increase opportunity and promote financial stability.  To address asset and income poverty, Oklahoma should fund a state Individual Development Account program to help its low-income population build wealth. To improve its below-average secondary and post-secondary educational outcomes, Oklahoma should increase funding to schools, especially in high-poverty districts, and match savings for college in 529 accounts. In addition, to protect assets and avoid the pitfalls of predatory high-cost loans, Oklahoma should increase access to safe financial products and limit high interest rates and other harmful practices of payday lenders.

Oklahoma Policy Institute is co-releasing the Assets & Opportunity Scorecard as part of an ongoing commitment to advance anti-poverty policies in Oklahoma that prioritize wealth creation and asset-building for low- and middle-income households.  Oklahoma Policy Institute Director, David Blatt, interprets the scorecard results to mean that, “Too few Oklahomans have a college degree and too many are living in asset poverty, without the savings to weather a financial setback or invest in their future. We need better policies that ensure that all Oklahomans are on a path to prosperity and we must protect existing policies, like tax credits for working families, that help hundreds of thousands of households make ends meet.”

The Scorecard paints a picture of a country where middle class families continue to fall further behind more than two years after the official end of the recession.  For ‘asset poor’ families, making ends meet from day to day is a constant struggle and investing in the future is all but impossible.  Locally, a new organization is committed to promoting those policies that improve the outlook for poor, near poor, and middle class Oklahomans.  The mission of Oklahoma Assets is to advocate policies and programs, like the ones just outlined, that create a more inclusive economy – one in which financial success, economic stability, and opportunity are available for all.

To download a summary of Oklahoma’s Scorecard click here.

To view all Oklahoma data from the 2012 Assets & Opportunity Scorecard click here.

To access the complete Scorecard, including data from all 50 states click here.

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Let’s assume that you stand on principle that it’s not the government’s role to engage the health care system.  Then we have a gravely serious problem.  We are very nearly the unhealthiest state in the country and we’re getting worse.  Individual behaviors – smoking, diet, fitness - certainly affect health, but it’s by no means certain that they’re the most important factors.  What we’re facing in Oklahoma is bigger than the sum of each individual resident’s health choices.  Acute structural defects in the state’s health care system demand solutions that are bigger than each of us and addressing them will benefit all of us.

First, we do not have enough doctors, nurses, and health care providers in Oklahoma.  If you live in an urban area, this will be hard to relate to, but it’s true.  We rank 49th in availability of primary care physicians, with only about 82 physicians per 100,000 Oklahomans.  The consequences of this fact should be obvious.  Without access to regular preventative care and treatment when you’re sick, minor health problems can become catastrophic illnesses.  Rural Oklahomans could be making healthy choices, but end up unhealthy because of lack of access to care.  We need government support for efforts that promote access to care, like schools of community medicine, graduate student loans, and incentive programs for doctors who settle in remote areas.  How can we attract modern economic development to a state where many residents haven’t ever had a doctor?

Second, we have hundreds of thousands of households living in poverty.  Poverty affects a person’s health in innumerable ways that are beyond their control.  Not being able to afford medical care, even if you have a doctor nearby, can be an insurmountable hurdle to well-being.   Children living in poverty are especially vulnerable, as their health choices are totally dependent on caregivers who are already struggling to meet other basic needs like food, clothing, and shelter.  The state and federal governments, through the SoonerCare/Medicaid program, currently subsidize medical care for 472,111 Oklahoma children who might otherwise go without.  If you don’t think that government has a role to play in the overall health of our citizens, then you’d better be prepared to count those children out.

Other structural conditions, many perpetuated by living in poverty, also contribute to poor health:

• Lack of medical care, malnutrition, and second-hand smoke as an infant or during early childhood has lifelong effects on health.
• Limited access to healthy groceries coupled with abundant access to fast food in urban areas (‘food deserts’) significantly constrain household diet choices.
• Poor air quality exacerbates chronic conditions like asthma and other respiratory disorders.
• Fewer gyms and public parks in low-income areas make consistent exercise more challenging.
• Insufficient income to purchase nutritious food coupled with lack of knowledge about healthy eating stacks the deck against low-income households.

Government can and should invest in improving the structural conditions that destine impoverished people to a lifetime of poor health outcomes. There is no other alternative.  Oklahoma households cannot continue to work, save, and invest as more and more of their labor and income is taken up caring for ailing parents and grandparents.  The economic development goals of the state cannot be met with an ever-sicker, ever-poorer workforce.  Individual health problems eventually become public health problems that the state must address.  If we don’t come to terms with the grim reality of our health care situation on the ground, we cannot expect the state to enjoy continued, broad-based prosperity.

