AQUINO/SIMMONS: Times dictate an expansion of tax credits available in Illinois

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In February, Gov. JB Pritzker used his State of the State and budget speech to paint a very hopeful view for Illinois’ future, after two trying years.

The governor rightly praised our determination to fight through the COVID-19 pandemic and rebuild our economy. He noted our state’s finances are exceptionally positive today: Our debt has decreased, our budget balance has grown, and we will be able to take care of our education, health care, social services and other highest priorities.

We especially appreciate the governor’s plans to provide $1 billion in tax relief. Of course, our constituents struggle to pay for their groceries, their gas, their property taxes, and relief is needed.

But for so many lower-income working families, the stakes are higher. When the roof leaks, when a loved one gets hurt or sick, when the car has a flat tire or bum radiator, or when they are struggling to pay that month’s rent and can’t find another affordable place to live right now — these everyday problems we take for granted can grind their lives to a halt.

They need more cash in their wallet, right now. They need Illinois lawmakers to step up since the federal Child Tax Credit aid they depended on has expired. They need an expanded Earned Income Credit in Illinois, along with a new Child Tax Credit.

We are leading the push behind Senate Bill 3774, which will provide real and meaningful tax relief to nearly 5 million Illinoisans — almost 40 percent of our state’s population — by supporting two tools to give them their hard-earned money back.

Illinois has had the Earned Income Credit — modeled off the popular federal Earned Income Tax Credit — since 2000, and it has produced more than $3 billion in benefits during that time. Illinois’ tax structure is at its core one of the nation’s most regressive, burdening lower-income families and rewarding higher earners. But the EIC helps to tip the scales toward equity by offering a cash refund of an average $600 for hard working, low-income families.

Our proposed expansion would be phased in over three years. First, we will add adults who are younger than 18 and older than 65 to qualify for today’s EIC. Then, we will add the new statewide Child Tax Credit of at least $600 back to everyone who qualifies for the EIC and has dependent children under 17. Finally, we will give the CTC to anyone with dependents under 17, even those who cannot receive the EIC because they have no income.

Over those three years, we will expand the value of the state EIC from 18 percent today to 25 percent in the final year of the federal EIC.

We all saw the success of the federal Child Tax Credit, which pulled 3.7 million children out of poverty nationwide.

But since the federal government stopped mailing checks, we learned that 138,000 children in our own state fell back into poverty; that is unacceptable. Under our legislation, we would offer working parents a minimum $600 credit that they can use to meet their expenses, weather the pandemic, and avoid having their kids go hungry at night.

The expanded EIC and Child Tax Credit would also help to close the racial wealth gap. Although the credit itself is not targeted by race, Black and brown working households in our districts will see tremendous benefits, as 65 percent of all Illinois Latinx and 44 percent of all Black homes would qualify for relief.

The respected fiscal think tank The Center for Tax and Budget Accountability strongly endorsed the idea earlier this year, calculating that more than $1 billion in local and statewide economic benefits from the expanded rebates will far exceed its initial price tag of about $400 million.

How do we create revenue from giving it back first? Working families have little savings, and often no ability to handle emergencies when they pop up.

They will put the relief money right back into our local economy, with an estimated $2.50 benefit for every dollar we provide through the credits.

Illinois families need relief, especially when our finances are sound. The Earned Income Credit and Child Tax Credit are the most direct, effective ways to provide that relief.

We have a growing number of legislators who will demand this smart, targeted relief be considered now. We call on Gov. Pritzker and our colleagues in the House and Senate to make the EIC and Child Tax Credit a top priority as we negotiate a new budget.

Sen. Omar Aquino and Sen. Mike Simmons are both Democrats from Chicago.

Region: Northern,Region: Kankakee,Feeds,Opinion,City: Kankakee

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April 2, 2022 at 08:05AM

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