A report from the Corporation for Enterprise Development (CFED) finds Minnesota does well on many aspects of its Assets & Opportunity Scorecard, but too many families face persistent financial insecurity. The situation is often much worse for Minnesota’s households of color.
CFED, a nonprofit that works to improve economic opportunity and financial stability, released its annual scorecard earlier this year. The Steep Climb to Economic Opportunity for Vulnerable Families measures the financial security of Americans and their opportunities to climb the economic ladder in all 50 states and Washington, DC. The Scorecard focuses on five issue areas:
- Financial assets and income,
- Businesses and jobs,
- Housing and homeownership,
- Health care, and
Minnesota ranks 6th highest for outcomes and 9th for policies among the states in CFED’s Assets & Opportunity Scorecard. Even so, over a quarter of Minnesotans don’t have enough liquid assets, such as savings accounts, to live at the poverty level for three months if they suddenly lost their jobs.
The report also shows that Minnesota has some tremendous gaps in financial security between white residents and people of color. The homeownership rate for households of color is a little more than half of the rate for white households, and is much worse for some communities. For example, only one-quarter of black households own a home.
Additionally, black and Hispanic Minnesotans are three times more likely to forgo a doctor’s visit due to cost than white Minnesotans; this is likely related to the fact that they are much more likely to not have health insurance. And while this insurance gap has shrunk recently, the uninsurance rate for households of color in Minnesota remains three times that of white Minnesotans. The disparity is worst for Hispanic Minnesotans, who are uninsured at five times the rate of white Minnesotans.
The CFED report commends Minnesota for enacting policies that support families in attaining financial stability, but also provides a road map for how to make further progress.
CFED notes the importance of tax policies in families’ ability to earn enough to afford basic needs and to begin to save for a more secure future. But in many states, lower-income people pay a larger share of their incomes in state and local taxes than those with the highest incomes – and Minnesota is no exception. CFED gives Minnesota high marks for having a strong state Earned Income Tax Credit (the Working Family Credit) and property tax refunds for homeowners and renters.
Additionally, low-income families need health insurance like everyone else, yet they may struggle to afford premiums and co-payments. Better access to health insurance through expansion of Medicaid means Minnesotans are more likely to get the medical treatment they need, and a broken arm is less likely to send a family deep into debt.
But we still have a long way to go. That’s why more than 100 organizations from across the state, including the Minnesota Budget Project, have joined together in the Minnesota Asset Building Coalition (MABC). MABC is supporting several proposals this session to improve financial security for families here in the state, such as:
- Tax time financial assistance, which provides additional funding at Volunteer Income Tax Assistance (VITA) sites so that low-income taxpayers can receive the tax credits for which they qualify, and access financial services that meet their needs, like opening a savings account.
- Vehicle ownership and repair programs so that nonprofits can better connect low-income workers to working vehicles so they can get to good jobs to support their families.
- Expanding the Working Family Credit and making targeted increases in the Child and Dependent Care Credit so more Minnesotans can succeed in the workplace and better make ends meet.
- Improving access to retirement savings plans for workers who don’t currently have an employer-based plan and want to be in better control of their financial futures.