Welcome to Opportunity Digest, OpportuntyTexas' blog that keeps supporters and the community informed.
On October 23, at the Federal Reserve Bank in Houston, about 100 representatives from the Houston community, including non-profit employees, board members, college administrators, cultural organizations, and private and corporate foundations gathered to learn about the new data tool launched by Center for Public Policy Priorities as part of the OpportunityTexas campaign, which we affectionately call “TROI” (Texas Regional Opportunity Index).
Afterwards, a panel of speakers shared their own data “success stories” and discussed how they could use TROI in their own work. The panel included Patricia Gail Bray from Episcopal Health Charities, Patrick Jankowski from the Greater Houston Partnership, and Fran Rosebush from the United Way of Greater Houston. Ronnie Hagerty from the United Way moderated the panel.
As the makeup of the panel indicates, there is a great willingness in Houston to join forces across sectors and to innovate for a better Houston! (A little competitive spirit against other Texas cities doesn’t hurt, either.) Our hope that people would use TROI to drive community practice and better public policy is already evident in the collaborative spirit and energy in Houston.
The audience questions revealed a great hunger for data. (The most common questions were, “Why didn’t you include X indicator?” and “Can you add data for additional years going back?”)
We’ve already gotten a lot of positive feedback on TROI and are looking forward to building out the tool to be even more friendly for our users. Let us know your thoughts on TROI and what you think would be helpful data points or features to include in the future!
Check out TROI here.
Read CPPP’s press release for TROI.
The Center for Public Policy Priorities (CPPP) is sharing the latest data from Texas Voluntary Income Tax Assistance (VITA) sites from the 2013 tax season. VITA provides free tax preparation at community centers to individuals making up to $51,000 per year. Trained volunteers prepare taxes for low-income filers and ensure taxpayers claim and receive important tax credits like the Earned Income Tax Credit (EITC), the Child Tax Credit, and education tax credits. VITA sites play an important economic impact role in Texas communities by returning over $230 million in refundable tax dollars to the community.
In 2013, 237 VITA sites – coordinated by human service organizations, universities, and other public agencies and non-profits – operated across the state of Texas. With a slight drop in the number of sites, Texas VITA sites continue to increase “numbers served” and “dollars returned”. This year, more than 125,000 low- and moderate-income Texans filed their taxes at VITA sites – a nearly 10% increase from the 2012 tax season.
2013 marked the seventh consecutive year of growth, with considerable increases coming over the past three years. This year, Over 113,000 VITA taxpayers (91%) received refunds, with 70% of those selecting direct deposit to have their refund electronically transferred to their bank accounts. The average refund received by 2013 VITA filers was $2,073, representing a large proportion of the average filer’s annual income.
VITA sites play an important role in stimulating local economies and supporting low-income families by helping families file for beneficial tax credits and serving as a primary platform to provide other financial stability services to families. The Earned Income Tax Credit (EITC) is widely considered the most successful income supplement for working families, lifting millions of Americans, including about 765,000 Texans, out of poverty. In 2012, 2.6 million Texans received the credit, claiming $6.9 billion, or approximately $2,600 per filer, more than every other state except California. While this year’s data on total EITC receipt in Texas is still pending; EITC receipt at VITA sites continues to increase. As shown above, VITA sites helped Texans claim more than $91 million in EITC refundable tax credits, representing 39% of the total refund dollars received by VITA filers in 2013.
So why should Texans – particularly higher-income Texans who aren’t eligible for VITA services – care whether low-income families receive their EITC? Simply put, the EITC has effects that stretch beyond individual families to communities at large. Research shows that the EITC benefits families by encouraging parental workforce participation, benefiting child and maternal health, and improving child academic performance and economic mobility. The EITC also benefits local economies; a significant amount of EITC dollars flow to small cities and suburbs, and research has found that the EITC is a substantial neighborhood investment program, with benefits exceeding those of more traditional urban development programs.
Increasingly, Texas VITA sites are doing more than tax preparation. They can also help their clients meet their savings goals by encouraging filers to use the split refund tax form and providing savings incentives and “just-in-time” financial education, among other services.
OpportunityTexas, promotes tax time as a critical asset building platform and moment—for savings, education, and professional needs. For the past three years, OpportunityTexas has led the Tax Time Savings Project, which incentivizes filers to purchase a savings bond with their refund or to open a matched savings account with a local credit union. Thanks in part to the Texas Tax Time Savings Project, over 2,000 VITA filers saved a portion of their return in 2013. Each year has attracted more and more Texas savers.
