Woullard Lett¹
Michael Swack

Introduction

The majority of persons with disabilities are disproportionately poor and economically marginalized. For instance, people with disabilities represent the highest unemployment group, and poverty persists among the approximately 54 million people with disabilities in the United States today^{2 3 4}. Among working-age adults with severe disabilities, 38.3% live in poverty with annual incomes under $15,000^{5 6}. Even when employed, people with disabilities earn substantially less than non-disabled peers - roughly 72 cents for each dollar earned by non-disabled counterparts⁷. 39% of persons with disabilities indicated in a Harris Survey poll that the lack of financial resources is the most serious problem they face⁸.

People with disabilities have long been deterred from accumulating personal savings and accepting financial contributions from others due to the fact that it may disqualify them from essential public benefits, such as Medicaid and Supplemental Security Income (SSI). Increasing efforts to provide asset development programs for low-income community members increase the possibility that persons with disabilities will be served. This may occur as a function of the circumstance that many people with disability share with the targeted population, i.e., low income.

This study examines the role of state tax policy in support of asset building among persons with disabilities. We will examine the New Hampshire Community Development Finance Authority as a model state tax credit program that promotes asset building.

Assets as an alternative

Inherent and fundamental to asset accumulation for people with disabilities is the understanding that social and economic independence equates with civil rights. Conversely, sustained poverty leads to social dependence, regardless of disability or not. However, a crucial correlate is: economic advancement in and of itself does not equate with the alleviation of disability. In fact, quite the opposite: economic advancement helps eliminate discrimination on the basis of disability (or any other characteristic that is based on social dependency). Thus, asset accumulation and the effects of economic independence lead to recognition of difference, not continued discrimination, and to social recognition and equal participation in society as contributing citizens^{9 10}.

For persons with disabilities the choice is not either income generation or asset accumulation. Both are important parts of a strategy for economic independence. Supporting asset development through tax policy may contribute to economic independence and community inclusion goals of people with disabilities and the organizations that serve them. State tax policy can be a framework through which collaboration between organizations can be promoted and asset building for people with disabilities can be funded. One model of state tax policy support of asset development that could serve people with disabilities is the New Hampshire Community Development Finance Authority.

New Hampshire Community Development Finance Authority

The New Hampshire Community Development Finance Authority (CDFA) is a quasi-public entity created in 1983 and governed by an eleven member board of directors. It currently operates four programs: Community Development Investment Program; Capacity Grants Program; Community Development Block Grant Program; and the Main Street Program. CDFA's oldest program and primary focus is the Community Development Investment Program (CDIP). It is through CDIP that state tax policy channels private investment into community development efforts¹¹.

A small group of non-profit housing developers and community economic development organizations formed to meet the needs of low and moderate income communities. Recognition of the housing and economic development problems in the state brought together politicians, academics and community development practitioners to fashion a response. One of the first steps taken was a needs assessment that focused on the capacity of community development organizations and the types of projects undertaken, as well as the types of projects developed by local government jurisdictions. This was used to identify bi-partisan political sponsorship for the legislation that created the New Hampshire Community Development Finance Authority (CDFA).

Finally, the need to create a structure that responded to the fiscally conservative and politically libertarian culture of the state was considered in the creation of the CDFA. The structure was designed to increase the flow of available equity into projects that created community and individual assets. The process maintained local ownership and control of resources while enhancing the ability of local communities to set their economic agenda.

CDFA objectives

The CDFA is a state chartered institution that uses tax credits to promote a variety of asset-building strategies by providing financial and technical support to community development projects through the Community Development Investment Program.

In response to rising unemployment and inadequate housing, the New Hampshire state legislature authorized the CDFA to provide up to five million dollars annually in tax credits through the Community Development Investment Program for projects that promote community development and support asset building.

Negotiating tax credit awards

Once awarded tax credits, applicant organizations have the responsibility to identify donor businesses to "buy" or redeem the tax credits through donations of cash or property. Many organizations awarded tax credits identify corporate donors through their own networks. Some organizations seek the assistance of CDFA staff in identifying appropriate donors. Once a match is made donor businesses provide the applicant organizations a pledge agreement.

