Rethinking the Federal Budget and Household Budget Analogy

Sometime this fall – probably in October – the federal government will reach its borrowing limit and we are likely to witness another fierce debate about federal debt and deficit spending. Often in these debates, pundits and others make the claim that since households have to balance their budgets, the federal government should do the same. While this makes for a popular political soundbite, the truth is most households are deficit spenders with debt loads just like the federal government. Just ask yourself if you, or anyone you know, can afford to buy a house or car, or go to college for that matter, without taking on debt.

While there are significant differences between the federal budget and the household budget, they both clearly rely heavily on deficit financing in order to function. For example, according to the U.S. Census Bureau, the median household debt in 2011 was $91,000 while median household income in that year was just $50,052. This means that median household debt is nearly twice as high as median income or about 180 percent of median household income. Conversely, federal debt held by the public as a share of the economy (GDP) in 2012 was 73 percent, according to the Congressional Budget Office. Looking a gross public debt this number jumps to 102 percent. 

Debt

Some might say that this is an unfair comparison because we are not including assets or looking at the net wealth of the households or government. After all, many households may have large mortgages and car loans but the also have equity in these assets. While this is true, how often do we look at the assets of the federal government when looking at its debt burden? Almost never. But we should.

Again, according to the U.S. Census Bureau, the median net worth of households in 2011 was $68,828. This number reflects the total value of market assets ( homes, vehicles, cash, savings plans, etc.) minus liabilities (shown above as secured debt) owned by household members.

Trying to figure out the net worth of the federal government is not an easy task. According to the US General Service Administration, the market value of federal government real property (building and structures) was $1.26 trillion in FY 2005. The federal government also has about $1.4 trillion in financial assets.

The federal government also owns a lot of minerals. According to the Institute for Energy Research, the total value of federal mineral holdings (oil, natural gas, and coal resources) is worth $150.5 trillion. According to the U.S. Department of Treasury, total U.S. debt in the first quarter of 2013 was $16.8 trillion. If we compare our federal mineral assets to this liability, this means federal assets are nine times higher than our national debt or that the federal government has a net worth of $138.7 trillion.

What all of this makes clear is that it is important to look not just at our national and household debt, but also at our net worth. Our assets and our liabilities. After all, this is the standard way accountants assess the financial position of businesses and non-profits. Why not apply the same principles to the federal government?

Budget Beat Gets a New Look

Budget Beat – July 26, 2013

Evidence Counts – SNAP Benefits Important to West Virginia

The House of Representatives has passed a Farm Bill without SNAP (food stamp) benefits. If this bill becomes law it will affect low-income families in West Virginia who relies on the benefits to help them make ends meet. One in 5 of us in the Mountain State rely on help from SNAP to put food on table. Read more in Ted’s blog post.

SNAP WV

Implementation of Obamacare is just months away and West Virginia is preparing for the transition. In his two blog posts, Brandon explains some of the continuing bumps in the road as full implementation looms. As West Virginia prepares, the governor’s office has submitted a letter with questions on how the Marketplace will work. Read more here. Opponents of the Affordable Care Act continue to call for its repeal time and time again. Interestingly, back in the 1980’s conservatives put together a plan for health care reform that is similar to the same law they are opposing today. More here.

Coal may still be King, but natural gas must be royalty as well. Between 2010 and 2012, natural gas production doubled in West Virginia. Legislative leadership is growing on starting a Future Fund in West Virginia, to set aside tax revenue from natural gas production for the future. As Ted explains in his blog post, now is the time.

Even though West Virginians pony up more than residents of other states when it comes to paying for road maintenance, it’s still not enough to pay the tab. How much does the state pay for its highways as compared to other states? Read more in Sean’s blog post.

In the News – Students and SNAP – Federal Decisions Affecting West Virginia

Again this week the WVCBP was mentioned in a State Journal article on student loan interest rates. While the U.S. Senate reached a deal this week, it remains to be seen if the law will make it to the president’s desk.

West Virginia Public Broadcasting interviewed Ted Boettner to find out more about how the new Farm Bill, and its gutting of SNAP benefits, will impact the state. Each congressional district in the state has double-digit numbers of people who rely on the program to makes ends meet. Hear Ted’s interview here.

Middle Class Are the Job Creators?

Even some in the 1% say that it is the Middle Class who creates jobs. Without them, there would be no one to buy things and keep the economy growing. Here’s more on research that supports this notion.

