How the Mayor's Task Force Wants to Combat Poverty in Dallas

Categories: City Hall

rawlingspoverty.JPG
City of Dallas
Doing what he can to fight poverty.
In February, Mayor Mike Rawlings created a task force to fight against what he calls Dallas' "barbell economy." Dallas is a wealthy city, experiencing 68 percent GDP growth between 2000 and 2012, but it is also a city with pockets of concentrated poverty that promote blight and toxic stress for residents.

The task force, headed by Councilman Tennell Atkins, CitySquare president Larry James and attorney Regina Montoya, has been helped in the preceding months by hundreds of people. As you might expect, its recommendations to the council were general, if pragmatic and unlikely to face much opposition.

The recommendation likely to receive the most attention is a plan to leverage the federal Earned Income Tax Credit to reduce poverty and generate revenue for the city.

Basically the city would use $1 million in city funds and in-kind donations to set up centers to help those who qualify for the EITC file their taxes, access financial services and best utilize the money received from the credit. The centers, according to Atkins, will lead to more EITC qualifiers actually filing a tax return and allow those qualifiers to keep more of what they get back -- because of the access to financial planning and services for the unbanked and saving the average $225 tax preparation cost. The task force estimates that the total benefit to the Dallas economy from the initiative would be 36 times the initial investment, or $36 million.

That's about as concrete as it gets. The group supports the creation of a "Office of Community Opportunity" inside city hall to address poverty issues, leading the fight for a higher minimum wage by guaranteeing a living wage for city workers -- as the city already does -- and employees of city contractors. Reforming blight and early childhood education were also suggested priorities, the latter of which is already being pursued by Dallas ISD.

West Dallas was lauded for being an example of the diffusion of concentrated poverty.

"I believe that there is a best practice that has happened in West Dallas," Rawlings said.

Poverty, like wealth, builds on itself, the mayor said. That's why breaking up high-poverty pockets is important.


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45 comments
noblefurrtexas
noblefurrtexas topcommenter

I think it's fair to say that one of the few elements that give the Mayor's group any credibility is that it's chaired by Dallas civic leader Regina Montoya. She not only has a practical understanding of lower income situations, but also knows what it takes to get the civic and volunteer enclaves in our city into gear. 


While I strongly disagree with any attempt to create a minimum wage at the local level - especially in Dallas, I believe there are a number of conditions and behaviors that influence poverty among families and individuals. 


If we can't change those conditions and behaviors, we won't be able to do much to improve poverty.  It's been a problem for a century or more, and throwing money or welfare at it isn't the solution. 


LBJ declared a "War on Poverty" during his Presidency, but all it did was throw more and more money into impoverished areas, and really didn't life many people out of economic despair. 


Unless, and until, we address the root causes of poverty, and have an honest conversation about what causes and perpetuates it, we won't make a dent in eradicating it.

noblefurrtexas
noblefurrtexas topcommenter

The very minute I read, "earn a living wage", I knew our liberal mayor was off the rails again.  History and Milton Friedman have proved that raising the minimum wage is inflationary, and quite naturally raises the costs of good and services -- especially for those getting the raises - and the raises are eaten by price increases. 


Moreover, raising the minimum wage ends up costing jobs, because most successful business have an "allowance" for how much they can pay for labor (or hourly wage) employees.  If it's $50,000 per year for 5 employees, then each earns $10,000.  As well, the business has to pay federal taxes and has local costs for each employee. 

If the minimum wage is raised 20%, then the employee costs will be $60,000 plus the federal taxes for the higher earning rate. 

FACT:  Businesses pass all cost increases along to customers/consumers.  That's how they survive in business. So, the business either raises its prices -- as do all other merchants -- or it cuts employees to keep its costs the same, and doesn't raise prices. 

But, cutting the number of employees by 20% means someone gets laid off, and those left work harder with the expectation of turning out the same amount of work five once did. 

Solving poverty challenges is NOT a matter of throwing more money at those WITH jobs.  It is a matter of first dealing with those without jobs, and addressing the reasons why they haven't been working. 

