The Earned Income Tax Credit is a federal tax credit for low- and moderate income families that encourages and rewards work. The credit was created in 1975 under President Ford. Because of its remarkable ability to reduce poverty and promote family health and self-sufficiency, it has been expanded since then by President Reagan and all subsequent presidents.

For parents, the EITC’s empirically demonstrated effects include:

State EITCs Offset Regressive Effects of Income, Sales and Property Taxes

Twenty-four states have created state EITCs to supplement and enhance the impact of the federal program. State EITCs work similarly to and leverage the federal EITC. States rely

heavily on taxes like sales, gas and property taxes, which hit lower-income families harder (as a share of income) than wealthier ones. State EITCs reduce the taxes paid by these

working families, allowing them to keep more of what they earn. 

 

Working families with children earning up to $39,000 to $52,000 (depending on marital status and the number of children) generally can qualify for a state EITC, but the largest benefits go to families with annual incomes between about $10,000 and $23,000.

An Innovative Proposal: Using a State EITC to Promote College Savings and Incent Post-Secondary Education in Utah

An innovative proposal under discussion for Utah combines two key elements proven to reduce intergenerational poverty:

• Tax credit equal to 5% of the federal EITC, which means a maximum credit of about $300

• State match up to $100 for filers who deposit their credit into the Utah Educational Savings Plan.

 

One study cited by the Aspen Institute documents that low- and moderate-income children with dedicated college savings as small as $1-$499 are three times more likely to attend college and four

times more likely to graduate from college than those without.2 Such a hybrid program could allow Utah to benefit from the combined effects of these two ideas that have proven so effective when applied separately.

 

The EITC Has Bipartisan Support

Federal EITC Facts for Utah

The federal Earned Income Tax Credit was created under President Ford and expanded under Presidents Reagan, Bush, and all subsequent presidents.

• 193,551 Utah households received the federal EITC for 2013, about 18% of tax filers.

• Utah’s EITC households include 218,500 workers and 291,000 children.

• The EITC brought about $450 million into Utah’s economy in 2013.

• Thousands of veterans and military families are helped.

• Were it not for the EITC, an additional 70,828 Utahns would fall below the poverty line, including 31,835 children.

 

Additional data about the EITC’s effects in Utah is available for each county, city, and legislative district at the following websites:

• http://www.eitc.irs.gov/EITC-Central/eitcstats

• http://www.brookings.edu/research/interactives/eitc

 

Access a printer-friendly version of the report:

The Earned Income Tax Credit: A Time-Tested Two-Generation Strategy for Poverty

 

Read other issues briefs about two-generation strategies here.

Voices for Utah Children is proud to be a part of the Aspen Institute Ascend Network. The goal of the Aspen Institute Ascend Network is to mobilize empowered two-generation organizations and leaders to influence policy and practice changes that increase economic security, educational success, social capital, and health and well-being for children, parents, and their families. Learn more at http:/ /ascend.aspeninstitute.org/network

For 30 years now, Voices for Utah Children has called on our state, federal and local leaders to put children’s needs first. But the work is not done. The children of 30 years ago now have children of their own. Too many of these children are growing up in poverty, without access to healthcare or quality educational opportunities.

How can you be involved?

Make a tax-deductible donation to Voices for Utah Children—or join our Network with a monthly donation of $20 or more.  Network membership includes complimentary admission to Network events with food, socializing, and opportunity to meet child advocacy experts. And don't forget to join our listserv to stay informed!

We look forward to the future of Voices for Utah Children and we hope you will be a part of our next 30 years.

Special thanks to American Express for sponsoring our 30th Anniversary Year. 

Why a “Children’s Budget”?

Children, it is often said, are Utah’s most precious resource. They represent the workforce, consumers, and leaders of tomorrow. For that reason, the investments we make in our children today have enormous economic and social implications for Utah’s future. That is why our federal, state, and local units of government pool taxpayers’ resources to establish an education system, provide for the health and other basic needs of our most vulnerable children, and intervene in children’s lives when their safety is at risk.

This report, Children’s Budget 2015, examines public investment in children from FY2008 through FY2014. It is an update of earlier reports by Voices for Utah Children published in 2009 and 2011. This report does not assess the effectiveness of these programs or gaps in services. Rather, it objectively quantifies the level of public funding for children in Utah and identifies trends over the seven-year period.

