The latest national KIDS COUNT Data Book reveals that more than 1 in 4 children in Kentucky live in poverty. Some families in which these children live may be scraping by, but others may not know where their next meal is coming from or where they will sleep next week. Living in poverty permeates every aspect of a child’s life—including their health, educational attainment, and future success—and by addressing poverty we can immediately begin to positively impact a child’s future.
The problem with poverty, and the many issues that stem from its branches, is that solving it seems such a daunting task. But there is no better time than the present. Now is the time we tackle what may seem impossible and take action to improve the economic security of all of Kentucky’s children and families. Kentucky can leverage innovative and sustainable policies—including good paying jobs, tax credits for working parents, and microenterprise programs—that can address challenges ranging from families facing homelessness tomorrow to families who want to do more than scrape by in the long term.
Tax Credits for Working Families
One proven solution to help working families is a state refundable earned income tax credit (EITC). This credit would put an average of about $235 (at 10% of their federal EITC) back into the pockets of low-income working parents—and into their local communities. Twenty-three other states have implemented refundable EITCs.
Child tax credits would also help working families keep more of the income they earn. Costs for caring for children have increased, and for our lowest income families, more than half of their income goes to caring for their child. One option would be a state child tax credit, in which families would receive a nonrefundable credit for each child. Another option would be a young child tax credit, which would give families a credit of $1000 for each child five and under. If the parents of one of the 140,000 Kentucky kids ages five and under were slated to owe hundreds of dollars in taxes, a young child tax credit could take that amount to zero. Kentucky has the opportunity to be a trailblazer in helping working parents with young children by being the first state to implement a young child tax credit.
Housing Assistance for Families
When it comes to meeting basic needs, there is nothing more basic than a roof over a child’s head and a bed to sleep in at night. When parents can live in one place for a long period of time, they are more likely to maintain a stable job, and their children can have more educational stability. Thirty-four other states, including Tennessee and Ohio, have programs in place to help families keep a roof over their heads, some of which cost the state as little as $42,000 a year. There are two types of housing programs that Kentucky could initiate: subsidy programs that provide longer-term support for paying housing costs, or short-term homelessness prevention programs that help families get back on their feet by finding new housing or providing one-time startup costs, like a deposit for an apartment or utilities.
Kentucky can jumpstart business development by funding parents and other entrepreneurs looking to earn more for their families while creating jobs in their communities. Microenterprise programs give Kentucky entrepreneurs opportunities to get their businesses started through tax credits or low interest loans. Microenterprise programs are targeted towards the areas or populations that need them most—geographic areas within cities and counties that are suffering from disinvestment, underdevelopment, and economic decline—encouraging private businesses to reinvest and rehabilitate those areas. Targeting microenterprise in these underdeveloped areas can create opportunities for families that may not have existed previously.
Subsidized Employment Programs
Employment provides the best path out of poverty for families. Subsidized employment programs help businesses create jobs by temporarily subsidizing wages for those new jobs. Much like microenterprise opportunities, these programs target underdeveloped regions or specific groups of workers, such as single mothers, parents returning from incarceration, or young adults. By incentivizing businesses, these programs not only help a family or young adult’s bottom line; they also allow companies to tap into a new workforce and equip them to be better employees through on-the-job training and a stronger work history. These temporary investments lead to permanent employment for workers and potential boosts in local economies.
Researchers have evaluated proven models in other states, including Florida and Georgia, and found that participants decreased their use of public benefits, increased their educational attainment, decreased their likelihood of involvement in the criminal justice system, and increased their long-term earnings. Outcomes improved for their kids as well; children did better in school and were less likely to be involved in the criminal justice system. In one program in Florida, researchers found that participants increased their unsubsidized earnings by about $2,500 in the year following their subsidized employment program—a potentially life-changing amount for some Kentucky kids and their families.
The Time Is Now
Kentucky kids prosper when their parents prosper. The health, education, and economic security of kids today—and the future of the commonwealth in the years to come—depend upon policymakers’ commitment to innovative, sustainable solutions to making a dent in the plague of poverty. Addressing the root problems of poverty begins with opportunity. Opportunity to work, opportunity to start a business, opportunity to feed your family and put a roof over a child’s head.
With more than 1 in 4 kids waking up each day in poverty, we cannot afford any more delays. Proven solutions like tax credits, housing assistance, microenterprise opportunities, and subsidized employment can reinvigorate communities and give the children living in those communities a path to a brighter future. The future belongs to those who show up, the only question remaining is if we are ready to do just that.