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What's new with SEED?CFED hosted productive and engaging semi-annual state policy meeting in San Juan, Puerto Rico, on April 17. The meeting was attended by more than 40 people from 11 states, the District of Columbia, and Puerto Rico. Highlights from the meeting are included below. Account platforms for CSAs: The “retail model.” As part of an ongoing discussion of potential platforms for children’s savings accounts (CSAs), Elena Chavez, a senior associate with the Aspen Institute’s Initiative on Financial Security (IFS), presented on the “retail model” of account delivery. In the retail model, financial institutions handle most aspects of opening and administering accounts. IFS has taken the lead on researching and advocating a retail model of CSAs in the U.S., drawing heavily on the experience from the U.K.’s Child Trust Fund. Click here to view the PowerPoint from the retail model presentation. Policy design. CFED policy director Jennifer Brooks and SEED director Carl Rist led a presentation and discussion on CSA policy design, with a focus on the six CSA bills that have been introduced in state legislatures thus far in 2007. The presentation focused on policy design decisions, such as whether accounts are universally available or targeted, the platform for and use of accounts, and the tax treatment of contributions, in each of the six bills. Click here to view a matrix of design decisions in the six bills. The session also included discussion of options for tying accounts to financial education; pros and cons of pursing detailed versus “shell” legislation; and the need to address politically charged issues like immigration in designing and advocating for CSA legislation. Polling data on CSAs. Guy Molyneux, with Peter D. Hart Research Associates, presented findings from a recent poll on CSAs. Building on results from focus groups conducted last summer, Hart Research surveyed 801 registered voters nationwide, about half of whom have young children or are prospective parents. The poll found that 69% of Americans (and 78% of parents) either strongly or somewhat favor the concept of CSAs. Poll respondents liked that CSAs could be used to pay for the skyrocketing cost of college and could also change children’s expectations of educational attainment. Perhaps most striking was that when presented with a hypothetical pair of candidates, one who favored CSAs and one who did not, respondents favored the candidate who supported CSAs, regardless of the candidate’s party affiliation. Click here to view the PowerPoint from the polling presentation. Keynote speaker. William Miranda Marín, mayor of the Puerto Rican municipality of Caguas, delivered the keynote speech during lunch. Under Mayor Miranda Marín’s leadership, Caguas became the first municipality in the world to announce the establishment of matched accounts at birth. The mayor discussed the impetus for his decision to institute CSAs and his vision for increased financial security for low- and moderate-income Cagueños and Puerto Ricans. Legislation. Arkansas became the eighth state to establish matching grants for 529 college savings accounts when Governor Mike Beebe signed into law Act 597 on March 28. The act authorizes the creation of the Aspiring Scholars Matching Grant Program, a pilot program that will match low-income families’ deposits into 529 accounts. The law also excludes 529 accounts from asset tests in key public assistance programs, including TANF, Medicaid, and Food Stamps. Click here to read Act 597. Southern Good Faith Fund, a SEED state policy and community partner, played an instrumental role in designing and generating support for the legislation. This law is the first success by a SEED state policy partner in securing passage of legislation to establish children’s savings accounts. Southern Good Faith Fund will continue to advise the Section 529 Plan Review Committee on the specifics of the Aspiring Scholars Grant Program. The Illinois House unanimously passed the Children's Savings Account Task Force bill (HB 1662) on April 26. The bill “creates a task force to review and make recommendations about children's savings account program options and to create a strategic implementation plan to create a savings account at birth for every child born in Illinois to Illinois residents.” The Senate unanimously passed a similar bill (SB388) on March 29. The Illinois Asset Building Group (IABG), which developed the original legislative language for both bills (which are similar though not identical), will now push for the Senate to adopt the House version of the bill. Both the House and Senate bills had bipartisan co-sponsors. Click here to read HB 1662. New Mexico Lieutenant Governor Diane Denish signed into law the Individual Development Accounts Act (HB 140) on April 4. The new law provides language allowing those 15 years old and above to open IDAs, and changes the name of the accounts from Family Opportunity Accounts back to individual development accounts. Family Opportunity Accounts were established in 2006, through legislation that provided $1.5 million in funding for IDAs in New Mexico. Click here to read HB 140. IDA legislation is moving in the Texas House. HB 939, now referred to as Committee Substitute House Bill (CSHB) 939, was approved by the House Financial Institutions Committee, and now moves to the House Calendar’s Committee, which decides which bills go before the full House for a vote and when. CSHB 939 would provide a process for organizations to apply for state funds. These funds could then be used as the non-federal matching requirement for the federal Assets for Independence IDA program. Click here for more information on CSHB 939. **** Events. Dory Rand, Supervising Attorney at the Sargent Shriver National Center on Poverty Law, will discuss asset limit reform in a free conference call on May 23 at 12:00 p.m., CDT. Rand will discuss strategies to reform state rules on asset caps and eliminate such barriers to savings or asset accumulation for recipients of public benefits. Stacy Dean, the Center on Budget and Policy Priorities’ director of food assistance policy, will be among other advocates taking part in the discussion. For more information or to respond to this invitation, contact Meg Dunne at (312) 263-3830 ext. 246 or megdunne@povertylaw.org. Call (888) 296-6500 (pass code 115217) to join the conference. |
Ending Poverty in America: Creating an Opportunity Society Ending Poverty In America: Compassion and Coalition Supercharging savings starts at an early age Born with a bank account? Possibly Sowing SEEDS of sense |
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This bulletin is designed primarily for CFED's Partners in the SEED Initiative; however, other policymakers, advocates and practitioners may also find it useful. Please feel free to share it either by forwarding this e-mail or by sending us suggested additions to our mailing list. We welcome your feedback and suggestions. |
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