Report says 21 percent of Va. residents lack nest egg

About one in five Virginia residents has almost no savings or other assets to weather a financial crisis, according to a nonprofit group's report.

The report released last week by the Corporation for Enterprise Development ranks shows 21 percent of Virginia residents don't have a financial cushion in case they lose their jobs or sources of income.

The group used 52 measures in five different areas: finances and income; businesses and jobs; housing and home ownership; health care, and education. Virginia ranks 14th among the states.

While many Virginia residents have jobs, they lack adequate savings or other assets to cover expenses for three months if they lose steady income. One of the measures excludes assets such as a home or car that cannot be easily converted into cash for day-to-day needs.

“Without those savings, few will be able to invest in a more economically secure future, including buying a home, saving for their children's college educations or building a retirement nest egg,” said CFED President Andrea Levere.

Virginia earned a “D” grade in health care, noting a lack of insurance coverage in lower income groups. It found that 33.6 percent of low-income parents and 10.5 percent of low-income children had no insurance.

Virginia also earned “B” grades for businesses and jobs, housing and home ownership, education, and financial assets and income.

The report noted the state ranks 40th in early childhood education and 32nd in high school degrees.

It said while the state does better than average in most financial areas, consumer credit is a concern. The state ranks 40th in average credit card debt, 27th in bankruptcy rate and 23rd in consumers with subprime credit. Virginia ranks 44th in both small business ownership rate and microenterprise ownership rate.

The group suggests several policies that Virginia can enact to improve its climate for asset building.

To increase the high school graduation rate, Virginia should increase funding for kindergarten-through-12th grade education, particularly in high-poverty districts, and establish a stronger system for teacher evaluation and retention, the report said.

It suggests the state establish a self-employment assistance program to increase microenterprise and small business ownership opportunities.

And Virginia should expand health care coverage by raising income eligibility thresholds for childless adults for public health insurance programs, and implement simplified enrollment and renewal procedures for Medicaid and the state Children's Health Insurance Program, the report said.

“We cannot let the challenges facing our economy prevent us from investing in policies with a proven record of helping struggling families succeed,” Levere said. “As a country, we must take the necessary steps today to protect vulnerable families from further financial shocks and lay the groundwork for future prosperity.”

The Washington, D.C.-based Corporation for Enterprise Development is dedicated to expanding economic opportunity for low-income families and communities.