|
ARCHIVE
|
Identity Theft, State Retirement Systems
January 2, 2008
|
Affordable Housing, Grandparents, Utah's Tax Structure
November 28, 2007
|
Vouchers, School District Splits, Voting
October 25, 2007
|
Concurrent Enrollment, ACT Scores, Stroke Prevention
September 26, 2007
|
Water, Climate, Health, Refugees
August 29, 2007
|
[MORE]
|
|
|  |
|
|
Strengthening our Economic Future
Collaborative Policy Initiative Builds Consensus Around Bold Policy Proposals
by Lane Summerhays, Chair, United Way Financial Stability Council
Just over one
year ago, United Way of Salt Lake, in partnership with United Way of Northern
Utah and United Way of Utah County, released a report entitled, “Living on the
Edge: Utahns’ Perspectives on Bankruptcy and Financial Instability.” The report
shed light on the complexity of financial problems that often lead to
bankruptcy, as well as the extent to which Utah households, particularly
middle-income households, are experiencing a growing sense of financial
insecurity. The report found five key
areas which contribute significantly to the financial instability of Utah
families: a) stagnant and/or declining
median wages; b) the high cost of housing; c) rapidly increasing health care
and health insurance costs; 4) inadequate financial education and financial
literacy; and 5) the lack of household savings (especially for emergencies,
higher education, and retirement).
The extent to
which these challenges impact families, our economy, and our future is so
significant, that a broad group of community leaders committed to spend six months
exploring potential solutions that could have broad reach and deep impact. In April of 2007, 130 business, civic and
community leaders convened by United Way began a process of developing bold
strategies to achieve:
- A strong middle class with
income sufficient to meet basic needs.
- Affordable health care and
housing for every Utahn.
- Opportunity and incentive to
save and form assets for all families.
- Consistent and comprehensive
financial education for all.
Income
Median household income, when adjusted for inflation (CPI),
has declined since 1980. Middle-class
families are finding it especially difficult to afford basic needs such as
housing, health care, investments for retirement and college savings. Economic mobility among low- and
middle-income families appears to be declining. These trends may pose significant threats to our future economic
and social stability. The causes,
long-term impact, and potential remedies of this problem require continued
study and high-level attention.
However, immediate action can be taken to improve academic achievement,
college readiness, and attainment of post-secondary education. We must reverse the trend of declining
college enrollment and strive to motivate and prepare every student in Utah for
post-secondary education – and then assure that each student has the
opportunity to secure that education regardless of their personal financial
situation. Educational initiatives such
as this must also be coupled with continued efforts to develop, retain and
attract high wage jobs to our state.
Financial Education
While there are many existing sources of financial education
and an abundance of programs, curricula and resources, there are many powerful
barriers that prevent people from obtaining and/or utilizing existing
information to form strong financial habits.
To address these challenges, we must find ways to embed simple and
consistent financial education messages and tools in schools, churches,
workplaces, community organizations and families. To do this we should build on and connect existing successful
models by developing clear, consistent and simple messaging in multiple
languages – and provide access to those models through a “one-stop” shop that
is tied to a broad and effective social marketing campaign. We should build on existing models of
financial education in the public school system in grades K-12 and link that
education to education delivered in churches, workplaces and any other
appropriate location. In addition, we
should carefully examine the consumer impact of predatory lending and high risk
credit and explore strategies for curtailing practices that prey on the
financially vulnerable.
Savings and Assets
Across the country, one-quarter of Caucasian children and
one-half of non-Caucasian children grow up in households without any
significant savings or resources available for investment. Half of all adults nearing retirement age
have $10,000 or less in an employer-based or individual retirement savings
account). As a result, a projected 40 percent
of today’s baby boomers are likely to depend almost entirely on Social
Security’s poverty-level benefit after age 70.
United Way’s Financial Stability Council recommends supporting
strategies that help all Utahns invest in education, retirement, homeownership
and other productive assets by creating and supporting default saving and
investing behaviors for individuals and families. These “default” savings
strategies should include both the establishment of Children’s Savings Accounts
(CSAs), expanded access to automatic, professionally administered 401(k) plans,
and modification or elimination of asset tests in public assistance programs.
Housing
The growing gap between income and housing costs hurts
everything from the availability of crucial components of the workforce to the
performance of children in school. If this trend continues, Utah’s strong
economic position and its long-term economic vitality will be lost. To address this problem we must significantly
increase private, local, state and federal resources for affordable housing
development. At the state level, we
should establish one or more permanent and ongoing funding sources that
generate at least $20 million/year and can be leveraged to secure sufficient
resources to invest in a wide range of affordable housing needs. In addition, we must also work to strengthen
local government commitment to supporting the development of affordable housing
and give preference for new resources to local governments and/or developers
that proactively implement affordable housing plans.
Health Care
Utah’s health system faces significant and urgent challenges. Record numbers of Utahns are without health coverage
and the cost of health insurance
premiums for those individuals, families and businesses thatdo have health coverage is skyrocketing. In
the past10 years, median
household incomes in Utah grew
by 15 percent, while family
health insurance premiums grew by 109percent. If this continues, the
cost of health insurance
premiums will exceed household income within 20 years. Many businesses simply cannot afford to offer insurance anymore. The percentage of private
businesses that offer health insurance in Utah has declined from 57.4 percent
in 1998 to 44.1 percent in 2005. Utah is now in the top 10states for businesses that are dropping
health benefits.
Meaningful reform of our health care system will take several years to
implement and must address the
challenges of costs, access and quality together. Building on the work of the
Financial Stability Council, legislative leaders Representative David Clark and
Senator Sheldon Killpack have teamed up with Governor Huntsman to propose a
conservative, market-driven framework for reform that will enhance individual
responsibility and consumer choice while improving overall quality and
access. To establish the foundations
for a multi-year systemic reform effort, we must begin by providing consumers
with better cost and quality information, promoting healthy behaviors, and
maximizing enrollment in existing programs.
Then, we must develop a plan to realign incentives within our system to
allow for greater competition, individual responsibility, and consumer choice.
Going Forward
The goal of the Financial Stability Council was to stimulate dialogue
and build consensus around visionary ideas that have the potential for broad
reach and deep impact among the citizens of Utah. As the 2008 Legislature begins, state policy makers will have
the opportunity to make meaningful progress in each of the five areas. Senator Hillyard is sponsoring legislation
to expand the Regent’s Scholarship program to all qualifying high-school
graduates. Senator Pat Jones is
sponsoring legislation to expand financial education opportunities in grades
K-12. Congress will be considering
legislation to make Children’s Savings Accounts a reality. Governor Huntsman has recommended additional
funding for affordable housing development, and as described above, Utah is
poised to make significant progress in reforming our health care system.
[PRINTER FRIENDLY VERSION]
|
|
| |
|
|
|
LETTERS
|
|
There are no letters for this article. To post your own letter, click Post Letter.
|
|
[POST LETTER]
|
|
|
|
