The Child Tax Credit expansion is a big deal

The Child Tax Credit expansion is a big deal

An estimated 316,000 Louisiana children from low-income families would benefit from an expansion of the federal Child Tax Credit that was negotiated as part of a bipartisan tax deal announced on Tuesday. The Center on Budget and Policy Priorities reports that the tax credit wouldn’t be as generous as the 2021 expansion that was part of the American Rescue Plan Act, but would be tightly targeted to families that earn too little to qualify for the full credit: 

In the first year, as many as 400,000 children would be lifted above the poverty line and we estimate that another 3 million children will be made less poor. These reductions in the extent and severity of child poverty would grow over time under the proposal. When the proposal is fully in effect in 2025, some half a million or more children would be lifted above the poverty line and about 5 million additional children would be made less poor than if the current credit remained in place, we estimate.

Washington Post columnist Catherine Rampbell shows how the expansion would benefit a typical family:

For instance, low-earning families often cannot receive more than a tiny child tax credit (if any) for any children beyond their firstborn. Meanwhile, higher-earners get cash back for every kid. This backward logic is thanks to how the child tax credit “phases in” based on income. The new agreement fixes this, allowing poor families with multiple kids to claim the same benefit for each of their children. That means a single mom with two children who earns $13,000 working part-time as a waitress would see her credit double (a $1,575 increase) in the first year, according to CBPP’s calculations.

But the deal still has to pass muster in the Senate and House. And as Punchbowl reports, there’s already pushback from GOP lawmakers. 


WIC faces funding shortfall 
Millions of people who rely on the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) would lose access to benefits if Congress can’t agree on a budget deal. While Congress took important steps on Tuesday to avoid that outcome, the program that finances healthy foods and other support for pregnant and postpartum women and their children still faces a massive funding shortfall. The New York Times’ Madeleine Ngo reports:

The Agriculture Department warned last month that the program could see a $1 billion shortfall and that millions of eligible pregnant and postpartum women and their children could risk missing out on nutrition assistance this year if Congress does not increase funding. … Katie Bergh, a co-author of the Center on Budget and Policy Priorities analysis, said it was encouraging to see participation grow because WIC has typically had lower uptake, but inadequate funding could lead to states pulling back on outreach. 


Another property tax exemption
Louisiana voters recently approved a constitutional amendment that gives parish governments the ability to offer property tax breaks to first responders. The move is the latest example of a growing trend to provide certain classes of Louisianans with exemptions on their property taxes. The Times Picayune | Baton Rouge Advocate’s Drew Broach reports

While popular with politicians, the practice of freezing or reducing assessed value on more homes means less revenue for local government to educate students, pave streets, drain stormwater, collect garbage and pay police. “The question is how much long-term damage this is doing to our tax structure,” [president of the Louisiana Public Affairs Research Council Steve] Procopio said.

Louisiana property taxes are quite low compared to most states. The state is ranked 48th in the nation in property taxes as a percentage of owner-occupied housing value, according to the conservative Tax Foundation. To compensate for low property tax revenues, parishes and municipalities rely heavily on regressive sales taxes – which fall hardest on low-income residents – to finance essential public services. 

LBP’s analysis of the property tax amendment is here


Mental health treatment backlog
A backlog of mental health services is clogging court systems and jails throughout Louisiana and leading to prisoners languishing behind bars for months before they receive treatment. Louisiana agreed to admit patients into treatment facilities within 15 days under a settlement of a 2016 federal lawsuit, but the state has since fallen out of compliance. The Times Picayune | Baton Rouge Advocate’s Rebecca Holland reports

In cases of violent crimes, the person would likely spend years in jail anyway, but about 20% of the people on the waitlist in East Baton Rouge as of October 2023 had been arrested for simple burglary, theft, drug possession, and other minor charges. “Those misdemeanor charges, those things don’t carry that much time, so it’s a real problem,” [former director of mental health services at the East Baton Rouge Parish Prison Dr. Robert] Blanche said. He said most people, especially those who are severely mentally ill, wait in single cells because they are vulnerable to abuse. But that environment is not conducive to solving mental health issues.


Number of the Day
92.5% – Percentage share of the U.S. households’ stock market wealth that is held by the top 10%. (Source: Federal Reserve via Axios)