National scorecard points to opportunities to improve financial security in Kansas

An analysis released today shows that even middle-class Kansas families are not equipped to weather a job loss or other loss of income. In fact, 20 percent of middle-income families and 11 percent of upper middle-income families in Kansas are deemed “asset poor,” meaning they do not have the assets or savings to subsist at the poverty level for three months.

However, Kansas measures favorably up against other states when it comes to overall financial security, according to the analysis and scorecard produced by the Corporation for Enterprise Development (CFED). Kansas was among 10 states to earn an “A” from CFED.

“The scorecard illustrates that Kansas has a foundation for financial stability in place,” said Gary Brunk, president of Kansas Action for Children. “But, as economic conditions worsen, we have to shore up that foundation and make sure Kansans have the financial resources to weather the recession and come out ahead on the other side of it.”

In determining scores for each state, CFED compared state-level policies related to individual financial assets and income, businesses and jobs, housing and homeownership, health care, education, and community investment and accountability. Kansas scored particularly well on Housing and Homeownership issues.

“Kansas was fairly insulated from the mortgage crisis that affected so many states,” said Brunk. “But, we haven’t been insulated from the rest of the economic recession. To protect our state’s economy and our tax base, we need to look at ways to increase job security, encourage homeownership in rural parts of the state, and protect consumers from predatory lending practices.”

Areas noted in the scorecard for improvement include:

• Encouraging entrepreneurs. Kansas can increase its small business ownership rate by focusing on programs that provide technical assistance and loans for microenterprises.

• Promoting savings. Kansas can increase net worth among residents by improving its Individual Development Account (IDA) program.

• Regulating payday lending. Kansas can lower its high rate of asset poverty and bankruptcy by adopting payday lending regulations, including an annualized interest rate cap to protect residents from having their assets stripped by predatory lenders.

• Fostering greater tax transparency. Kansas can improve its accountability to taxpayers by requiring the production of an annual tax expenditure report.

• Strengthening rural homeownership. Kansas can make homeownership more affordable in rural and at-risk areas by strengthening use of the state’s Housing Trust Fund.

To download the complete scorecard, visit http://scorecard.cfed.org.

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