U.S. and Illinois Fall Short on Asset Goals, According to CFED

While Illinois, along with 20 other states and the District of Columbia, received an overall asset policy rating of “favorable” in CFED’s 2005 Assets and Opportunity Scorecard, Illinois’s score for overall asset outcomes was a “D,” that is, many Illinoisans are not getting ahead and instead are living with no safety net at all. Illinois received a “substandard” rating for income tax threshold and asset limits for public assistance.

CFED, which bills itself as a “ nonprofit, nonpartisan organization that works to expand economic opportunity,” released its 2005 scorecard earlier this month. The scorecard ranks the 50 states and the District of Columbia on their performance in 69 asset outcome and policy measures in the areas of financial security, business development, homeownership, health care, education, and tax policy and accountability. The scorecard is designed to gauge how easily or hard for families to get ahead and is meant to be used as a tool for states to see what works and change what does not. CFED states, “‘Getting by’ may require only a paycheck, but getting ahead requires a variety of assets, a financial safety net, education, and health care.”

Nationally the results are mixed. The scorecard showed that the health insurance coverage rate was less than 65 percent, which is terrible for a developed country. By contrast, homeownership is at an all-time high with a rate of almost 70 percent. Overall, however, the asset reality for many families is bleak. Of the 50 states and the District of Columbia, only 10 were given an overall rating of A, while the majority got a C or below. In the asset policy area, 26 states got a “substandard” ranking, the lowest score. Too many Americans, especially nonwhites, women, and low-income people, do not have the access or the opportunity to build and maintain assets. States and the nation as a whole have a lot of work to do before they can say that they are taking care of their citizens.

The scorecard divides the results into two categories: asset policies and asset outcomes. CFED says that “state policies can play a key role by removing barriers to asset accumulation, supporting asset building, and protecting assets that already exist.” The Illinois Asset Building Group (IABG), a coalition cochaired by the Sargent Shriver National Center on Poverty Law and the Heartland Alliance, will be using the scorecard to develop a policy agenda aimed at improving asset policies for low- and moderate-income people in Illinois.

CFED divides asset outcomes into five categories: financial security, business development, homeownership, health care, and education.

The first, financial security, asks whether people are able to build and protect their wealth. With scores of 38 in bankruptcy rates, 24 in households with zero net worth, and 33 in asset poverty by gender, Illinois received a C in financial security. However, in racial household asset equality, Illinois ranked ninth, indicating that the racial difference in asset equality is not extreme.

In business development, Illinois earned a D, which means that Illinoisans have limited access to start and grow a business. In fact, Illinois ranked 49th in small-business ownership. For many Americans, small-business creation has been the best way to enter the middle class.

Illinois also received a D in homeownership, with rankings of 31 in racial diversity of homeownership and 41 in homeownership by gender. Homeownership is the single largest source of equity for Americans. Overall the national rate has risen, although there remains a homeownership gap between whites and nonwhites.

While Illinois rated a C in health care, it ranked 10th in uninsured low-income parents and 19th in employer-provided insurance. CFED’s study showed that employer-offered insurance decreased nationally, while nearly half of all bankruptcies resulted from illness or medical bills.

In education, an asset closely tied to income and the ability to obtain and keep good employment, Illinois received a C, with average rankings for outcomes and educational policy for K-12 and college education.

The scorecard also took a look at how race and gender affect asset issues nationally. The report showed that minority and female-headed households fell below the national average in ownership, and many had zero or negative worth. CFED reported that “minority families have only one-sixteenth the net assets of white families.”

For more information on the scorecard or IABG, contact Dory Rand, Shriver Center, at 312.368.2007. To read more about the scorecard, go to www.cfed.org/go/scorecard.