By Sheryl Harris, Plain Dealing

More than a quarter of Americans have little or no savings to help them survive an emergency that leads to a three-month loss of income, according to a new report on the health of Americans’ finances.

And that’s only if they can sell their homes or cars to get fast cash.

The number jumps to 44 percent when researchers exclude assets like homes, businesses and cars that could be sold to raise cash, according to the Washington-based nonprofit Corporation for Enterprise Development, which got an assist from Ohio Policy Matters.

In other words, lots of us are asset poor, even if our incomes may look OK on paper.

The report is an effort to go beyond the poverty figures released annually by the U.S. Census and take a deeper look at Americans’ financial security, according to Jennifer Brooks, one of the authors.

To create its state rankings and recommendations, the group compiled publicly available data and supplemented it with information purchased from private sources, like credit bureaus. As it looked at the data, it found:

• More than half of consumers have subprime credit scores.

• One in five jobs is low-wage.

• More than half of employers don’t offer healthcare.

• Just over half of American workers either don’t have or don’t participate in retirement plans.

“Ohio is doing better than many other states,” Brooks said. The state has policies – including encouraging saving for college, lowering barriers for mid-income unemployed to receive assistance, barring car-title loans and supporting microenterprise — that push it ahead of states like Nevada that were similarly slammed by the foreclosure crisis, she said.

But although the state has great architecture in place to help residents, it can do a better job, notes David Rothstein of Ohio Policy Matters.

For example, he said, Ohio requires financial literacy in schools, but “because that’s an unfunded mandate, some schools do it, some don’t.”

Similarly, the report gives the state props for having a payday loan law on the books that caps loan rates at 28 percent. It doesn’t, however, take into account loopholes that allow payday stores to continue to lend at triple-digit interest rates.

The Corporation for Enterprise Development recommends a range of policy changes states could make that could help consumers build savings, ranging from strengthening financial literacy in schools to establishing the state equivalent of the Earned Income Tax Credit.

It also recommends tweaking the federal Saver’s Credit. The tax credit was created to help low- to moderate-income consumers save for retirement, Brooks said, but it could be more effective if it was refundable and easier to use.

More on the study here.

Study finds few have enough savings to get through emergencies

What does it mean to be poor?

If it means living at or below the poverty line, then 15 percent of Americans — some 46 million people — qualify. But if it means living with a decent income and hardly any savings — so that one piece of bad luck, one major financial blow, could land you in serious, lasting trouble — then it’s a much larger number. In fact, it’s almost half the country.

“The resources that people have — they are using up those resources,” said Jennifer Brooks, director of state and local policy at the Corporation for Enterprise Development, a Washington, D.C., advocacy group. “They’re living off their savings. They’re at the end of their rope.”

The group issued a report today examining so-called liquid asset poverty households — the people who aren’t living below the poverty line, but don’t have enough money saved to weather a significant emergency.

According to the report, 43 percent of households in America — some 127.5 million people — are liquid-asset poor. If one of these households experiences a sudden loss of income, caused, for example, by a layoff or a medical emergency, it will fall below the poverty line within three months. People in these households simply don’t have enough cash to make it for very long in a crisis.

The findings underscore the struggles of many Americans during what has often seemed like an economic recovery in name only. While the Great Recession officially ended more than two years ago, unemployment remains high and wages have barely budged for most workers. For more people, whether they draw a paycheck or not, a life free of deprivation and financial anxiety seems perpetually out of reach.

That’s not to say that everyone who is liquid-asset poor spends all their time fretting. On the contrary, because many have regular paychecks coming in, they may not grasp the precariousness of their situation.

“They don’t necessarily realize how close people can be to one interruption to income or one interruption to health benefits,” said David Rothstein, the project director for asset building at the non-profit Policy Matters Ohio. “They’re one paycheck away from being in debt.”

Rothstein, who also serves on a steering committee at the Corporation for Enterprise Development, told The Huffington Post that payday lenders — who loan money to desperate borrowers at high interest rates, drawing people into hard-to-escape cycles of debt — are “a huge problem” in Ohio, as in many other states. People often turn to payday lenders to cover one-time, unexpected expenses, but can end up in a long and costly relationship.

“People say things like, it’s just one mechanical problem with their car,” said Rothstein. Before they know it, he said, “every other week, they’re back at the payday lending shop.”

The Corporation for Enterprise Development findings echo other recent studies showing that many Americans are ill-prepared for financial emergencies. Analysts said the reasons include flat wages, the high cost of medical treatment and the nationwide drop in housing values leaving homeowners with less wealth than they believed they had.

Andrea Levere, the president of Corporation for Enterprise Development, told HuffPost that greater financial literacy might have helped prevent the current situation.

People can “graduate high school and not know how to write a check,” Levere said, adding that an increased emphasis on personal responsibility for budgeting and spending sould be an important part of any step forward.