Chat With Sean

What policies must be in place to combat poverty? How is the sequestration impacting low-income families? Our very own Fiscal Policy Analyst Sean O’Leary will be a panelist on a national call sponsored by the Coalition on Human Needs that will tackle these issues. Plan to listen in on Wednesday, July 31 from 11AM to noon. To register for the call, click here.

Grants Available

The Affordable Care Act (ACA) expands health insurance coverage to virtually all Americans through Medicaid or the new Health Insurance Marketplace. This is an once-in-a-lifetime opportunity to provide health care and financial security to thousands of our neighbors, friends and colleagues. In order to take full advantage of this opportunity, West Virginians for Affordable Health Care is offering a series of regional training across the state and mini grants to nonprofit and faith-based organizations, and government units. The training and mini grants are designed to develop “community assisters.” The role of community assisters is to educate the public on the new insurance options and how to enroll; assist people with uncomplicated family situations to enroll in Medicaid; and to connect the uninsured to more highly trained individuals who can enroll people with even the most complicated situations.

If you are a FRN, a CAP agency, a faith-based organization, a local health departments, volunteer fire departments, etc. and want to apply for a grant up to $5,000 to help fund a community assister, click here for a copy of the grant application.

Party Like It’s 1989

Obamacare parties like it’s 1989…the Republican Party, that is.

You see, the premise of Obamacare, or the Affordable Care Act (ACA), is that everyone should have access to health care, and to accomplish this it requires 1) that insurers offer coverage to anyone regardless of health status and 2) everyone be required to have health insurance.  Somewhat ironically, these are the exact same premises of the 140-page plan for national healthcare reform that was laid out in 1989 and again in 1993 by the conservative Heritage Foundation.  At that time, this plan for reform was supported by a whole host of conservatives like Newt Gingrich, Orrin Hatch, and Chuck Grassley, all who vehemently oppose “Obamacare” today.

Anybody who has followed the health care reform debate has probably heard this story before but it bears repeating, especially in light of yet another recent round of attacks from opponents, because it illustrates how middle of the road the ACA actually is.  

The Heritage Foundation originally released its plan in 1989 as momentum for health care reform was growing.  Health insurance coverage had been dropping steadily for years while costs were going up steeply and there was a rising chorus of Democrats and liberals pushing for a national health insurance system similar to Canada’s.  It’s worth noting that this was back in the good old days when health care accounted for a paltry 11% of national spending or $2,000 per person per year, “more than the per capita GNP of many countries” as the Heritage Foundation put it.  Today, by comparison, about 18% of our GDP, over $8,600 per person per year (!!!!) is spent on health care.  If the Heritage Foundation described health care as “on the critical list and needs intensive care” back then, one can only imagine how it feels about it today. 

Fearing a move toward “socialized medicine,” growth of government, and rationing of care, the Heritage Foundation proposed a plan that would have required all American households to maintain at least a basic level of health insurance coverage while providing tax subsidies to low- and middle-income families who would have had trouble affording the insurance.  One of the expected impacts of the insurance requirement was a more robust individual, non-group market where health insurance companies would be forced to compete for consumer business which would help control costs.  The plan even included a provision to permit family health insurance plans to cover “non-traditional” dependents such as children over the age of 18 living away from home, for example kids in college. 

If you’re at all familiar with the basics of Obamacare, you’ll immediately recognize how nearly identical the cornerstones of the Heritage Plan are.  Granted, there are differences in the plans, the biggest being the Heritage Foundation’s stance against an employer mandate.  However, few of those who oppose Obamacare yet previously supported the Heritage Plan are claiming to do so on the basis of the employer mandate.

The principles of the Heritage Plan even had strong bipartisan support as recently as 2009, in the form of the Healthy Americans Act.  Formally known as the Wyden-Bennett Act, the Healthy Americans Act was first proposed in 2007 by Senators Wyden (D-Oregon) and Bennett (R-Utah) and was essentially a mirror image of the Heritage Plan, individual mandate and all.  In 2009, this bill had bipartisan support with 12 co-sponsors in the Senate, including seven Democrats and five Republicans.

In essence, a plan that was created specifically as the conservative alternative to a socialized medicine reform and was touted as pro-consumer/pro-business a few years ago is now being derided by many of the same people as socialist and anti-business. 

That’s politics for you.  Unfortunately, in this case, politics means the health and well-being of our citizens.  

