Some of Dearborn's poorest residents are likely to feel more economic pain during the next several months after Michigan enacts some of the toughest cash-assistance provisions in the country.
The Republican-led Michigan Senate–voting along party lines–approved two bills that would curb welfare cash benefits to only 48 months during a resident’s lifetime. The state currently has a 48-month limit, but those months can be suspended as long as cash recipients can prove they are adhering to a predetermined self-sufficiency plan, which includes searching for work and/or taking part in job-training programs.
The bills are designed to save the state more than $70 million in welfare benefits.
Under the legislation approved in the Senate–and previously in the House–the clock would tick, in most cases, regardless of the efforts made by recipients to become self-sustaining. About 6,000 cases could be exempted from the rule.
The bill would also prevent 19-year-olds living at home from receiving benefits, but increase the amount of money a family could earn and still collect benefits.
State Rep. George Darany (D-Dearborn) said the party-line vote to cap benefits was ill-advised and could be detrimental to Dearborn’s residents, who are struggling through the worst economic downturn in 50 years.
“Most states have a 60-month limit, and there are provisions to help people who are trying hard to find a job,” he said. “Given that we’re in the economic situation we’re in, with high unemployment, this was timed poorly.”
Darany said he’s concerned about the fact that the legislation would be retroactive–meaning that as many as 12,600 families could be taken off assistance with little warning as early as October.
“There are a lot of people in Dearborn affected by this–and the economy–because of the number of manufacturing losses we had,” he said, adding that cut-off families would lose more than $500 per month. “The money (cash assistance) puts food on the table and keeps the lights on–it’s going to be devastating for families.”
Starfish Family Services, a nonprofit group dedicated to helping poor families, released its Community Needs Survey earlier this year. Their data for Dearborn and Wayne County is sobering.
In Dearborn, 15 percent of families earn less than $20,000 annually, and 40 percent take in less than $45,000. Also according to the Starfish study, 62 percent of students for the 2009-10 school year received a free or reduced lunch.
In Wayne County, the poverty rate spiked from 16.4 percent to 24 percent from 2000 to 2009. Median annual incomes fell by 27 percent, from $52,491 in 2009 dollars to $38,192 during the same period. From September 2001 to 2010, the number of families receiving food stamps increased by 120 percent, from 238,460 to 525,600.
Ann Kalass, the CEO of Starfish, said her agency will work overtime to help families in need.
“We are going to help our families tap into other resources, and we’ll try to refer them to those that can help them,” she said. “But it’s going to be difficult.”
Brigitte Fawazi-Anouti, the co-director of social services at the , said those resources are hard to come by as it is, and a ripple effect will set in.
“The part that is really bad about this is that it’s retroactive,” she said. “When you consider how few jobs are available and that people need money to look for work, to drive and maintain a vehicle, you have to wonder what’s going to happen to these people that are trying to get by.
“It’s not going to affect just the person that receives assistance–it’s going to affect the community,” she said. “Crime could go up, merchants will lose money–everyone is going to feel this.”
The poor and jobless residents have taken several hits during the last few months, including the loss of earned income tax credits and a six-week reduction in unemployment benefits. Michigan currently has the fifth-highest unemployment rate in the country.
The cash assistance bills will have to return to the floor of the state House in a special session July 27 to work out some changes that were made by the Senate. The package is expected to be approved and signed into law by Gov. Rick Snyder.