Donor businesses contribute cash or property in exchange for CDFA tax credits. They receive a state tax credit for 75% of the value of their donations. The tax credits can be applied against three state business taxes: business enterprise tax, state business profits tax and insurance premium taxes¹². The donor's role is limited to making the donation and receiving the tax credit. They have no decision making, governance or oversight role in the process beyond the initial decision to make the donation.

CDFA asset-based strategies

CDFA projects provide housing and economic opportunities for low and moderate income citizens. Projects include housing development, business development and job creation projects. They typically contribute to the development or redevelopment and economic well being of targeted areas or constituencies.

CDFA is a public policy response rooted in asset development. Asset development and ownership strategies such as affordable homeownership and IDAs provide tangible asset ownership options. CDFA programs also provide community economic development organizations the institutional support required to create and sustain projects and programs that foster ownership and equity among economically marginalized communities. It does this by using state tax policy to provide community development initiatives with equity investment for projects.

This strategy to promote asset accumulation is targeted specifically for low and moderate income communities. People with disabilities have not been targeted as a group. But CDFA board member K. Bogle-Shields¹³ and CDFA grantee J. Eades believe that persons with disabilities' low and moderate income economic status has resulted in their being included in programs offered by CDFA¹⁴.

Review of CDFA projects

CDFA has funded several projects for organizations that serve or impact people with disabilities. Projects have included affordable housing, job creation and the asset building strategies like individual development accounts (IDA), affordable home ownership and transportation ownership. While many projects may impact people with disabilities as part of the low and moderate income constituency served by CDFA, there have also been projects that directly impact them.

One of the few CDFA tax credit awards to an organization that serves people with disabilities was made to Riverbend Community Mental Health Inc. This organization serves the mental health needs of consumers. CDFA board members were aware of the organization's mission, but did not consider it a factor in granting the tax credits. The type of project, transitional housing, and the income levels of potential beneficiaries were the main selling points of the project. According to C. Albano, CDFA acting executive director, "I don't think CDFA has ever put an application round out and said that … people with disabilities and organizations representing people with disabilities … get priority"¹⁵.

However, Albano reports that CDFA has funded an innovative program named "Wheels to Work." This program increased access to transportation ownership for Medicaid clients and other low-income individuals¹⁶. Wheels to Work received a tax credit award that was used to create a partnership between a local community action program (CAP) agency and an automobile dealership. The dealership received tax credit for used automobiles donated to the CAP agency. The agency in turn refurbished the automobiles and sold them to low income clients for a small fee.

CDFA tax credit funding played a significant role in the creation of a statewide network of IDA programs. The CDFA tax credits served as the match required to access federal funds to support the program. In addition to serving the needs of low-income individuals in general, the IDA program partners include one program that targets persons with disabilities. "One of our community partners … specifically targets the disabled population" according to S. Drake, Director, New Hampshire Community Loan Fund Home-of-Your-Own & IDA Programs¹⁷. Other programs may include participants with disabilities though not exclusively.

Drake stated that CDFA support of cooperative manufactured housing has contributed to the ability of a local agency to provide ownership opportunities to persons with disabilities through the Home-of-Your-Own program¹⁸. Benefits for persons with disabilities from this particular program include the social empowerment and community integration that result from the cooperative ownership structure. CDFA tax credit support of housing options for low-income individuals provided the framework through which opportunities for persons with disabilities were created.

CDFA provides tax credit support for non-profit housing developers throughout the state. This general support enables the statewide network of non-profit housing developers to provide affordable housing for low-income residents.

It is likely that persons with disabilities have benefited from the increased availability of affordable housing. K. Bogle-Shields, CDFA board member, stated "I consider people with disabilities to be poor people. Not across the board, but there are a heck of a lot, generally, who are poor. So, if you are funding affordable housing or if you are funding IDAs, that would include persons with disabilities"¹⁹. At a minimum, housing developers comply with ADA accessibility requirements and some projects may include additional accessibility accommodations.

CDFA and people with disabilities

An increasing number of government and non-profit programs serving people with disabilities across New Hampshire have sought to provide participants with asset ownership in addition to employment. Awareness of the key role asset ownership may play in poverty reduction is increasing among organizations that serve people with disabilities.

