Posts Tagged ‘Asset Building’

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Michigan Earned Income Tax Credit to be Eliminated Under House Plan

Monday, January 31st, 2011

[This EITC update is brought to you by Ross Yednock, Director of the Asset Building Policy Project at CEDAM.]

The House Republicans recently unveiled their legislative plan entitled Guiding Principles: Jobs, Reform, Responsible Leadership (PDF). The plan calls for, among other things, more transparency in government spending and contracts, cutting government worker benefits and pay, speeding up permit applications and reviewing current tax credits and exemptions.  Specifically, the plan calls for the elimination of the state Earned Income Tax Credit.

The Asset Building Policy Project (ABPP) at CEDAM joins the Michigan Catholic Conference, the Michigan League for Human Services and others in opposing the elimination of the state EITC.

The state EITC provides critical support for Michigan’s workings families striving to achieve self-sufficiency. It is not a “hand out” or “paying people not to work” as some lawmakers have said. Such comments are gross mischaracterizations of the state EITC and overlook its proven effectiveness in lifting families out of poverty by removing barriers to work and promoting financial independence. Moreover, comments that are at best inadvertently inaccurate, or at worst, deliberately deceitful, hinder real public debate and discourse on the important policy matters that will move Michigan forward.

The state EITC, along with the federal EITC, helps nearly 800,000 Michigan families every year offset the impact that payroll, sales, and other taxes has on their limited budgets. In addition to helping families, both the state and federal EITC provide an economic stimulus to local communities, as these refunds generate new economic activity and help local grocers, day care providers, retailers, banks, credit unions and more stay afloat and keep jobs in the community. Eliminating the state EITC two years since it took effect will hurt Michigan families and make it harder for all of Michigan to move forward.

The House Republican plan also calls for implementing a strict 48 month, lifetime limit for welfare recipients in Michigan. The exemptions to the 48 month, lifetime limit Michigan currently has in place mostly deal with “hardship” and the inability to find work despite looking. As state lawmakers look at this part of the House Republican proposal, the ABPP at CEDAM urges them to also eliminate asset limits for this program, as well. Such a policy discourages financial self-sufficiency and state workers could use the time and resources they spend determining if their client meets asset-tests to actually help their clients use their assets to achieve financial security.

To learn more about the state EITC:

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Show Me the Money Day on Jan 29th in Lansing

Wednesday, January 26th, 2011
Show Me The Money Day image

Partnering with the Asset Independence Coalition, CEDAM will host Show Me the Money Day in Lansing on Saturday, January 29th, 2011 from 10AM – 4PM at the Capital Area District Library Downtown. See the event flier (PDF).

The event will offer participants free tax preparation for those generating an income of $49,000 and less, resources from various local financial institutions and nonprofits at a vendor cafe, and financial empowerment classes running all day.

The class schedule is as follows:

10:30 -10:45 Welcome (Eric Schertzing, Ingham County Treasurer; Amy Kraus, City of Lansing Treasurer)
11:00 -11:30 Do You Have What It Takes to be an Entrepreneur? (Peggy Vaughn-Payne, NorthWest Initiative)
11:45 -12:15 Foreclosure Prevention (Denise Keiser, Center for Financial Health)
12:30 – 1:00 Get Smart About Credit (Jamecia Gordon, Flagstar Bank)
1:15 -1:45 How to Cut Your Grocery Bill (Amber Paxton, Asset Independence Coalition)
2:00 -2:30 Unique Opportunities to Save (Amber Paxton, Asset Independence Coalition; Megan Kursik, CEDAM)

Prize drawings will be held throughout the day for $50 U.S. Savings Bonds, gas cards, and more! The event is designed to connect Lansing area residents with opportunities to save and build wealth and is being held in conjunction with National EITC Awareness Day. For more information, please contact Amber Paxton at 517-256-1466 or Megan Kursik at 517-485-3588×1942.

A list of January and February financial events throughout Michigan may be found online at the bottom of the www.michiganeic.org/taxpayers page.

Here is a quick announcement from WLNS News about Show Me the Money Day:

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Saving Can Be Fun? Really??

Monday, January 10th, 2011

Prize-linked Savings as an Approach to Financial Security 

We live in a world full of opportunities for entertainment. Music, movies, games, cars, restaurants, resorts; the list goes on and on. Especially this time of year, we are bombarded with media images and mass marketing campaigns promoting all things ‘necessary’ for an exciting, happy, luxurious life. Seemingly almost by the minute, our entertainment options get bigger, flashier, newer and as we are told, ever more advanced. And of course, we continue to shell out money to buy the latest and greatest forms of entertainment. Really, who wants an iPhone 4 when you can have a 4s?? Siri is totally worth it.

In the asset building and financial empowerment world, we often cringe at the thought of how much encouragement and pressure Americans face every day to spend their money. Even worse, we hate to hear examples of individuals’ fiscal irresponsibility. How does a person who might not make rent blow their tax refund on a 40” flat screen TV?

No matter how you slice it, entertainment is irresistible. And realistically, how many people want to live a life where you only experience the ‘necessities’ and the rest of your income goes to the bank? Middle and upper income earners make purchases every day on material luxuries and exciting or relaxing experiences. Is the right to spend money on fun just something low income people must give up in order to follow a perfect budget because they don’t have much excess income?

I think we all deserve some entertainment in our lives. And as the saying goes, “If you can’t beat ‘em, join ‘em.” If people will part with their hard-earned money (and lots of it) to buy entertainment, then perhaps entertainment can incite people to put that same money toward more financially secure purposes. Is it possible to make good financial behaviors and choices – like saving – fun and exciting? Could saving be a form of entertainment?

