Checking In: Asset Building Legislation in Colorado

costs to families

The Colorado legislature is just passing the three-quarters mark of the 2019 legislative session and it is time to take stock of the legislature’s progress. The Bell Policy Center will be looking at a number of policy areas and explaining why these issues are important, and the specific bills that are moving to try and increase economic mobility for Coloradans.

Building Assets

One of the under discussed aspects affecting economic mobility is building assets. While income is understandably a huge part of economic mobility, building assets is a key driver in helping families move into the middle class and buffering against temporary financial setbacks. In many ways, wealth — income minus debt, plus assets — is the foundation of long-term economic success and future generations’ financial success.

With Coloradans overwhelmingly passing Proposition 111 last November, voters signaled that obstacles to building assets — like unreasonably high interest rates from payday lenders — are a problem. And while the Yes on Proposition 111 campaign was a huge success, there is much more work to do to help Coloradans build wealth.

There are still many barriers to building financial assets that effectively keep people from properly accumulating wealth, but Colorado’s legislature set out to try and remove some of them, while blocking other barriers from being erected. Below is some of the legislation that is moving this session to help Coloradans cultivate wealth.

Saving for Retirement

SB19-173: Colorado Secure Savings Plan Board

Problem addressed: Over half of all private-sector workers in Colorado — over 750,000 Coloradans in their prime working years — do not have access to a retirement plan through their work. That means that hundreds of thousands of Coloradans are at risk of having very little retirement savings when they need it. And that ends up affecting the state as a whole, as those without retirement savings end up depending on social services — like SNAP and Medicaid – causing budget tensions for the state and local governments.

How this helps: The legislation will trigger a study by the state to determine the best way to engineer a retirement plan for Colorado workers. They will send their recommendations from the study to the legislature for policymakers to act on their findings. Ultimately, this will lead to a system where Coloradans can have few hurdles to save for retirement and live out their golden years in comfort and stability.

Saving for College

HB19-1280: Child College Savings Account

Problem addressed: College tuition has gotten extremely expensive. While this year the legislature called for an increase in higher education funding to keep in-state tuition flat, the state is still billions of dollars behind where it was in 2000. In fact, between 2000-2016 in-state tuition more than doubled, as state funding for higher education was cut by nearly 40 percent. As a result, student debt has grown at an alarming pace, hurting Colorado families in a myriad of ways including hamstringing family budgets and even causing some to forgo college entirely.

How this helps: This bill would give each Colorado child born after January 1, 2020 $100 to invest in a 529 tax deductible college savings account. It will give families a leg up on saving for college, as well as a place to put money into the future so they don’t have to take out an enormous amount of debt to attain a higher education. Even smaller investments such as $100 have been proven to increase the number of students that attend and graduate from college.

Protecting Consumers

HB19-1289: Consumer Protection Act

Problem addressed: Consumers are constantly at risk of being preyed upon by bad actors within the economy. While no law is fool-proof in dissuading predatory economic players, our laws have not kept pace, in many ways, with the proliferation of bad faith operators.

How this helps: This bill will tighten up definitions in the “Colorado Consumer Protection Act” to include punishment for a person who “recklessly” violates consumer protection. Furthermore, the act increases the penalties for violations of consumer protection laws. This will not only help consumers, but further deter bad actors in this space, allowing consumers to stay away from scams and bad actors, keeping more of their wealth.

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