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The Biggest State Policy Changes of 2011
By Ethan Geiling on 01/11/2012 @ 10:45 AM
2011 was an eventful state policy year, to say the least! As states struggled with budget deficits, advocates worked to defend policies and programs from cuts. In addition, however, there were also a number of significant victories. Below are highlights of some of the most significant state policy changes of 2011.
- State Earned Income Tax Credit: One of the most exciting 2011 policy changes happened in Connecticut, where advocates successfully passed a fully-refundable state EITC at 30% of the federal credit (see page 6 of our Assets & Opportunity Scorecard Resource Guide to read the story behind this change). Illinois doubled its state EITC from 5% of the federal credit to 10%. Unfortunately, Michigan reduced its EITC from 20% to 6% of the federal credit. Wisconsin also reduced its EITC for families with two or more children.
- Asset Limits in Public Benefit Programs: The biggest and most highly-publicized asset limit change happened in Michigan; the state unfortunately reinstated the asset test in the Supplemental Nutrition Assistance Program (SNAP), limiting assistance to people with less than $5,000 in liquid assets and $15,000 in vehicle value. On the positive side, Nebraska raised its SNAP asset limits to $25,000 in liquid assets with all non-liquid assets excluded. Unfortunately, Michigan may have started a nasty trend that is continuing into 2012. Pennsylvania recently announced that it plans to reinstate the asset test in SNAP, and Colorado legislators are considering reinstating the Medicaid asset test.
- State Individual Development Account Programs: Alabama created a state IDA program, although the program didn’t receive funding. A handful of states — including Georgia, Massachusetts, Mississippi, and Texas — introduced legislation to create state IDA programs or to restore funding that had been previously slashed. Unfortunately, both Minnesota and Louisiana have eliminated state IDA funding for fiscal year 2012. In Minnesota, this cut meant the loss of approximately $250,000, and in Louisiana, it meant the loss of $1.3 million in state IDA funding.
- Financial Education: Massachusetts launched a statewide Office of Financial Education to coordinate and enhance financial education delivery across the state (see page 6 of our Assets & Opportunity Scorecard Resource Guide for the story behind financial education in Massachusetts).
- 529 College Savings Plans: West Virginia launched a robust matching grant program featuring up to a $500 annual match for low-income families. North Dakota implemented a $100 matching grant incentive for newborns. However, on the downside Minnesota completely eliminated its matching plan. Three states minimized major barriers to saving by adjusting their plans’ minimum deposit and fee rules. Both Alabama and Rhode Island removed minimum deposit requirements from their plans. Indiana introduced a no-fee savings plan to benefit low-income residents.
- Job Quality Standards: Eight states raised the minimum wage for workers beginning in 2012: Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington. These increases range from 28 to 37 cents per hour. Washington is the first state to set its minimum wage about $9 per hour.
- Prize-Linked Savings: Although it’s a relatively new policy, prize-linked savings saw considerable action in 2011 (see our State Stroke-of-a-Pen guide for more information about prize-linked savings). Washington, Nebraska and North Carolina passed legislation in 2011 that allows certain financial institutions to offer prize-linked savings programs. Four other states – Arkansas, Iowa, Mississippi and New Mexico introduced legislation to allow PLS programs in 2011, but the bills did not pass.
Can’t wait to see what’s in store for 2012!
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