Impacts of Tax Cuts and Jobs Act on Philadelphia’s Residents in Poverty

Impacts of Tax Cuts and Jobs Act on Philadelphia’s Residents in Poverty

January 15, 2018
By Lauren Parker, Assistant Director of Planning & Evaluation
City of Philadelphia Office of Community Empowerment & Opportunity

Nearly 400,000 Philadelphia residents live in poverty, half in deep poverty . For the average Philadelphian household of three, poverty means sustaining a family on $1,700 a month pre-tax and deep poverty means impossibly doing so on $850 a month . Moving people out of poverty is perhaps the most critical issue facing Philadelphia today.

As the City of Philadelphia’s anti-poverty agency, the Office of Community Empowerment & Opportunity keeps a close eye on policy changes that could affect low-income residents. As such, we’re deeply concerned about the impact of the federal tax bill, the Tax Cuts and Jobs Act, signed into law on December 22.

This bill will do many things – perhaps most significantly it will create a $1.5 trillion deficit to the economy over the next 10 years by giving enormous tax breaks to corporations (which have seen record profits in the past few years) and mandating that low- and moderate-income households pay for those handouts. This growing deficit leaves me wondering if our Congress is teeing up an argument to cut social welfare programs to pay for these future deficits.

Based on projections by the Tax Policy Center, most households making less than $75,000 (three-quarters of households in Philadelphia) will see increases in the long-term under this new tax bill, with low-income families bearing the brunt. In 2027, when personal exemptions expire, a married couple making $30,000 with two children will have to shell out an additional $400 more than what they paid in 2017, which is significant.

Despite the purported failures, an additional 20 million people in our nation became insured under the Affordable Care Act . In Philadelphia, Medicaid expansion allowed 166,000 low-income people gain coverage and fewer people avoided health care because of cost . However, in 2019 this tax bill will eliminate a main incentive to become insured – the individual mandate. Without the mandate, an estimated 13 million people will drop their coverage . By doing so, fewer residents will get the preventative care needed to avoid more costly procedures down the line and premiums will rise, further dis-incentivizing health care coverage. This is significant to people in poverty because there is strong evidence that health insurance, both private and public, actually lifts people out of poverty by reducing out-of-pocket medical spending. This is especially true for children.

Philadelphia is often characterized as an affordable city – indeed, compared to our neighbors in New York City and Washington D.C., housing costs seem reasonable, especially for middle-income families. But for renters making less than $35,000, living in Philadelphia is, in real terms, unaffordable. An astounding 85% of these households spend more than 30% of their income on rent.

The Low-Income Housing Tax Credit (LIHTC) is the major vehicle for developing affordable housing in the country, often praised for its ability to stimulate private investment without subjection to the fancy of congressional appropriations. In Philadelphia alone, an estimated 24,650 residents live in units financed by LIHTC .

The Tax Cuts and Jobs Act will have a devastating effect on the production of LIHTC-financed housing. By lowering the corporate tax rate from 35% to 21% (the lowest rate since 1939), banks and investors will have less tax liability and less desire to seek out tax credits like LIHTC, making the market for tax credits much less competitive. This will leave affordable housing developers with less investment on the dollar to finance their projects.

The impact of the tax bill on low- and moderate-income individuals and families will be significant, but so will be the impact on our partners in the non-profit community that rely on charitable giving to stay afloat. Under H.R.1, the standard deduction will double, making individuals will be less likely to itemize their tax deductions, such as their yearly donations. The Tax Policy Center estimates that 21 million fewer taxpayers will itemize their charitable donations – a cut nearly in half . This is severe for the network of service providers and community-based organizations doing anti-poverty work that rely on donations to buffer their budgets.

While the congressional fight for the tax bill may be over, the impacts have yet to set in, so a fight is still to be had. Now is the time to strategize in our personal lives and within our institutions. We must ask ourselves how we can be more engaged political citizens and continue to pressure our elected officials to stand up for the literal survival of our low-income neighbors; to underscore the point that it is exactly systems and policies like the Tax Cuts and Jobs Act that perpetuate poverty and lead to cuts in social supports down the line. Let us not forget this moment. Let us not allow our representatives to forget this moment either.