Examples of this include Common Ground, an organization that serves people with emotional, psychological or behavioral difficulties, pioneering the Home of Your Own program in New Hampshire to provide affordable homeownership. Another is the Lakes Region Community Services Council, a human service agency that offers family centered supports and services to individuals with developmental disabilities, traumatic brain injury, and other disabling conditions; identifying business ownership opportunities for their consumers. These programs are representative of an approach that acknowledges the importance of asset development to people with disabilities.

The New Hampshire Community Loan Fund received support from CDFA for "Home of Your Own," a program that provides homeownership opportunities for person with disabilities. CDFA has contributed to the statewide IDA network that includes an organization serving people with disabilities. Other people with disabilities may have qualified for CDFA-funded programs targeting low and moderate income communities based on their income.

CDFA has strengthened community economic development organizations in New Hampshire by providing a supportive infrastructure that facilitates access to capital and collaborative partnerships. These activities have contributed to the overall increase in number and capacity of community development organizations. Asset development among organizations that serve people with disabilities is an emerging practice. Widespread adoption of asset building as a strategy among organizations that serve people with disabilities may require similar support.

For recommendation on how to replicate this model in other states as well as improving inclusive efforts, see the May EQUITY Tip of the Month.

The full text version of this paper will be posted on the School of CED Applied Research Center website.

1 Woullard Lett is a Research Associate at the Applied Research Center in CED of Southern New Hampshire University School of Community Economic Development, 2500 N. River Road, Manchester, NH 03106.

Michael Swack is a Senior Research Fellow at the Applied Research Center in CED of Southern New Hampshire University School of Community Economic Development, 2500 N. River Road, Manchester, NH 03106.

The study was funded under a grant from the Department of Education, National Institute on Disability and Rehabilitation Research (NIDRR) to the University of Iowa #H133A031732. The opinions and conclusions are the authors and do not represent the opinions or policy of the Federal government, the University of Iowa or Southern New Hampshire University.

The authors thank Tobey Davies (Center for Community Economic Development and Disabilities, School of Community Economic Development) and Nelly Lejter (Applied Research Center in CED, School of Community Economic Development) for their comments on earlier drafts of this paper and Yoel Camayd-Freixas (Applied Research Center in CED, School of Community Economic Development) for his assistance.

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10 Blanck, P., Schur, L., Kruse, D., Schwochau, S., & Song, C. (2003). ). Calibrating the impact of the ADA's employment provisions. Stanford Law and Policy Review, 14 (2), 267-90.

11 Community Development Finance Authority Act of 1991. State of New Hampshire Revised Statute Annotated Title Xll Public Safety and Welfare, chap.162-L. Retrieved December 3, 2003 from http://www.gencourt.state.nh.us/rsa/html/xii/162-l/162-l-4.htm

12 Community Development Finance Authority Act of 1991. State of New Hampshire Revised Statute Annotated Title Xll Public Safety and Welfare, chap.162-L. Retrieved December 3, 2003 from http://www.gencourt.state.nh.us/rsa/html/xii/162-l/162-l-4.htm

13 Bogle-Shields, Kathy. Vice-President for Community Development, Providian National Bank Concord, NH. Personal Communication. Interview date: September 16, 2004. Informant type: CDFA board member

14 Eades, Julie, Executive Director. New Hampshire Community Loan Fund, Concord, NH. Personal Communication. Interview date: September 27, 2004. Informant type: CDFA grantee

15 Albano, Charles, Acting Executive Director. New Hampshire Community Development Finance Authority,Concord, NH. Personal Communication. Interview date: September 2, 2004. Informant type: CDFA staff

16 Albano, Charles. Personal Communication. September 2, 2004.

17 Drake, Sharon, Director. Home of Your Own and IDA Programs. New Hampshire Community Loan Fund, Concord, NH. Personal Communication.
Interview date: September 2, 2004. Informant type: CDFA grantee

18 Drake, Sharon. Personal Communication. September 27, 2004.

19 Bogle-Shields, Kathy. Personal Communication. September 16, 2004.