Poverty-shrinking policies changing the lives of millions should be made permanent — Opinion

View from a little boy running across a play structure bridge

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Full tummies and fridges; safe housing; warm clothing for the coming winter. These are the types of basics — along with medicine, school supplies, and car repairs — that the expanded federal Child Tax Credits (CTC) paid for when Minnesota families started receiving part of their tax credits in July.  

Minnesota CTC payments in July alone totaled an estimated $270 million, with which 375,000 Minnesotans bought food, 86,000 purchased school supplies, and 164,000 Minnesotans paid for housing, according to Census Bureau estimates.  

These expenses won’t end in December — and that’s why this tax credit shouldn’t end then either.

Earlier this year, Congress passed a historic expansion of the Child Tax Credit in the American Rescue Plan that is expected to reduce the number of children living in poverty nationally by more than 40%. Important but temporary improvements to the credit include expanding the amount families receive; allowing older children to qualify; and, including families who previously were left out of the credit. Prior to the temporary changes, an estimated 322,000 Minnesota children did not receive the full credit because their families did not have enough earnings. 

Among the many positive outcomes of the CTC expansion is the power of the policy to address Minnesota’s racial disparities, which are among the worst in the nation. While child poverty in the state is expected to drop 48% if the Child Tax Credit expansions are made permanent, poverty would drop by 55% for Black children in Minnesota.

Another crucial change is how families can receive their credit this year. Families are receiving the credit through an innovative delivery mechanism that provides a portion of the credit in monthly installments, rather than families having to wait until they have filed their income taxes next year. This year, families can receive half of their Child Tax Credit as monthly payments through December. The other half of the credit will be sent as a lump sum when families file their 2021 federal income taxes next year.

Jessica Webster, staff attorney with Minnesota Legal Aid, said the cash benefit of this expanded CTC is critical. “Families we work with identify cash as their most pressing need. Cash is one of the most difficult resources to access and usually falls far short of what people need. For example, the state’s (Minnesota Family Investment Program) cash benefit doesn’t cover rent for a 2-bedroom fair market home anywhere in Minnesota.” 

Advocates for Minnesotans living on low wages are calling on Congress to make permanent federal recovery policies that reduce hardship and have meant greater economic security for millions. This  includes the expanded CTC offering larger credit amounts, including more families and children, and providing the credit through monthly payments.

We’ve seen how the pandemic and accompanying recession hurt hardest those with the least resources to get by — lower-income and Black, Indigenous, and People of Color Minnesotans. It also shone a spotlight on how past failures to fully invest in all Minnesotans and their families made the impact of the pandemic even worse. Now we have a once-in-a-lifetime opportunity to address the challenges that families have faced for too long, and create a stronger, more equitable recovery. We can’t go back to a status quo that leaves so many families and children behind.

The U.S Senate and House recently passed a budget resolution that sets the stage for recovery legislation representing the most sweeping effort to strengthen families’ and workers’ economic security in over half a century.

Minnesota family and worker advocates are urging Minnesota’s Congressional delegation to enact these critical investments in children, workers, education, housing and health care, while ensuring the wealthy and corporations contribute more to help fund these investments and bring greater equity to our tax code. 

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Deb Fitzpatrick
Deb Fitzpatrick

Deb Fitzpatrick is the policy and legislative affairs director for Children's Defense Fund Minnesota.

Meghan Marriott
Meghan Marriott

Meghan Marriott is engagement manager for the Minnesota Budget Project.