“In our community and across the country, we have two groups: People who money works well for, who, especially in 2020, are part of the asset-owning class who are excited and exuberant about their stock returns, and those who money is working against,” says St. Paul Mayor Melvin Carter.
That recognition is what pushed Mayor Carter to create the city’s Office of Financial Empowerment in 2019, an office that aims to fight poverty and economic inequality by coordinating a city-wide effort to increase financial education and wealth-building efforts. To date this has taken the form of everything from supporting fair housing protections and policies to starting a college savings account for every child born in the city and working towards a guaranteed income.
Despite the COVID-19 induced financial crisis, which has led to Carter’s proposed 2021 budget calling for vast cuts across almost all departments, the Office of Financial Empowerment will continue on, thanks to its efficacy at bringing in outside funding.
Supported in part by the Cities for Financial Empowerment Fund, the office is not only continuing the programs it started, but has pivoted to provide COVID-19 related programming as well.
Thanks to the global pandemic and economic fallout, “there are more and more people who are … stressed to an almost debilitating level who don’t know what the future will hold,” Carter says.
“The goal of the office, which sits in the Office of Financial Services, is a department full of people whose job it is to make money work for the City, capital C,” he says. The Office of Financial Empowerment was created to take the financial skills and expertise within that department and direct it toward bringing financial stability to those in St. Paul who need it the most “because our highest purpose is connecting people to stability,” Carter adds.
In its short existence, the office has already launched several initiatives such as CollegeBound St. Paul, a program that sets up every child born in the city on and after January 1, 2020 with $50 in a college savings account. The initiative also provides wrap-around services for families to learn more about saving and planning for their child’s future and allows families to contribute more to the account over time.
The program was rooted in research that found that children from low- and moderate-income families are three times more likely to enroll in college and four times more likely to graduate from college if they have a college savings account with between $1 and $500 in it. “It felt like too much to know to not do something about it,” Carter says. “Part of my pitch to the legislature was: Show me any other program that we could even project might increase the likelihood of low-income people going to college — that’s going to cost 10 to 100 times more on a per child basis than $50.”
Among its other offerings, the office provides free tax filing for low income families to help them qualify for various other programs across the state like tax credits. “In the napkin math we did, we figured that about 20 percent of families eligible [for assistance programs] either forgot to file their taxes or didn’t think they made enough money to file.”
Then the pandemic hit, and the office found new ways to serve the city.
It spearheaded a city-wide food security working group and, as a result, struck a partnership with Youthprise, an after-school nutrition program. “We partnered with them to scale up the infrastructure they had set up,” says the office’s director, Muneer Karcher-Ramos. By working with the city’s libraries and parks and rec departments, the collaboration was able to deliver meals through city buildings and is expected to reach half a million meals served by the end of this week.
The office is also involved with Mayor Carter’s effort — a part of Mayors for a Guaranteed Income, a group of 25 mayors from across the country advocating for exactly that — to pilot a guaranteed income program in St. Paul that would use CARES Act money to provide up to 150 families with $500 a month for 18 months.
In the immediate future, the office is continuing to pivot towards pandemic-related financial needs. Late this month or early next, the office plans to launch a program to help residents better understand and watch out for COVID-related scams and fraud schemes. The effort will be in partnership with the BBB, the Federal Trade Commission, and the Minnesota Department of Commerce.
While the office has drawn inspiration from places like the Financial Justice Project from the San Francisco’s Office of the Treasurer and Tax Collector and St. Louis’ College Kids savings program — “We’re being unapologetic about borrowing anything from across the county that works,” the mayor says — St. Paul’s Office of Financial Empowerment relies deeply on listening to the community to assess which needs to address. Carter offers the example of listening to St. Paul librarians who brought up the issue that resulted in the city eliminating library late fees in early 2019.
“Mayor Carter cast a vision that we need to build a city that works for everyone. Being uniquely situated in multiple pandemics — economic, health, and racial justice — we’ve really been able to focus on what the type of city-wide change is that we want to advance,” Karcher-Ramos says. “We’ve really been thinking big about what public private partnerships are needed and what the possibilities are…and lean into the possibilities of what residents across St. Paul need.”
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.
Cinnamon Janzer is a freelance journalist based in Minneapolis. Her work has appeared National Geographic, U.S. News & World Report, Rewire.news, and more. She holds an MA in Social Design, with a specialization in intervention design, from the Maryland Institute College of Art and a BA in Cultural Anthropology and Fine Art from the University of Minnesota, Twin Cities.