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State Policies to Promote Economic SelfSufficiency through Asset Development

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NGA Center for Best Practices - Annual Human Services Policy Retreat ... Noteworthy numbers for Michigan #5 in homeownership rate #7 in homeownership by income ... – PowerPoint PPT presentation

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Title: State Policies to Promote Economic SelfSufficiency through Asset Development


1
State Policies to Promote Economic
Self-Sufficiency through Asset Development
  • NGA Center for Best Practices -
  • Annual Human Services Policy Retreat
  • Miami, FL ? June 18, 2005
  • Carl Rist, Director, SEED Initiative
  • CFED

2
Why Asset Development?1. Assets matter
  • Welfare policy too focused on consumption
  • Assets change thinking and behavior
  • Greater household stability
  • Long-term thinking and planning
  • Enhance well-being and life chances of kids
  • Income may feed peoples stomachs, but assets
    change their heads. (Michael Sherraden, Wash
    Univ. in St. Louis)

3
Why Asset Development?2. Unequal asset
distribution
4
Why Asset Development?3. It works
  • ADD evaluation (large-scale IDA demonstration
    with over 2,000 participants). On average, ADD
    participants
  • Had family income at 116 of the
    family-size-adjusted poverty line,
  • Saved 19.07 per month in average net deposits
    (1.6 of monthly income),
  • Made a deposit in about 6 of every 12 months,
  • With an average match rate of 21, accumulated
    700 per year in IDAs.
  • 300 IDA programs at least 15,000 savers.

5
2005 Assets and Opportunity Scorecard Financial
security across the states
  • Most comprehensive tool yet to measure ownership
    and financial security at the state level
  • Assessment of states efforts to encourage and
    protect wealth among their residents

6
2005 Assets and Opportunity Scorecard
  • Emphasize assets as a unifying theme for
    promoting economic opportunity. Data are
    organized into five indexes
  • Financial security
  • Business development
  • Homeownership
  • Health care
  • Education
  • These issue areas show that asset building is
    essential to these elements of economic
    opportunity as well as make the data more
    accessible to advocates.

7
2005 Assets and Opportunity Scorecard Data
  • Cover performance and policies in the five areas.
  • Include both quantitative and qualitative
    measures.
  • Describe how well each state and the District of
    Columbia helps its residents to build and protect
    wealth.

8
Assets across America the national picture
  • Nearly one in five households owes more than it
    owns
  • One in four families does not own enough to
    subsist at the poverty level for three months
  • One in four female-headed households has zero or
    negative net worth
  • One in three minority-headed households has zero
    or negative net worth

9
Assets across America Financial
SecurityFindings on Net Worth
  • For every one dollar in net worth of a household
    headed by a male, a female-headed household has
    less than 40 cents.
  • For every one dollar in net worth of a household
    headed by a white adult, a minority-headed
    household has about 6 cents.
  • The median Massachusetts household has four times
    the net worth of the median Texas household.

10
State Grades
11
State Policy Ratings
12
A look at Michigan
  • Overall grade on asset performance C
  • Overall policy rating Substandard

13
Noteworthy numbers for Michigan
  • 5 in homeownership rate
  • 7 in homeownership by income
  • 8 in Head Start coverage, college degrees by
    race
  • 44 in foreclosure rate, college degrees by
    income
  • 46 in microenterprise ownership
  • 48 in small business ownership

14
Notable policies in Michigan
  • Favorable to asset building and protection
  • Match for low-income families saving in MI 529
    plan
  • High asset limits on means-tested programs
  • Property tax relief for all homeowners
  • First-time homebuyers assistance
  • High per pupil spending
  • Tax expenditure report

15
Asset-building policy opportunities in Michigan
  • Raise the income tax threshold
  • Raise the state minimum wage above the federal
    level
  • Expand SBIC financing
  • Provide CDBG funds for microenterprises
  • Use bond sales for affordable housing
  • Raise income limits for public health care
    coverage
  • Publish a multitax incidence report

16
www.cfed.org/go/scorecard
  • All data available for download
  • State summary of data
  • List of advocacy organizations by location and
    issue area expertise
  • CFEDs center for policy advocacy
  • Media samples
  • Guide to create state scorecard

17
A New Idea Childrens Savings
  • What difference would it make if every child
    started with an account at birth?
  • Vision
  • 1,000 at birth for every child,
  • Accounts used for asset building,
  • Universal system
  • Progressive matches
  • Appropriate financial education delivered at scale

18
Childrens Savings Policy
  • International precedent
  • Child Trust Fund
  • Federal proposal
  • ASPIRE Act
  • State precedents
  • Oregons Childrens Development Accounts
  • 529 College Savings Plans

19
Childrens Savings SEED Initiative
  • Multi-year, multi-site experiment with SEED
    (childrens savings) accounts
  • 1,250 accounts with children in 12 sites,
    including 500 in MI.
  • State policy partners
  • Illinois
  • Michigan
  • Kentucky
  • Oklahoma
  • Alaska
  • One state Universal Model experiment to be
    chosen

20
Contact
  • Carl Rist
  • CFED
  • 123 W. Main St., Suite 210
  • Durham, NC 27701
  • 919.688.6444
  • 919.688.6580 (fax)
  • carl_at_cfed.org
  • www.cfed.org
  • www.cfed.org/go/scorecard
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