Milton Friedman believed poverty was a combination of causes and effects.  It involved the health of the local economy for providing jobs, the relative costs of essentials such as food, gas, energy, and medicine, and the internal psychology of each poor person toward poverty vs. working one's way out of poverty. 

He also believed the increase in single-parent households since the 60s was a major contributor to poverty, and especially those with children. 

Even Lyndon Johnson's war on poverty (intended to win more black votes) was mostly an empty effort beyond proving more money for welfare - which also raises taxes on those with jobs. Then Affirmative Action earned more enemies that the Soviet Union. 

 



JackJett
JackJett

At first glance I thought the headline read......Mayor Wants to Combat Poetry in Dallas.  That might be one issue that we could all agree on without blaming Obamacare.

JFPO
JFPO

So the mayor who made much of his personal fortune exploiting the poverty stricken via the payday lending industry is now concerned about the people he exploited. Sounds legit.

Montemalone
Montemalone topcommenter

Wouldn't it be easier, and cheaper, to just put all the poor people on the Red line DART train and tell them to get off in Plano?

Catbird
Catbird

Hey Rawlings: Leave them kids alone!

ColonelAngus
ColonelAngus

"The centers, according to Atkins, will lead to more EITC qualifiers actually filing a tax return and allow those qualifiers to keep more of what they get back -- because of the access to financial planning and services for the unbanked and saving the average $225 tax preparation cost."


99% of these folks will file form 1040-EZ, which is incredibly simple to complete.  Assuming some of them insist on paying a preparer, any charge more than $50 is robbery. Of the $36 million estimate, whatever portion is comprised of tax-prep cost savings should be discarded.

AmyS
AmyS

I believe the IRS offers these services for free, annually at neighborhood librarys. But hey, it's a way to flush $1 million into the economy.

WylieH
WylieH

[Dallas is a wealthy city, experiencing 68 percent GDP growth between 2000 and 2012..]

Not true.... the 68% stat refers to the DFW region as a whole.  The reason I am starting to make a big deal about this is because economic conditions and trends within the City of Dallas and Dallas County are markedly worse than most people realize.  We need to start acknowledging that fact and figuring out how to address it.

mavdog
mavdog topcommenter

@noblefurrtexas 

the raising of a minimum wage level to what is called a "living wage" is not as black and white as you describe.

the raising of the wage may or not be inflationary based on the ability of the employer to increase the price of their product. In a very competitive environment the employer may not be able to increase their pricing and just absorb the increased costs and accept lower net income.

The costs to society, as well as to the employer, of a worker who cannot provide basic living conditions for themsselves due to insufficient waage has been documented. A fairly compensated worker is more productive, a worker who is able to clothe, feed and house themselves and their family are a less burden on society as well.

Lowering the cost of labor is not a panacea to an economy.

ScottsMerkin
ScottsMerkin topcommenter

@bvckvs That's quite a tantrum, and a very uniformed one at that, dumbass

ColonelAngus
ColonelAngus

@bvckvs  "So - the Republican mayor's solution to poverty is to provide income tax preparation services to those who don't make enough money to have to pay taxes."


That is an ancillary benefit in their estimation.  The main point of the proposal is to encourage illegal aliens who qualify for the EIC, and are unaware of this, or afraid to file a return, to file and get a few grand from the Treasury.  Of course this will increase the federal deficit, but the mayor doesn't care because the refunds will boost the local economy.  Besides, annual deficits are north of a half-trillion and scheduled to rise, and no one seems to care.

mavdog
mavdog topcommenter

@bvckvs 

"weird" is that you don't take the time to understand the earned income credit before making your comment about it.

the EIC is geared to the lower income tax filers (one files a return BTW even if you "don't have to pay taxes") with refunds of their payroll taxes based on if they are in a single or married household and the number of dependents.

a study in 2010 found 5.4 Million households were lifted above the poverty line by the EIC.

http://www.offthechartsblog.org/government-programs-kept-millions-out-of-poverty-in-2010/

TheRuddSki
TheRuddSki topcommenter

@bvckvs

I think the services are reserved exclusively for those who, by law, must file a tax return, but they might work with you if you pleaded.

andypandy
andypandy

@ColonelAngus  Couldn't they just go to Kinko's, run off a few fliers with the nearest public library and turbo tax's website and spend less--TurboTax and others don't charge if you make below a certain amount--I can't imagine anyone, especially the working poor, pay $225 for tax prep services.

