Economy

Poverty

Poverty imposes far-reaching hardships, not only on the poor but also on all who share their communities. Virginia can point to one of the lowest poverty rates in the nation — it was ranked 9th lowest in 2004 — and it continues to work to make education and opportunity available to its at-risk population.

Why is This Important?

Poverty has a significant impact on individuals and society at large. Children who live in poverty are likely to suffer from poor nutrition in infancy, experience emotional distress, and have an increased chance of academic failure and teenage pregnancy. Adult men and women who live in poverty are at a high risk of violence. Poverty can also affect seniors' ability to obtain health care and prescription medication or to care for themselves, given their health care costs.

How is Virginia Doing?

Poverty Rates. See text for explanation.

In 2005, Virginia had the eighth lowest poverty rate in the nation. During 2005, 10 percent of Virginia families fell below the federal poverty level. While this rate is an improvement over Virginia's 11.3 percent poverty rate of a decade ago, the general rise in poverty since 2001 suggests the state may be moving back toward higher poverty rates. Among Virginia's peers in 2005, Maryland had a lower rate of 8.2, while North Carolina and Tennessee both had higher rates of poverty at 15.1 and 15.5 percent respectively. The national average was 13.3 percent in 2005. New Hampshire had the lowest poverty rate at 7.5 percent.

Poverty Rates, By Region. See text for explanation.

In 2003, the Southwest Region had the highest percentage of families living below the poverty level (15.7 percent) of any region in the state, followed by Southside (15.6 percent) and Eastern (13.4 percent). At the other end of the scale, the Northern Region (5.4 percent) had the lowest percentage of families living below the poverty level, followed by Central (10.1 percent), and Valley (10.2 percent).

What Influences Poverty?

As with personal income, the two largest factors affecting poverty are educational attainment and economic opportunity.

What is the State's Role?

Traditionally, the primary role of government in addressing this issue has been to provide a social safety net that mitigates the impact of poverty. Since the mid-1990s, however, welfare reform efforts at the state and federal level have changed the focus of this effort to "welfare to work," where those in need are provided temporary assistance and access to resources that will enable them to become self-supporting. This is accomplished through programs like Temporary Assistance for Needy Families, food stamps, Medicaid and various workforce initiatives. In addition to temporary assistance and workforce training for those in poverty, the state can reduce long-term poverty rates by enhancing general education and providing a good business climate — two of the key factors that affect long-term poverty rates.

Data Definitions and Sources

Data Source:
U.S. Census Bureau
http://www.census.gov/main/www/cen2000.html

Localities, State, US: 1995-2003
http://www.census.gov/hhes/www/saipe/county.html

States, US: 2004, 2005
http://factfinder.census.gov/home/saff/main.html?_lang=en

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Major State Programs

Work Opportunity Tax Credit and Welfare to Work Tax Credit: The Ticket to Work and Work Incentives Improvement Act of 1999 reauthorized the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work Tax Credit (WtW) for employers who hire long-term welfare recipients. Long-term recipients can earn their employer a tax credit of up to $3,500 for their first - and $5,000 for their second - year of employment. Welfare recipients and members of other target groups can earn employers a WOTC credit of up to $2,400 in the first year. The number of new hires who can qualify employers for these credits is unlimited. www.vec.virginia.gov/vecportal/ employer/wotc.cfm

Child Support Enforcement: Currently, there are 363,000 child support cases in Virginia. Collectively, 484,000 of Virginia's children are owed more than $2.2 billion. www.dss.virginia.gov/family/ dcse.html
Visit Virginia's Most Wanted for postings of child support evaders. www.dss.virginia.gov/family/ wanted.html

Food Stamps: Food Stamps are electronic benefits that can be used like cash to buy food at any store that has a sign displaying the Cardinal Card or the Quest sign. Each eligible household will receive a card that may be used like a bank debit card to purchase eligible food items. www.dss.virginia.gov/benefit/ foodstamp.html

Medical Assistance/FAMIS: The Medical Assistance program (Medicaid) was established under Title XIX of the Social Security Act to enable states to provide medical care for public assistance recipients and medically needy persons (i.e. persons of low income who can meet their maintenance needs but have insufficient income to provide the cost of medical care). The program is financed by state and federal funds.

In Virginia, Children's Health Insurance includes Medicaid and Family Access to Medical Insurance Security (FAMIS) and is available through a single application. Children will be covered by Medicaid if the family's income meets the Medicaid income requirements. Children who are not eligible for Medicaid and who meet the FAMIS eligibility requirements will be covered by FAMIS. www.dss.virginia.gov/benefit/ me_famis/index.html

Temporary Assistance for Needy Families (TANF): The TANF program provides eligible families with a monthly cash payment to meet their basic needs. For a child to be eligible he or she must be:

www.dss.virginia.gov/benefit/ tanf/index.html

Homeless Prevention Services: The SHARE Homeless Intervention Program (HIP) provides temporary rental and mortgage assistance to low-income households at imminent risk of homelessness due to a crisis situation, and security deposit and temporary rental assistance to homeless families and individuals.
www.dhcd.virginia.gov/
HomelessnesstoHomeownership/
Homelessness_Prevention_Services.htm

Homeownership: Helping individuals with home ownership is an important goal for the Department of Housing and Community Development, which offers programs that assist citizens of the Commonwealth achieve their dreams of owning a home. www.dhcd.virginia.gov/
homelessnesstohomeownership/default.htm

Community Development: The Department of Housing and Community Development offers programs that provide a range of multi-purpose community development grants. These programs offer flexible funding resources that can be used to address a variety of needs.
www.dhcd.virginia.gov/
CommunityDevelopmentRevitalization/default.htm