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Our turn | An Illinois Child Tax Credit: Good for Kids, Good for Business, Good for Illinois | Opinion

We see and hear it every day in our line of work. Parents who just found out their rent is going up and have no other affordable housing options in their neighborhood.

Food prices that have increased considerably over the last two years and have not fallen.

Family budgets that do not cover all the needs that parents have for themselves and their children.

We may no longer be at the height of a pandemic and inflation may have slowed since 2022, but it’s still tough getting by for many Illinois families. The Economic Policy Institute estimates that a family of two adults and two children living in the Champaign-Urbana metropolitan area needs an annual income of $102,371 to meet basic household needs and maintain a modest standard of living.

By comparison, the official federal poverty level in 2023 for a family of four was $30,000.

Poverty can affect a child’s mental health, academic performance, and even future income. However, children can thrive when we support families. Studies have shown the positive impacts that refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit, can have on a child’s health, educational attainment, future income, and even reducing cases of child abuse.

The 2021 increase in the federal child tax credit, along with other COVID-19 relief measures, reduced child poverty by nearly half nationally. Unfortunately, Congress enacted the increase for only one year.

A bill pending in the U.S. Senate would increase the federal child tax credit. It is not as extensive as the 2021 changes, but could still lift up to 400,000 children above the poverty line nationally in its first year, according to the Center on Budget and Policy Priorities.

However, Illinois lawmakers do not need to wait for Congress to guarantee help for Illinois families.

Illinois has a state and local tax system where the lowest-income households pay twice as much of their income in state and local taxes as the top 1 percent, according to the Institute on Taxation and Economic Policy. Our tax system is not only regressive but also widens the racial wealth gap, given differences in household incomes by race and ethnicity.

Illinois lawmakers can provide economic relief to Illinois households and reduce racial and ethnic inequalities by passing a refundable state child tax credit. A current proposal introduced in the General Assembly (HB 4917 and SB 3329) would create a $300 credit per child for most families below the state median income level.

This legislation, supported by more than 50 advocacy organizations across the state, would help approximately 1.4 million children.

The policy is also good for Illinois businesses and our local economies, as families who receive the credit purchase clothing, food, school supplies, and other goods and services. Additionally, the state recovers a portion of the spent child tax credit revenue in sales and income tax revenue with the new economic activity generated.

So let’s improve the lot of low- and moderate-income Illinois children and our communities by passing a refundable state child tax credit.

Tasha Green Cruzat is president and board member of Children’s Advocates for Change, an Illinois-based children’s advocacy organization. Dara Munson is president and CEO of Family Focus, which invests in strengthening families and their children in Chicago and northeastern Illinois.