Senator Greg Clausen: Helping People Move Out of Poverty
(SAINT PAUL-MN) This week, my bill to help low income Minnesotans find a clear path out of poverty was heard in the Senate Health, Human Services and Housing Committee. It’s a great way to encourage folks to start saving money with the promise that if they start a savings account and successfully complete a savings contract, the state and federal government will kick in a 3 to 1 match to their savings.
My bill appropriates $250,000 per year to the Family Assets for Independence in Minnesota (FAIM) program, which funds the state’s share of the match program. FAIM participants can place up to $40 a month of their income into a Family Asset (savings) Account to use to purchase a home, pursue higher education, or start a small business. Half of the 3 to 1 savings account match comes from the federal government, and the other half from state government.
An important component of the asset contract is that participants must learn good financial habits for preserving their assets. Last biennium, the Legislature reinstated the $500,000 cut to the program that occurred in the 2011 session. The loss of the funds in 2011 resulted in the loss of the state match. In 2012, the Legislature temporarily patched together some funds to continue services for most of the state.
The 2015 legislation appropriates $250,000 for each year of the biennium. Additionally, the bill adds a new section to the Family Assets for Independence statute that would define the services a financial coach has to provide to a program participant. The duties include financial education, asset-specific training, and financial stability education. This is a sensible bill that can help Minnesotans save enough money to pull themselves out of poverty, help them purchase their first home, go back to school, or even start a small businesses.