Gov. Mike Pence describes Indiana as “the fiscal envy of the country,” enjoying balanced budgets, strong reserves and the largest tax cut in the state’s history. Indiana is on a roll, he proclaimed in his State of the State address Tuesday. This ignores some bitter realities.
“To describe Indiana in terms of absolute economic success is disingenuous,” said Derek Thomas, senior policy analyst for the Indiana Institute for Working Families. “I don’t think anyone is envious of Hoosier families and their finances.”
Thomas is the author of a study released today that finds a record-breaking 1 million-plus Hoosiers living in poverty, with increases in the number of low-income people, the child poverty rate and the overall poverty rate that surpass the U.S. average and the rates of all our neighboring states. Culled from the Census Bureau’s American Community Survey, Bureau of Labor Statistics figures and analysis of other federal reports, the report is a grim reflection of Indiana households since the recession. In addition to increasing poverty rates, the percentage of low-income households has risen to nearly 36 percent of the population as the number of middle- and high-income Hoosiers has decreased.
“It looks like most Hoosiers are losing economic ground,” Thomas said. “Of course, having a job is the No. 1 tool for economic self-sufficiency, but wages are declining.”
Median household income in Indiana has decreased by 14 percent since 2000; by 10.8 percent since 2007. It is the largest decrease among all neighboring states.
Figures for Temporary Assistance to Needy Families show that the safety net is failing. Since 2008, the state has seen a71 percent decline in TANF alongside a25 percent increase in poverty.
“That’s not the way the program is supposed to work,” Thomas said. “When poverty rises, TANF participation is supposed to increase to provide help.”
The numbers play out in every Indiana community.
“I can definitely say that the overall assessment of the situation is exactly what we see as well,” said Steve Hoffman, executive director of Community Action of Northeast Indiana. “Yes, the overall economy may be improving, but it is still a struggle for many. Rising employment rates only help so much, as the majority of our families are working but still can’t make ends meet.
“We know that it takes roughly double the poverty level to be economically self-sufficient,” he said. “I firmly believe in that standard and it is our guide strategically as well. What is critical to helping families to that level is helping them address all issues, so they can build upon their employment or education to reach self sufficient levels. That is hard to do when a family has no child care or a broken car, much less housing issues or struggling to by food.”
The report offers a “Working Families Tax Cut Package” designed to address the dismal numbers.
“We’ve spent over a decade creating a sandbox for business,” Thomas said. “Cutting taxes for the people whose incomes are growing has not worked in Indiana; it has not worked in the U.S.”
No discussion of additional business tax cuts, including the personal property tax, should happen without equal attention paid to addressing the increasingly inequitable burden on the poor.