Brought $14.8 million to Cuyahoga County
The Cuyahoga Earned Income Tax Credit Coalition brought free, high-quality tax preparation services to 12,082 Cuyahoga County residents this year, according to a report released today by Policy Matters Ohio.
Most clients earned less than $25,000, and 3,948 received the Earned Income Tax Credit (EITC). The Coalition and its partners helped residents obtain $14.8 million in federal refunds for the 2013 tax filing season, bringing $30 to Cuyahoga County for every dollar spent to provide services. In the EITC alone, the Coalition filed claims that brought $5.5 million to Cuyahoga County.
“Free tax preparation through the Cuyahoga EITC Coalition brings federal money to northeast Ohio and helps working families thrive here,” said executive director, Amy Hanauer. Based on a survey of nearly 2,700 clients, Policy Matters Ohio found that low-income families that rely on their EITC refunds primarily use it to pay for basic needs.
The federal EITC helps low and moderate-income working families and individuals to keep more of what they earn. Because it is refundable, working families who don’t earn enough to pay income taxes still get an earned income credit to make up for the regressive nature of other taxes and to help make work pay.
Ohio lawmakers made positive changes to Ohio’s EITC this year, doubling it to 10 percent of the federal credit, but design flaws prevent the state credit from reaching many low-income workers. In particular, Ohio’s EITC is not refundable, which means that the lowest income earners don’t get anything. One of the major goals of the EITC is to make up for regressive property and sales taxes, but the lack of refundability means that the state credit doesn’t help with that.
“The federal EITC is one of the main ways that we help working families avoid poverty,” said Hanauer. “We’re excited to work with policymakers to make Ohio’s state credit more effective.”
Policy Matters Ohio is a nonprofit, nonpartisan state policy research institute with offices in Cleveland and Columbus The Cuyahoga County EITC Coalition is led by Enterprise Community Partners and includes more than 40 partners.
Free tax program served 12,082 families this year, brought $14.8 million to Cuyahoga County.
Ohio CASH Coalition members reach out to congress memebers to sponsor the Durbin Cartwright bill. Read their letter below:
Ohio job growth flat in August. Twelve month trend shows Ohio lags the nation in recovery.
Census data show Ohio still struggling to recover from post-Recession poverty.
Following Ohio’s decision to expand Medicaid, uninsured rate hits post-recession low. More improvements from Affordable Care Act expected for 2014.
In this eNews: Ohio workers more productive, earning less; design flaws mean that boost in in Ohio EITC credit won’t reach those that need it most; unemployment compensation debt predates the recession; Policy Matters in the news.
Urges Support for Durbin-Cartwright bill; Strong CFPB Regulations
Frustrated by an industry that dodges regulations while continuing to trap consumers in a cycle of debt, COHHIO and partners of the Ohio CASH Coalition are calling for federal action to curb payday lending abuse in Ohio.
The Coalition is targeting the Consumer Finance Protection Bureau (CFPB) and the Ohio Congressional delegation in support of two important federal efforts, including pushing the CFPB to develop strong regulations to rein in payday lending nationally; and urging Ohio’s federal lawmakers to co-sign the Durbin-Cartwright bill (S673/HR 5130), the Protecting Consumers from Unreasonable Credit Rates Act. The bill would cap the interest rate at 36% APR on consumer credit products such as payday loans and auto title loans, which can go as high as 700% APR (see “Keys for Collateral” study). The letter sent to Ohio’s Congressional delegation is attached.
The CFPB, led by Ohio’s former attorney general Richard Cordray, is in the late stages of developing rules for the industry. His office has been studying thousands of consumer complaints since 2012. In July, the CFPB reached a $10 million settlement with Ace Cash Express, one of the country’s largest payday lending companies, over illegal collection tactics.
The Coalition supports the CFPB in issuing the tightest rules possible. Among them:
1. Require lenders to take into account a borrower’s ability to repay the loan when considering income and expenses;
3. Restrict lenders from requiring a post-dated check or electronic access to a borrower’s checking account as a condition of extending credit.
“Rich Cordray has watched this industry rip off struggling customers all over the country, and even thumb its nose at the law in his home state,” said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio (COHHIO). “We are confident that Rich will be able to do what Ohio failed to do at the state level five years ago, which is to rein in this financially abusive industry.”
COHHIO helped lead the charge in 2008 to cap payday lending interest rates at 28% APR. The Short Term Lender Law passed in June and was overwhelmingly affirmed at the polls in November after the industry challenged the law through referendum. Later, the industry sidestepped the law and began lending under different and inappropriate statutes, all the while packing in fees and charges to boost APR to 300% and beyond.
“The Ohio legislature has been unsuccessful at taming the payday industry, which makes the Durbin-Cartwright bill even more important for working families who struggle just to get by,” said Kalitha Williams, policy liaison of Policy Matters Ohio and convener of the Ohio CASH Coalition. “This is why the Coalition supports the rate cap bill and hopes members of the Ohio delegation will do the same.”
The Durbin-Cartwright bill would enact a 36% interest rate cap for rates associated with consumer credit products, including payday loans and car title loans, which typically carry triple digit interest rates.
“We’re confident the Ohio delegation will see the Durbin-Cartwright bill as a way to level the playing field among lenders and stop the unnecessary drain of critical dollars from families who need it most,” Faith said.
Ohio CASH, a project of Policy Matters Ohio, stands for Creating Assets, Savings and Hope and is the state asset building coalition focused on family financial stability and consumer protection.
COHHIO is a coalition of organizations and individuals committed to ending homelessness and to promoting decent, safe, fair, affordable housing for all, with a focus on assisting low-income people and those with special needs.
If you would like to request a speaker, please email Mike Shields at email@example.com, with details including:
Your name, phone number, and email address, and the name of your organization
The topic of your event, and expected number of participants
The date(s) requested. If you have a flexible date, it is more likely we will be able to accommodate your request.
Whether your event provides an honorarium
Thanks for your request!
Ohio’s unemployment compensation solvency problem not the economy, but administrative underfunding; fixing that is crucial because Ohio dropped the ball on funding claims for the displaced workers in greatest need.