UPDATE:  Wonkblog over at the Washington Post ran a similar blog on July 26th comparing a number of Republican plans to Obamacare over the years, including a counter-proposal from House Finance Committee Chair Paul Ryan with many surprising similarities to the ACA.  Check it out here: “Republicans had a plan to replace Obamacare. It looked a lot like Obamacare.

The Future Fund: It’s Time!

According to the WV Geological & Economic Survey, natural gas production doubled in West Virginia, from 265.2 billion cubic feet in 2010 to 538.7 billion cubic feet in 2012. As the chart below shows, this is the most natural gas West Virginia has ever produced.

WV NatGas Production

While there are no facts about the future, it is pretty clear that the state will continue to see large increases in natural gas production over the next several years and perhaps decades. With this in mind, now is the time to make sure that we do not repeat the past and move forward by creating a West Virginia Future Fund

By dedicating a portion of our natural gas severance taxes to a permanent endowment, future generations will benefit from the state’s rich natural resources and it can help us weather the boom and bust nature of the natural resource extraction industry. Using the interest income from the fund to invest in our people and our public structures, will mean stronger economic growth and a more broadly shared prosperity for the state. 

Highway Spending – How Does West Virginia Stack Up?

The Governor’s Blue Ribbon Commission on Highways has begun its series of public hearings on how to close the state”s funding gap for state roads and highways, after releasing a report earlier this year that said West Virginia needs an additional $600 million to $1.23 billion in new funding for its highway system. With that in mind, it’s worth looking at how much West Virginia spends on roads and highways now, and how we compare to other states.

According to the 2010 Economic Census of State and Local Government Finance, West Virginia spent $1.23 billion on highways, in combined state and local expenditures. Below, I compiled a table with West Virginia’s highways spending ranking among the 50 states and D.C., as measured by several different metrics. Those metrics include as a percent of total spending, as a percent of GDP, per capita, per total vehicle miles traveled, and per mile of public road.

Untitled

When it comes to highway spending, West Virginia is already above average in several measures. We rank in the top 10 when it comes to highway expenditures as a percent of total expenditures, and as a percent of GDP. We also spend more on highways per capita and per miles driven than the national average, spending $667 per person, and $0.061 per mile driven.

However, the state ranks below average when it comes to spending per mile of public roads. According to the data, West Virginia spends about $32,000 per mile of public roads in the state, compared to the national average of $38,325. This figure suggests that rather than spending more than average on our roads, West Virginia has a high number of roads to maintain for a state of its size.

So what happens to our rankings if we add in an additional $600 million, like suggested by the Commission? The table below shows those results.

Untitled

By adding in an additional $600 million, West Virginia would jump into the top 5 for highways spending as percent of total spending, as a percent of GDP, per capita, and per vehicles miles traveled. But when it comes to highway spending per mile of public road, West Virginia would still only rank 16th, although above average.

All of this suggests that West Virginia faces some unique challenges when it comes to funding our roads system. For a small, relatively poor state, we have a relatively large amount of roads to take care of. The state already dedicates more of its resources to our highways, asking more of its citizens than most states, but we also have more to take care of than most states. And the governor’s commission has suggested that doubling our efforts is needed just to keep it all together. It will take creative and forward thinking solutions from our political leaders to solve this puzzle.

Download an excel file with the figures for all 50 states here – highway expenditures

SNAP Cuts Could Hurt West Virginia Families

Last week, the U.S. House passed a “farm bill” that for the first time in decades did not include food assistance or SNAP (formerly known as the Food Stamp Program) for vulnerable children and families. This move came on the heels of an earlier version passed by the U.S. House in June that reduced SNAP by $20.5 billion over the next decade by limiting eligibility options for states or what is known as  “categorical eligibility.” The House bill will also make it more difficult for the state to implement the West Virginia Feed to Achieve Act by not allowing children in SNAP to be automatically enrolled in the free school meals program. 

Food assistance is crucial for low-income families in West Virginia, many of which work hard but are unable to afford basic necessities because of the low wages they are paid at places like Walmart. Cutting the nation’s most important anti-hunger program could have a damaging impact on vulnerable populations in West Virginia. 

SNAP in West Virginia

According to WV-DHHR, 341,516 people (about 1 in 5 people) received a SNAP benefits in May 2013 and the average monthly benefit per household member was $119 or just $1.35 per person per meal. So it is important to realize that this isn’t a lot of money to many people – try buying a meal for $1.35 – but it is enough to make a real difference in the lives of people at or near poverty. This is especially true for children.  Approximately 39 percent – or nearly two-fifths – of those who received SNAP benefits in the Mountain State are children and almost a quarter is adults living with children. SNAP is also important for seniors and people that are disabled, with 1 in 5 people on SNAP in the state who are either disabled or elderly.

