Members of State Task Forces Call for a New Poverty Measure, By John Kefalas, Member, Colorado House of Representatives

As chair of the Colorado Economic Opportunity Poverty Reduction Task Force, I have recently come to grips with the fact that the federal poverty measure is seriously outmoded. Our Task Force has heard testimony and made recommendations on the need for a more up-to-date method of counting those who are poor so we can better understand and track our efforts to alleviate poverty.

That۪s why all of the members of the Colorado task force recently joined together with a bipartisan group of colleagues from other state poverty and opportunity commissions to sign a letter urging federal action to modernize the poverty measure. The letter was signed by 131 individuals from state poverty and opportunity task forces in 13 states and the Virgin Islands. Action from either the executive branch or Congress is needed to revamp the measure, which is why we sent our letter to Rebecca Blank, under secretary for economic affairs at the Department of Commerce, and to Senator Chris Dodd and Representative Jim McDermott, who have introduced legislation to create an alternative poverty measure.

The current poverty measure, which was developed in the early 1960s, sets the poverty threshold at three times a subsistence food budget, annually indexed for inflation currently $17,163 a year for a family of three. Today, however, food represents just one-seventh of a family۪s budget. The new burdens on family spending include the rising cost of health care, the challenge of finding affordable housing and quality child care. Not one of these costs is accounted for in the current poverty measure. The measure also does not count as part of family income such valuable non-cash benefits as housing assistance, child care vouchers and food stamps, and tax benefits like the Earned Income Tax Credit (EITC) and Child Tax Creditnone of which existed when the measure was created.

Congress has recognized these shortcomings before. In the 1990s, they asked the National Academy of Sciences (NAS) to revisit the poverty measure, and an expert panel issued a series of recommendations for a new measure that would better capture the true conditions of poverty. Despite a new way forward, Congress has not yet acted on the NAS۪s proposed changes to the poverty measure.

Some states have begun to take things into their own hands. Among the 13 state task forces that have already released recommendations for tackling poverty, about half address the need for a new poverty measure.

For example, here in Colorado, our Economic Opportunity Poverty Reduction Task Force wants to develop a model that would evaluate the effect of our poverty reduction recommendations on the state۪s poverty rates and has suggested that the legislature act on this. Our Legislative Council economists are also working to ensure that by this summer our state will be able to use the NAS measure with the same level of detail as New York City, which adopted its own new measure in 2008.

Other state task forces have also taken a hard look at the poverty measure, including:

• Connecticut۪s Child Poverty and Prevention Council, which worked with the Urban Institute to project how their proposals would impact state poverty rates, based on an NAS-inspired measure.

• Delaware۪s Child Poverty Task Force, which has explicitly requested that the state “develop a new poverty definition for Delaware that considers more than just pre-tax income, including the post-mid 20th century changes that have occurred impacting family resources such as out-of-pocket medical expenses.”

• The Legislative Commission to End Poverty in Minnesota by 2020, which has endorsed a revised and up-to-date federal poverty measure as well as a state measure that embraces the NAS approach. Minnesota۪s Commission also suggested “poverty impact statements,” which would employ the NAS measure to evaluate the potential impact of new legislation. Like Connecticut, the state of Minnesota included an Urban Institute analysis of how their proposals would affect poverty based on an NAS approach.

• The Vermont Child Poverty Council, which issued a final report in 2009 that sought continued analysis of whether and how the state could better define family poverty.

• Virginia۪s Poverty Reduction Task Force, which recently released a report that criticized the adequacy of the current federal measure, and stated that “some combination of alternate measures is necessary to improve our understanding of self-sufficiency thresholds across the state.”

A federal, modernized income measure is vital if we are to have a clear picture of poverty in this country. The good news is that the political will is building. As a candidate, President Obama acknowledged the importance of a more up-to-date poverty measure. In both the Senate and House, the Measuring American Poverty Act of 2009 has already been introduced, which would direct the Census Bureau to develop and implement a new measure based on the NAS recommendations.

The need for a revised federal measure has made its way onto the agendas of state poverty and opportunity commissions and individual members have now directly called for federal action. Together, the states and the federal government can work to address this important problem.

John Kefalas is a Member of the Colorado House of Representatives, representing the state۪s 52^nd district. He was elected in 2006. He chairs the Colorado Economic Opportunity Poverty Reduction Task Force, which is tasked with developing recommendations to halve poverty in Colorado by 2019.