New Research on Poverty in Philadelphia by The Pew Charitable Trusts

New Research on Poverty in Philadelphia by The Pew Charitable Trusts

December 13, 2017

On the coldest morning of the season, attendees from diverse agencies, organizations, and professions gathered to discuss and engage with research on one of Philadelphia’s most pressing issues: poverty. Philadelphia has the highest poverty rate of the ten largest cities and ranks fifth among the poorest large cities in the nation. The poverty rate in the city has remained largely unchanged over the last decade: now at 25.7%. Director Larry Eichel and Officer Octavia Howell of The Pew Charitable Trust unpack these figures in their newest report, “Philadelphia’s Poor: Who they are, where they live, and how that has changed”. The Pew Report can be found here.

Their research found that children, Hispanic residents, and African-American residents disproportionately experience poverty, each group having a poverty rate well above the city-wide average. Households in poverty are distinct in that they are more often headed by women, and are more likely to include children. Additionally, while most cities across the nation have seen a “suburbanization” of poverty, Philadelphia is seeing a concentration of poverty within city limits. Eichel and Howell speculate that this difference is related to the relatively low costs of public transportation and housing within the city, and the higher land-use regulation of surrounding suburban counties.

During the Q&A that followed, attendees raised questions on the history and geography of poverty in the city. Others were more about the personal experiences of residents: What is life like for almost 400,000 persons experience poverty in our city? While Census data does not lend itself to an easy answer, attendees were eager to share their ideas and solutions to create change on the ground.

Mitch Little, Executive Director of the Office of Community Empowerment and Opportunity, closed the event with a call to action: “We understand where it is and who it is. Do we have the gumption to have the conversation and dig deeper?”

Here’s what you said about the Roundtable:

What is one thing that you will take away from this Roundtable to enhance the work you do?

  • Talking about poverty without race is not meaningful.”
  • “New areas of poverty where we have low programming.”
  • “Child poverty rate is incredible – and we need to continue to work to improve their situation.”

How could future Roundtables be improved?

  • “Building on this one so that it is not a one and done. We now have the data, so what next?”
  • “Another session to discuss presentation in smaller groups then returning to the larger group with comments, questions, and application.”
  • “More opportunity for participants to speak to each other.”

Click here to access the Presentation from the Roundtable.

Promise Zone Highlights and High-fives to Philadelphia Youth Network!

Samantha Porter – Director of Place-based Initiatives,
Office of Community Empowerment and Opportunity

There was a surge of activity in the Promise Zone during the final quarter of 2017!

In October, Lauren Parker and Cheryl Weiss represented the West Philadelphia Promise Zone at a convening of the National Coalition of Promise Zones (NCPZ) in Washington, DC. The purpose of this trip was to advocate for the continuation of Promise Zone “preference points” in federal funding opportunities under the new Administration. Together with 21 urban, rural and tribal Promise Zones, our team met with legislators, representatives from the primary federal agencies providing place-based funding opportunities, as well as officials from the Vice President’s office. The trip also provided an opportunity for us to learn and share best practices for doing this work. We are excited for continued participation with NCPZ in 2018.

The Promise Zone VISTAS have started to build a relationship with their peers across the river in the Camden Promise Zone. This resulted in the opportunity to observe a two-day summit for the Camden Promise Zone federal and non-profit partners, led by the Partnership for Public Service. The summit focused on building strong partnerships and improving coordination between federal and implementation partners.

One noteworthy highlight comes from our partner organization, Philadelphia Youth Network (PYN), which has just received an Aspen Institute Forum for Community Solutions (AFCS) Youth Entrepreneurship Fund grant. This grant will support Project U-Turn, a citywide initiative to reengage Opportunity Youth and increase overall graduation rates among. In the Promise Zone, this work supports the E3-West Power Center operated by The Bridge. This, along with other engagement strategies, have helped students from the Promise Zone to explore pathways to college and career training. Congratulations to PYN!

Lastly, as I reflect on Martin Luther King Day, I more fully understand the collective impact work we do in the Promise Zone as a shining example of Dr. King’s message. I am reminded that the Promise Zone designation is not a grant, rather a commitment by each of our partners to stand by our neighbors as we continue to make a positive impact in the lives of others.