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What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week at OK Policy, we interviewed Steven Dow about recent controversy at the Oklahoma Commission for Human Services.  We pointed out that state leaders can’t rely on growth revenue to fund infrastructure repair and other priorities if they continue to cut (or even eliminate) the income tax.

Former State Treasurer Scott Meacham explains on the OK Policy blog that Oklahoma’s Rural and Small Business Tax Credit initiatives end up costing the state hundreds of millions in tax revenues.  The blog also featured a post on asset-building as an anti-poverty strategy.  Our director David Blatt was a guest this week on Studio Tulsa, discussing the importance of the income tax in adequately funding state government and essential services for Oklahomans.  Oklahoma Policy Institute’s director was also quoted in two articles this week on federal income tax liability for low-income households and the role of unemployment benefits during a recession.

In the Know, Policy Notes

• Tthe Economix blog examines whether it is more cost-effective to direct resources to college students or to preschoolers and kindergarteners in order to increase college completions over the longer term.
• Researchers at the University of Colorado at Boulder discover that immigration is correlated with falling crime rates.
• Bloomberg reports on how municipalities and state agencies, including the Oklahoma Turnpike Authority, are taking advantage of historically low interest rates to refinance bond issues and save money.
• The National Employment Law Project warns that if Congress doesn’t renew extended unemployment insurance by the end of this year, we risk plunging millions into deeper financial crisis and putting yet another obstacle in the path of economic growth.
• The National Academy of State Health Policy released a paper detailing efforts by state agencies to identify and act on racial and ethnic health disparities.

Numbers of the Week

• 16.43 inches – Amount statewide average precipitation was below normal this water year (October 1-September 30), the 2nd driest year on record for Oklahoma.
• 1,865 – Number of foreclosures in Oklahoma in August, down 5.8 percent from the same month in 2010
• $31,600 – Minimum amount in salary and fringe benefits earned by a first-year Oklahoma public school teacher with a bachelor’s degree, 2011-2012
• 80.3 – Number of primary care physicians per 100,000 people in Oklahoma, compared to 120.5 nationally.  Oklahoma ranked 49th in availability of primary care physicians, 2010
• 29 percent – Percentage of Oklahoma’s K-12 children who are on their own after school, 2009

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What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week the Census Bureau released new state-level data on income, poverty and health insurance coverage in 2010.  The Tulsa World interviewed our Director David Blatt on the rising poverty rate in Oklahoma.  Yesterday’s OK Policy blog post – Poverty rises in Oklahoma; children especially bearing the brunt -  concludes that despite experiencing a comparatively less severe recession than most other states, the situation for those at the bottom in Oklahoma is more fragile than ever.

On Monday we ran another post in our ongoing series examining the federal health care law; IT incentives and investments under the federal health care overhaul are propelling an industry that still relies primarily on paper records into the 21st century.  Watch a ten-minute documentary on our blog featuring interviews with Medicare families struggling to keep up with health care costs and other necessary household expenses on a fixed budget.

A guest post from attorney Noble McIntyre makes the argument for increased spending on public safety education in Oklahoma.  OK Policy analyst Gene Perry was quoted in a NewsOK article about state subsidies for the coal industry.

In the Know, Policy Notes

• The Institute on Taxation and Economic Policy has 3 new fact sheets on why state tax cuts don’t create jobs.
• The Century Foundation analyzes exactly how the Affordable Care Act will both strengthen health insurance protections and save money.
• Stateline reports on how Arkansas has largely avoided the fiscal problems experienced by other states during the recession.
• The Policy Shop explains why spending cuts will hurt economic recovery more than tax increases.
• The AARP reports that material conditions have deteriorated significantly for older households during the last decade.

Numbers of the Week

• 42,000 – Number of children in Oklahoma who are eligible for Medicaid (SoonerCare), but are not enrolled, 2011
• 4,614 – Number of alcohol-related traffic crashes in Oklahoma in 2010; 6.6% of all traffic crashes in the state (69,805) were alcohol‐related.
• 15.1 percent – Percentage of Americans living in poverty in 2010; a family of four is living in poverty if their annual income is less than $22,113.
• $1,430 – Amount in payroll tax relief an Oklahoma household with $46,000 in annual income would receive under the proposed American Jobs Act.
• 85 percent – Percentage of recent bachelor’s degree holders who remain and work in Oklahoma one year after graduation.

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