Alabama Governor vetoes IDA Legislation

Ron Gilbert, Alabama ARISE

Alabama’s Governor Bob Riley spends time talking about investments in economic development activities as a way to offer opportunities to the “least of these.” But when he had the chance to put words into action, he chose otherwise.

Without any explanation, the Governor pocket vetoed legislation that would have created an Individual Development Account program. The proposed bill was enabling legislation only, and in recognition of the state’s current budget woes, no appropriation was sought for the current fiscal year. But advocates wanted to establish the program with the hope that a strengthening economy in the future would provide matching funds for the savings of low- and moderate income Alabamians. IDAs have proven a successful tool over the past decade in supporting the acquisition of assets by individuals and families who otherwise would be unable to do so. Alabama’s proposed legislation mirrored the federal Assets for Independence legislation that provides federal matching funds for IDAs, and would have provided the mechanism by which Alabama could have supported first time home buyers, small business development and postsecondary education.

Alabama offers virtually no form of needs-based financial assistance for postsecondary education, and it’s this asset for which it is most likely that Alabama’s state government could contribute. A portion of the small amount currently dedicated to needs-based assistance could be redirected to IDAs, in effect tripling the available funds for educational purposes by matching savers’ contribution and federal dollars.
But the Governor, for unknown reasons, made the decision not to invest in Alabama’s families. Arise has asked Riley to tell us what changes to the law would make it acceptable to him, and hope that he’ll provide a response. The Alabama Asset Building Coalition hopes to reach an agreement with the Governor this summer that will allow this needed measure to be approved in the next legislative session.

Announcing the Southern Regional Asset-Building Coalition

Announcing the Southern Regional Asset-building Coalition

Ntam Baharanyi, Tuskegee University 

Families in the rural South face unique challenges related to persistent poverty including low-wage jobs, the lack of higher education, and the continuing impact of racial tensions in the region. However, persistent poverty goes beyond having little or no income to having little savings or assets to fall back upon when income is interrupted. 

Asset-building has thus become a key tool for addressing persistent poverty. Assets are financial and physical investments that typically appreciate over time, serving to stabilize families and pass on wealth to future generations. Asset-building encompasses the range of strategies, programs and policies that enable families with limited financial resources to acquire long-term and productive assets such as a home, post-secondary education, and savings for retirement.

The United States has a long history of supporting federal policies and programs to encourage asset acquisition dating as far back as the Homestead Act of 1862, which gave freehold titles of land to Americans to settle in the West, to the GI Bill of 1944, which brought access to higher education within the reach of millions of World War II veterans. Similarly, the recent Post-9/11 GI Bill seeks to provide educational benefits for eligible veterans similar to what the GI Bill did for men and women of the military in the second half of the 20th century.

Yet, hurricanes such as Katrina, Ivan, and Andrew demonstrated that many families in low income and minority communities in the South are entrenched in persistent poverty with insufficient resources to draw upon in critical times.

Thus, the key dilemma is “how can asset building policies work for low-income and asset-poor families in the south?”

The Southern Regional Asset Building Coalition – an initiative of the Ford Foundation anchored at Tuskegee University—responds by promoting an inclusive asset-building policy agenda in the Southern Black-Belt region. Our initial partners include the Center for Social Development at Washington University in St. Louis, the Mississippi Association of Cooperatives, the Federation of Southern Cooperatives in Louisiana, Alabama Arise, Florida Family Network, and the Black-Belt Action Network. Building on a network of organizations in the field of asset building and starting with existing programs, ideas, and policy groups in the various states, we strategize with state and regional coalitions to promote policy and program development for asset ownership, protection and preservation.

To date, we have held several state meetings and a regional conference in Biloxi, Mississippi that have brought various groups together to learn best practices from others in the field and gain knowledge related to income and asset poverty in the region. We have developed a vision, set our mission and goals, and embarked upon our action plans. We plan to launch an online clearinghouse by the end of the year which will serve as a repository to collect and disseminate information and expertise to bridging wealth gaps in the South.

Meanwhile, this blog will serve as a mechanism for exchange of policy-advocacy ideas and perspectives relevant to the southern Black Belt, wealth-gap conditions, and communities of color in the region. It also welcomes discussion on specific research concepts and practitioner tools that present innovative approaches in State or Federal policies that significantly enhance savings, home and business ownership, and access to higher education, while reducing predatory lending and discrimatory practices in low-income communities.

On October 15-16, 2009, we will host our second regional Conference entitled “Closing the Wealth Gap: Promoting an Inclusive Asset Building Policy Agenda” in Tallahassee, Florida. We invite you to join us as we seek to address through asset building the dilemmas of persistent poverty in the rural South.