At the same time, Corporation for Enterprise Development officials were quick to argue that public policy needs to address the scope of the problem. Levere cited the example of asset limits in public benefit programs, which restrict services like food assistance and public health insurance to households with few or no assets — a policy that critics say denies help to many people in need.

“In some cases,” said Levere, “it means they can’t even own a car that is in good enough shape to get them to work.”

Brooks agreed. “A family that loses its job, that was maybe solidly middle class, in a state where they have restrictive asset tests, is going to have to liquidate all their assets, all their savings for the future” in order to qualify for benefits.

The report maintains that there are a number of measures that could alleviate liquid asset poverty, from strengthening consumer protections against payday lenders to making greater assistance available to first-time homebuyers. Levere said even minor policy adjustments could have “revolutionary implications.”

“There’s a lot of ways forward. It doesn’t mean it’s not tough,” Levere said. “I’m a great believer in one step at a time.”

The 2012 Assets & Opportunity Scorecard ranked Ohio 37th in the country overall for how its residents fare in terms of achieving financial security across 52 measures in five different issue areas. Many of Ohio’s residents have jobs, but they lack adequate savings or other assets to cover expenses for three months if they lose a steady income.

State ranks 37th overall for the financial stability of its residents

Washington, D.C. — In Ohio today, 27.3% of households are “asset poor,” meaning they have little or no
financial cushion to rely on if unemployment or another emergency leads to a loss of income, according to
a report released today by the national nonprofit Corporation for Enterprise Development (CFED).

The 2012 Assets & Opportunity Scorecard ranked Ohio 37th in the country overall for how its residents fare
in terms of achieving financial security across 52 measures in five different issue areas. Many of Ohio’s
residents have jobs, but they lack adequate savings or other assets to cover expenses for three months if
they lose a steady income. Asset poverty, the Scorecard’s signature measure, is a conservative estimate of
financial security since it counts all assets, including those—such as a home—that would need to be
liquidated to be used for day‐to‐day needs. A more realistic measure of the resources available to families
is “liquid asset poverty,” which excludes assets such as a home or car that are not easily converted to cash.
Excluding these assets, the liquid asset poverty rate increases to 43.6% of Ohio residents.

For asset poor families, scraping by day to day is a constant struggle and investing in the future is all but
impossible. “Growing numbers of Americans have almost no savings or other assets to fall back on if they
lose their jobs or face a medical crisis,” said Andrea Levere, president of CFED. “Without those savings,
few will be able to invest in a more economically secure future, including buying a home, saving for their
children’s college educations or building a retirement nest egg.”

The Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ ability to
save and build wealth, fend off poverty and create a more prosperous future. The Scorecard explores how
well residents are faring in the 50 states and the District of Columbia and assesses policies that are helping
residents build and protect assets across five issue areas: Financial Assets & Income, Businesses & Jobs,
Housing & Homeownership, Health Care and Education.

Ohio earns a “C” in Financial Assets & Income, leaving its residents economically vulnerable. The state
ranks 40th in bankruptcy rate, 41st in underbanked households and 36th in borrowers 90+ days overdue.
Ohio has one of the worst foreclosure rates in the country, ranking 45th. While the state ranks 21st in overall
homeownership rate, the state ranks 43rd in both homeownership by race and income. When it comes to
Education, the state ranks 38th in both two‐ and four‐year college degree, and 44th in average college
graduate debt and 43rd in college graduates with debt.

The Scorecard highlights a dozen policy solutions that can help Ohio increase opportunity and promote
financial well‐being for all residents. To address low average annual pay and high income poverty, Ohio
should increase the minimum wage, implement a state Earned Income Tax Credit and make the
Dependent Care Credit refundable to supplement the earnings of low‐income workers. To address high
asset poverty and bankruptcy rates, Ohio should enact stronger consumer protection laws and close
loopholes regulating payday lenders, rent‐to‐own stores and paid tax preparation stores. In addition, to increase homeownership and address high foreclosure rates, Ohio should enact foreclosure protection
laws regulating mortgage servicers and allow local land banking to ensure strong management and
redevelopment of foreclosed properties.

“We cannot let the challenges facing our economy prevent us from investing in policies with a proven
record of helping struggling families succeed,” said David Rothstein, project director for asset building at
Policy Matters Ohio, a Lead State Organization for the national Assets & Opportunity Network. “As a state,
we must take the necessary steps today to protect vulnerable families from further financial shocks and lay
the groundwork for future prosperity.”

Nationally, the Scorecard paints a picture of a country where low‐ and moderate‐income families continue
to fall further down the economic ladder more than two years after the official end of the recession.

• More than half of consumers (56%) have subprime credit scores.
• Between the third quarters of 2008 and 2011, the home foreclosure rate increased by 50%, widening
  the already‐considerable homeownership gap between white households and households of color.
  As of 2010, 73% of white households owned homes, compared with just 47% of households of color.
• One in five jobs is low‐wage and nearly half of employers do not offer health insurance. In
  addition, 55% of workers do not have or participate in retirement plans.
• While the number of people getting four‐year college degrees is up slightly, the average debt for
  graduating college seniors has risen 19% since 2007 to $25,250.