As we begin preparing for the 2014 tax season, it is important to keep in mind what we know about VITA sites in Texas and their large potential impact on Texas communities and families. In the coming months, CPPP and OpportunityTexas will be releasing more information about VITA sites in Texas. Stay tuned for a policy page on VITA sites and tax-time savings projects coming this summer, as well as, local data on VITA preparation and savings through our Texas Regional Opportunity Index (TROI) coming in early fall!
This piece is cross-posted on the Better Texas Blog.
This post originally appeared on the Center for Public Policy Priorities' blog, here.
At CPPP, we believe in the people of Texas. And we believe that all Texans deserve a chance to live a safe and healthy life–seeing a doctor when they need one, having healthy food on the table, and getting the education they need to secure their economic future.
But what does it take for families to be able to make ends meet and reach these basic tenets of the American Dream? Our new Better Texas Family Budgets provide a conservative measure of what it costs for families to make ends meet without sacrificing safety, health or security. Our budgets also reflect that families’ expenses differ dramatically depending on where they live, their savings goals, and who is in their family (e.g., kids or spouse).
And we’re taking this information on the road!!!!
Since it’s release in January, we’ve taken our Family Budgets tool throughout Texas, sharing the findings with city and county leaders, service providers, business leaders, and the general public.
The response has been overwhelming. Through our tool, we can show what it takes for families to get by in a specific metro area in Texas, what percentage of jobs in that area pay enough for families to get by, and the profound impact of job-based health insurance on a family’s financial security.
To date, we’ve taken our Roadshow to five cities reaching over 600 people. Our goal is to reach every metro area in Texas at least once (if not multiple times!) by the end of 2013. The culmination of the Roadshow will be a Family Economic Security Summit in Austin in the Spring of 2014 where communities from across the state can come together to create a shared state-level agenda to increase family economic security.
But we can’t do this without your help! If you would like to help bring the Roadshow to your city, fill out our speaker request form. We would love to work with you to plan either a standalone event or integrate our work into an existing agenda. The critical first step is to get the conversation going. Because it’s only by working together that we can build a road to a better Texas for everyone.
On Tuesday, the Travis County Commissioners Court passed a “living wage” requirement for county tax incentives designed to lure jobs to the area. Travis County, after two years of study on the issue, valued dignity and shared prosperity.
Under the new requirement, all employees would earn at least $11/hour, and that includes construction workers and subcontractors employed to prepare, build, or finish the site.
Let’s take the Domain in North Austin, for example, which received Travis County tax incentives in 2003. If this policy were in place then, the construction workers, carpenters, painters, and welders building out the campus would have earned a minimum of $11/hr. Additionally, the more permanent on-site workforce—maintenance, custodial, and retail—would also be earning at least $11/hr.
Why is this a big deal? The vast majority of companies receiving incentives typically pay well above $11/hr. Still, $11/hr doesn’t go very far, especially if you are supporting a family. In fact, based on our upcoming Better Texas Family Budgets research, each parent in a two-parent, two-child family would have to make $15.75 just to make ends meet in Austin. But $11 goes a lot farther than $7.50/hr (minimum wage=$7.25), the current prevailing wage for construction workers in Austin. Further, most of these workers are classified as independent contractors with no health insurance coverage, retirement benefits, or unemployment insurance. These are jobs, alright, but arguably not good jobs.
Now that Travis County has acted, the City of Austin is considering similar guidelines. Some, however, are opposed to a city requirement, noting that such a rule would cost jobs, even though tax incentives can take credit for a tiny fraction of new jobs created. Given what it takes to make ends meet in Austin, $11/hr is the least we can do to make better jobs for everyone.
Today is EITC Awareness Day. The economic impact on the Texas economy and working families is huge.
Coinciding with the onset of tax season, EITC (Earned Income Tax Credit) Day is meant to raise awareness about the financial significance of this refundable tax credit that lifts millions of Americans, including about 765,000 Texans, out of poverty (as defined by the Census Bureau’s Supplemental Poverty Measure). New research has also found that this credit not only helps families receiving the credit get by, but also get ahead by improving the school performance and potentially the lifetime earnings of their children. In Tax Year 2012, Texas once again led the nation with the most EITC dollars claimed with over $6.9 billion, an increase of nearly 30% since Tax Year 2007. For Texas, the average refund is nearly $2,600; only Alabama has a higher average EITC refund.
EITC Awareness Day also serves as a clarion call to encourage eligible filers to file their taxes at a Volunteer Income Tax Assistance (VITA) site. In 2012, more than 114,000 Texans filed their federal income taxes at more than 250 VITA sites, a 10% increase from the previous year.
