Children thrive when their parents can earn a living and meet the basic needs of their family. And yet, year after year, we see an unrelenting pattern – too many kids across the Commonwealth growing up in poverty. Fighting poverty is a tough and complex proposition, but there are actions that can be taken at federal, state, and local levels that will immediately make a difference. It’s really about political will and not policy viability.
New data released by the U.S Census Bureau reveal that 247,780 Kentucky children still live in poverty. The American Community Survey one-year estimates show 25 percent of Kentucky children lived in poverty in 2016, which was not a significant change from the 2015 estimate. This estimate reveals that the percent of Kentucky children living in poverty remains higher since the Great Recession began in 2008 (23.5 percent). The data places Kentucky with the 4th highest rates of child poverty and overall poverty among states.
Additional data released from the Census Bureau show that refundable tax credits, such as the Earned Income Tax Credit (EITC), have the greatest effect on child poverty among all cash and non-cash benefits and resources received by families. In 2016, 4.4 million U.S. children were lifted out of poverty due to refundable tax credits.
No aspect of a child’s life is more pervasive than economic well-being. Living in poverty literally permeates every aspect of a child’s life, including their health, reading levels, and workforce prospects. If Kentucky wants to gets serious about tackling childhood poverty, no idea holds more potential than a state refundable Earned Income Tax Credit.
For years, the federal EITC has encouraged work while also helping working families who earn low incomes make ends meet. Nearly half of states have enacted a refundable state EITC as an additional temporary support for their families. The new report from the Blueprint for Kentucky’s Children, A State Earned Income Tax Credit Would Help Kentucky Families and Local Economies, outlines additional benefits of a state refundable EITC, including gains to local economies, increased workforce participation of adults, and improved workforce preparedness of youth.
The EITC has a proven record of getting and keeping people working. It is, in fact, the nation’s most successful anti-poverty program. It makes pragmatic and principled sense to enact a refundable EITC right here in Kentucky. How often can one solution create real wins for our families, local communities, and the state economy?
Find the latest Blueprint for Kentucky’s Children issue brief, A State Earned Income Tax Credit Would Help Kentucky Families and Local Economies, here.