1. Expanding the Savings Agenda RAISE Texas Summit Federal Reserve Bank of Dallas—Houston Branch October 30, 2012 Laura Rosen OpportunityTexas

2. Tax-Time Saver Story Bobby, a VITA client from Longview, decided to purchase a $500 Bond because he received a much larger return than he had anticipated. He plans to put this money aside for retirement and said this savings will be the beginning of his retirement savings.

3. Texas Tax-Time Efforts Increase Savings 201020112012 Filers that Saved on Tax Return 778361,728 Tax Returns Prepared93,206104,116114,019 Annual Percentage change12%10% Percent of VITA Filers that Saved on Tax Return 0.08%0.80%1.52% Percent of VITA Sites Where Clients Saved on Tax Return 15%31%36% Annual Percentage change107%16%

4. Three Largest Tax-Time Savings Projects in Texas OpportunityTexas Tax-Time Savings Project (2011 & 2012 tax seasons) San Antonio’s SaveUSA (2011 & 2012) United Way of Greater Houston’s Tax-Time Matched Savings Program (2012)

5. This Year, Texas Tax-Time Efforts Doubled # of Savers from 2011 836 total savers

6. OpportunityTexas Tax-Time Savings Project, 2011-12  Incentives: $25 grocery store card (used in 2012) more popular than $50 Savings Bond (2011)  Immediate incentive can have effect 2-3 times greater on motivating savings initiation. 1  Return-on investment,” i.e. savings-to-incentives, increased from 3:1 to 10:1 from 2011 to 2012. Jones, Damon and Aprajit Mahajan, “Time-Inconsistency and Savings:Experimental Evidence from Low-Income Tax Filers,” CFS Research Brief, October 2011.

7. OpportunityTexas Tax-Time Savings Project, 2011-12 Outcome20112012 Number of Project VITA Filers who Saved 265942 Total Value of TSP incentives $9,695$14,240 Total TSP savings$29,950$143,300 Texas communities participating in the project 912 Texas VITA sites participating in the project 2451

8. Future of Tax-Time Savings – 2013 Tax Season and Beyond  Tax-Time Savings Project Partnership with Texas Credit Union Foundation  SaveUSA-like program with a few modifications $25-50 upfront incentive for initial deposit of between $250-500 1:1 match up to $100 on additional deposits  2014 – Sites have a menu of savings product options  Savings bonds  Savings accounts  Prepaid cards Exploring prepaid card as emergency and college savings product for VITA sites to promote in 2014 tax season Median % of filers direct depositing refund – 67%, range 25-100% Is prepaid something network is interested in?

9. College and Children’s Savings in Texas  Smarter Texans Saves, Amarillo ISD  Child Support for College (CS4C)  Save & Match/Texas Match the Promise Foundation - Platform to accept private (and public) $ to be used for 529 college savings matching grants

10. Match the Promise Scholarships Up to $500 match on tuition unit purchases Approximately150 awards Matching Scholarship $2,000 tuition grant 5 awards Promise Scholarship www.matchthepromise.org

11. Scholarship Application Timeline Sept. 1- December 31, 2012 Scholarship Application Period March 31, 2013 Scholarship Award Notification August 31, 2013 Scholarship recipients have until this date to meet contribution requirement

12. Scholarship Eligibility  Grades - Students in grades 6-9  Account Ownership – Must have a Texas Tuition Promise Fund account or enroll by 12/31/12  Tx Residency – Must be a Texas resident and a dependent for tax purposes of a Texas resident  Family Income - $75,000 or less  Savings Contribution - Minimum $100 contribution to Promise Fund account during the current sales period – September 1, 2012 – August 31, 2013  Career Essay – Submit 200-300 word essay about the career in which the student is interested  Report Card or Transcript – Submit 2011-12 report card/transcript  Initial Pool – 797 account holders potentially eligible

13. College Savings Challenges & Next Steps 529 Plan Barriers  No retail presence  Only broker-dealers and certified investment advisors can provide enrollment assistance and advice Explore Alternatives & Policy Changes  Pursue additional policy change to enable 529 enrollment assistance  Other product alternatives, including prepaid card

14. Resources  November 5, 2-3pm  Registration link on OpportunityTexas website Registration link Dollar for Dollar Publication Webinar: Promoting Savings at Tax- Time

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