Pennsylvania's Financial Scorecard: Only One 'A'
Pennsylvania is far from being honor roll-worthy when it comes to helping its residents become financially stable.
The Corporation for Enterprise Development (CFED) released its 2013 Assets & Opportunity Scorecard Monday, and the commonwealth earned a "C" in three subjects: businesses and jobs, housing and homeownership, and education. Pennsylvania received a "B" for financial assets and income and an "A" for healthcare.
State advocates had three suggestions to bump up the B's and C's to A's: encourage asset building, invest in entrepreneurs and protect homeowners.
Lyn Kugel of PathwaysPA suggested eliminating the asset test for assistance programs like food stamps. She said it would give Pennsylvanians an opportunity to get an education and build savings or assets while they are working without risking the loss of those programs.
"We need to encourage residents to build savings and prepare for the unforeseen so that fewer residents are one incident away from financial devastation," Kugel said. "Most Pennsylvanians do not have the ability to save the equivalent of three months of income to avert financial devastation if an unexpected critical event occurs."
Kugel said asset poverty is essentially living "paycheck-to-paycheck without any savings" and noted the incidence of asset poverty is 1.5 times higher than income poverty in the state.
To eliminate that problem for residents, Kugel said Pennsylvania should give residents a better awareness of state-sponsored savings programs like 529 savings accounts would be key in allowing residents to build financial security and assets.
Harriet Winokur, of the Montgomery Asset Building Coalition, turned her eyes to Washington and said the Earned Income Tax Credit (EITC), should be maintained. It's a federal income tax credit for low to moderate income working individuals and families.
Winokur said that although it may seem like a taxpayer burden, it is actually beneficial to the state economy as a whole.
"Low to moderate income tax payers would have extra money to put in their pockets to pay for some of their needs and to build assets," Winokur said. "Between $1.50 and $2.00 of every refund to Pennsylvanians goes back into the economy, so it has a multiplier effect."
Lynne Cutler, of the Women's Opportunity Resource Center, says Pennsylvania should invest in small and micro-businesses more since the scorecard ranks the state 43rd out of 51 for job creation.=
"Pennsylvania ranked 48th out of 51 in micro-business formation, 28th out of 51 in small business formation and 49 out of 51 in women's business ownership," Cutler said.
Cutler said micro-businesses tend to be local, independent businesses. She said if one in three micros hire just one employee, the country will be at full employment.
Micro-businesses have one to five employees and less than $150,000 in capital needs.