Poverty Guidelines Do Not Consider Housing Costs
California's poverty rate is the third highest in the nation when housing and utility costs are factored into income and other expenses, according to a study released Wednesday by the Public Policy Institute of California, the Los Angeles Times reports (Wride, Los Angeles Times, 5/11).
The federal formula to determine poverty rates is based on income and food costs, but does not account for housing costs that vary by region, according to report author and PPI program director Deborah Reed (Bailey, San Jose Mercury News, 5/11).
The federal poverty threshold is used to determine eligibility for several federal programs, including the Children's Health Insurance Program and Head Start (Los Angeles Times, 5/11). The federal government also uses the formula to determine eligibility for Medi-Cal and funding allocations to state and local agencies (San Jose Mercury News, 5/11).
Under the current formula, California's poverty rate is the 15th highest in the nation, at 13.3% compared to 12.7% nationally. However, the poverty rate increases to 16.1% of the state's population compared to 12% nationally after factoring in the cost of living, Reed said (Los Angeles Times, 5/11).
The study also found that the state's poverty rate has been increasing faster than the national rate since 2001 (Hoffman, Contra Costa Times, 5/11).
According to Madeleine Stoner, faculty chair of the University of Southern California Urban Initiative, the study shows the state "should be eligible for more [federal] funding" (Los Angeles Times, 5/11).
The report is available online. Note: You must have Adobe Acrobat Reader to view the report.