Levere added that the Scorecard findings are “particularly disturbing in the context of precipitous drops in
incomes for many Americans and widening of the wealth gap between the richest and poorest households.”
The report found growing racial gaps in asset poverty, with the number of people of color who are asset
poor more than double the number of white people (43% versus 20%). The number of people of color who
were found to be liquid asset poor was nearly double the number of white people (60% versus 32%).
To read an analysis of key Ohio findings from the Assets & Opportunity Scorecard click here. To access the
complete Scorecard visit http://scorecard.cfed.org.

# # #

CFED expands economic opportunity by helping Americans start and grow businesses, go to college, own
a home and save for their children’s and their own economic futures. We identify promising ideas, test and
refine them in communities to find out what works, craft policies and products to help good ideas reach
scale, and develop partnerships to promote lasting change. We bring together community practice, public
policy and private markets in new and effective ways to achieve greater economic impact.

The national Assets & Opportunity Network is a movement‐oriented group of advocates, practitioners,
policymakers and others working to expand the reach and deepen the impact of asset‐based strategies.
Network members are on the frontlines of advocacy, coalition building and service delivery.

Selected media coverage

Working Poor: Almost Half Of U.S. Households Live One Crisis From The Bread Line

“Successful renewable energy programs and energy efficiency projects over the past few years have proven that there is significant potential for Ohio to meet the growing demands of the clean energy sector. The new Green Manufacturing Action Plan report affirms it and proves that Ohio can’t afford to stand on the sidelines while other states and countries compete to win good jobs in one of the world’s fastest growing industries.”

Shanelle Smith, Ohio BlueGreen Alliance

The Ohio Green Manufacturing Action Plan
Next Steps in a Clean Energy Manufacturing Policy Agenda for Ohio

Introduction
Over the past five years, Ohio has created policies that prioritized clean energy and sought to rebrand the state as “America’s Energy Gateway.” The state started incentive programs for renewable energy installations and energy efficiency projects, and also passed an Alternative Energy Portfolio standard mandating greater use of renewable and advanced energy resources. Unfortunately, Ohio’s energy policies have been less aggressive in their attempts to build a strong clean energy product supply chain to aid Ohio’s large manufacturing sector. There has been progress, but not enough. Policies specifically targeting the advancement of clean energy manufacturing are scarce.

Ohio can’t afford this ambivalence toward one of the world’s fasting growing industries. The state has lost over 400,000 manufacturing jobs since 2000 and needs to reassert itself as a manufacturing hub. The infrastructure and expertise remain in place: Ohio still has over 630,000 skilled manufacturing employees and the sector accounts for almost one-fifth of the state’s gross domestic product (GDP). Ohio policymakers should bolster the manufacturing sector by doing more to support those trying to compete in the growing clean energy industry.

Clean energy manufacturing is similar in many ways to traditional manufacturing and many existing firms are already making the component parts needed for clean energy systems. This is not an exotic economic activity. It is a crucial opportunity for the existing workforce and manufacturing base to supply new demand for their products.

One priority is for the state to implement policy mechanisms that increase access to capital for Ohio clean energy manufacturers (CEMs). Since the financial crisis and subsequent recession, private lenders have become extremely cautious and capital has become insufficiently accessible. For CEMs, these difficulties are exacerbated by clean energy’s status as an emerging industry that remains unfamiliar. This feeds perceptions of higher risk. In reality, green industries are rapidly growing worldwide and Ohio companies have already seen gains from investing in clean energy. Demand for renewable energy — and all of the manufactured component parts and equipment that come with it — is growing internationally and countries are vying for market share. Ohio needs to invest in its CEMs to stay competitive and make sure the state gets its share of family-supporting manufacturing jobs.

In order to offer advice on what steps Ohio can take to win the competition for clean energy jobs, the Ohio BlueGreen Apollo Alliance has convened a task force comprised of representatives from the business, investor, labor, policy, and environmental communities. The following are the Ohio BlueGreen Apollo Green Manufacturing Action Plan (GreenMAP) policy recommendations for the creation of clean energy manufacturing jobs in Ohio.

Summary
Our recommendations in the realm of finance focus on bolstering Ohio’s current clean energy policies with capital access programs exclusive to clean energy manufacturing. Currently, Ohio lacks any financing programs focused solely on clean energy manufacturing. State aid to clean energy manufacturers is sporadic and difficult to attain. Grant programs and tax credits are helpful but do little for companies requiring loans to develop their product lines and enter the market. For this reason, we recommend that Ohio create a loan program exclusive to clean energy manufacturers. Further, loan programs should seek to maximize the benefit of public dollars by leveraging private investment.

