ECONOMIC OPPORTUNITY

As the national recession enters a second year, Texas is retreating from a three-year period of economic expansion and broadbased job growth. With jobs and profits harder to come by, Texas will need to respond to the immediate challenges posed by an impending global recession while crafting a more sustainable economic development strategy that equally considers the economic needs of companies and working families. The State of Working Texas 2008 is the latest in a series of joint projects of CPPP and the Economic Policy Institute, which published The State of Working America 2008/2009 earlier this year.

Yesterday, CPPP brought together state and national experts to discuss steps Texas could take to strengthen our unemployment insurance system. We were joined by Maurice Emsellem, the Policy Co-Director of the National Employment Law Project.

Presentations given at the event by CPPP's Don Baylor and Mr. Emsellem are now available online.

Meaningful access to higher education is a cornerstone of economic opportunity. Higher educational attainment strengthens the workforce, increases earnings, and often leads to a better quality of lifeâ€"for individuals and the broader society. To remain competitive in the global marketplace, Texas must support students who are seeking higher education. This policy page discusses the underfunding of Texas’ financial aid programs and the Texas Higher Education Coordinating Board’s strategies to improve educational participation and success.

Our Texas KIDS COUNT Project reports annually on key measures of child well-being, monitoring our state’s progress to ensure that all Texas children can grow into healthy, secure, and educated citizens who contribute to our common good.

This year’s report includes an essay focusing on the steps Texas must take if we are serious about closing educational gaps between economically advantaged, primarily White students and economically disadvantaged, primarily minority students in achievement (how well children do in school) and attainment (how far children go in school).

Texans are losing jobs and taking longer to find work in today’s tough economic environment, reminding us this Labor Day of the importance of Unemployment Insurance (UI). Unemployment checks enable Texans to buy groceries, pay rent, and meet basic needs, helping both Texas families and the Texas economy. Unfortunately, Texas state policies prevent four of every five jobless Texans from collecting UI. This paper recommends common-sense, affordable changes to shore up this vital public structure that protects Texans in tough economic times. Our recommendations include new definitions for eligibility, modern infrastructure to process claims, and a smarter, sustainable funding plan.

New data released today by the U.S. Census Bureau shows that many Texans did not share the benefits of economic expansion in 2007 and still cannot meet their basic needs. Hard work for Texans was rewarded in far too many cases with very low wages and no employer-sponsored health insurance. While Texas poverty and income improved slightly in 2007, poverty rates remain worse than during the last recession, and Texas still has the worst uninsured rate in the U.S. The data suggest that Texas state policies make it harder, not easier, for hardworking Texans to get out of poverty and to get health insurance.

More than 400,000 Texans may be eligible to receive economic stimulus checks but have not yet made a claim, according to the IRS. Employers, nonprofits, and state and local governments ought to consider helping locate eligible Texans and encourage them to file for stimulus payments. These rebates can still be claimed by filing a 2007 tax return before the October 15 deadline. Veterans, retirees, and others who typically are not required to file tax returns are at the highest risk of not receiving their share of the stimulus. As of late June, Texans are missing out on more than $124 million in unclaimed rebates.

Senior Policy Analyst Don Baylor provided comments on the rules of the Prepaid Higher Education Tuition Board's Texas Tuition Promise Fund. Recommendations include increasing participation by creating “provisional” accounts between open enrollment periods and driving contributions to the Save & Match fund by harnessing the tax-deductibility of donations to a nonprofit foundation.

The gap between the richest and poorest families, and between the richest and middle-income families grew substantially in Texas over the past two decades, according to a new study by the national Center on Budget and Policy Priorities and the Economic Policy Institute. Growing income inequality tears at the fabric of our economy, and shows our public policies are failing to promote shared prosperity. In fact, inequality has accelerated since the late 1990s as incomes have fallen for poor families and virtually stagnated for middle-income families in Texas. (The full report can be found at http://www.cbpp.org/4-9-08sfp.htm.)

An educated and skilled workforce is critical to Texas’ economic vitality and competitiveness. 529 College Savings Plans offer important tools for increasing educational levels by improving K-12 student achievement, minimizing dropouts, supporting our lagging financial aid system, and reducing dependence on expensive student loans. Increasing participation in these college savings plans should be a vital component of statewide efforts to increase college enrollment and completion. This policy page introduces college savings plans, how they operate, and why a matched savings policy can move Texas forward.

It’s the American Dream that if you work hard you get ahead. But with the high cost of living these days, that isn’t always the case. Sometimes families run short of cash and turn to payday loansâ€"short-term loans that give Texans a cash advance on their paychecks, Social Security payments, or veteran’s benefits. Millions of families use these loans when they are short of cash, but the high cost outweighs the convenience. Interest rates start at 400 percent APR and can surpass 1,000 percent, and it is typical for a worker to pay $180 in interest on a 10-day, $700 loan. More often than not, the individual is unable to repay the full amount within the short repayment period, and the debt balloons. In fact, most payday lending volume comes from individuals forced by the cost of the original loan to take out another and another. We’ve seen the devastating impact of subprime lending on the economy. But what do payday loans cost families and communities in Texas?

Today, Governor Rick Perry issued a proclamation designating January 31st as Earned Income Tax Credit (EITC) Awareness Day in Texas. To read the proclamation, see http://www.uwtexas.org/data/docs/EITC_Procalamation.pdf. The EITC is a refundable federal tax credit for eligible households with earned income no more than $39,783. For the 2008 filing season, the maximum refund is $4,716. As the nation’s most successful anti-poverty program, the EITC enables working families to address basic needs while also providing a platform for financial stability and success. Families can apply online for the EITC at http://www.irs.gov/efile/article/0,,id=118986,00.html or by visiting a local Volunteer Income Tax Assistance (VITA) site. To find a VITA location nearest you, see http://www.uwtexas.org/data/docs/Texas_Tax_Preparation_Sites.pdf.

The recently enacted 2008 federal budget bill includes a boost for community tax centers that help working families file tax returns for little to no cost. The bill authorizes an $8 million matching grant demonstration program for Community Volunteer Income Tax Assistance (VITA) programs through the end of Federal Fiscal Year 2009 (September 30, 2009). Community VITA programs play a critical role in Texas and across the nation by helping lower-income individuals claim valuable tax credits and refunds, including the Earned Income Tax Credit, and the Child Tax Credit. CPPP has prepared a short and user-friendly presentation to educate volunteer tax preparers about the impact of savings on public benefits eligibility, as well as new flyers (in English and Spanish) that volunteer tax preparers can give to their low-income clients when helping prepare their taxes.