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Ann Danforth is economic security policy analyst at Maine Equal Justice. James Myall is economic policy analyst at the Maine Center for Economic Policy.
Earlier this month, the U.S. census released data on poverty in 2022, and despite a growing economy, a great many families have been left behind.
Nationally, one measure of poverty jumped from 7.8 percent in 2021 to 12.4 percent in 2022. That’s the highest increase i n nearly 50 years. For children, the picture is even worse. In just one year, child poverty more than doubled from 5.2 percent to 12.4 percent. That means that more than 9 million children — one out of every eight kids — were in poverty in 2022.
It’s a dramatic about-face from where we were a year ago, when we celebrated cutting child poverty rates nearly in half thanks to an improved federal child tax credit. When Congress failed to continue those improvements, all that progress swiftly and predictably receded, increasing hardship for children and families.
Luckily, we have a roadmap for how to address the problem. Policies like an improved federal child tax credit offer a way back, and many Maine lawmakers have embraced state-level solutions as well. Research shows that our economy grows and our communities are healthier and better educated when everyone has the resources they need to thrive — not just survive. Policies that invest in moving children out of poverty and creating improved opportunities for Mainers throughout their lives are transformational not just for individuals, but also our entire state.
Mainers with low income will tell you how hard it is to raise a family in survival mode, constantly worried about making ends meet. Even two-earner families can struggle to put food on the table, fill the oil tank or make rent as costs continue to climb. But a little more income, like from state and federal child tax credits, goes a long way — especially without endless restrictions and rules about how to spend it.
Families use their tax credits for everyday essentials like food, utilities, clothing, savings and paying down debt. The enhanced credit also supported local economies, with every dollar generating $1.50 to $2 in local spending. Over the long term, results are even more dramatic. Researchers estimate that renewing the expanded child tax credit would have cost about $100 billion per year while generating $1 trillion worth of societal benefits from better outcomes in education, earnings, health and reduced costs related to child protection and criminal justice. Failing to renew a proven policy that supports working class families, local economies and boasts a 1,000 percent return on investment simply defies logic.
The extraordinary changes in poverty make clear that decisions made in Washington and Augusta matter. They can either create sturdier ladders and a fairer economy or make it harder for people to get a leg up. These impacts are not felt uniformly. Rural, Black, brown and Indigenous children were helped the most by the expanded child tax credit and now are being hurt the most by congressional failure to renew it. By reinstating minimum income requirements, as many as half of all rural, Black and Hispanic children again receive less or no help from the child tax credit.
At the state level, we made important progress by modernizing Maine’s Child and Dependent Tax Credit. Starting in 2024, this expanded credit will provide families with little to no income $300 per child or adult dependent. As a result, close to 50,000 families previously ineligible for the full credit because their incomes were too low will receive this payment. While it’s no substitute for the enhanced federal child tax credit, the improvement to Maine’s child tax credit is critical to Maine families and a testament to what’s possible when our government chooses to invest in kids and communities.
Our organizations have each been deep in the details, rules and budget lines of economic security programs for around 40 years. Our experience, the stories and voices of Mainers, and decades of studies all confirm that helping families make ends meet, with as few hoops to jump through as possible, is the way to growth and fairness for Maine and the nation. Let’s reinstate the policies that work.