There is a strong case to be made that no one cares more about kids than Utahns. Utah has the highest fertility rate in the country and the most children as a percentage of its population, 31% vs. 24% for the nation . Utah saw the second fastest growth rate in its child population of any state from 2000 to 2010 , second only to Nevada (which grows mostly by in-migration rather than through births). Given the high priority Utahns place on children, understanding how much is spent on children by the state and for what purposes is critically important for policymakers and the general public.

Information on funding for children is important for several reasons. It can:

1. Assist policymakers in assessing whether their funding decisions reflect, in the aggregate, their priorities with respect to children.

2. Illustrate how specific programs compare with spending on children overall.

3. Aid policymakers in examining how much is spent on children for specific purposes (i.e. for early education or child welfare) or how funding for children compares to total state and federal spending in the state.

Examining how much Utah invests in children can help the state evaluate how efficiently it is enhancing the potential of our future workforce and maximizing our investment in human capital and economic development. Public investment in children in Utah should be understood as an important component of our economic development strategy that impacts the state as a whole, both in the present and the future.

In this report, Voices for Utah Children divides all state programs concerning children into seven categories, without regard to their location within the structure of state government. The seven categories are as follows, in descending order by dollar value (based on the sums of both state and federal funds):

• Education, which makes up 90% of the state-funded portion of the Children’s Budget and 77% overall counting both state and federal funds

• Health

• Food and Nutrition

• Early Childhood Education

• Child Welfare 

• Juvenile Justice

• Income Support

We then add up the expenditures in each of these areas, separating state from federal dollars, and we compare the figures over time from FY2008, the last year before the state budget began to be affected by the Great Recession, through FY2014, the most recent year for which final expenditure data was available. 

Our most important finding is the following: 

While the state economy has recovered from the Great Recession in a number of respects, state investment in children has not.  Specifically, real (inflation-adjusted) state investment in children in FY2014 remained 6% below what it had been in FY2008, at $5,424 per child in FY2014, compared to $5,746 in FY2008. 

Making up that $322 per-child gap between the FY2008 level of public investment in children and the level in FY2014 would have required an additional state expenditure in FY2014 of approximately $293 million. 

This finding that state government investment in children has not yet recovered from the recession is not the only example of how Utah still remains below its pre-recession performance, even five years after the recession ended.  For example, real median wages also remain below pre-recession levels and poverty rates have remained elevated well above where they were at the same point in previous economic expansions.  

For more information, see the complete report:

Utah Children's Budget Report 2015

For 30 years now, Voices for Utah Children has called on our state, federal and local leaders to put children’s needs first. But the work is not done. The children of 30 years ago now have children of their own. Too many of these children are growing up in poverty, without access to healthcare or quality educational opportunities. How can you be involved?

•          Celebrate the 30^th Anniversary of Voices for Utah Children with us at our Children’s Champion Award Luncheon on September 30, 2015.
•          Make a tax-deductible donation to Voices for Utah Children—or join our Network with a monthly donation of $20 or more.  Network membership includes complimentary admission to the luncheon.

We look forward to the future of Voices for Utah Children and we hope you will be a part of our next 30 years.

Special thanks to American Express for sponsoring our 30th Anniversary Year. 

For 30 years, Voices for Utah Children has been working on issues facing children in the areas of juvenile justice, child welfare, economic stability, education and health. We have become increasingly concerned about racial disparities in all these areas.

Gathering and analyzing racial and ethnic data is the first step in making informed policy decisions. Those decisions must be guided by comprehensive, regularly updated data. Parsing data through racial and ethnic lenses uncovers patterns and trends that can assist in planning more responsive programs and services.

This Data Link compares Utah’s Hispanic children to white, non-Hispanic children with the goal of helping policymakers develop strategies that eliminate racial disparities and lead to improved child and family outcomes for all Utah’s children.

In 2014 there were 154,419 Hispanic or Latino children under the age of 18 in Utah. They make up 17% of the state’s children. As you can see from the data, these children are more at-risk for poor outcomes than their white non-Hispanic peers.

View the complete report:

Hispanic Kids Data Link 

For 30 years now, Voices for Utah Children has called on our state, federal and local leaders to put children’s needs first. But the work is not done. The children of 30 years ago now have children of their own. Too many of these children are growing up in poverty, without access to healthcare or quality educational opportunities. How can you be involved?