The anti-poverty impact of the EITC, as well as the refundable Child Tax Credit (CTC), was even more enhanced by the American Reinvestment and Recovery Act (ARRA) expansions of both refundable tax credits. As with the EITC, the CTC pulls family income above the poverty line, with the CTC itself lifting over 411,000 children out of poverty in Texas last year. With the recent enactment of the American Taxpayer Relief Act of 2012, these EITC and CTC enhancements are extended through Tax Year 2016.
In addition to the financial stability provided by the EITC–enabling families to catch up on utility bills and pay down debt–the EITC is also helping families move up the economic ladder. Recent research has found that it helps children do better in school by reducing the toxic stress kids living in deep poverty experience. It also may increase children’s lifetime earnings potential — emerging research has found that raising a poor family’s income by $3,000 a year (a fairly typical amount for a poor family to receive from the CTC and EITC) between a child’s prenatal year and fifth birthday is associated with a 17 percent increase in earnings in adulthood.
Many families are also leveraging the “tax time moment” to climb the economic ladder by setting aside a portion of their refund for savings and investment This EITC day, we highlight and applaud the numerous Texas VITA sites that are promoting savings through the split refund option. In 2012, nearly 60 VITA sites offered modest incentives for filers to save a portion of their refund, and over 1,800 Texans participated, generating over $590,000 in savings—primarily through the OpportunityTexas, United Way Greater Houston, and United Way San Antonio efforts, as documented in Dollar for Dollar. Because of the momentum of these projects, we expect more savers at more sites in 2013.
Happy EITC Day, Texas!
As we wrapped up the RAISE Texas Training and Summit at the Federal Reserve Bank in Houston, several things came to mind:
One is the maturity of the network. Ten years ago at the first meeting, 25 people attended the Texas IDA Network to focus on one issue. This year’s summit, attended by about 150 people, included sessions on tools for public benefits enrollment, financial empowerment and municipalities, financial coaching, and how new technologies are spurring asset building innovation.
Second is the broader range of groups actively engaged, which now includes philanthropy, local elected officials, and groups that serve particular populations such as foster youth or domestic violence survivors.
Third is the contribution of CPPP and OpportunityTexas to the network on data analysis, policy advocacy, and usable local platforms such as Better Texas Family Budgets and the Texas Regional Opportunity Index. Throughout the conference, CPPP and OpportunityTexas presented at six of the 13 sessions over the day-and-a-half statewide event.
In addition to learning about the positive action by the 82nd Legislature (and state implementation) to build and protect assets, RAISE Texas is gearing up to have greater impact in the 83rd Legislature around payday lending, asset limits, and expanding postsecondary access and success. Along with a more visible state policy profile, RAISE Texas members continue to have measurable impact on the financial stability of families in their communities through existing initiatives including tax preparation, credit counseling, workforce development, and payday loan alternatives. Other innovative pilots, including Child Support for College and Ads4Next, continue to push the envelope and demonstrate that, indeed, Texas is at the forefront for local and statewide asset building innovation and practice.
In 2011, nine percent of Texas teenagers age 16 to 19 were neither in school nor in the workforce. Unless Texas takes action, these young people will likely face substantial personal challenges to success and impose a large cost on taxpayers in the short- and long-term.
According to a new KIDS COUNT report from the Annie E. Casey Foundation, employment among youth ages 16 to 24 is at its lowest level since World War II and has decreased substantially since 2000. The report, Youth and Work: Restoring Teen and Young Adult Connections to Opportunity, illustrates the high cost of youth unemployment for young people, their families, and the economy both now and in the future. It provides examples of best practices and recommends concrete action items that we can take to help reconnect young people to the labor market and make them more successful:
These are particularly relevant for Texas. While the overall Texas economy has improved since the Great Recession, career opportunities for youth continue to lag. In Texas, 24 percent of teenagers ages 16 to 19 and 63 percent of young adults ages 20-24 are employed. Further, approximately 9.8 percent of Texas teenagers and young adults in this age range (16-24) were classified as in the labor market but unemployed in 2011, a substantially higher rate than Texas’ overall unemployment rate of 7.9 percent. With such high unemployment rates, youth are missing out on the experience and soft skills necessary to succeed in the 21st century labor market.
More than one quarter of Texas’ population is under age 18, and the child population increased by 1 million from 2000 to 2010. As a state with a large, and growing, number of young people, Texas can and must do better to ensure that youth are able to succeed in the labor market.