I feel as though I’ve become a bit of a broken record lately – at least when it comes to our monthly Kentucky Economic Watch. The recession has ended, but Kentuckians are still suffering. SNAP is up, unemployment is down, and state revenues are improving. This has been the case since May, and it all continued to play out in July.
This time, I’d like to take a closer look at the mechanics of the Supplemental Food Nutrition Assistance Program (SNAP, a federally funded program that reduces food insecurities by helping Kentuckians get enough nutritious food to eat, and it brings money into our economy through spending at grocery stores), formerly known as Food Stamps.
In July 2011, 832,178 individuals and 387,387 households in Kentucky received SNAP benefits. To qualify for SNAP, households need to meet specific income tests. A family of four must have a gross monthly income (earned income plus any cash benefits, like social security) less than $2,389 per month (130 percent of poverty). Or, a family earning less than $28,668 in a year can qualify for SNAP. The maximum allotment a family of 4 could receive per month is $668. In 2010, the average monthly SNAP benefit for households in Kentucky was $279.87. For more information about eligibility, click here.
A recent report from the Food Research and Action Center about Food Hardship in America shows Kentucky ranks 9th in the country for the highest rates of food hardship for households with children in 2009 and 2010 and Louisville and Jefferson County ranks 6th. In July alone, an additional 700 Kentuckians relied on SNAP benefits to get enough food to eat. But, despite the clear need for SNAP, Congress’s newly-appointed committee to address the nation’s debt, the Joint Select Committee, will likely look at cutting federal programs, including SNAP, like they have done before.
Let’s hope our Congressman realize the need for this vital public program and protect it as negotiations begin again this fall.
Unemployment Rate Decreases and State Revenues Grow
The unemployment rate continued to decrease in July 2011, dropping 0.1 percentage points since June 2011, to 9.6 percent, the lowest it has been since January 2009. This sign points to economic recovery, however, the number of people actively looking for work (those counted as unemployed) in Kentucky has declined – which also contributes to the drop in the unemployment rate. This means that individuals facing long-term unemployment are becoming discouraged and stopping their job searches, according to Dr. Justine Detzel, Office of Employment and Training chief labor market analyst. SNAP, which I discussed above, provides a valuable support for those families unable to find work and those families that are working but aren’t earning enough to make ends meet.
Since July 2010, individual income tax revenue grew 11.5 percent; sales tax revenues increased 6.8 percent, and the general fun as a whole increased 6.9 percent. July is the first month of the 2012 fiscal year and has proven to be a strong start to the fiscal year to come. Despite the strong revenues, balancing the budget will be difficult; especially as the state waits to see how the roll-out of Medicaid managed care goes.
Heading into the 2011 Legislative Session, Kentucky faced a $139 million gap in the Medicaid budget for the current fiscal year. To solve the shortfall dilemma and avoid detrimental cuts, the House and the Senate agreed to a plan which both moves money from the 2012 budget to 2011 and saves money through implementing Medicaid managed care. Managed care is a cost-savings approach to delivering health care services which aims to improve the quality and coordination of care and increase access to care. Passport currently operates as a managed care system in Jefferson county and 15 nearby counties. [i] Now, three additional managed care companies will be providing services in the remaining counties in Kentucky. This is all supposed to be implemented October 1, 2011. If Medicaid managed care does not save money, the state could be facing another budget shortfall.
To access this issue and archives of the Kentucky Economic Watch, visit here.
[i] Passport Health Plan website. http://www.passporthealthplan.com. Accessed August 2011.