More Downs Than Ups For State, Local VITA Funding

ChartA decline in state and local funding continues to hit struggling households’ free tax preparation services, according to our recent survey – and that, in turn, hits families’ wallets.

Forty-three individuals from 29 states and the District of Columbia responded to the National Community Tax Coalition’s recent survey on state policy and advocacy matters. Among other things, our poll attempted to gauge the level of state and local government support for Volunteer Income Tax Assistance (VITA) benefiting low- and moderate-income, working households.

While our poll was unscientific, its main takeaway was fairly clear: In too many places, VITA can count on fewer and fewer resources with which to help families in dire need.

Providers representing a dozen states said their VITA programs were receiving at least some state dollars, ranging from $7,000 to as much as $186,000. But such funds were decreasing in eight of those states, respondents said, and increasing in only one.

The same held true for local governments’ VITA support. Respondents from programs in 12 states claimed local funding of $10,000 to $300,000 – with an eight-to-one ratio between those reporting declining dollars and those with increasing revenues.

In some cases, state or local funding for VITA had been zeroed-out entirely.

Sadly, these moves are not being offset by any new growth in VITA’s federal matching grant. Given the awful fiscal atmosphere in Washington, advocates actually have considered it a victory to hold those grant dollars steady at $12 million for the past couple of years, with hopes of an increase as soon as feasible.

On the other hand, working families’ needs are growing in this struggling economy, including their needs for free, reliable tax preparation services.

VITA helps households claim the full amount of any refunds owed them, as well as asset-building and other financial services. Such assistance helps them put food on the table, pay their rent and cover their utility bills.

As Congress hashes-out a budget for FY2013 and statehouses scramble to settle their own spending plans, we hope they’ll remember the ways VITA connects these dots between working families and fulfillment of their everyday needs.  We hope policymakers will protect and strengthen VITA resources, rather than continue to chip-away at them – and we ask your help in making that request of them.

By Sean Noble, Director of Public Policy & Research

About National Community Tax Coalition

National Community Tax Coalition (NCTC) is the nation's largest, most comprehensive membership organization for community-based organizations offering free tax and financial services to low-income working families.

Posted on April 9, 2012, in NCTC and tagged , , . Bookmark the permalink. 1 Comment.

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