In addition to new loan programs targeting clean energy manufacturers, we recommend the continuation and expansion of tax incentives and grant programs aimed at the clean energy industry, so long as they have standards and conditions in place to ensure appropriate use of funds. These policies have lowered the costs of becoming more energy efficient and producing one’s own renewable energy, and have increased demand for the clean energy products that are manufactured here in Ohio.

In addition to these new financing mechanisms and incentives, we also recommend:
• Prioritizing support for small to mid-size clean energy manufacturers.
• Continuing and expanding support for research and development.
• Continuing and expanding support for existing clean energy manufacturing clusters.
• Expanding workforce development programs to train employees for these new industries.
• Expanding Ohio’s demand-side clean energy policies.
• Pushing for improvements in clean energy manufacturing policy at the federal and regional levels.

Policies and programs should in all cases be structured to advance the objective of growing good green jobs in Ohio’s clean energy manufacturing sector. The following principles should guide policy development to help achieve this objective:
• Take into account positive supply chain building and job creation effects.
• Prioritize and incentivize investments based on in-state content production or job creation.
• Include family-supporting wage and benefit requirements.
• Include reasonable clawback provisions for companies that fail to meet requirements after receiving a state incentive.

Report on Green Manufacturing in Ohio Reveals More Investment Necessary to Sustain Growth

The Ohio BlueGreen Apollo Alliance today released a report that provides a roadmap to create thousands of jobs in Ohio, ensuring the state remains competitive in the global marketplace as America’s Energy Gateway. Existing factors identified in a new report, The Ohio Green Manufacturing Action Plan (GreenMAP), such as Ohio’s 630,000 skilled workers and strong manufacturing infrastructure, make it one of the best states in the nation for clean energy manufacturers to make new investments.

“Successful renewable energy programs and energy efficiency projects over the past few years have proven that there is significant potential for Ohio to meet the growing demands of the clean energy sector,” said Shanelle Smith, Ohio senior coordinator for the BlueGreen Alliance. “This report affirms it and proves that Ohio can’t afford to stand on the sidelines while other states and countries compete to win good jobs in one of the world’s fastest growing industries.”

Although Ohio has already taken steps to spur clean energy investments, the report identifies a menu of options where further incentives are necessary in order to continue growth. Those recommendations include: expanded financing and incentive support, prioritizing support for small- to mid-size clean energy manufacturers; expanding support for research and development; expanding workforce development programs to train employees for these new industries; expanding Ohio’s demand-side clean energy policies; and pushing for improvements in clean energy manufacturing policy at the federal and regional levels.

“As Ohio continues to develop new clean energy sources like wind towers, the Ohio GreenMAP will help us create jobs, becoming a leading supplier and net exporter of those systems as well,” said Wendy Patton, senior project director at Policy Matters Ohio.

Nationally, clean energy job creation has shown to be more resilient than job creation in other sectors of the economy, especially during a recession. While other sectors of the economy have shed jobs over the past few years, the number of jobs created in renewable energy has increased.

“Clean energy manufacturing represents a major family-supporting job creation engine in Ohio, we have the empty factories and skilled workforce to capitalize on this opportunity, now is the time to use the GreenMAP to help put Ohioans back to work in good jobs making the things that America need most,” said Harriet Applegate, executive secretary of the North Shore Federation of Labor.

Outside of Ohio, the number of clean energy investments is accelerating. Global investment in green energy passed $1 trillion thanks to a record investment of $260 billion this year.

“Ohio can’t afford to wait while other states and nations retool to manufacture the clean energy technologies in high demand worldwide. This plan provides us with a framework that will spur private investment and create clean energy manufacturing jobs in the state,” said Kimberly Gibson, director of the EWI Energy Center.

A significant number of Ohioans already work in the clean economy. Between 2003 and 2010, Ohio added 16,793 clean jobs, growing this sector of the economy by 2.5 percent annually. Clean energy jobs pay better than the average job in Ohio, paying $39,275 on average, which is over $3,500 more annually.

“Manufacturing for the clean energy sector in Ohio will not only put the unemployed back to work but will also reduce pollution and localize our energy sources, making us healthier and less dependent on foreign oil,” said Ashley Craig, senior environmental business specialist at the Environmental Law and Policy Center.

###

Get the full report here

By John Higgins

The Akron school board’s decision to sit out the March primary and instead try for a new-money levy in November raises the stakes at the bargaining table for teachers, whose two-year contract expires this year.

Both sides agree that a negotiation demonstrating the teachers’ willingness to sacrifice could help win support for a tax hike in tough times.

But how much sacrifice will be enough?

School officials, parents and voters in four area districts seeking new money on the March ballot — Woodridge, Buckeye, Field and Waterloo — are asking the same question.

Although superintendents have tried to keep cuts away from the classroom, wages and benefits comprise 73 to 83 percent of those districts’ budgets.

This year is different: The size of Akron’s projected deficit next year — $22 million — means the district won’t be able to shield teachers and other staff from steep cuts.