SNAP WV

According to the Center on Budget and Policy Priorities,  87 percent of households receiving SNAP have income below the federal poverty line (about $22,000 for a family of four in 2012) and 31 percent of households are in deep poverty, with incomes below 50 percent of the poverty line. More than one-third (37%) of all SNAP participants are in working families and approximately 17 percent of eligible individuals don’t receive SNAP benefits.

SNAP participation will decline with economic recovery

Before the Great Recession began, about 15 percent of the state’s population was enrolled in SNAP. Today, that number has jumped to about 19 percent.  The graph below looks at SNAP participation rates and the share of underemployed (U-6) in the state. The underemployment rate includes the unemployed, those looking for full-time work but are working part-time, and those who aren’t currently searching because no jobs are available. Therefore, it is a good measure of economic distress. 

As you can see, and as the CBO pointed out nationally, the rise in SNAP participation increased dramatically as the number of underemployed in the state rose due to the recession and the slow recovery. 

food stamps and WV economy

As such, SNAP has been a crucial part of our state’s economy recovery, pumping about $500 million into the state’s economy in 2012. Without these critical resources, our state would be suffering from higher underemployment and less economic activity. According to Moody’s Analytics, every $1 in SNAP benefits generates $1.70 in economic activity during a weak economy .

As the recovery picks up, participation in the program will subside and return back to pre-recession levels. This means that SNAP, unlike our expensive and inefficient health care system, is not contributing to our long-term budgetary problems. Therefore, there is little economic justification for imposing huge SNAP cuts on most vulnerable children and families out of deficit concerns.

SNAP is well-managed and effective

While some critics believe that SNAP is prone to a lot of waste, fraud, and abuse, this is not the case. In fact, SNAP is one of the most effective and efficient government program in the country. The  error rates for SNAP have dropped dramatically over the last decade, from more than 8 percent in the 1990s to an all-time low of 3.4 percent in 2012. According to the Center on Budget and Policy Priorities, “USDA has cut “trafficking” — the sale of SNAP benefits for cash, which violates federal law — by three-quarters over the past 15 years.” Today, only 1 percent, or $1 in every $100 of SNAP benefits, is trafficked. 

The truth is SNAP works. Low-income people on SNAP are not only able to feed themselves and their families, but it allows them to use their limited incomes for other other purposes, such as paying rent, filling up the car with gas, or buying school supplies for their children. And the money they spend using SNAP goes right back into our economy and local grocery stores.

Food Stamp Program originated in West Virginia

As we documented in our report on children and poverty in West Virginia, the birth of the modern food stamp program was in West Virginia:

“McDowell County mines more coal than it ever has in its history, probably more coal than any county in the United States,” Kennedy said in a 1960 speech in Canton, Ohio.“ Yet there are more people getting surplus food packages in McDowell County than any county in the United States. The reason is that machines are doing the jobs of men, and we have not been able to find jobs for those men.”

 In fulfillment of his campaign promise, Kennedy signed an Executive Order announcing the food stamp pilot program.On May 29, 1961 Chloe and Alderson Muncy of McDowell County became the first recipients of food stamps. Today the program is called the Supplemental Nutrition Assistance Program and it serves over 47 million Americans and 323,000 West Virginians.

The SNAP program is a major national accomplishment. Before it emerged, many more West Virginians were growing up in hunger and in deep poverty. A recent academic study that appeared last year in the National Bureau of Economic Research bear this out. As noted by poverty expert Arloc Sherman, the “study found that the babies benefited from the introduction and expansion of food stamps in the 1960s and 1970s and found that they grew up to be healthier and more likely to finish high school than their peers born in counties where the program had not yet been instituted.”

Implications for WV Feed to Achieve Act

As noted earlier, the bill passed by the House in June could make it more difficult for the state to implement the WV Feed to Achieve Act, which aims to maximize eligibility and funds available in the National School Lunch and Breakfast Program to provide universal free school meals to all students. Since the bill strips away automatic enrollment and eligibility for free school meals for those that receive SNAP, it could  reduce the number of children enrolled in the National School Lunch and Breakfast Program and limit county school board from maximizing participation in the program. According to the Congressional Budget Office, an estimated 210,000 children in families whose eligibility for free school meals is tied to their receipt of SNAP would lose free school meals.

