DATE: January 28, 2003
TO: Board of Supervisors
SUBJECT: Earn it. Keep it. Save it. Make it Work for You! Support for Family Self-Sufficiency
SUMMARY:
On September 17, 1996 (8), the Board of Supervisors approved Supervisors Greg Cox and Pam Slater’s recommendations to create a pilot Family Resource Center and personal responsibility program.
On May 13, 1997 (9), the Board of Supervisors approved Supervisors Greg Cox and Pam Slater’s recommendations to restructure the Department of Social Services and expand the Family Resource Center pilot program Countywide to meet the Board’s goals of self-sufficiency for families.
Today’s recommendations continue this Board’s efforts to provide accessible resources to welfare recipients, as well as lower-income working adults, to assist them in meeting the needs of their families. The Earned Income Tax Credit (EITC) was enacted in 1975 by the Federal government to assist low- and moderate-income working families and encourage parents to work. Research indicates that the EITC increases work effort substantially among single mothers and encourages adults to stay in the workforce. Through EITC expansion efforts in the late 1990’s, over 2.8 million families were lifted out of poverty nationwide. There are a large number of families in San Diego eligible to receive the EITC that do not currently file for this benefit. Approval of these recommendations will begin new EITC outreach efforts to San Diego area families as well as encourage enrollment in health insurance programs.
RECOMMENDATIONS
Chairman Greg Cox and Supervisor Pam Slater:
- Direct the Chief Administrative Officer to partner with community-based organizations in Downtown and Southeast San Diego, Escondido and Oceanside that are currently engaged in a planning effort to promote financial literacy, the EITC and access to healthcare and authorize the expenditure of up to $50,000 towards this effort.
- Direct the CAO to assist these pilot programs in reaching low-income working families, subject to availability of funds.
- Direct the CAO to facilitate access to Health-e-App technology at the pilot locations and work with community-based, certified assistors at the pilot sites to assist families in applying for Healthy Families and MediCal.
- Direct the CAO to develop a one-page fact sheet on the EITC and include this with W-2 forms distributed to all County employees.
- Direct the CAO to mail information on the EITC to all CalWORKs, Food Stamp and MediCal recipients in February and March.
- Direct the CAO to include EITC information in the Independent Living Skills Program for foster youth.
- Direct the CAO to provide the EITC fact sheet to local community-based organizations, the San Diego Workforce Partnership, San Diego Regional Chamber of Commerce as well as the local chambers of commerce.
- Direct the CAO to return to the Board in 180 days with an update on the pilot programs and recommendations for continuation or expansion of EITC outreach programs in future years.
Fiscal Impact:
Approval of these recommendations will result in the expenditure of up to $50,000.
BACKGROUND:
The Earned Income Tax Credit (EITC) is a refundable tax credit that is distributed to families who work, but earn low wages. The credit has been called the nation’s most effective anti-poverty program because it encourages parents to work. The EITC was enacted in 1975 by the Federal government under President Gerald Ford and has been expanded under Presidents Ronald Reagan, George Bush and Bill Clinton.
To be eligible, families must earn at least $10,000 per year. The amount of the credit ranges from a minimum of $376 to a maximum of $4,140 depending upon family size and earnings. Research indicates that the EITC increases work effort substantially among single mothers and for those individuals previously on welfare. Through EITC expansion efforts in the late 1990’s, over 4.8 million people in low-income working families were lifted out of poverty nationwide.
It is no wonder that many families do not file for this credit because the IRS publication explaining the EITC is 54 pages, including six separate worksheets a family might have to complete. The Health and Human Services Agency estimates that 85,000 families in San Diego County are potentially eligible to receive the EITC, but do not currently file for this benefit. The average credit per family is $1,598. If all the potentially eligible families in San Diego County file for the credit and were approved, an additional $135.8 million would be brought into the San Diego economy in just one year!
Two separate community-based efforts are underway to reach out to families that may be eligible for the EITC. The goal is to encourage them to learn more about the EITC and to file for the credit, if they are eligible. These efforts also include outreach to families eligible for Healthy Families or MediCal. Online applications will be available at the pilot sites.
Pilot Locations
The Central Region Coalition for Building Family Wealth, a broad-based, community-oriented collaborative, is targeting families in the Central City, Bronze Triangle, and Diamond District neighborhoods through three pilot sites. The Bronze Triangle is a community-based organization targeting 500 families in the Sherman Heights, Barrio Logan, and Logan Heights communities this year. They have recruited volunteers in collaboration with LEAD San Diego who are completing the IRS-required training and are also providing a location, phones, and computers at a neighborhood site. The County of San Diego Health and Human Services Agency (HHSA) Central Region is targeting 200 families in the downtown Metro area with a strong focus on CalWORKS recipients. Over 15 County employees from the HHSA are volunteering their time to take the IRS-required training and will be assisting families on weekends to prepare tax returns. The San Diego Neighborhood Funders Collaborative is working with community organizations in the Diamond District neighborhoods to also establish a pilot site. Additionally, InfoLine, Home Start, Inc., and the Annie Casey Foundation and others are participating in the coalition and will be contributing to these efforts.
In North County, the County has partnered with the City of Escondido, North County Collaboratives, Hope Through Housing, Home Start, Inc. and Bank of America to provide outreach to 200 eligible families and assist them with the EITC worksheets and healthcare applications. The City of Escondido is providing financial support as well as public education and promotional literature while the North County Collaboratives are assisting with coordination. Hope Through Housing is providing the site locations including five Internet ready computers and telephone access. Home Start will provide staff to enroll clients in no- or low-cost medical insurance and will also do EITC home enrollments during the week. Bank of America will conduct financial literacy classes on how to open up checking and savings accounts. A second pilot site will be located in Oceanside.
In addition to partnering with community-based organizations to reach out to target populations, the County must partner with the business community and encourage outreach to employees across the County. To that end, all County employees should receive a one-page explanation of the EITC with W-2 forms this year for their own information or to share with friends and family. This same information will also be mailed to all current CalWORKs, Food Stamp and MediCal recipients as well as be incorporated into the Independent Living Skills training for foster youth.
Approval of these recommendations will begin new EITC outreach efforts to San Diego area families as well as encourage enrollment in health insurance programs. With the looming State budget deficit and the potentially detrimental effects that State budget cuts will have on San Diego families, we must aggressively pursue existing programs to assist working families in our communities and bring money to the San Diego economy.
The EITC has been in existence for over 27 years and every family in San Diego who is eligible should know about this tax credit so they can file their annual tax return appropriately.
We urge your support!
Respectfully submitted,
GREG COX
Chairman
PAM SLATER
Supervisor, Third District