Maine lawmakers on both sides of the aisle want to use surplus funds to get relief to the people who need it most. One way to do that is sitting right in front of them.
L.D. 1544, a bill from Rep. Mo Terry, D-Gorham, would provide extra support for low-income parents by expanding the state’s child tax credit from $300 to $350 per child and making the credit fully reimbursable, meaning even the poorest families could take advantage.
Expanding the state-level credit would help cover some of what was lost when Congress failed to renew the federal child tax credit extension, which was also made fully reimbursable in 2021 – and helped drop the child poverty rate nationwide by about 46%, to its lowest level ever.
The success of that simple policy showed, without a doubt, that child poverty exists because we as a country have chosen not to implement a proven solution to it. The policy delivered additional money to 61 million children in 36 million households, temporarily lifting nearly 4 million kids out of poverty.
In Maine, the federal child tax credit dropped child poverty by an astounding 40%. Research has shown that the money went toward basic needs such as food, utilities, housing, clothes and education.
While the state-level credit proposed would not be so generous, it would lift an estimated 3,500 Maine children out of poverty. By being fully refundable, it would bring extra resources to 73,000 children whose parents now make too little to qualify for the credit. Those families would have a little more breathing room in their finances – something that can make all the difference in the world when it comes to the health of a family and its children.
The credit would also be an investment in Maine.
“The child tax credit has such a transformational impact on children’s lives that every dollar spent on the credit has a ten dollar return on investment to society in the form of increased future earnings, better health, improved educational outcomes and reduced involvement with the criminal justice system for impacted children,” the Maine Center for Economic Policy said in testimony in favor of the bill.
And while much of the debate over the bill has centered on its support for young families with children, it also would help out others who are often left with little help. The credit would apply to all caregivers with dependents, so that grandparents who are looking after grandkids would qualify, as would parents with adult dependents.
For some, this money may represent an energy bill paid or a home repair completed, “or simply some added peace of mind that comes with a financial security net,” the Maine Council on Aging said in support of L.D. 1544.
The bill passed the Taxation Committee with a divided report, with one Republican joining Democrats in favor. Republicans, as a whole, have been pushing income and sales tax cuts as a way to give Mainers relief from high costs. However, in the only detailed plan members have released, Maine House Republicans proposed reducing the lowest tax bracket from 5.8% to 4.5%, ostensibly to get tax relief to the poorest working Mainers.
The problem is, such a change would be of little to no benefit to Mainers making under $25,000 a year, while those making more than $150,000 a year would enjoy the largest reduction.
With so many needs not being met for Mainers on the lower end of the income scale, it would be a waste of resources to give more to folks that already have enough.
Instead, lawmakers should use a child tax credit to get money where it will do the most good: in the hands of people who need it to build better lives for themselves and their children, so that the next generation of Mainers can flourish.
Send questions/comments to the editors.