Congress should protect and strengthen SNAP

While it is unclear how many children and families could be impacted by Congressional action to cut SNAP benefits, the program is vital to protecting our state’s children, seniors, and working families. According to the Food Research and Action Center, West Virginia ranks 3rd highest in the nation with 22.5 percent of our residents that did not have enough money to buy they food they needed for their families. Instead of increasing hunger in our state,  our congressional leaders should be exploring ways to strengthen the SNAP program instead of tearing it down.

What Does It Take To Get By In West Virginia?

The Economic Policy Institute has updated its Family Budget Calculator for 2013. The Family Budget Calculator measures the  income level necessary for families to secure an adequate but modest living standard by estimating community-specific costs of housing, food, child care, transportation, health care, other necessities, and taxes. The calculator gives a broader measure of economic welfare than the standard poverty threshold. While the poverty threshold measures the income level necessary to live free of serious economic deprivation, the Family Budget Calculator measures what is necessary  in order to live securely yet modestly, without any government assistance. The calculator measures a modest cost of living for households of six family types across 615 urban and rural communities in West Virginia and across the country. 

For the Charleston, WV metro area, the household costs for a family with two adults and two children adds up to $58,165. That is how much a family would need to earn to afford food, housing, healthcare, and other necessities without relying on food stamps, subsidized housing, child care and other government assistance programs. While West Virginia is generally considered a low cost-of-living state, according to the ACS, the median income for a married-couple family in West Virginia was $58,220. That means the typical family would have to spend nearly every dollar it has just to live comfortably.

With the typical family just getting by, families with parents working low-wage jobs simply will not earn enough through work to meet basic family needs. A family with with both parents working full time making $9.60/hour, which would put it in the 20th percentile (and above the minimum wage), would earn $39,963 annually, nearly $20,000 short of what is needed to live securely.

The figure below breaks down the costs for a two-parent, two-child family in Charleston, with monthly expenses totaling $4,847. Health care is the biggest cost, amounting to 29% of the family’s budget, while the costs of child care is also significant, accounting for 18%. 

Untitled

As the calculator shows, many hard-working families in West Virginia are struggling to make ends meet even with full-time jobs. Investing in our workforce and in our public services, through education, workforce training, Medicaid benefits, food and housing assistance, and subsidized child care helps these families get by.

Check out the calculator here for budgets for one- and two-parent families with one to three children in 12 different areas of the state.

Governor Tomblin Has ACA Questions

This afternoon, the Governor’s Office sent a letter to the Department of Health and Human Services (HHS) chief, Secretary Kathleen Sebelius, regarding the Affordable Care Act in West Virginia.  In the letter dated July 15, Governor Tomblin requests “prompt answers to several questions concerning implementation of the [Patient Protection and Affordable Care Act].” (See the letter here)

The majority of the questions relate to either timeliness and a concern of the fast approaching October 1st (the date the Marketplace and open enrollments are scheduled to go live) or additional guidance for specific rules.  West Virginia is far from unique in feeling the pressure of the impending deadlines as many states are scrambling to ensure their exchanges are fully functional on time, while some are even scrapping or delaying parts of their initial plans. 

There have also been concerns expressed from many state leaders about the lack of detailed information and final guidance regarding certain aspects of the law.  Of course, the fact that others are in the same boat is little consolation for state leadership here. HHS has a lot of work to do in a very short time, however they continue to state that it will be ready to go on schedule.  Certainly though they are also feeling the time crunch as evidenced by the announcement earlier this month that they would be delaying the large employer mandate by one year among other delays

One question that I didn’t quite follow in the governor’s letter was number six.  Information about who may qualify for the Marketplace is readily available on www.healthcare.gov while specific information about premiums and subsidies in West Virginia will be dependent on the plans that are offered in our Marketplace Exchange.  These rates have yet to be released by the Offices of the Insurance Commissioner (OIC), although they likely will be soon.  Regardless, final eligibility determination won’t be available until the open enrollment period which doesn’t begin until October 1st anyhow.

Undoubtedly, there is a lot of work to be done at both the state and federal level in the next few months and Governor Tomblin raises some very pertinent questions here.  HHS needs to communicate better with states and issue final guidance very soon if it wants states to be ready by October 1st.  The OIC also has its hands full and will need to find someone to step in immediately and fill the extra big shoes left by the departure this month of Jeremiah Samples, who is leaving to be the Assistant Secretary at DHHR.

 It will be difficult, but let’s hope West Virginia is up to the challenge of helping extend health insurance to over 170,000 additional state residents.  

