By Julie Vogtman, Senior Counsel
While Washington begins debate on an FY 2013 budget proposal that would slash federal safety net programs (and everything else), some states facing projected budget shortfalls in FY 2013 have already proposed draconian cuts of their own.
Alabama is one of those states, and as Greg Kaufman recently reported in The Nation, the steps Alabama’s legislature takes over the next few months to close its FY 2013 budget gap could be disastrous for struggling women and their families.
For example, at a hearing late last month, a state legislator with a lead role in budget drafting suggested that a 25 percent cut to general fund revenues flowing to the state’s Department of Human Resources (DHR) is likely next year. That’s a huge cut – so huge that the Commissioner of DHR, Nancy Buckner, testified that she would be forced to entirely eliminate the state’s Temporary Assistance for Needy Families (TANF) and child support enforcement programs.
For example, at a hearing late last month, a state legislator with a lead role in budget drafting suggested that a 25 percent cut to general fund revenues flowing to the state’s Department of Human Resources (DHR) is likely next year. That’s a huge cut – so huge that the Commissioner of DHR, Nancy Buckner, testified that she would be forced to entirely eliminate the state’s Temporary Assistance for Needy Families (TANF) and child support enforcement programs.
Shutting down these programs would be devastating for vulnerable families in Alabama.About 39,000 children in very low-income families would lose monthly TANF benefits. An estimated 218,000 families – most headed by single mothers – would lose help in collecting child support owed by non-custodial parents, meaning up to $315 million in child support payments could go uncollected. Losing this income would hit poor families especially hard; on average, child support represents 40 percent of annual income for poor custodial families who receive it.
It doesn’t have to be this way. A boost in revenues could help close Alabama’s budget gap and avoid harmful cuts. The top one percent of earners in Alabama pay only about 4 percent of their incomes in state and local taxes – less than half the share that low- and middle-income residents pay. A higher tax rate for high earners could raise revenue; currently, the state’s top income tax rate of 5 percent applies whether a family has $10,000 of taxable income or $1 million. Alabama could also raise revenue by closing loopholes in its corporate tax code. Yet the only tax proposals that seem to have gained any traction in the state legislature are new tax breaks for businesses (see “3-12 ACPP Report”), and according to the Speaker of the state House of Representatives, Mike Hubbard (R-Auburn), it is “extremely unlikely” that any tax increases will pass during this session.
In 2010, Alabama had the tenth highest poverty rate in the country, and nearly half of all families headed by single mothers lived in poverty – grim statistics that would only be worse without basic income supports like TANF and the child support enforcement program. We hope legislators in Alabama will change course and protect programs for low-income women and families by ensuring that wealthy individuals and businesses pay their fair share.