Impact Alabama's SaveFirst Program Honored For Community Impact

Impact Alabama's SaveFirst Program Recognized
Pictured Left to Right: Renee Blalock, BPL Director; Channing Kennedy, Alabama Impact Program Manager;
Sarah Louise Smith, Alabama Impact Executive Director; Pam Jesse, Woodlawn Branch Manager;
Maya Jones, West End Branch Manager

The Birmingham Public Library Board recently presented certificates of appreciation to Impact Alabama Program Manager Channing Kennedy and Executive Director Sarah Louise Smith for providing free tax help to patrons through their SaveFirst program.

SaveFirst has been available to Birmingham Public Library (BPL) patrons for the past several years. This past year, the program was available at three BPL locations: Smithfield, Woodlawn, and West End. The program just at these three locations resulted in 1,486 tax forms prepared and filed, $2,297,516.00 refunds secured, and an estimated $449,800 saved in preparations fees.

About SaveFirst
SaveFirst targets those who qualify for the Earned Income Tax Credit, the federal government’s largest anti-poverty program supporting low- to moderate-income working individuals and families. (Website)

The Need for SaveFirst
Many low-income households are eligible for the EIC and other tax credits, but are unaware of their existence and thus do not apply for the annual refunds. The IRS estimates that 15% or more of EIC refunds are unclaimed by low-income families, which amounts to approximately $2.7 billion each year (The 2004 Just Money Project).  Moreover, many who do not have the resources or knowledge to file their own taxes instead rely on costly commercial tax preparers. Additionally, many consumers are convinced to take out a Refund Anticipation Loan (RAL)—a predatory one-to-two week loan secured by and repaid directly from the proceeds of a consumer’s tax refund, offered at exorbitantly high interest rates, ranging from about 50% to over 800% APR.

In Alabama, more than 500,000 families annually claim an estimated $1 billion through the federal EIC. However, with more than 75% of EIC recipients in Alabama paying a commercial preparer to complete their taxes, Alabama families lose more than $78 million annually to tax preparation and refund anticipation loan costs—a figure which places us at 48th in the nation. That extra $78 million could have made a tremendous contribution to helping lower-income families secure health insurance, pay down debts or put food on the table. (Website)