“We tried to stretch our dollars as far as we could by trying to be smart with the cuts that we made,” Superintendent David James said. “The cuts that we have to make now are going to affect everybody.”

Cuts to erase such a deep deficit probably would require the elimination of 224 jobs, James said, and even if the levy passes in the fall, some teachers will lose their jobs.

The five districts in the Akron-Canton area seeking new money this year are confronting the same dilemma: Without new taxes, the deficits of four of them are so steep it would take 
double-digit wage reductions to fill the gap, according to a Beacon Journal analysis of district budget projections.

Akron would need a 12 percent across-the-board wage cut from all employees to eliminate next year’s shortfall.

In some districts, the cuts would be even more severe.

Woodridge is so deep in the hole it would take a 32 percent cut in wages across the board to climb out, according to the analysis.

In Portage County, Waterloo would have to reduce employee wages by 21 percent.

Such draconian cuts would mean losing many good teachers, Waterloo Superintendent Andrew Hill said.

“We’d probably have a mass exodus of people,” he said.

Ohio’s poor economy already has exacted a toll on teachers in recent years, Many have agreed to pay freezes and have increased contributions to health-care costs to help districts balance their books.

Akron’s teachers have gone three years without a raise in base salary and are paying more for prescription drug co-pays and health insurance deductibles.

Those concessions and other cuts, coupled with federal stimulus money, have helped extend the life of a levy voters approved in 2006 longer than school officials expected.

Jeff Moats, the teachers’ union president, said he understands the pressure he and the district will be under to strike a deal that will persuade voters to approve the levy.

“I’m aware of the circumstances and the levy going on the ballot in November,” said Moats, president of the Akron Education Association, which represents 1,700 full-time and 500 to 600 part-time employees. “Teachers are a big force in the levy.”

Negotiations with the teachers typically begin around March 1 and should conclude by late May or early June, followed by the five smaller unions, which typically agree to similar deals.

Jason Haas, newly elected school board president, agreed that the outcome of the contract talks will be a key selling point in November.

“That’s an important question for the next year: How do we approach negotiations and get to a position where everybody leaves relatively happy?” he said.

Akron came close to passing a 5.5-mill levy last November, losing by only 197 votes after an automatic recount.

Haas said teacher pay wasn’t a big issue in that campaign.

“When it did come up, what I did say was, ‘Hey listen, they’ve taken pay freezes [and] we’re working with a joint health-care committee to assess how we can save money,’ ” Haas said. “The people I talked to in the fall, they understood that.”

Teachers haven’t received an across-the-board raise in base pay since 2008.

A first-year teacher with a bachelor’s degree starts at $34,378. A teacher with 30 years of experience and a master’s degree makes about $73,000 annually.

Defeat follows concessions

Getting more concessions might improve Akron’s chances at the ballot box, but it’s no guarantee.

Just ask Waterloo school officials in Portage County.

Waterloo teachers agreed to freeze their base pay and to forgo scheduled salary increases last year as part of an overall package of savings that trimmed $1 million — a tenth of its budget. The teachers also agreed to higher deductibles for health insurance and higher prescription co-payments.

Voters still turned down Waterloo’s levy request in November.

If voters don’t approve a levy in March, the district will need to cut $400,000 by the beginning of the next school year, Hill, the superintendent, said.

That probably would mean layoffs.

“We’re not far from being at state-minimum staffing levels,” Hill said. “There are no areas we can cut where it’s not going to have some kind of direct impact on either increasing class sizes greatly or eliminating programs.”

Most districts face deficits

Many schools in Ohio face the same dire prospects, according to a recent survey of the state’s districts by Policy Matters Ohio, a nonprofit think tank specializing in economic research and government.

The survey found that two-thirds of Ohio districts face deficits and nearly a quarter of school officials who responded to the survey said they plan to cut teaching staff by about 2.5 to 5 percent.

“Respondents also reported that they have already reduced staff, through attrition or layoff, by 700 positions, more than twice as many as the 331 reductions reported for the last school year,” according to the survey released Jan. 19. “If this rate of reduction occurred in all Ohio districts, then up to 2,500 teaching jobs may already have been eliminated in Ohio schools in the current school year.”

Parents generally hate layoffs because they might lose popular young teachers who lack seniority, and the teachers who remain have larger class sizes and fewer course options.

School officials across the state have combed their budgets to find alternatives to mass layoffs and program cuts.

In 2010, the Martins Ferry school district in southeast Ohio attempted uniform, across-the-board pay cuts to avoid layoffs.

“We actually had an audit from the state, and they came in and they were telling us basically, ‘You’ve got to cut a lot of folks,’ ” Superintendent Dirk Fitch said. “We just didn’t want to do that to our students and our staff. We tried to look for an alternative way.”

The district imposed a two-year, 5 percent cut on every employee, including the superintendent.