TheRuddSki
TheRuddSki topcommenter

@ColonelAngus

Most low-end filers use these services for the instant-refund feature. The city needs to spend one million tax dollars to hire tax preparers who will convince the filers to wait two weeks for the cash.

If it turns out to be an ineffective effort, simply double the cost.

noblefurrtexas
noblefurrtexas topcommenter

@AmyS While I agree with you, $1 million dollars wouldn't pay for one leg of  Air Force One's trip from Andrews Air Force Base to the Boston/Martha's Vineyard area.  Obama's one day trip back to the White House for a news conference had a total cost of $2.5 million dollars. 

These people have no respect for taxpayers or tax dollars, and even though we're seriously in the red, they spend OUR money like it grows on trees. 


Even worse, the collection agency (I.R.S.) for the government is easily the most ruthless tax collector on the planet, yet it also spends our tax dollars "targeting" the administration's political adversaries as though we're some South American banana republic.

TheRuddSki
TheRuddSki topcommenter

@AmyS

It would make more sense to just hand out the money.

noblefurrtexas
noblefurrtexas topcommenter

@WylieH I couldn't agree more.  The disparities between inner city and rural areas are staggering in terms of quality of life and expenses.  And, with cities deciding city council people can get elected easier in poor areas of town by turning city hall into a social agency, cities waste more money on "welfare" items that the counties and state government should be paying for.


Not since George Shrader have Dallas city budgets and city expenditures been efficient enough to keep taxes low and purpose appropriate and services delivery high.

GDP for the metroplex also is inflated because of the benefit of having over 30,000 people living in the Park Cities, among the most prosperous communities on the planet, and also a strong business recovery rate as well as a long list of  "permanent party" businesses which are good employers and consistently weathering economic ups and downs. 

Meanwhile, the middle class is shrinking, many more people are on pubic assistance, the flood of illegals is greater, and the GDP for the DFW area don't include the over-the-top expenses for public assistance and "safety nets".  



mavdog
mavdog topcommenter

@WylieH 

I see the use of a GDP stat as a tool with little meaning, for it doesn't tell the story of what a household (or an individual) earns but what is produced. We should understand there likely is not a direct correlation of the two.

Look at household incomes:

in 2000, 16.6% had income of less than $15K, in 2014 that no. is 17.3%.

In 2000 .8% had incomes of more than $500k, in 2014 it is 1.2%.

In 2000 139,800 HH had less than $25K in annual income, in 2014 that no. is 150,200.

In 2000, 9,596 HH had incomes greater than $250,000, in 2014 that no. is 24,427.

the lower and the upper income HH are increasing, the no. of middle income HH is decreasing.

(all City of Dallas demo stats)

noblefurrtexas
noblefurrtexas topcommenter

@mavdog @noblefurrtexas I go along with the proposition that the free market should decide what prices are in the free market.  The labor market is a free market, and "worth" rises and falls with comparative value to sales, services, competitiveness, etc. 


If the minimum wage is virtually doubled, think of what that does to the employer's profitability, pricing of goods and services, long-term business viability,


Most fast food service jobs have gone to students or base entry-level people, most who do not have to support themselves with those wages.  Those who perform well quickly get raises, those who don't still have some kind of wages to take home. 


If someone wants to be paid a "living wage", the he or she needs to have skills that merit those wages.  Someone with corn rows, pierced ears and lips, who barely speaks English and has the attention span of a frog, may do a fine job turning burgers, but is not someone you want at the front counter meeting the public. 


The biggest pushers for "a living wage" are labor unions wanting to increase union dues. The next biggest are politicians trying to buy votes with other peoples' money. 


Frankly, I think lower wages are a natural incentive improving skills and education in order to be worth more.  That's very very different than threatening an employer to pay more, even though there is no improvement of performance or services. 


