Jeffersontown, KY – Thousands of Kentucky families and communities could see immediate and long term benefits with the passage of SB 155, introduced today by Senator Morgan McGarvey. SB 155 would enact a state Earned Income Credit (EIC). Kentucky would be the 25th state to have a state EIC with the passage of this bill.
SB 155 would piggyback on the federal EIC, which is one of the most effective programs at lifting children and families out of poverty. A state EIC, as outlined in SB 155, can only be claimed by people who earn income through work, and the credit is structured to encourage people to work more hours.
“This is an opportunity to encourage all the right values – work, responsibility, family, and fairness,” said Senator McGarvey. “Ronald Reagan called the EIC the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress, and we need to embrace that opportunity in Kentucky.”
“A state EIC is a win for businesses and communities across the Commonwealth while promoting economic stability for thousands of families,” said Terry Brooks, executive director of Kentucky Youth Advocates. “People who work full time should be able to support their families and stay out of poverty. This is a small investment that will make a big difference for those hard working Kentuckians trying to make ends meet.”
The EIC both helps families and strengthens local economies. Families mostly use the federal EIC to pay for basic necessities. That spending takes place at local stores and businesses, stimulating the local economy. In the last decade, several studies have demonstrated that every dollar of EIC refund to taxpayers generates local economic activity worth: $1.07 in Nashville; $1.40 in Fresno; $1.58 in San Antonio; and $1.67 in Michigan. By implementing an EIC in Kentucky through SB 155, thousands of low-income working families would have additional funds to address their immediate needs – from fixing their car so they can get to work, to ensuring their children have adequate clothing and school supplies.
“While the Governor included a version of a state EIC in his Kentucky Competes tax reform plan, we are excited to see this introduced, as a standalone measure, in the Senate,” said Dr. Brooks. “We commend Senator McGarvey for his leadership on this important step for families in Kentucky. As we think about the differences those tax refunds mean to all of us during this tax season, we know a state EIC would be of great benefit to thousands of Kentucky families. This is one measure that both parties can agree on this legislative session.”
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