“The teachers union actually voted to accept it,” Fitch said. “They pretty much saw the need for it and how it would help the district. Up to that point, most of the people had been getting raises.”

But the union representing nonteaching staff objected, arguing that it violated the contract. An arbitrator agreed, finding that the Ohio law dealing with collective bargaining trumps another statute that allows for uniform pay reductions.

“As a general rule, you can’t cut anyone’s salary unless it’s for misconduct or they’re moving to a lower-rated job,” said Don Collins, general counsel for the State Employment Relations Board, which is not involved in the Martins Ferry case. “Most of that is guarded by the collective bargaining agreement.”

Martins Ferry is appealing the arbitrator’s decision.

Some districts have persuaded their unions to accept a pay cut through regular contract negotiations.

Sidney City Schools, north of Dayton, negotiated a four-year contract in June that cut teacher pay and benefits by an average of nearly 6 percent.

“Both our unions agreed to the same reductions, and these same reductions were implemented for all 400 employees,” Superintendent John Scheu said.

The district, which has about the same enrollment as Barberton, will be solvent through 2016 without seeking new money, Scheu said.

Overall, only about 22 percent of requests for new money succeeded in the November election, according to Support Our Schools, a nonprofit that assists small districts with levy campaigns.

Scheu said the low passage rate “sends out a loud and clear message to me that voters will support renewals, but before districts ask for additional sacrifices from their taxpayers, all employees are expected to show sacrifices on their part as well.

“Salary reductions are expected if voters are asked to ante up additional money.”

The Policy Matters survey found that most districts are leery about asking voters for more money. About three-quarters of school officials who responded said they had no plans for ballot issues this year.

Major cuts on table

Toledo City Schools, like Akron, is an exception and plans to try for a levy in November.

Superintendent Jerry Pecko said he hopes voters will appreciate that Toledo’s teachers agreed to a 3.5 percent pay cut in August.

That concession helped the district overcome a $44 million deficit that threatened to wipe out course offerings important to teachers, said Pecko, who had spent 13 years as superintendent in the Barberton and Springfield Local school systems in Summit County before he was hired in Toledo in 2010.

“We had art, music and P.E. on the table. We were going to eliminate them completely,” Pecko said. “That was big in their minds as well. They were adamant that they did not want to see that go. But when your back is up against a wall, sometimes those are hard choices to make.”

Pecko said the district skipped the March primary to give the public more time to absorb a massive reorganization that eliminated the district’s middle schools and created K-8 elementary schools in their place. Holding off until November also will give the public time to realize that teachers made a significant sacrifice.

“These negotiations were important for us to complete and be able to demonstrate that there is sacrifice on the part of the employees,” Pecko said.

He said the pay cuts bought Toledo some time, but the district still will need new revenue.

“We have this year and next year as wiggle room, but we have to pass something in calendar year 2012 and start collecting in 2013,” Pecko said. “If we don’t, we’re going to be in deep trouble.”

In Portage County, Waterloo Superintendent Andrew Hill acknowledged some voters think all the cuts should come out of the employees’ paychecks.

“That’s definitely the mentality that a lot of people have,” he said.

Hill said he understood that attitude. Although Waterloo teachers make less than the average among Portage County districts, that “doesn’t mean much” to people struggling on even smaller paychecks — or no paycheck at all.

Voters in March will have to judge how much sacrifice is enough, Hill said.

“We want to attract and retain top-quality people,” he said. “At some point, the community just has to decide what is it that we want.

“How important are these people? How important are these programs? What is the quality of education you want for your kids?”

Akron teachers’ negotiations under more scrutiny with November levy looming

Proponents of liquor privatization in at least eight states hope they can drink their budget deficit pain away.

Privatization, which would do away with post-Prohibition regulations on the sale of distilled spirits, could herald a new era of easy access to liquor and perhaps cheaper prices. The move is being aggressively supported in some states by big box retailers like Costco, which are hoping to get a cut of the liquor market. But opponents say the onetime cash infusion that would come from selling off liquor licenses would sacrifice the revenue generated by state monopolies on liquor sales or distribution.

Ohio this week announced details of how it will transfer control of its state-owned monopoly on liquor distribution to a private non-profit. In nearby Pennsylvania, Gov. Tom Corbett (R) would like to privatize the state’s control over liquor stores.

So far, opponents have managed to derail recent efforts at privatization in Virginia and North Carolina, while discussions are ongoing in Idaho, Oregon and Utah. Washington State is moving forward with a privatization plan approved by a voter initiative in November.

In some states, the liquor wars have created strange bedfellows, pitting privatization-friendly conservatives against Christian temperance groups, seeming relics of the early 20th century. Also opposed to privatization efforts are some public health officials, and unions worried about losing good-paying jobs.

“We have it. It’s a valuable asset. It produces a lot of good, needed revenue and it controls a dangerous product,” said Wendell Young, president of UFCW Local 1776, which has 2,100 members working in Pennsylvania state liquor stores. His rank-and-file, he said, “don’t make any more or less money by selling to the wrong people at the wrong times — minors.”