Or, as my grandfather preached, there ain't no free lunch.  (Milton Friedman he wasn't, but he was a very smart and successful man.)

JFPO
JFPO

Before he peddled diabetes in the form of sugar water he called "pizza sauce," Mike sat on the board of ACE Cash Express as recently as five years ago.

mavdog
mavdog topcommenter

@ColonelAngus 

The 1996 Welfare Reform Act stopped any EITC from being paid to illegal aliens.

ColonelAngus
ColonelAngus

@mavdog @bvckvs  "the EIC is geared to the lower income tax filers (one files a return BTW even if you "don't have to pay taxes") with refunds of their payroll taxes based on if they are in a single or married household and the number of dependents."


Almost.  Many (most I think) receive thousands more in EIC refunds than they pay in payroll tax.  For example an MFJ filer with 3 kids making $15K - $20K gets an EIC of $6K, despite paying only $1000 - $1500 in FICA.  This was implemented to remove the disincentive faced by those making an income just low enough to pay no income tax; if they worked more hours the incremental dollars were hit with both FICA and income tax.  This refundability was hotly debated in Congress, but ultimately it passed.

ColonelAngus
ColonelAngus

@andypandy @ColonelAngus  Yes.  But Ruddski makes a valid point.  If they go to the instant-refund preparer, they leave with a check TODAY.  Sadly, they pay dearly for it, but for many low-income individuals a check in hand is the most important thing.

ScottsMerkin
ScottsMerkin topcommenter

@TheRuddSki Im pretty sure that tax refund loans have been outlawed as they existed a few years ago.  Not sure if some new way to get your refund early has come around.  Hell, I did direct deposit and had my refund in 7 days

noblefurrtexas
noblefurrtexas topcommenter

@mavdog If you extracted just the Park Cities from the numbers, the GDP would drop like a rock.  And, this is after the great banking, S&L, and insurance wipe-out which followed the explosion of the real estate bubbles. 

One of the best methods of determining actual financial health of an area is to consider the total population, but then measure the economic health of the Middle Class. Tracking those indexes immediately point to strengths and weaknesses as well as creating a reasonable study of walk-up and point of purchase local customer bases.

Montemalone
Montemalone topcommenter

@mavdog If Ross Perot went to South Dallas, on average everyone would be a millionaire.

Doesn't mean everybody'd be eatin' fois gras, but hey, looks good on paper.

mavdog
mavdog topcommenter

@noblefurrtexas 

 I go along with the proposition that the free market should decide what prices are in the free market. 

If you want to see what a laissez faire economy looks like, just go look at the late 19th Century. It is not a pretty picture, not in regards to allocation of resources, the concentration of wealth, or to the plight of the worker.

I for one do not wish to go back to such an inefficient, socially combustable environment.

75 Million wage and hourly workers in the US are paid minimum wage.That is a very substantial number.

While some may be young workers who will move up the ladder, many are those who do not have the ability to do such. Mentally incapable, physical limitations, there are valid reason besides "corn rows, pierced ears and lips, who barely speaks English".

wow, in your mind "corn rows" and body piercings make a person less of productive employee? don't have a lot of hang ups and prejudices, do you?

Horatio Alger wrote fiction novels, just like your view that all a person needs is to work hard and success always follows. for some it doesn't, they need protection.

ColonelAngus
ColonelAngus

@mavdog @ColonelAngus  In the eyes of the law, you are correct as usual.  And in fact that was the case for a few years.  But things changed over time and despite the law there are many illegals receiving the credit today.

mavdog
mavdog topcommenter

@ColonelAngus 

sounds right, with the point being those who don't owe income taxes benefit by filing for the EIC.

mavdog
mavdog topcommenter

@noblefurrtexas 

If you extracted just the Park Cities from the numbers, the GDP would drop like a rock

gee, if you extracted Preston Hollow the numbers would drop like a rock.

and if you extracted Fair Park and Pleasant Grove the numbers would rise.

I'm sure there was something of a point that you wanted to make, but it just didn't make it into your post...btw, HP, with all its trust fund kids, doesn't contribute as much to the GDP as you seem to believe.

