Ending the Blame Game

Last week Terry Brooks had a post about the possibility that people could be losing sight of our country’s very real child poverty problem amid the hype about the national debt and credit rating. I have a corresponding fear that people hear all the talk about the impact and aftermath of the recession and conclude that Kentucky’s sad economic situation can be blamed solely on the recession, or even worse, that there’s little to do other than waiting it out. It’s a fear at the front of my mind right now, given KYA just helped release the Annie E. Casey Foundation’s 2011 KIDS COUNT Data Book which ranks each state on child well-being, with Kentucky coming in at 41st in the nation.

My concern stems from what has been absent from this conversation. The recently released Data Book reports updated data on ten key indicators of child well-being, with two additional economic well-being indicators. The data we see in the 2011 book provides a valuable snapshot of what Kentucky experienced during the recession. This data is very important for understanding the recession, but what is not made obvious is how the state has been persistently plagued by some of these problems.

Unfortunately, some of Kentucky’s low rankings are neither new nor surprising. Take our child poverty rate as an example. In the newest Data Book the commonwealth ranks 48th in the nation due to 26 percent of Kentucky children living in poverty in 2009. Hopefully, many folks will be disappointed and perhaps even disgusted to hear that more than one in four Kentucky children lived below the federal poverty level, but it should not be particularly shocking. As you can see in the graph below, Kentucky experienced child poverty rates greater than 20 percent for a number of years before the recession hit us at the beginning of 2008.

Figures like these can be very depressing to those who care about children and the future of our state. However, they should not be viewed as a trend we must resign ourselves to. There are concrete and common-sense actions that we can take as a state to reverse this trend. Two changes that KYA sees as necessary steps in the right direction include:

  • Implement a refundable state-level Earned Income Tax Credit to increase the economic stability of thousands of low-income families in Kentucky by helping them address their immediate needs and giving them the opportunity to build long-term financial assets. It is well-documented that the federal EITC lifts more children out of poverty in the US than any other program, and has a 30-year track record of supplementing the earnings of low-income families by allowing them to keep more of their hard-earned money.
  • Make the state child and dependent care tax credit refundable. In its current state this credit largely benefits families making over $75,000. Making it refundable would help low-income working families offset the extremely high costs of child care.
  • Replicate what the federal government has done for military members and their families by capping the interest rate on payday loans at 36 percent. The current scenario of 391 percent APR for a typical two week loan has pulled too many working families already living paycheck to paycheck down a debt trap drain.

Let’s stop pinning the blame on the recent recession and do what’s necessary and within our means to get our state to a position we can all be proud of.

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