Life’s most persistent and urgent question is, ‘What are you doing for others?‘”
– Dr. Martin Luther King Jr.

Next Shared Prosperity Roundtable – Historical Perspectives on Poverty in Philadelphia

January 2018 Shared Prosperity Roundtable: How Did We Get Here? Historical Perspectives on Poverty in Philadelphia

This roundtable will build upon a conversation started last month, where researchers from The Pew Charitable Trusts presented on their recent report Philadelphia’s Poor: Who they are, where they live, and how that has changed. This report provided an intensive look into Census data to uncover demographic trends of poverty over the last four decades in Philadelphia. The January roundtable follows up on this conversation with historical and neighborhood-level context to answer – what were the driving forces behind the demographic shifts seen over the past few decades and leading to current patterns of poverty?

The roundtable will feature a panel discussion moderated by Dr. Carolyn Adams (Temple University), that will include diverse perspectives on poverty, race, ethnicity, and segregation in Philadelphia. Audience members will also have an opportunity to engage with one another around this topic and discuss possible solutions to long term trends in poverty and inequity in Philadelphia.

Details: 

Fri, January 26, 2018

9:00 AM – 11:30 AM EST

United Way of Greater Philadelphia & Southern NJ

1709 Benjamin Franklin Parkway

Philadelphia, PA 19103

Register here:

https://www.eventbrite.com/e/shared-prosperity-roundtable-historical-perspectives-on-poverty-in-philadelphia-tickets-42054137056

Executive Director Mitchell Little Releases Statement on H.R. 1

Statement on Tax Cuts and Jobs Act

Today Mitchell Little, Executive Director of the Office of Community Empowerment and Opportunity (CEO) released the following statement on the passage of H.R. 1, the Tax Cuts and Jobs Act.

On December 20, 2017, Congress passed a comprehensive tax reform bill. With a few exceptions, the provisions of H.R.1 are effective January 1, 2018 through December 31, 2025, at which point the rules revert back to current law. The effects of H.R.1 are sweeping and will significantly impact the taxation of corporations and individuals alike.

CEO is encouraging our community to take advantage of the counselors at our Financial Empowerment Centers to see if these changes impact your income or expenses in a way that reduces your disposable income.  We also recommend that you reach out to your Congressional Representative as well as a tax professional to learn more about the bill and the impact it will have on you and your family.

Please make use of the below links to learn more about the implications of H.R.1.

To schedule an appointment at one of our Financial Empowerment Centers, please give them a call at: 215-563-5665

Free Tax PreparationCampaign For Working Families

Contact your Congressional Representative:

Congressman Dwight Evans

Congressman Robert Brady

Congressman Brendan Boyle

H.R.1 Summarized (for informational purposes only):

The Balance

Tax Policy Center Analysis

4th Annual Uniting to Fight Poverty Summit

4th Annual Uniting to Fight Poverty Summit

One City, One Future: Building Shared Prosperity from the Ground Up

November 30, 2017

Convening community members, service providers, policy-makers and advocates, the Office of Community Empowerment and Opportunity (CEO) held its 4th Annual Uniting to Fight Poverty Summit. The theme of this event was One City, One Future: Building Shared Prosperity from the Ground Up. Mitchell Little, Executive Director of CEO started the day by welcoming everyone before turning the floor over to Omar Woodard of the GreenLight Fund to introduce the Morning Keynote speaker, State Representative Chris Rabb.

Rep. Chris Rabb’s speech set the tone for the entire day. He spoke about how we not only need to reclaim the language we use when we talk about poverty, but also expand our understanding of wealth. Wealth does not only apply to finances. Rep. Rabb stated “I don’t like to talk about [financial] wealth when I talk about shared prosperity, because there are so many other forms of wealth that we have to uplift.” Rep. Rabb also discussed the important role that our ancestors play in what we do today; they are the ones who started the fight centuries ago and it is up to us to finish it.

