California Asset Building

To qualify for major public assistance programs like CalWorks, Food Stamps, and Medicaid, families must be both low-income and asset-poor. “Asset limits” make sense at first glance. The public pocketbook is not limitless and public aid should be directed to those who are truly desperate. However, asset limits can also put low-income families in a precarious position, causing them to deplete – and keep depleted – the part of a family’s financial portfolio that is critical for promoting independence and… more

In California, 28 percent of adults don’t have a checking or savings account, according to the US Census. Nationally, the estimate is that 10 percent of all households don’t have accounts. In San Francisco, the Brookings Institution estimates that one in five San Francisco adults---and half of its Blacks and Latinos—don’t have accounts. The un-banked are most likely to be people of color, less educated, and have lower incomes. For example, a Harvard poll of Hurricane Katrina evacuees in the… more

The working poor face a huge disadvantage because they lack a basic financial tool -- a bank account. Anne Stuhldreher comments. (more)

What are asset-building policies?Asset building is about giving all Californians access to the government-sponsored financial tools and incentives that have created and sustained economic prosperity for higher-income families. Today, for example, the federal government spends over $300 billion per year to help individuals and families acquire assets through home mortgage deductions, tax incentives, business investments and retirement savings programs. There’s only one problem with these effective policies--more than 90 percent of that money goes to households already making over… more

The bad news first. California now ranks last nationally in home ownership. It also has the fourth worst "asset poverty" rate in the nation, meaning that nearly a third of the state's households are on such a financial brink that they'd fall below the poverty level within three months after an unexpected hardship like a job loss or medical emergency.

California's future economy depends on more people gaining access to home ownership and higher education. But it's difficult enough to… more

Cesilia Bueso, a San Francisco teacher and single mother, won't attend the public hearing in San Francisco Thursday on reforming the tax code to make it "simpler, fairer, and more pro-growth." But the panelists have much to learn from her -- and from a San Francisco effort to help low-income people receive larger tax refunds and then save some.

Tax refunds provide most Americans with their best shot to save. By April 15, more than 100 million Americans will have… more

The word "foundation" usually evokes the same stereotypes.

Swanky offices on the upper floors of downtown buildings. And power-suited program officers who write checks to organizations that "serve" people the foundation staff will never meet, but are neatly categorized as "underprivileged," "homeless," or "teen mothers."

But the Jacobs Family Foundation, a $21 million family fund created to revitalize a southeastern San Diego neighborhood called "The Diamond," wanted to turn that model upside down. Frustrated by the limited results they achieved by… more

We can all agree $1.3 billion is a lot of money. Divide it among 750,000 working poor Californians and it's still a lot -- about $1,700 per family. That's how much the IRS estimates eligible Californians missed out on last year from our country's largest resource for low-income people -- the Earned Income Tax Credit. With Gov. Arnold Schwarzenegger's proposed budget threatening significant cuts in social programs, California should do much more to let people know about this critical resource.… more

Even in this era of dwindling public resources, California can take significant steps to encourage its residents to save and invest in themselves. The following are a sampling of cost-effective, asset-building policies. Most are from other states, which are ahead of California in this emerging policy area. These recommendations would bolster the economic security of the state and its 35 million residents.

Create a system of voluntary retirement accounts for businesses and individuals. Only 39 percent of California workers participate in… more

California's leaders need to cut a new deal with struggling families: If you're willing to work and save, we'll help you own a private investment account, accumulate wealth and control your own economic future. And to California's kids, leaders should say: We'll get you started on a path of saving and investment from the day you are born, make sure your school teaches you how this economy works, but it's up to you to make smart investments in your future… more