Help Us Reach 500 and Much More

Budget Beat – July 12, 2013

What Do Immigration and Health Care Reform Mean to West Virginia?

The fall-out from the Obama administration’s decision to delay the employer mandate continued in the media this week. Brandon’s blog post pointed out that those saying the delays are a sign the ACA is seriously flawed are the same people who have been trying to derail the bill from the beginning, and, in the end, the delays will impact few West Virginia employers.

Medicaid expansion in West Virginia will make health care available for many who are currently uninsured. Another way to make the state healthier? Reduce the number of high school drop outs. Read more in Brandon’s blog post on how the state could save tens of millions of dollars each year in health care costs by investing in education.

Immigration reform is also all over the headlines. If West Virginia’s undocumented workers were to gain legal status, they would contribute more in state and local taxes and income taxes to the tune of $1.2 million. Read more in Sean’s blog post.

Senate Continues Student Loan Interest Rate Debate

The WVCBP was mentioned in a State Journal article this week in its coverage on the doubling of student loan interest rates. As we reported, West Virginia graduates have an average debt of $25,000, higher than the national average.

Ted Boettner was mentioned in Phil Kabler’s Sunday Gazette-Mail column‘s discussion about the hole in the state budget which coincidentally enough matches up with recent tax cuts. Who knew?

West Virginia’s undocumented workers are already paying taxes and contributing to the state’s economy. Under immigration reform, they would contribute even more as Sean explained in a WV Public News story today.

Fiscal Note Survey Preliminary Data Released 

On Monday, Fiscal Policy Analyst Sean O’Leary presented survey results on how West Virginia legislators view the state’s fiscal note process. A majority of the legislators who responded find problems with fiscal notes, from their accuracy to the inconsistent way they are compiled. Look for a WVCBP issue brief with the full results next month.

 fiscal note presentation photoshopped

 Sean O’Leary and Ted Boettner Open Meeting on Fiscal Note Survey – July 8, 2013

 Help Us Reach 500 Followers on Twitter!

Improving Health By Focusing on…High School Graduation?

How could West Virginia save hundreds of millions of dollars per year in healthcare costs?  By getting more kids to graduate high school.  Confused?  Let me explain. 

Most people understand that health is much more than just medical care.  A person’s health is the result of a combination of a myriad of factors like genetics, environment, geography, income, and even a bit of luck. So it would probably come as little surprise to find out that research shows a strong connection between one’s health and his or her education. The real surprise comes, however, when you discover just how tightly these two are intertwined.

A report released this month by the Alliance for Excellent Education found that students who graduated from high school instead of dropping out would save states an average of $16,113 per graduate in Medicaid and uninsured care over his or her lifetime.  With one out of every four high schoolers dropping out before receiving their diploma, West Virginia could save a lot of money by reducing dropouts. 

Of all the factors contributing to health outcomes, educational attainment may be the most strongly correlated.  As they say, however, correlation does not equal causation and having dropped out of high school does not make someone unhealthy in and of itself. But it does significantly increase the likelihood that they will be unemployed or have low-paying jobs, lack health insurance and the ability to seek regular medical care, be unable to access healthy and affordable food, and live in substandard housing.  In addition, lower levels of education mean they are more likely to work in jobs that are generally more dangerous and expose workers to greater health hazards like operating heavy machinery, coal mining, logging, or handling dangerous chemicals.  Each of these is a health risk factor by itself, and a high school dropout is much more likely to encounter many or all of them than someone with a high school diploma or higher.

In 2010, only 75 percent of West Virginia high school seniors received their diploma.  If we could reduce the number of dropouts by half, bringing the graduation rate to 87 percent alongside states like Iowa, Vermont, and Wisconsin, West Virginia would save an estimated $30.9 million in Medicaid costs every year.  Additionally, there would be greater societal savings of tens of millions of dollars in reduced heart disease, obesity, alcoholism, and smoking-related costs. 

health savings

When one talks about the “healthcare system” we usually think of big hospitals, expensive equipment, and doctors saving lives in the ER.  But these are just the tip of the iceberg of what truly impacts our everyday health and well-being.  We are surrounded at all times by factors that contribute to our health, as individuals and as a community or state.  The roads we drive on, the air we breath, the water we drink, the sugar content of the food we buy, our parents’ health behaviors, the number of parks in our neighborhoods – everything plays a role, and central to it all is education.  Investing in education is also a down payment on the future health of our state.