OpportunityTexas Increasing Income & Assets, Building Savings, & Creating Jobs West Texas Asset Building Summit Breaking Down Economic Barriers San Angelo, TX June 10, 2010 Don Baylor, Jr. Senior Policy Analyst

What CPPP Does Improving public policies to better the economic and social conditions of low- and moderate-income Texans. Creating economic opportunity to strengthen families and grow the middle class; Increasing access to quality, affordable health insurance; Helping families meet basic needs; Enhancing child well-being and child protection; Ensuring effective public administration; and Securing fair and adequate taxation to pay for critical public investments in Texas.

Why Assets? “Income helps families get by. Assets help them get ahead” Assets matter economically, socially, and psychologically Asset poverty rates are higher than income poverty rates, and wealth gaps are larger than income gaps Assets help to increase: Household economic stability Educational attainment Economic mobility “Income helps families get by. Assets help them get ahead” Use only if giving presentation to total newbie audiences to asset building field By assets we mean a home, a business, savings for a rainy day or retirement, education, health insurance Focus on assets is essential for lower-income Americans to enter the economic mainstream and build wealth 3

Asset Building: Who Benefits? U.S. continues to subsidize wealth creation Homestead Act GI Bill Home Mortgage Deduction 401ks, IRAs, 529 College Savings Accounts VA and FHA Loan Programs Bottom 60% of households receive less than 3% of outlays for federal asset building budget. Earned Income Tax Credit/Child Tax Credit Individual Development Accounts (IDAs) Proposed Saver’s Credit Texas (Low investment in asset building strategies) For presentation where it is helpful to set larger policy context– text to be developed Make the case that the US does have a long history of subsidizing asset building, and much of what can be considered “asset policy” helped to create strong middle class that was the hallmark of American productivity. But asset policy has been uneven and inconsistent, and in many cases even as the government subsidizes asset building for middle and upper income households, it restricts opportunities for low income households. Housing Trust Fund one of the few notable examples of AB investment 4

What is (Household) Asset Poverty? Inability to subsist at the poverty line for 3 months upon loss of income. ~1 in 3 TX households with kids = ASSET POOR 14% of Texans live in extreme asset poverty with zero or negative net worth Minorities are nearly twice as likely to live in asset poverty % of households Share of those living in asset poverty by race White 58.5% 23.7% Black 11.8% 52.1% Latino 26.4% 47.4% Asian 2.8% 30.3% Native 0.4% 37.5% Texas Asset Poverty Data The highest income households had 17 times the net worth of the lowest ($182,075 vs. $10,788) 14% of Texans live in extreme asset poverty Minorities are nearly twice as likely to live in asset poverty Source: CPPP Analysis, U.S. Census Bureau, 2000

West Texas Asset Poverty More than 1 in 3 West Texans are Asset-Poor (36%, Coke/Tom Green) Education 46.3% (less than high school) 35.3% (some college) 14.6% (Bachelor’s) Ethnicity 29.9% (Anglo) 61.5% (African-American) 46.4% (Latino) Income Poverty ranges from 10-20% in West Texas. Asset poverty about two to three times Income poverty San Angelo MSA, 15.8% all individuals; 11.5% for families

National Trends (Pre-Recession) Median Net Worth fell for the 40% of U.S. households that earn less than $37,000 Savings declined to zero/sub-zero Median amount of revolving debt rose 64% (2006-08) Percentage of individuals with employer-provided health insurance fell Even though median net worth increased overall for U.S. households

Recession’s Wake Eight million jobs lost; LTE at 46% Massive wealth destruction ($15T) Reduced home values, foreclosure surge Savings rebounded but may have peaked in 2009 (3%) Revolving debt has declined sharply Teachable Moment? 19th consecutive month of declines in revolving debt

Assets & Opportunity Scorecard Most comprehensive tool measuring ownership and financial security at state level Provides assessment of how well states support efforts of residents to build and protect their assets Focus on assets is essential for lower-income Americans to enter the economic mainstream and build wealth This slide is where you communicate the BIG PICTURE of what the Scorecard is and why we do it. 2nd bullet on slide is key. OPTIONAL explanations for why we focus on assets: No better or more tangible indicator of the strength of an economy than the reserve of financial, business, home, education and health assets and protections built by families and society. Range and distribution of assets of an economy provides an incisive picture of current health and resilience of an economy, but more importantly, reflects the ability of an economy & families to adapt to, take advantage of and shape the future. Assets move families beyond living paycheck to paycheck and give them tools to plan for the future. Getting by may require only a paycheck, but getting ahead requires a variety of assets, a financial safety net, education and health care. About the Scorecard & Campaign 9 9

Assets & Opportunity Scorecard Covers performance and policy priorities in five Issue Areas Financial Assets & Income Businesses & Jobs Housing & Homeownership Health Care Education Framework underscores need to integrate asset development, asset protection, and social insurance to advance financial security for all Americans Brings stakeholders across a diverse set of issues to work together This slide is about the ORGANIZATION of the Scorecard and why it covers what it does. About the Scorecard & Campaign 10 10

Texas’ Final Grade: D Index Grade Financial Assets & Income C Businesses & Jobs Homeownership Health Care D Education -9 of 48 policy “pie slices”

Outcomes: Where Texas Fared Poorly Measure Rank Low Wage Jobs 41st Homeownership Rate 44th Mortgage Debt as % of Home Value 48th Health Insurance Coverage 51st High School Degrees Head Start Coverage 49th Net Worth Income Poverty Asset Poverty 37th Unbanked Households Retirement Plan Participation Installment Debt 46th Health Insurance Coverage: In the bottom five for Uninsured Rate, Uninsured Low-Income Children, Uninsured Low-Income Parents, and Employees Insured by Employer; Educational Access: High School Degrees, Head Start Coverage, Four Year Degrees by Race We also know that Texas has the lowest composite credit score

RAISE Texas Statewide network working to support and expand asset-building activities in Texas, with a focus on low- and moderate-income areas. Committed to building financial success of Texans through financial education, IDAs, children's savings accounts, community tax centers, and other programs that lead to increased economic security and prevent asset stripping.

RAISE Texas: Opportunity Hub Model Need to build collaboration Provide one stop financial centers. City of San Antonio Office of Financial Empowerment, Foundation Communities Community Financial Center, Financial Opportunity Center in Houston.

Building a Movement on Common Ground OpportunityTexas Model The Family Bottom Line

What is OpportunityTexas? Income, Savings, and Job Creation Community Investment Innovation Public-Private Partnerships Systems Integration Joint Project of CPPP and RAISE Texas Rollout in Fall 2010 Mention Ford

The Year Ahead CFED Assets Learning Conference (September 22-24), Washington, D.C. (www.cfed.org) RAISE Texas Policy Conference, Fall 2010, Austin (www.raisetexas.org) OpportunityTexas Launch, Fall 2010 82nd Legislature, January 2011 (www.cppp.org)

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