Yesterday, Governor Quinn signed into law  a bill that will doubles the state’s Earned Income Tax Credit (EITC) over a two year period and boosts the personal exemption by $50 to $2,050. The bill also ties the credit to the inflation rate. Currently, the Illinois EITC is at 5% of the federal EITC. This new legislation will increase the credit to 7.5% next year and 10% the year after.

This increase means that a single parents working a minimum wage job earning about $12,800 annually will save $150 on their taxes next year. A married couple with three children earning $30,000 a year will save about $200 on their taxes. It is estimated that more than 1 million Illinoisans will be directly impacted by this increase.

As part of the Make Work Pay Coalition, IABG has been advocating for an increase in the state EITC for years. This increase in the credit will:

1. Further incentivize work: For those with very low earnings, additional hours of work yield both more wages and a larger EITC.
2. Lift Illinoisans out of poverty: The EITC is one of the most cost-effective, most targeted approaches to reducing poverty among children and families.
3. Offset the disproportionate share of state and local taxes that our lowest-income workers pay: Low-income families were disproportionately affected by the increase in the state’s income tax rate. While the increase was an essential step towards resolving the state’s prolonged fiscal crisis, the revenue legislation included no provisions to improve tax fairness.

The tax credit was the counterpart to a bill Quinn signed in December giving corporate tax breaks to Sears Corp. and CME Group.

The Social IMPACT Research Center has launched a new interactive poverty data portal to complement the recently released 2011 Report on Illinois Poverty.

This interactive website allows you to more easily access county-level data related to poverty, employment, education, and assets. We hope that the site will empower advocates, impacted community members, and our decision makers to see the true impact of poverty on different populations and areas of the state.

IMPACT has developed a comprehensive picture of poverty in our state. They provide data across 35 indicators related to poverty, including income, employment, housing, heath & nutrition, and total assets.

Asset Poverty in Illinois

According to the 2011 Report on Illinois Poverty found that:

• 51.9% of Illinois Seniors do not have any retirement income aside from Social Security
• The rate of Illinois consumers with credit scores below 620 has increased 22.4% since 2007. Low credit scores limit prime borrowing opportunities for items including car loans, credit cards, and home loans.
• Since 2003, Illinoisan’s average debt has increased by 37%

Assets are essential for helping families weather crises and invest in future opportunities that will provide a pathway to financial stability. The data provided in the Illinois Poverty Report, illustrates the need for more comprehensive asset building opportunities that address continued erosion of wealth from our communities. For instance, expanded retirement savings opportunities through Auto IRAs should be an option for Illinois workers and will address the growing dependence on Social Security.

As we work to address asset poverty in Illinois, ilpovertyreport.org provides the tools and information needed to better inform advocates and decision makers about the depth and scope of hardship across the state. Check out the site and take advantage of the fact sheets, spreadsheets customized to geography and selected, indicators, and share the information with others.

Yesterday, President Obama made a recess appointment placing Richard Cordray as the head of the Consumer Financial Protection Bureau (CFPB).

The CFPB, established under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, is charged with writing, implementing, and enforcing federal financial law. It’s our country’s first federal financial regulator who’s sole responsibility is to protect consumers from unfair and dangerous financial practices and products. However, while the CFPB officially opened it’s doors in July of 2011, it has been without a Director and thus unable to carry out all of it’s duties.

With Richard Cordray as its first Director, the CFPB will now have the full authority necessary to investigate and examine financial institutions, payday lenders, private student lenders, credit bureaus, mortgage companies and other financial firms.

On his first day as Director, Richard Cordray is asking consumers to tell their story:

There are countless community members across the state that have faced  unfair, abusive, practices by some financial insitituions. We encourage you to tell your story on the CFPB Website.