Glen Whitman, an economics professor and author of “Strange Brew: Alcohol and Government Monopoly,” argues that one of the most emotionally powerful arguments against privatization, that it might lead to underage drinking, excessive drinking or drunk driving, doesn’t hold water. Or liquor.

“It’s awfully suspicious when businesses whose main operations are concerned with purveying alcohol are so concerned with temperance,” Whitmore said, pointing out that privatization wouldn’t cause states to stop enforcing liquor laws. “If you’re really concerned about the externalities created by alcohol, you can have a tax — a tax at the retail level that is therefore transparent.”

Privatization backers like Corbett argue taxes on private sales could make up for revenues lost from state liquor stores, veritable cash cows that are among the few public enterprises capable of making a profit. Libertarians, meanwhile, say states simply shouldn’t be in the business of liquor distribution or sales. They would like to see state governments get out of the game, whether or not it means they lose money.

“There’s no way you can answer the question, is [selling liquor] some inherently governmental function?” argued Leonard Gilroy of the libertarian Reason Foundation. “Any time you get entrenched interests, upsetting the apple cart or changing the status quo is going to be difficult.”

In the case of state monopolies on liquor, the apple cart — or perhaps the apple brandy cart — comes in many different forms. And so do those “entrenched interests”: in various states, government officials, unions and wholesale distributors are all happy with the way things are.

In some of the 19 so-called “control” states, state agencies handle both distribution and retail sales of liquor. In others, ordinary consumers never witness the bureaucrats’ handiwork firsthand, since the states only handle wholesale distribution. Utah’s Mormon heritage means that most to-go purchases of beer and wine there must be made at state stores.

To unravel what one expert described as a “patchwork quilt” of regulations across the states, Gilroy said, you have to go back in time. “When prohibition was repealed, states were in a position to decide, how are we going to do this going forward?” he said. Since then, he said, “the change is all in one direction” — states have only made their liquor laws more permissive.

But they have done so too slowly for big box chains like Costco, which led a $22.7 million push in 2011 to have voters approve an initiative in Washington state privatizing liquor retail sales — but, according to the initiative’s text, “only for premises comprising at least ten thousand square feet.” The referendum also let retailers buy directly from distilleries, skipping over the distributors who earn tidy profits acting as middlemen. It passed in November, and the state is now in the process of transitioning to private sales.

In nearby Oregon, Tom Burkleaux of the New Deal Distillery in Portland, which produces artisanal drinks like “Hot Monkey Vodka,” is worried that the “Walmartification” of the liquor business could spill over into his state. The Oregon Liquor Control Commission, which has a monopoly on spirit distribution in the state, makes a conscious effort to ship local products.

“It helps everybody that you have to compete on product value and price, versus whether you can pay off the store to carry you,” Burkleaux said.

Aside from all the other considerations — jobs, public health, “Walmartification” — one issue perhaps looms largest for state lawmakers: money.

In Virginia, a push toward privatization by Gov. Bob McDonnell (R) appears dead after the state’s liquor stores announced that they saw a record profit of $121 million in the last fiscal year. McDonnell’s privatization plan, which would only have raised $200 million by selling liquor licenses, was deemed “a small piece of change” by one state senator, according to the News & Advance of Lynchburg.

Likewise, in Pennsylvania, opponents have argued that the state’s liquor distribution system is highly efficient. When privatization backers can only argue that liquor shouldn’t be a government function, not that privatization will make states money, they have a losing argument. “When people have to resort to philosophy, they can’t win in a fact-based conversation.”

In Ohio, by contrast, Gov. John Kasich (R), who has made privatization of state assets a centerpiece of his administration, was able to sell the state legislature on outsourcing the state’s liquor distribution business.

$500 million from that sale, to a private non-profit entity called JobsOhio that will now have the monopoly, will be used to balance the state’s general budget. The state’s own budget director described the move as an “exceedingly complex transaction that is unusual for state government.” Critics have charged that it will deprive the state’s general fund of a steady source of income in future years while handing over economic development power to an entity, JobsOhio, that has less transparency and public oversight.

“I don’t think that paying interest to bondholders so that we can privatize economic development at a loss of revenue to taxpayers is a positive step,” said Zach Shiller, research director at Policy Matters Ohio, a group that is critical of the effort.

The administration has argued that JobsOhio, which will be charged with using liquor profits to advance economic development in the state, will be more flexible than state agencies in attracting corporations to the state.

“JobsOhio will not only be amply transparent, it will be successful,” said Kasich spokesman Robert Nichols.

The Earned Income Tax Credit is the largest poverty relief program for working families. Its refundability gives it power to help families provide for basic needs and support their children, and it dwarfs other cash assistance and traditional welfare programs in providing benefits. It is also supplemented by 23 state programs that are set at a percentage of the federal credit. So every policy improvement of the federal EITC has a ripple effect at the local level.

