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Third Stop: Villaraigosa Poverty Forum

By Crystal Swann and Conference Staff
September 29, 2008


Mayors from across the nation met in Los Angeles on September 23 and 24 to develop a poverty, workforce and housing platform for the next President of the United States. The meeting was the third of five 2008 Mayors’ Action Forums, which Conference President Miami Mayor Manny Diaz is convening between early August and early October.

Against the backdrop of the new Maxine Waters Education Preparation Center in South Central Los Angeles, Diaz led a stirring and impassioned discussion about the need for this nation to invest in its people with the same sense of urgency and commitment that’s informed current efforts adopt a “bailout” plan for the nation’s beleaguered financial institutions. Diaz stated that, “The mayors are here to craft a domestic agenda that invests in people.”

Poverty

Los Angeles Mayor Antonio R. Villaraigosa, Chair of the Conference’s Poverty, Work and Opportunity Task Force, opened the dialogue on poverty by summarizing the Conference’s efforts to date. At its 2007 Annual Meeting in Los Angeles, the Conference adopted a policy urging the federal government to revise the formula for calculating the federal poverty line, so that it better reflects the actual wages that families must earn to meet basic needs, and that the formula reflect costs such as housing, transportation, health care, and child care, in addition to food. Villaraigosa stated that, “Adopting a new poverty measure is critical to more realistically gauge the costs of living for the most vulnerable members of society.”

During his expert presentation, Dr. Manuel Pastor of the Program for Environmental & Regional Equity at the University of Southern California pointed out that the current measurement of poverty doesn’t take into account the impact on poverty of the most successful anti-poverty program – the Earned Income Tax Credit (EITC). Pastor stressed that an accurate measure of poverty must take into consideration the most basic needs – transportation, housing, childcare and food – but must also count expenditures such as the EITC. It’s difficult to count or measure the success of EITC in lifting people out of poverty without full understanding of real costs and expenditures to a family.

Major recommendations in this area included adopting a new poverty measure, expanding benefits; simplifying the EITC; and creating a new cabinet level position to work across departments to coordinate the myriad federal programs designed to address poverty.

Workforce Development

Noting that the nation’s unemployment rate rose to 6.1 percent in August, Tulsa Mayor Kathy Taylor opened the discussion on workforce development with the caution that this is a reflection of a deeply distressed economy, in which job opportunities are dwindling amid continuing turmoil in the housing, credit, and financial sectors. “Effective and meaningful job training programs and income support for jobless workers, coupled with job search assistance, are needed now more than ever,” Taylor said in leading the discussion. “A good job that pays a living wage is obviously the first step on the ladder to self-sufficiency for poor Americans.” Atlanta Mayor Shirley Franklin expanded upon the issue, stressing the need to ensure that workforce and skills training are linked with educational opportunities.

In addition to calling for an investment in the workforce program, the mayors in their recommendations challenged the next President to seriously look at the effectiveness of the US Labor Department and its programs. Mayors noted that the current workforce model is not providing workers with the skills necessary to compete in the global marketplace and that its outdated, state-driven structure doesn’t support innovative local programming or best practices.

Housing

Citing his previous role and experience as Chair of the U.S. House of Representatives Armed Services Committee, Oakland Mayor Ron Dellums, now Chair of the Conference’s Committee on Community Development and Housing, said that the national security agenda commonly put forth is a “limited discussion.” He asserted that a national security policy conversation must also address the quality of life in America’s cities. Without a discussion of cities, Dellums asked, “What are we defending?”

Dellums said that the tools already exist to address the housing issue: Community Development Block Grants, the HOME Investment Partnerships Program, public housing options, HOPE VI, Section 8 Rental Assistance, and homelessness programs. An increased level of funding is needed in each of these programs, Dellums stated. But he also noted, “There is an elephant in the room” – several actually: the proposed $700 billion Wall Street bailout; two wars that amount to $1 trillion dollars in cost; and an already existing trillion-dollar national deficit. “Have cities become impotent with the large sums of money going to the bailout, wars and deficit?” Dellums asked. “We must have this discussion. We must let the Congress and the new President both know that the eyes of the nation’s mayors are upon them.”

Jeff Schaffer, Southern California Director, Enterprise Community Partners, Inc. provided expert testimony on key housing and community development issues and offered recommendations for addressing them. According to Schaffer, “Enterprise recommends two policy approaches for fighting poverty through housing development and rehabilitation:”

  • stabilize and strengthen communities to prevent more families from falling farther behind, by making a major national commitment to affordable housing and neighborhood preservation, especially in communities hit hardest by the foreclosure crisis; and

  • make smarter, greener investments in housing to help people save money, pay less for health care and have easier access to transit, establishing policies that encourage and support energy efficiency and environmental sustainability as a central feature of affordable housing development and rehabilitation.

    Schaffer said that the new federal neighborhood stabilization program, funded at $3.9 billion, will not be enough. Every effort must be made “to ensure that Fannie Mae and Freddie Mac [both now in conservatorship] do not sell off their massive holdings in Low Income Housing Tax Credit equity investments, which would flood an already saturated equity market for Housing Credits. The effect on the ground would be less funding for affordable housing development and rehab in cities across the country.”

    Schaffer commended the Conference of Mayors on its Energy Block Grant proposal. “That is a strong proposal, and we need to do much more to ensure that equity and opportunity are part of the green American city, especially in places where people in poverty live,” Schaffer said. “Specifically, Congress should make a commitment of $5 billion a year over ten years to bring home the benefits of energy efficiency to 25 million low-income homes and apartments.”

    Financial Literacy

    Mayors agreed that financial literacy was a key ingredient to a national, multi-dimensional strategy to decrease poverty. Villaraigosa suggested that banks should be required to do more to financially educate their customers and the general public, provide programs to “bank the unbanked”, and help families build and manage financial assets. “These are absolutely central issues needed to help people climb out of poverty,” Villaraigosa said.

    Diaz noted that such key programs as the Earned Income Tax Credit were opportunities to assist people to set up checking, savings, and investment accounts with their refund checks, therefore integrating them into the mainstream financial system. Over the last decade mayors have launched serious outreach efforts to increase participation rates in the EITC and then leverage that participation into broader financial literacy efforts.

    Franklin highlighted U.S. Conference of Mayors policy passed in June that would require the federal government to fund local financial education efforts through revenues generated from federally-imposed fines, fees and penalties collected from financial institutions.

    Robert Mooney of the Federal Deposit Insurance Corporation (FDIC) expressed his support for the mayors’ agenda to make financial literacy a national issue. He described the FDIC’s Alliance for Economic Inclusion initiative that encourages community banks to work with cities to serve underserved areas and to bank the unbanked. “There is a high cost to being poor,” Mooney said, referring to the 28 million people in the U.S. who are unbanked and millions more who are under-banked. “We have an obligation to bring affordable services to underserved areas,” he said.

    Mooney also described a new initiative between the FDIC and the Census Bureau to mine the data collected through its population surveys, to further identify underserved areas and to more accurately gauge the number of people who are being inadequately served by financial institutions.

    Recommendations

    At the conclusion, the mayors agreed on several key fundamental components of a national poverty, workforce, and housing agenda that should inform the next Administration’s policies, including:

  • mayors agreed to pledge to support a call for a national redefinition of poverty;

  • a reinvestment in local workforce programs that connect people with skills and training to compete in a global economy; and

  • increased investments in proven program such as the Community Development Block Grant which puts money directly into communities and allows Mayors the flexibility to target services in their cities.

    The full agenda will be presented at the Conference’s Fall Leadership meeting in Miami October 4.

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