Public benefits benefit all of us. . .

We live in a society that provides some benefits, though limited, for the poorest and weakest among us. 

That said, we often over look the fact that these benefits designed to lift "the poor" also benefit the rest of us. For example, SNAP funds (food stamps) are spent in retail grocery stores who benefit from the purchases the public benefits make possible.  SNAP is a huge positive to Kroger's bottom line, resulting in jobs, dividends to share holders and economic growth in the community overall. 

What is true of SNAP funds is also true of other public benefits received by low-income families.  In fact, one of the quickest methods for injecting life into any economy is by means of direct benefits to those at the bottom of the economic ladder.  For some reason most of us don't understand or give much thought to this economic reality. 

Texas is not too proficient at claiming the benefits from the federal government that should be coming back to us.  I say "back," because the benefits are funded by taxes we've already paid.  When our state fails to enroll, certify and qualify eligible persons for the benefits for which they qualify, the result is a significant capital lost to our state's economy. 

And, it is clear that our record of recovering those benefits is not good. 

Here's the sad news about Texas and unclaimed federal dollars across a broad array of public benefits annually: 

SNAP (food stamps) $2.4 billion unclaimed

Energy assistance  $568.7 million unclaimed

Childrens' Health insurance  $1.2 billion unclaimed

Children's Medicaid  $866.2 million unclaimed

Adult Medicaid (aged & disabled) $523.6 million

Medicare Part D Low-Income RX  $236 million

Pell Grants for college tuition $349.3 million

For a grand total, conservatively estimated at $6.1 billion annually!

We fail to enroll all of the eligible participants and we loose the funding for Texas.  As a result, tax dollars that I pay leave Texas and benefit other states.  During tough economic times for our state, this loss is completely unacceptable. 

In addition, each of these funds, once claimed and spent, possess and exhibit a "multiplier effect" in the economy.  In other words, these funds and their impact on the economy multiply as they circulate and are spent and respent through various sectors of our economy.  

Here's the multiplier factor for several of these funds designed to assist the poorest and weakest among us:

SNAP (food stamps) spent in retail grocery stores has a multiplier effect of 1.95 per dollar spent.

CHIP's multiplier effect is 3.17 per dollar spent.

Adult Medicaid--3.17 per dollar.

Energy assistance--2.25 per dollar.

Pell Grants--3.15 per dollar.

Medicare RX--2.67 per dollar. 

The overall impact of these public benefits beyond the aid to poor families themselves includes a stimulus to the economy of the state in real dollars and in new jobs.  When we fail to draw down these benefits, we fail our own economy and we act in opposition to our own interests as tax payers.

We can do better. We should start by simply understanding the reality behind the numbers.

Portfolio at the bottom. . .

Almost thirty years ago I realized that, if I bought into an IRA, I could save about $1,200 in tax liability for that one year. 

At the time I served a church in Richardson as its Senior Pastor.  I had no financial advisor.  So, following my usual "best practices," I opened the Yellow Pages and thrust my forefinger into the book where it landed on a broker named Scot Smith.  Best choice I ever made!  I have very little money, but Scot has stuck with me through it all and he has managed my funds very well.  Whatever retirement income I end up with will be in large part due to Scot's hard work on my behalf. 

So, I've been wondering.  If I have the benefit of a financial counselor near the top of the economy, why shouldn't folks nearer the bottom enjoy the same guidance benefit? 

My options orbit around a good job, 401K investments and a little inheritance income.  

Those at the bottom have the prospects of an entire range of public benefits designed to lift people into self-sufficiency.  Part of the problem though has to do with connecting eligible persons to the options and opportunities that they could enjoy.   

Take our entry level employees at CitySquare (formerly Central Dallas Ministries).  These are hard working individuals.  Our minimum wage at CitySquare is $10 an hour.  That translates to an annual wage of under $21,000, a pay scale that equals poverty status according to current federal poverty standards. 

What if we offered financial benefit counsel to these employees and to others who come to  us seeking assistance?  What if we trained and offered the services of "financial counselors" for the bottom of the economy? 

My question is necessary for a number of reasons. 

First, most people don't know what benefits are available for putting together a plan for a better life.  Overcoming a lack of basic skills is a major challenge for low-income wage-earners.  During that time of crucial learning, either in a classroom or on the job, people need assistance and support.  Connecting people to the resources can mean the difference between success and failure, as in continuing life at the bottom.

Second, obtaining the available benefits is not easy.  In fact, the longer I work in this sector the more I believe the system is set up to block eligible individuals and families from obtaining the benefits needed to be successful.  In short, it is hard to be certified for most of the assistance and human lift programs that are available.  For example, in 2008, Dallas County left over $500,000,000 of SNAP benefits (food stamps) on the table by not enrolling all qualified residents in the nutrition program that benefits individuals, families and retail grocers!  A competent counselor makes all the difference in the world to the process and to success. 

Third, an effective financial counselor often becomes a friend.  Most of us higher up the economic scale tend to forget the importance of supportive friendship.  Scot is my friend.  I trust him.  He gives me sound advice and clear direction.   Why would we expect things to be different among low-income persons?  And, this raises an important issue.  I believe that there may be a need to shift away from a classic social work/case management approach to this work.  What's needed will involve an approach more nearly like a financial advisor whose goal is to see a customer achieve maximum return on investment of time and effort. 

While the financial opportunities for low-income workers vary rather dramatically from state to state (with Texas ranking near the bottom on most public benefits), there are numerous resources available designed to advance people out of the underclass.  Included in this "portfolio of benefits" are Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Earned Income Tax Credit (EITC), Child Tax Credit, Children's Health Insurance Program (CHIP), Medicaid, Supplement Security and Disability Income, utility assistance, Women, Infant and Children program (WIC), Head Start, Free and Reduced School Food Program and various housing assistance programs. 

By weaving together a plan or linking up with applicable public benefits, a person with the assistance of a thoughtful financial advisor can begin to move forward.  At the same time, each of these possible investments in the lives of low-income individuals and families puts additional dollars into the economy where they are utilized. 

There is hope to be found here.  The question or the rate-limiter for impact relates to public will, as well as a willingness to view the various resources from a fresh, new perspective and without shame or reservation.  After all, lifting people in our economy is the purpose behind each fund opportunity.