Second, it is household income that I am directing attention to. GDP is not as good a gauge.

noblefurrtexas
noblefurrtexas topcommenter

@Montemalone @mavdog Yep.  Just look at the greater New York numbers.  They look like financial Nirvana until you include the Bronx and some of the really poor areas of the city.

noblefurrtexas
noblefurrtexas topcommenter

@mavdog @noblefurrtexas Corn rows and piercings make an employee look less presentable in a restaurant.  Efficiency isn't a matter of looks most of the time, but it is a matter of consideration for customer contact, as are manners, English, math abilities, etc. 


A number of years ago, a company I worked for was awarded a contract to do some work for McDonald's corporate which took us to a number of their restaurants.  Included in our study were salaries, productivity, work efficiency, and a number of other things.  

Most of the employees were students or young dropouts, lived with parents or relatives, and a few worked two jobs on different shifts. MOST were members of minority groups; mostly blacks. 

As I recall, and I could be off a little,fewer than 5% of those employees in the "young" categories were the sole breadwinners, and managers told us that was because those kinds of jobs were never intended to feed even a small family. 

I very much believe in the PRINCIPLES of 
laissez faire when it comes to government's forced conditions on the marketplace.  I think we can look at Obama's attempts to manipulate the economy, and the miserable failure he has been.  Many economists and business people - including me - believe if government had stayed completely out of it, the recovery would have accelerated enough to have kept a great many more "current" jobs, and much fewer people would have dropped out of the work force. 


Laissez faire, at least to me, doesn't mean we encourage robber barons, child labor, and some of the other excesses.  But, active interference by regulations and administrative excesses have produced a weak and dangerously fragile economy. 

Salaries for unskilled workers will gradually rise, even for those who STAY unskilled.  But, trying to make entry-level unskilled jobs into career work that will feed two or three people is as unrealistic as it is unsustainable in the long run for the business. 

 

MikeWestEast
MikeWestEast

@ColonelAngus @mavdog  Those aliens have either received a bona fide SSN via a Green Card for work or are using someone else's SSN.  The first option is legal, the second a crime and usually just screws up both original SSN holder's return and the defrauder's return.  Aliens without legal status get TINs from IRS automatically blocking them from EITC.  If you simply make up an SSN, that does not work either.  EITC does have fraud issues, but the perps are usually home grown.

ColonelAngus
ColonelAngus

@mavdog @ColonelAngus  It is phased out gradually at the upper end of the income scale for those who qualify, so that many who do owe income taxes also benefit.  IOW a filer who otherwise would owe a couple grand without the EIC still qualifies, has his tax bill reduced or eliminated, and often gets refunded the difference. 

mavdog
mavdog topcommenter

@noblefurrtexas 

Corn rows and piercings make an employee look less presentable in a restaurant

"less presentable"? why? if their hair is clean, what difference does the hair style make? you are just showing your prejudices here, nothing more.

workers should be compensated by their productivity, and the employee having "corn rows" or "piercings" do not reduce their productivity.

those kinds of jobs were never intended to feed even a small family

"intended"?? by whom? what a load of bs. the jobs were "intended" to fulfill a need in the business, and the wage was a result of supply and demand. the fact some workers must support themselves and family wasn't ever considered by the business. they have a need and the worker fills that need, the business couldn't care less is the worker was single or married, had kids or didn't.

I think we can look at Obama's attempts to manipulate the economy, and the miserable failure he has been.

wow, the economy has improved considerably from the train wreck of 2007. GDP has surpassed its previous peak, the stock market is going great, business is expanding. to say the Administration has been a "failure" on the economy is just absurd.

Many economists and business people - including me - believe if government had stayed completely out of it, the recovery would have accelerated

huh. well, many economists and business people-, including me-believe the actions of the government prevented the recession from becoming a full blown depression, and stopped a complete collapse of the financial markets that would have taken a generation to recover from. we're right, you're wrong.

Salaries for unskilled workers will gradually rise

why would it? there is no barrier to supply of the workers, and demand is not growing greater than the ability to supply the workers. elementary economic theory says the wages will NOT rise on their own.

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