The Doorways to Dreams Fund, the Michigan Credit Union League and individual credit unions across the state of Michigan have answered both questions with a resounding, “YES!”

These entities put their heads together to develop and launch the Save to Win savings product, available at participating Michigan credit unions since 2008. Save to Win is a one year Certificate of Deposit (CD) that offers savers chances to win $100,000, and other smaller cash prizes, every time they save $25. The account successfully weds entertainment with savings. Account holders get to experience the excitement of the opportunity to win large amounts of cash, while at the same time accumulating savings for future expenses, emergency needs, or even to be used as a stepping stone to longer term savings vehicles or purchase of an asset.

What’s more, Save to Win is fair and exciting for people of all income levels. The product is inclusive – it requires a minimum initial deposit of only $25 – and includes provisions that prevent people with more money from skewing the chance to win – savers are limited to 10 raffle entries per month. Through analysis of savings data from the product’s initial years, Save to Win has proven to reach and result in real savings accumulation by low-income earners, the un- and under-banked and other population groups often disconnected from the formal financial services sector. Save to Win provides a chance to save that is appealing to people whose needs and preferences are not often taken into great consideration in the design of formal financial products.

Save to Win shows that it is possible to experience an element of fun while saving. With a little innovative thinking, financial products can be designed to provide savers entertainment, while at the same time increasing their financial stability. Prize-linked savings models are a win-win for fun and financial security!

-Megan

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Innovative CEDAM Trainings – foreclosure and asset building

Tuesday, September 28th, 2010

There are two upcoming CEDAM trainings in October. The first focuses on foreclosure and the second is centered around asset building. Both trainings are innovative and beneficial. If you are unable to attend but know someone who might wish to do so, please direct them to this blog.

Registration for either of the sessions is easy. To register, simply contact:

Jessica AcMoody
CEDAM Office Manager
517-485-3588
acmoody@cedam.info

CEDAM’s Foreclosure Intervention Tactics
October 20th in Lansing

This session is a must-attend for anyone with a foreclosure program or interested in starting foreclosure counseling at their agency. The session is on October 20th, there is no prerequisite to enroll, and the cost is $35 for CEDAM or Michigan Foreclosure Task Force members ($70 for non-members).

This day-long intensive session on Foreclosure Intervention focuses on community-based collaborative responses to the foreclosure crisis and what it takes to launch, support and sustain this type of effort. Participants will gain a better understanding of the role that perspective plays in building a successful coalition. You will learn about what agencies should take into consideration before adopting this approach as well as key success factors and a basic roadmap for moving from concept to reality. Participants will also learn about innovative approaches to foreclosure prevention/intervention, neighborhood stabilization and reuse of foreclosed properties from those who are leading these efforts in their respective areas of the state. For the agenda for this training, please click here (PDF).

The Foreclosure Innovation Tactics training is generously sponsored by CEDAM, MSHDA, State Farm and the Michigan Municipal League.

CEDAM’s Innovation in Asset Building Strategies
October 21st in Lansing

This session is a must attend for anyone currently engaged in Financial Counseling, IDA’s, Financial Literacy or an agency that is interested in beginning any of these programs. The session is on October 21st, there is no prerequisite to enroll, and the cost is $35 for CEDAM or Asset Building Policy Project members ($70 for non-members).

Re-Thinking Asset Building Strategies will provide a unique framework for re-thinking and improving current asset building programs by reframing misconceptions about the people our programs serve (using the tools of The Lies that Bind: The Legacy of the Locks program presented by Anneshia Freeman from Grand Rapids). Participants can expect a frank discussion/workshop designed to foster greater understanding of individuals’ saving decisions.  The session will also provide feedback for current asset building programs and share best practices from across Michigan. For the agenda for this training, please click here (PDF).

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Best Practices in Asset Building

Monday, June 14th, 2010

Bank on Kalamazoo meeting, February 2010.

Asset building policy and programs seek to address issues of poverty and financial insecurity through asset accumulation by working families at all income levels. Assets include savings accounts, homes, education, and small businesses. The ownership of assets is critical to financial stability because assets provide financial resources and earned income that can be used to weather financial crises. The Michigan Asset Building Policy Project (ABPP) coordinates the Michigan Asset Building Coalition (ABC) to advance asset building policy initiatives and support diverse asset building practices across the state.

While universal access to asset building opportunities is the main goal of asset building, low-income earners have significantly fewer opportunities for saving and investing than middle to high-income earners.  Therefore, asset building policy often targets the low income population.  Common asset building practices include Individual Development Accounts (IDAs), 529 college saving plans, and initiatives like Bank On that provide access to financial services.

CEDAM members are innovating in asset building initiatives.

Oakland Livingston Human Service Agency (OLHSA) coordinates the Michigan IDA Partnership (MIDAP), which offers matched savings accounts to help low-income workers build assets.

Inner City Christian Federation and Community Action Agency – Jackson also offer accounts through MIDAP to provide a 3-to-1 match for savings toward a home purchase and a 2-to-1 match for savings for education or small business startup.

Northern Initiatives supports rural entrepreneurs through microenterprise loans that can be used for various business costs, including start-up capital, business acquisition, equipment upgrades and facility expansion.

The Kalamazoo-based Poverty Reduction Initiative (PRI) is tackling issues of poverty through programs focused on education and access to economic opportunity. PRI is designing a Bank On program for Kalamazoo that will connect unbanked residents with good financial services targeting their specific needs.

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