Half of Texas residents are living on the edge of a financial hardship with almost no savings to fall back on as a result of a job loss, health crisis or other income-depleting emergency, according to a report released today by the Corporation for Enterprise Development (CFED).
The 2013 Assets & Opportunity Scorecard defines these Texas residents as “liquid asset poor,” which means they lack adequate savings to cover basic expenses for just three months if they suffer a loss of stable income. Included in this group are a majority of Texas residents living below the federal poverty line of $23,050 for a family of four plus many Texans who would consider themselves middle class. Nearly three in ten households earning between $55,045 and $86,448 per year have less than three months of savings ($5,762 for a family of four).
Without savings, these families have limited hope of building a more prosperous future for themselves or their children, including saving for college, buying a home or setting aside money for retirement.
Texas ranks 39th in the country overall in the ability of residents to achieve financial security. You can view the entire Texas profile here.
The Scorecard evaluates states across 53 measures within the five different issue areas. Texas received:
- “F” in Health Care,
- “D’s” in Financial Assets & Income/Education, and
- “C” in Businesses & Jobs.
- Overall, our best area was Housing & Homeownership, where we scored a “B”.
Texas also ranks in the bottom ten on 18 of the ranked 53 outcome measures, including these notable ones:
- Unbanked Households; Underbanked Households
- Homeownership Rate
- Share of Consumers with Subprime Credit
- Households with Savings Accounts
- Retirement Plan Participation
- Uninsured Rate; Employer-Provided Insurance Coverage
- Share of Adults with High School Degree
- Student Loan Default Rate
To improve financial stability, reduce asset-stripping and enhance borrower success, Texas should enact “ability to repay on-time” legislation to limit fees, decrease rollovers and reduce auto repossessions.
To increase access to mainstream financial products, promote financial success and reduce asset poverty, Texas should remove state asset limits, particularly for SNAP and TANF, and promote household savings through strategic investments in proven financial education, credit building and college savings initiatives.
Finally, to address the highest uninsured rate in the country and to improve affordability and continuity of health coverage for low-income working families, Texas should opt to cover more than one million uninsured U.S. citizen adults in Medicaid beginning in 2014. In conjunction with Affordable Care Act implementation, Texas must continue to modernize and streamline Medicaid-CHIP enrollment and renewal procedures to ensure “no wrong door” enrollment for either public or private health coverage. To improve affordability and continuity of health coverage, Texas’ Department of Insurance must stop unreasonable rate increases and ensure that Texas’ health insurance exchange is user-friendly and family-centered.
To read an analysis of key findings from the 2013 Assets & Opportunity Scorecard, click here. To access the complete Scorecard, visit http://assetsandopportunity.org/scorecard. To register for CFED’s Washington D.C.-based webinar at 12 p.m. CST on the Assets and Opportunity Scorecard, click here.