After the Morning Keynote Address, participants broke into one of five breakout sessions:

  • Community-Controlled Affordable Housing: Community Land Trusts as a Not-so-New Anti-Gentrification Tool
  • Building Community Power through Consumer Protection
  • When Community Organizing Places Your Agency in the Crosshairs: Learning from the Destruction of ACORN
  • Strengthening Community Engagement and Organizing through Capacity Building
  • Standing with Philadelphia’s Immigrant Communities in a Time of Uncertainty

During lunch there was a powerful spoken word performance by Shirmina Smith and Ruja Ballard from the Philly Youth Poetry Movement. They did two pieces on what it is like to be young, female, black and poor in the world today. You can find them @yourfavoritejawns_ on Instagram.

The afternoon plenary session began with remarks from Mayor James Kenney, who was introduced by Hazim Hardeman, Temple University’s first Rhodes Scholar. Mayor Kenney reminded us that “Sometimes the issues that we face seem very daunting, but the things we do have ripple effects in hundreds of lives.”

Our afternoon keynote speaker, Majora Carter, was introduced by Kirtrina Baxter, community organizer for the Public Interest Law Center of Philadelphia.  As an urban revitalization strategist, Majora Carter discussed her work in the South Bronx, which is founded on the idea that you don’t have to move out of your neighborhood to live in a better one. She talked about how local initiatives that give low status neighborhoods access to greener spaces, technology, and greater community power can improve neighborhoods and remove the stigma of being a “bad place.”

After Majora Carter’s address, Mitch Little returned to the podium to give a brief overview of the 2017 Shared Prosperity Progress Report. The full Progress Report can be found here. The Call to Action was led by representatives from PowerCorpsPHL, a program focused on environmental stewardship, workforce development and youth violence prevention. Audience members were also given the opportunity to share what they would do to support their commitment to shared prosperity after the summit.

On behalf of the City of Philadelphia, Office of Community Empowerment and Opportunity, thank you for supporting this event and for your ongoing commitment to our city and its residents!

Additional materials from the event:

4th Annual Uniting to Fight Poverty Summit

4th Annual Uniting to Fight Poverty Summit

One City, One Future: Building Shared Prosperity from the Ground Up

November 30, 2017

Convening community members, service providers, policy-makers and advocates, the Office of Community Empowerment and Opportunity (CEO) held its 4th Annual Uniting to Fight Poverty Summit. The theme of this event was One City, One Future: Building Shared Prosperity from the Ground Up. Mitchell Little, Executive Director of CEO started the day by welcoming everyone before turning the floor over to Omar Woodard of the GreenLight Fund to introduce the Morning Keynote speaker, State Representative Chris Rabb.

Rep. Chris Rabb’s speech set the tone for the entire day. He spoke about how we not only need to reclaim the language we use when we talk about poverty, but also expand our understanding of wealth. Wealth does not only apply to finances. Rep. Rabb stated “I don’t like to talk about [financial] wealth when I talk about shared prosperity, because there are so many other forms of wealth that we have to uplift.” Rep. Rabb also discussed the important role that our ancestors play in what we do today; they are the ones who started the fight centuries ago and it is up to us to finish it.

After the Morning Keynote Address, participants broke into one of five breakout sessions:

  • Community-Controlled Affordable Housing: Community Land Trusts as a Not-so-New Anti-Gentrification Tool
  • Building Community Power through Consumer Protection
  • When Community Organizing Places Your Agency in the Crosshairs: Learning from the Destruction of ACORN
  • Strengthening Community Engagement and Organizing through Capacity Building
  • Standing with Philadelphia’s Immigrant Communities in a Time of Uncertainty

During lunch there was a powerful spoken word performance by Shirmina Smith and Ruja Ballard from the Philly Youth Poetry Movement. They did two pieces on what it is like to be young, female, black and poor in the world today. You can find them @yourfavoritejawns_ on Instagram.

The afternoon plenary session began with remarks from Mayor James Kenney, who was introduced by Hazim Hardeman, Temple University’s first Rhodes Scholar. Mayor Kenney reminded us that “Sometimes the issues that we face seem very daunting, but the things we do have ripple effects in hundreds of lives.”