Good morning everyone,

Thank you to Jackie Lynn Coleman, the staff of National Community Tax Coalition, the New America Foundation and the more than a dozen co-sponsors of today’s event. As you have already heard, the Earned Income Tax Credit coupled with free tax preparation is a multifaceted effort to improve the lives of working families. It is a reward for work, an opportunity to catch up or advance, and a tool for economic development.

First, the EITC is the largest poverty relief program for working families in the United States. This cannot be understated. Its refundability gives it power to help families provide for basic needs and support their children. What’s more, the EITC program dwarfs other cash assistance and traditional welfare programs in providing benefits. It is also supplemented at the state level, as 23 states have EITC programs for their income tax code that are a set percentage of the federal credit. So every policy improvement of the federal EITC has a ripple effect at the local level.

Second, the EITC feeds the “tax-time” moment that we see as the best opportunity for asset building for working families. Certainly, many families use the money to catch up on bills and housing costs. But more and more families are using part of their tax refund to save. Six years ago, fewer than 10 percent of our survey respondents indicated they would use some of their refund for savings. In the last 2 years, nearly half reported that they will save some.

The key is that we now have to provide avenues for that saving. The savings bond at tax time program, pushed so successfully by Doorways 2 Dream Funds, National Disability Institute, NCTC, and others is a perfect example of innovation in savings at tax time. In two years, more than 45,000 families purchased savings bonds at tax time – saving more than $10 million. What’s more, 25 percent of buyers in 2010 bought again in 2011.

We need to open the infrastructure at tax time for asset building opportunities. It needs to be extremely easy and possibly a “default” in certain areas for saving. We should make it easy for a savings and checking account set-up for tax refunds, which would eliminate check cashing issues, allow for direct deposit for quick refunds, and discourage extra charges from paid preparers at tax time. We also need an easy pipeline for 529 savings accounts at tax time. Many parents and grandparents think about their children at tax time, something we have seen with the savings bond programs, and thinking about education and future economic achievement is a perfect tax time opportunity.

Along with infrastructure changes, we need to improve the parts of the tax code as they relate to savings incentives. The tax code rewards short- and long-term savings for upper-income families from tax deductions on mortgage interest to special treatment of IRAs. Our current incentives for low- and moderate-income families pale in comparison. The current Savers Credit is nonrefundable, meaning for most low-income families, there is no additional incentive or reward for saving before or at tax time. Additionally, the Savers Credit only recovers retirement savings products, not a broader array of options as it should. My colleagues at New America have developed an idea called the Saver’s Bonus, which would create a simple mechanism on the tax form to allow working families to save for retirement, or their child’s college costs, or to save for emergencies.

Third, the policy implications for free tax preparation and the EITC are numerous. The EITC is too important, too potent, too much of a lifeline to be reduced by high-cost paid preparation. It dilutes a public assistance program that is intended to boost wages. We need to invest in free tax preparation for working families. It is crucial to support the two pieces of legislation (S.896 and H.R. 2151) that codify Volunteer Income Tax Assistance (VITA) and allow community-based tax preparation groups to operate. Each year, only 1/3 of the coalitions that need funding from the IRS get it. We need to fund them – all of them. Very few programs have as high of a return on investment as the VITA program does. In Ohio, our largest three coalitions bring in $25 for every $1 spent on tax operations.

The Recovery Act temporarily expanded the EITC in two ways. First, it added a “third tier” of the EITC for families with three or more children. These larger families can now receive up to $629 more than families with two children. This addition recognizes that larger families face a higher cost of living and that families with three or more children are more than twice as likely as smaller families to be poor. Second, the Recovery Act expanded marriage penalty relief in the EITC, reducing the financial burden some couples receive when they marry by allowing married couples to receive larger tax benefits.

These two expansions together benefited over seven million people and kept an estimated 500,000 people out of poverty. They originally were scheduled to expire at the end of 2010 but Congress has extended them through 2012. We should make these changes permanent.

As successful as it is, even the EITC could use some modernization. Low-wage filers who are not claiming dependents receive very little from the EITC. This is problematic as many of them support children they do not claim. The family dynamic has changed in the 30-some years since the EITC was enacted. The Brookings Institution did a well-researched report on the modest cost of doubling the EITC for filers not claiming children and the dramatic economic impact it would provide. We should give this serious consideration.

We should also consider ways to broaden the scope of “earned income.” Thousands of families are under-employed, working limited hours for limited pay. The recent recession showed us that for all its positive attributes, the EITC is really a program that supplements a decent minimum wage and relatively strong employment. The EITC is now ingrained into our social safety net. We need to be innovative and think about ways for the EITC to work for families with lost wages, hours, and job prospects. These additional asset-building measures will do some of that but paying closer attention to the entire safety net for working families is key.

Thank you for your time and interest. I look forward to our continued discussion.