Tuesday, May 05, 2009

A bridge to the middle class?.......give me a break..............

I get it. I work my ass off. Go to school. Work in a non-salaried position my entire life after getting out of grad school. Where was my handout? Some guy gets a grunt job because he didn't pay attention in school, goofed around, used drugs and now has a menial job somewhere and wants a house and the FEDERAL GOVERNMENT matches his savings with my tax dollars. Welfare at it's finest. I thought you had to work to get in the "middle class" instead of taking the bridge. I guess the "something-for-nothing" mentality is alive in well outside of casino gaming. You get double what you save, courtesy of guys like me.

From the GrandForksHearld.com

Published April 29, 2009

N.D.’s anti-poverty toolbox gets new tool

The bottom line is that Individual Development Accounts work and operate as a bridge to the middle class for the Americans who use them.

By Andrea Olson

FARGO — The North Dakota Legislature recently passed SB2260, which is an amazing victory for the people of this state. The bill provides a $125,000 appropriation for Individual Development Accounts, which are administered through the Community Action agencies in all 53 counties across North Dakota.

IDAs are long-term matched saving accounts for low- to moderate- income people to be used for a targeted asset goal. In order to qualify for the program, a participant must not be above 200 percent of the federal poverty level.

Currently, there are about 173,000 North Dakotans who are at or below this 200 percent mark. By no means is this a giveaway program. IDAs come with parameters and high expectations of participants. All participants must be employed and have good credit and a willingness to follow a slow and realistic savings plan towards one of three approved assets: college tuition, small business capitalization or first-time home ownership.

Throughout the savings period, participants are also required to make a monthly deposit into their IDA, and the contribution must come from money they have earned while working. The IDA is also a custodial account managed by Community Action, and the participant does not have card-blanche access to the funds.

Further, participants are required to complete financial literacy training — a critical component, as it teaches skills such as creating and following a budget, owning and managing a bank account or credit card and guidance about refundable tax credits such as the Earned Income Tax Credit.

Additionally, participants also are required to attend asset-specific training. This training is focused on the participant’s asset that they plan to buy upon the completion of their IDA savings. For example, a participant who is saving for a first-time home purchase is required to attend a home buyer education class.

Ultimately, the IDA lets participants acquire a lasting asset after saving for an extended period of time. Participants are required to save for a period of at least 10 months, although most save money over the course of a few years. At the end of the program, every dollar deposited into the IDA by the participant is matched by a combination of federal and nonfederal funds at a rate of 2:1. In North Dakota participants are able to save up to $2,000 for a match of $4,000. This means if the maximum amount is saved, the participant gets a total of $6,000 to use for their asset purchase.

Since 2002, North Dakota has celebrated many IDA successes with participants, and more than $280,000 has been spent on asset purchases. Two participants acquired their first home in Minot, another eight in Fargo and six more in Grand Forks. Two small business owners in Grand Forks and Fargo have been able to accumulate the necessary equipment to make their businesses more viable and competitive.

Also, 29 students from a variety of backgrounds pursuing a range of degrees at UND, Dickinson State University and elsewhere have successfully attended and/or graduated from college using their IDA funds. The federal government supports IDAs through the Assets for Independence Act, which was passed in 1998. Each dollar North Dakota has committed will be matched by a federal dollar and together will match the savings of the participant.

IDAs promote not only self-sufficiency but also economic development. Participants who graduate from college will have better jobs, those who expand their small business will generate revenue for our economy, and first-time home owners will pay property taxes and likely will become more active in their communities.

The bottom line is that IDAs work and operate as a bridge to the middle class for the Americans who use them. A tremendous “Thank You” to the initial sponsors of the bill: Sens. Mac Schneider, D- Grand Forks; Robert Erbele, R-Lehr; and David Houge, R-Minot; and Reps. Vonnie Pietsch, R-Casselton and Robert “Tork” Kilichowski, D-Minto.

Also, the many legislators who supported the bill also deserve thanks. As a result of their efforts, many hard-working North Dakotans will be able to acquire a lasting assets through IDA accounts. Olson directs the North Dakota Community Action Partnership

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