2/24/20: Self Sufficiency Standard Talking Points

Last week, PA Pathways released an updated Self-Sufficiency standard for the state of Pennsylvania. As you may recall, prior to this, the Self-Sufficiency Standard had not been updated in PA since 2012. To date, the release has received limited news coverage or general public attention. The Philadelphia Inquirer ran a story on it, and it was also picked up in a Butler County paper.

If you receive questions about the Self-Sufficiency Standard and how it compares to the ALICE report – here are a few high-level talking points you can use.

  • The Self-Sufficiency Standard is a more generous standard of living than the ALICE survival budget, but still not sustainable in the modern economy. Whereas, the ALICE survival budget is the bare minimum required to work and live. The Self-Sufficiency Standard is proposed as a measure to meet basic needs adequately. This is why the Self-Sufficiency Standard budget is higher than the ALICE survival budget.
  • The key differences in the methodology which make the Self-Sufficiency Standard more generous are: 1) food costs are based on the next level up in USDA’s food budgets; 2) more generous housing allowance; 3) averages the cost of home-based and center-based child care. All other measures are calculated with different methods, but the costs tend to reflect similar to the ALICE survival budget.
  • The Self-Sufficiency Standard identifies 846,000 working-age households (Ages 18 to 64) which lack the income to cover just necessities. The Self-Sufficiency Standard does not include seniors, whereas the ALICE study does. In doing so, ALICE calculates 1.2 million households in Pennsylvania where one or more adults are working and earning above the federal poverty level, but the household can’t afford the basics.
  • The 2019 Self-Sufficiency Standard for Pennsylvania is based on 2017 American Community Survey data with an inflationary factor applied to calculate household income in 2019 dollars. The 2019 ALICE report is based on 2017 data as well, and the refresh ALICE report in 2020 will be based on 2018 ACS data.

More information is available here.

2/6/20: Senate Passes SB 309, First-Time Homebuyers Savings Account Act:

SB 309 outlines a savings account to be set up with a financial institution by first-time homebuyers into which they would be able to deposit money. The amount deposited would be allowed to be deducted from a person’s taxable income with regard to calculating their state income tax. The savings account must then be used for the exclusive purpose of purchasing a first home.

The maximum amount that can be contributed to the savings account is $5,000 for an account holder who files an individual personal income tax return and $10,000 for joint account holders who file a join personal income tax return. If money were to be withdrawn from the account for something other than a first time home purchase, the withdrawn amount would be subject to a 10% penalty payment.

This outlined savings account in SB 309 is a response to declining home ownership. The program has estimated an annual increase of 4,000 home purchases within the state estimating a positive economic impact for PA between $10 million and $70 million.

Bill sponsor is Senator Bob Mensch, “Home ownership strengthens communities and provides stability for families,” said Mensch. “A first-time homebuyers saving account will be an important tool in helping people overcome the financial obstacles to home ownership.”

Read Senate Bill 309 here.

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