Recent State Policy Action
There has been a lot of state policy action across the country. Below are the latest updates from some of CFED’s Assets & Opportunity Scorecard policy priorities:
College Savings Victory: To help Missouri families save money for higher education, the state has partnered with the 529 College Savings Plan Program to start a matching grant program. Families with incomes below $74,999 are eligible for a dollar for dollar match up to $500 per year. $500,000 in matching grants will be available through the grant program over the next four years. Missouri joins 12 other states that currently provide incentives for making deposits into 529 college savings plans.
Momentum Building to Curb Predatory Short-Term Lending: According to the National Conference of State Legislators, 21 states have pending legislation related to payday and small dollar lending. At the federal level, 250 advocates signed a letter urging federal regulators to end the predatory practice of bank payday lending.
Tax Credits for Working Families: Threats - Kansas and Oklahoma are proposing to eliminate or significantly reduce state tax credits for working families, including the states’ Earned Income Tax Credits (EITCs), which are set at 17% and 5% of the federal credit, respectively. Advocates in North Carolina are fighting to extend their state EITC, rather than letting it expire after tax year 2012. Victories and opportunities - Virginia passed legislation strengthening its EITC by incorporating the federal EITC expansions adopted in the American Recovery and Reinvestment Act into the state version of the credit for tax year 2012. A number of states – including Michigan, Maryland, New Jersey, Iowa and Utah – are considering increasing their state EITCs. Click here for a more comprehensive update from taxcreditsforworkingfamilies.org.
Asset Limits in TANF: The Hawaii legislature is considering a number of bills that would raise or eliminate asset limits in public assistance programs. SB 2178 would increase the asset limit in Temporary Assistance for Needy Families (TANF) from $5,000 to $15,000; SB 2936 would eliminate the asset limit in TANF; and HB 2685 would raise the asset limit in certain public assistance programs to $10,000. To date, five states – Ohio, Virginia, Maryland, Louisiana and Alabama – have taken the positive step of eliminating the asset test in TANF.
Financial Education in Schools: New data from the Council for Economic Education shows mixed results over the past two years. As of 2011, 46 states require school districts to include personal financial in their curriculum standards – up from 46 states in 2009. However, only five states require student testing of personal finance concepts - down from nine states in 2009. Research shows that college students from states that require a mandatory financial education course as a condition of high school graduation are more likely to create and adhere to a budget and less likely to engage in risky credit behaviors.