“Nearly half of Maine residents are living on the edge of financial disaster with almost no savings to fall back on in the event of a job loss, health crisis or other income-depleting emergency,” according to a new survey released today by Penquis, the community action agency serving northern and eastern Maine on behalf of the national, non-partisan Corporation for Enterprise Development (CFED). According to CFED’s 2013 Assets & Opportunity Scorecard, these are the “liquid asset poor,” people who “lack adequate savings to cover basic expenses at the federal poverty level for just three months if they suffer a loss of stable income.” In Maine, CFED found that this includes not only a majority of families that live below the official poverty line ($23,050 for a family of four) but also many working families who consider themselves to be middle class.
CFED identifies a series of policy solutions that can Maine can adopt to address the issues raised in the scorecard. These include raising the state’s minimum wage, expansion of the Finance Authority of Maine’s efforts to provide access to capital for entrepreneurs and increased funding and support for the state’s Family Development Account program; lifting asset limits on MaineCare and other family support programs to remove the disincentive for low-income families to save.
At a time when Governor LePage has proposed cuts to state funding for K-12 education rather than revisit recent tax cuts that mostly benefit the wealthy, CFED also recommends that Maine increase funding, create strong systems for teacher evaluation and retention, and restore the full savings match on the 529 college savings plan in order to increase math and reading proficiency and boost college attainment rates.
“We all recognize the budget challenges facing Maine,” Charles Newton, Penquis Chief Executive Officer of Penquis, said in a press release. “This report I identifies opportunities that ought to be considered during legislative deliberations. We need to support public policy investments that have potential significant long-term returns. In particular, it is time for Maine to stop being a low-wage state.”