New funding source to increase financial literacy in Massachusetts passed by Joint Committee on Revenue

Senator Barry Finegold is pleased to announce that the Joint Committee on Revenue voted unanimously to recommend passage of a bill he recently filed, which would support financial literacy in communities across Massachusetts. This piece of legislation allows taxpayers to voluntarily check a box on their annual state tax returns and designate a contribution to the Financial Literacy Trust Fund (FLTF). The FLTF is used to strengthen the financial knowledge of Massachusetts citizens by supporting programs that have a proven track record of success in helping students, immigrants and others learn about how to manage their finances.

Finegold, a member of the Financial Literacy Trust Fund Board, has consistently engaged in issues surrounding fiscal education and knows how important financial knowledge can be to a family struggling to survive in this economy. “There is a huge need for financial literacy programs in Massachusetts and across the country,” Finegold said. “Knowing how to balance a checkbook or create a budget, for instance, can make an enormous difference for a family living at or below the poverty line.”

In 2012, the National Foundation for Credit Counseling released a Financial Literacy Survey that revealed 56% of American adults do not have a household budget, including 22% who say they do not have a good idea of how much they spend on housing, food, and entertainment. A recent state survey by the FINRA Investor Education Foundation (FINRA Foundation) found that 48 percent of Massachusetts residents reported not having rainy day savings to cover three months of unanticipated financial emergencies, and only 45 percent of Bay Staters reported spending less than their household income.

The need for financial literacy in Massachusetts is readily apparent, which is why Senator Finegold worked tirelessly to establish the FLTF during the last legislative session. As a result, the FLTF, governed by a twenty-member board made up of elected officials, business leaders, and economic literacy advocates, creates policies for the development of financial literacy in the Commonwealth and raises revenue to educate disadvantaged citizens on best financing and budgeting practices.

“Currently the Financial Literacy Trust Fund is supported by solicitations of private contributions as well as by public and private grants,” Finegold said. “The potential for increased revenue from voluntary donations on the state tax form would enable the trust to expand it work and provide programming to more residents in Massachusetts.”

Over the last few years, the FLTF has already tallied several victories. For example, in March of this year an announcement was made that $10,000 from the FLTF would be earmarked for programs to help seniors address financial challenges they face. Grant applications were made available to tax-exempt organizations having at least five years of experience serving senior citizen populations with regard to financial matters.

The FLTF has had early success in expanding access to financial literacy information for Massachusetts residents, and the passage of this bill would amplify the trust’s reach.