Our afternoon keynote speaker, Majora Carter, was introduced by Kirtrina Baxter, community organizer for the Public Interest Law Center of Philadelphia.  As an urban revitalization strategist, Majora Carter discussed her work in the South Bronx, which is founded on the idea that you don’t have to move out of your neighborhood to live in a better one. She talked about how local initiatives that give low status neighborhoods access to greener spaces, technology, and greater community power can improve neighborhoods and remove the stigma of being a “bad place.”

After Majora Carter’s address, Mitch Little returned to the podium to give a brief overview of the 2017 Shared Prosperity Progress Report. The full Progress Report can be found here. The Call to Action was led by representatives from PowerCorpsPHL, a program focused on environmental stewardship, workforce development and youth violence prevention. Audience members were also given the opportunity to share what they would do to support their commitment to shared prosperity after the summit.

On behalf of the City of Philadelphia, Office of Community Empowerment and Opportunity, thank you for supporting this event and for your ongoing commitment to our city and its residents!

Additional materials from the event:

CEO Seeks Shared Prosperity Fellows

As a Shared Prosperity Fellow, you will serve as an ambassador for CEO and work alongside stakeholders from government, philanthropic agencies, academia, business and consumer communities, all in an effort to achieve a common understanding of the dynamics of poverty in Philadelphia and be an active participant in making change around these complex issues.

Shared Prosperity Fellowships are offered in CEO’s policy and operations departments. The unpaid fellowship positions are open for undergraduate, recent graduates, and graduate students during the Spring 2018 (15-25 hours/week based on the Fellow’s class schedule). Option to apply for Summer 2018 during fellowship if accepted.

Applications will be reviewed and offers will be extended on a rolling basis.

A complete application with job descriptions is available here. Applications are due by Wednesday December 20th, 2017.

Real Change for Our City’s Panhandlers

Real Change for Our City’s Panhandlers

November 15, 2017

#RealChange

                This past July, the Office of Homeless Services launched the #RealChange campaign “Show You Care, But Not Right Here,” an effort to address the recent rise in panhandling in Philadelphia. November’s Roundtable featured Liz Hersh, Director of the Office of Homeless Services. Hersh discussed the current state of panhandling in Philadelphia by sharing the results of a research study conducted by OHS, as well as what the #RealChange campaign aims to do.

To address peoples’ concerns, OHS conducted a study to figure out the demographics of panhandlers and why they panhandle. The results of the study showed that not all panhandlers are homeless, but they are experiencing economic insecurity. Many live in subsidized housing or rely on disability income and use panhandling to supplement their income. On average, panhandlers earn $20 a day, $60 at most, and as low as $7 a day. Hersh mapped the demographics of people experiencing homelessness, and revealed that the panhandling population is not representative of the homeless population. The panhandling population is younger, whiter and more representative of the population impacted by the opioid epidemic.

The research study asked participants if they would be interested in a plan to address panhandling. OHS responded with Real Change, a public education campaign, and the Text to Give Campaign, an alternative for people who are not comfortable giving money on the street. Since July, $4,300 have been raised from 1500 donors. The money from this campaign will be used to provide housing and services for people living on the street. OHS also hopes to provide support for low-barrier employment —  a strategy for creating low-skill jobs for people with behavioral health or other challenges that may shut them out of the traditional labor market.

After the presentation, roundtable attendees broke up into small groups to discuss the following questions: What is needed to develop and expand opportunities for low barrier employment? And how can we create new incentives for those who are content to panhandle on the street, so that they will come in for services and receive support in locating alternatives to panhandling?

Roundtable attendees suggested that coalition building be used as starting point, so that different organizations can know what programs are out there and figure out how to align their efforts. As an example of a new opportunity for low-barrier employment, one table suggested a service where businesses can have sidewalks shoveled and salted, alleys cleaned and other services that aren’t covered by the City.  Other tables emphasized the need for transparency and peer outreach to help people trust programs and turn away from panhandling. Overall, everyone agreed there is a need to communicate a mutual benefit from these programs; there is a return on investment and an intrinsic value to connecting people to the dignity and stability that can come from earning an income.

Thank you to everyone who participated in this Roundtable!