Wednesday, May 18, 2005

Florida earns a “C” on financial security scorecard

Florida earned a “C” on the 2005 Assets and Opportunity Scorecard, a new report released yesterday by CFED, a national nonprofit organization that conducts economic research. Florida found itself squarely in the middle in a study that found large discrepancies between states in net worth, homeownership, and a number of other financially related measures.

CFED’s Assets and Opportunity Scorecard — you can find it online at www.cfed.org/go/scorecard and check out the scores for other states, too — measures the financial security of families in the U.S. by looking beyond just income to the whole picture of building ownership and protecting against financial setbacks. The Scorecard ranks the 50 states and the District of Columbia on 31 performance measures in the areas of Financial Security, Business Development, Homeownership, Health Care, and Education.

States were graded on a curve from “A” to “F” on their performance. Although Florida’s average grade indicates there’s is room for improvement in terms of levels of asset accumulation, the state performed strongly in terms of how those assets are distributed. The Sunshine State ranks 7th in household asset equality by race, 8th in household asset equality by gender, and 5th in both asset poverty by gender and by race. A similar pattern is evident in homeownership; while the homeownership rank itself is below average (35th), the state ranks 8th in homeownership by gender and 10th in homeownership by income.

“This grade not only takes into account the net worth of each person in Florida, but everything from small business ownership to the affordability of housing for the average worker, to educational attainment, to how many people have health insurance,” said Dr. Lillian Woo, CFED’s lead researcher on the Scorecard. “The ‘C’ grade suggests that there is more Florida can do to foster widespread wealth creation and protection.”

The Scorecard also looks at 38 state policies in these areas (as well as Tax Policy) that can help or hinder citizens’ efforts to get ahead. Policies are assessed as either “favorable,” “standard,” or “substandard,” based on their relation to the policies of the other states. Florida earned an overall “standard” policy rating. The state’s policies, such as the use of bond sales to fund affordable housing and support for first-time homebuyer assistance programs, favor one important type of asset creation: homeownership. In addition, the state has policies in place, such as equity in school spending and workforce training programs, to support its citizens’ efforts to build their own and their children’s human capital. At the same time, however, the state could initiate financial security policies to bolster the economic prosperity and stability of its citizens.

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