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Expanding the Ownership Society: Expanding the Ownership Society: State Asset Policy InitiativesState Asset Policy Initiatives
Presentation for the NGA Center for Best PracticesAnnual Retreat for Governors’ Human Services Policy Advisors
June 18, 2005Heather McCulloch, Consultant/Asset Building Strategies
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Why Do Assets Matter?
• Assets enable families to…– Weather financial crises– Invest in their children and their communities– Plan for a secure retirement– Pass resources on to future generations
• Income enables families to get by. Assets build their long-term economic security.
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Challenge: Asset Poverty
• Over 25% of families are asset poor
• 39% of children are being raised in asset- poor households including:
– 54% of all Hispanic children– 52% of African American children– 26% of white children
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Public Policy Challenges
• Families are leaving welfare but living in poverty
• Policies that encourage savings and investment are often inaccessible to lower-income families
• Asset limits discourage families from saving
• Low-income families have few opportunities to build their long-term financial security
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Asset Building Movement
• Based on concept that asset-building policies work, but they need to be more accessible
• Started with IDAs in 1990s and grew to include other strategies
• Recognized role of public policy in taking strategies to scale
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States and Asset Policy
• States have supported individual asset-building policies
• Today, many are beginning to take a comprehensive approach
• Exploring a range of integrated strategies
• Bringing diverse stakeholders to the table to identify solutions to asset poverty
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Emerging State Initiatives
• Delaware – Governor’s Task Force for Financial Independence (2001)
• California – Asset Policy Initiative of California (2003)
• Illinois – Illinois Asset Building Group (2003)
• Pennsylvania – Governor’s Task Force for Working Families (2004)
• Hawai`i – Ho`owaiwai Asset Policy Initiative of Hawai`i (2004)
• Michigan – Michigan IDA Partnership (2004)
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Common Goals
SavingsSavings
InvestmentInvestment
PreservationPreservation
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Common Goals
• Savings/asset accumulation – addressing barriers and creating opportunities for families to save
• Investment/asset leveraging – expanding opportunities to invest in home, business and real estate equity
• Protection/asset preservation – advancing measures to protect families’ assets
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Emerging Policy Priorities
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Savings/Asset Accumulation • Financial education – Improving and expanding
access to financial education
• Asset limits – Raising or eliminating asset limits in public benefit programs
• Individual Development Accounts (IDAs) – Increasing public support for IDAs
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Savings/Asset Accumulation
• Earned Income Tax Credit (EITC) – Capturing federal EITC and creating state EITCs
• Retirement savings – Expanding access to retirement savings
• Children’s Savings Accounts – Supporting children’s savings accounts programs
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Investment/Asset Leveraging
• Homeownership – Increasing affordable homeownership opportunities
• Business ownership – Supporting low-wealth entrepreneurs to build business equity
• Real estate – Leveraging economic development opportunities to build wealth for community residents
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Protection/Asset Preservation
• Health insurance – Exploring ways to expand health insurance coverage
• Anti-predatory lending – Reducing abusive lending practices
• Anti-insurance redlining – Implementing/strengthening measures to prevent insurance redlining
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Common Elements of Success
• Reframing the policy dialogue
• Providing strong leadership
• Building a bipartisan discussion
• Engaging diverse stakeholders
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Outcomes to Date• Legislation –
Advancing specific pieces of legislation
• New strategies and resources – Developing new strategies/leveraging resources
• Policy dialogue – Ensuring assets part of state policy discussions
• Public will – Building public support for asset-building policies
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Closing
• Building an ownership society requires inclusive public policies
• State asset policy initiatives are leading the way
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State Asset Policy Initiatives: Expanding the Ownership Society
Report will be published by the Fannie Mae Foundation
Available at www.knowledgeplex.org in July 2005
By Heather McCullochConsultant/Asset Building Strategies