Despite an improving national economy, 49.8 percent of Texas households are in a persistent state of financial insecurity, according to the 2014 CFED Assets & Opportunity Scorecard released today. The number of households who have little or no savings to cover emergencies or to start building a better life has barely budged from last year’s 49.5 percent level. We are excited to announce the Scorecard’s release with our partners RAISE Texas serving as the Assets & Opportunity network’s Lead State Organization and YWCA Dallas and United Way Greater Houston serving as Lead Local Organizations (See our press release announcing the Scorecard here).
This year marks a “first” for the Scorecard on a number of fronts. With the 2014 edition, CFED is taking the Scorecard from being a biennial event to being an annual check-in on state approaches to building and maintaining financial security and economic opportunity. Also, the 2014 Scorecard makes an explicit connection between financial security outcomes and related state policies. Overall, the 2014 Scorecard includes 66 outcome measures and 67 policies in the areas of Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care, and Education.
We saw a few changes from the 2013 Scorecard outcomes compared to the 2014 version. Texas made slight gains in Education, moving from a “D” to a “C”, making gains on 8th Grade Reading Proficiency and keeping the share of college graduates with debt well below the national level. Overall, Texas inched up from a 39th ranking to 37th on outcomes.
When we go back in time and look at the 2005 Scorecard, Texas has made a little progress in moving forward on a few indicators, namely private loans to small business, uninsured low-income children, and share of adults with a two-year degree. On its 2005 Scorecard, Texas scored 1 B, 1 C, 2 D’s, and 1 F, while the 2014 version includes 1 B, 2 C’s, 1 D, and 1F.
Today, however, Texas still makes a below-average showing in the 2014 Scorecard ranking in the bottom ten on 19 of 54 ranked outcome measures, mostly clustered in Financial Assets & Income, Businesses & Jobs, and Health Care. Here are some low points:
- High-Cost Mortgage Loans (46th)
- Low Wage Jobs (42nd)
- Student Loan Default Rate (46th)
- Unbanked Households (50th)
- Consumers with Subprime Credit (48th)
Looking at the policy side of the equation, Texas ranks near the bottom ten, coming in 41st when evaluating state policies that expand economic opportunity and increase upward mobility. Here are some areas where Texas needs serious policy intervention to fix the economic ladder:
- Lifting Asset Limits in TANF, SNAP
- Enacting Protections from Predatory Short-Term Loans
- Improving Access to Medicaid & CHIP
- Integrating 529/children’s savings accounts into K-12 educational system
- Increasing access to Quality K-12 Education
Although not perfect, we see a relationship between Texas’ subpar showing on outcomes with Texas’ weak policy track record on promoting savings, boosting entrepreneurship, expanding health care access, and protecting consumers from high-cost loans.
If you are interested in similar indicators of economic mobility at the local level, check out the Texas Regional Opportunity Index to build a county or regional profile.
By seizing the opportunity to change policies in these areas, Texas can create more ladders of opportunity and a stronger middle class.