Over the past two decades, the Individual Development Account (IDA) program has emerged as a proven strategy for helping families with low incomes build savings and assets. However, the program just suffered a setback when it was de-funded by Congress in the latest budget approved for the current fiscal year. Although the state of Vermont did include IDA matching and operating funds in its budget for FY18, it is unclear at this time if the state is still committed to releasing those funds, given the cut in the federal funds they were intended to match. If the state chose not to release this funding, it would have major implications for the future of the program, and even for the ability of current participants to continue saving and purchasing assets with their matched savings.
The federal government incentivized savings through the IDA by providing matching funds to households who saved money to acquire an asset-- buying a home, getting further education, or starting/expanding a business. Many states, such as Vermont, provided matching funds, resulting in a $2 match for every $1 saved, a great incentive to get households moving in the direction of greater financial stability. SEVCA, like the other Community Action Agencies (CAAs) in the state, still has several cohorts of IDA participants in the saving phase, and staff are needed to support them as they complete their savings and access their matching funds. Since the CAAs have to a great extent relied upon state funding for program operations as well as the match, and it is uncertain whether those funds will be forthcoming, the program is in jeopardy. Currently, the CAAs are advocating for the state to release the funds they appropriated for the program and working to locate alternative sources of funding.