A new report is proposing helping the working poor in New Jersey move ahead by using taxpayer funds and donations to create matching savings accounts.

Demelza Baer, the director of the economic mobility initiative at the New Jersey Institute for Social Justice, said the report calls for a new program to help Garden State residents earning below the median income.

She said about 40% of New Jersey residents are ALICE: asset limited, income constrained and employed.

New Jersey also has one of the largest racial wealth gaps in the country, with the net worth for white families at $309,000 while for black and Latino families it’s $5,900 and $7,000, respectively.

“There’s a lot of people who are working full time and unable to meet all of their monthly expenses, and because of that they’re not able to save,” she said. “This really prevents people from having not only financial security, it also prevents a lot of people from realizing what their version of the American Dream is.”

She said for some people that’s buying a house or a car, while for others it’s starting a small business.

She said the program “would empower a lot more state residents to have financial stability and security. It would enable our state’s economy to grow by supporting things like people becoming home owners.”

The proposed program, which would be administered by nonprofit agencies, would provide lower-income residents with financial coaching and counseling and then they would decide how much money a month they wanted to save. Then they would receive up to a 500% match, depending on their income status.

“So, for instance, if they put in $10 each month, their account would be growing by $60 each month because it would be the $10 they put in plus the $50 in matching funds," Baer said.

The report by the New Jersey Institute for Social Justice recommends the state's program be funded by state tax dollars and a donation program that would allow participants to get a 70% tax credits for the money they donated.

The program is similar to a key campaign issue that U.S. Sen. Cory Booker, D-N.J., has highlighted in his bid for the Democratic nomination for president. Booker supports a "baby bonds" program that would give every newborn a $1,000 savings account. The government would add to that account each month by an amount depending on the child's income level.

Baer argues hat this kind of a program would benefit the state economy because these accounts “are not just money that is going out the door — [it's] money that’s empowering people to do things that are not only good economically for them and their families but they’re good for the local communities.”

Homeowners pay property taxes and spend on maintaining their houses. Small businesses also pay taxes and employ people.

She said research shows these accounts are a net economic benefit for not just the people who participate but broadly for the economy.

“We’re talking about a relatively small investment that could potentially make a life-changing difference in the lives of thousands of state residents," she said.

She said state Sens. Teresa Ruiz, D-Essex, and Nilsa Cruz-Perez, D-Camden, have expressed interest in crafting legislation that would create a pilot program for what the report is recommending.

You can contact reporter David Matthau at David.Matthau@townsquaremedia.com

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