In these challenging economic times, each of us is responsible both for holding on to the dollars we have coming into our households as well as planning for the dollars we need to cover our obligations.
The mission of the Walla Walla Asset Building Coalition is to help support community members who are trying to do both of these difficult tasks.
Two examples highlight the multi-faceted approach of the Coalition’s work.
As a short-term effort, the Coalition kicked off our second annual campaign to educate area residents about the federal Earned Income Tax Credit. This is a refundable credit for working families that is worth on average about $3,000 for Walla Walla households that choose to claim it.
Last year the credit was worth more than $7.7 million dollars to Walla Walla County residents, an increase of almost $300,000 over the previous year. It has been estimated that there may be another $1 million of unclaimed EITC dollars. The Coalition is trying to encourage eligible households to apply for the Credit and not miss out!
Also during tax season the Coalition is partnering with the AARP Tax Aide Program, which helps area residents prepare their tax returns and also spots opportunities such as the EITC and the Child Tax Credit.
The Coalition is fully aware, though, that it is not enough to simply bring dollars into our homes. It is also important that we understand how to make the best decisions about those dollars. We need a long-term strategy as well as a short-term one.
To that end, this Tuesday, the Coalition, along with Banner Bank, is kicking off a 10-module financial education class called Money Smart. Created by the FDIC, and used with great success around the country, the Money Smart program will provide a class of 30 Walla Walla residents with the opportunity to learn more about banking, budgeting, saving, consumer awareness strategies and credit and debt issues.
The Coalition is also working to develop a community-wide savings campaign and is looking at ways of helping bring Walla Walla residents who are "unbanked" or "underbanked" into a more successful relationship with a mainstream financial institution.
This work is not just taking place in Walla Walla. Our local group is just one of 15 regional networks that are focusing community attention and energy on these activities.
Over the past five years, Washington state has made modest but far reaching investments in this type of work, last year committing $500,000 of state dollars toward these 15 networks.
That very small investment has paid off many times over. Looking at just one measure — increased EITC dollars into the state — last year Washington saw more than a $50 million increase compared to the year before, for an almost $700 million total EITC windfall. This says nothing of the longer-term benefits to the tens of thousands of Washington state residents who are improving their savings rates, taking financial education classes and learning to create household budgets.
Despite these innovative and cost-effective initiatives, and others around the state, Gov. Chris Gregoire has eliminated support for state asset building initiatives from her proposed 2010-11 budget. This is a grievous mistake, given the significant, proven short- and long-term gains that asset building efforts offer.
Last week in Olympia leaders from local asset building groups met with our legislators to impress on them improvements that come about from these activities. We hope that they appreciate and advocate for investing in supporting sound long-term financial habits of state residents. Their leadership to keep asset building a part of our state’s safety network is paramount.
The scary truth is that some of the reason why many families are reeling from the economic downturn suffered is because of an incomplete or incorrect understand of basic financial management principles. Asset building initiatives can help provide the financial education and support so that such mistakes are not made again.
Noah Leavitt is the coordinator of the Walla Walla Asset Building Coalition and can be reached at email@example.com