•          Celebrate the 30^th Anniversary of Voices for Utah Children with us at our Children’s Champion Award Luncheon on September 30, 2015.
•          Make a tax-deductible donation to Voices for Utah Children—or join our Network with a monthly donation of $20 or more.  Network membership includes complimentary admission to the luncheon.

We look forward to the future of Voices for Utah Children and we hope you will be a part of our next 30 years.

Special thanks to American Express for sponsoring our 30th Anniversary Year. 

HJR7 is a resolution under consideration by the Utah Legislature that would call for a federal Constitutional Convention to consider a balanced budget amendment. It may sound like it's simply sending a message about Utah's support for dealing with the federal debt, but in fact it goes quite a bit further than that.  By calling for an unprecedented Article V constitutional convention, HJR7 would make Utah the 26th state of the 34 required to convene a federal constitutional convention, which could end up passing far-reaching changes to the U.S. Constitution on any number of issues.  Moreover, a federal balanced budget amendment would likely lead to sudden severe cuts in federal, state, and local budgets, inevitably affecting children first and foremost, particularly lower-income children.

More Information

What’s Wrong with Calling for a Constitutional Convention to Enact a Balanced Budget Amendment?

Concerns about HJR 7 Calling for a Constitutional Convention to Enact a Balanced Budget Amendment to the U.S. Constitution

Contact Lawmakers 

Utah has Highest Uninsured Rate for Hispanic Children in the Nation

Every child in Utah should have a chance to succeed. When it comes to setting up a child for success, few things matter more than good health. It starts when their mothers get prenatal care. It continues with regular checkups after they are born to treat and, more importantly, prevent illness. Good health care helps children reach important developmental milestones and enter school ready to learn. Coverage is essential to children reaching their full potential. Unfortunately, too many Utah children are uninsured. This is particularly true for Hispanic children in our state.

• 22.2% of Hispanic children are uninsured in Utah. This is the highest rate in the nation by far and is twice as high as the national average for Hispanic kids of 11.5%.

• 22.2% of Hispanic kids are uninsured compared to only 7% of non-Hispanic children. This 11 percentage point disparity is the largest disparity in the country. Nationally, the average disparity is only 5 percentage points.

• Hispanic children make up 16.9% of Utah’s total child population but account for 39% of the uninsured children in the state. Of the 84,891 uninsured kids in Utah, 33,531 of them are Hispanic.

• Utah’s overall uninsured rate for kids is 9.5%, ranking us 41st (highest being worst) in the country. The national average is 7.1%. If we reduced our Hispanic uninsured rate to the national average of 11.5%, Utah’s overall uninsured rate for kids would drop to 7.5% and Utah would have the 19th best uninsured rate in the country for kids.

If we want more children to succeed in life, we must secure coverage for more of our children, regardless of ethnicity or race. We can begin to remove hurdles facing uninsured Hispanic children and set all of Utah’s children on a path to success by implementing a few first steps:

• Restore outreach funding for Medicaid and CHIP;

• Make it easier for children to keep their health coverage by implementing 12 month continuous eligibility;

• Remove the Medicaid and CHIP five year waiting period that legal immigrant kids must endure before enrolling in these programs.

Printer-friendly version of this factsheet:

Uninsured Rates High for Hispanic Children

How Unfunded Earmarks Are Undermining the Budget Process and Affecting Utah Families and Children

Utah’s unrestricted General Fund continues to decline as a stable and reliable revenue source due to a nearly 1200% increase in earmarks from FY 2005 to FY 2015, from $42 million to over half a billion dollars, from 2% to over 18% of the overall General Fund and still rising. This practice of earmarking, which means a multi-year diversion of funds (and none of the major General Fund earmarks has a sunset provision), runs contrary to best practices in public budgeting because it ties the hands of policymakers and undermines their ability to use the annual budgeting process to meet the evolving needs of the state’s ever-growing and ever-changing economy and population.

This explosion of earmarks has been primarily for the purpose of meeting the state’s transportation needs. The earmarks in question are all “unfunded” earmarks, meaning that none of them was created with a new revenue source to finance it, even though they address newly identified investments required to keep up with the state’s growing economy and population.

This enormous diversion of resources has meant that everything else financed by the General Fund, including education, public safety, drug treatment, aid for the disabled, support for vulnerable families, and many more, has been given short shrift, leaving critical needs unmet and allowing the state to fall behind in a number of important areas, threatening to undermine progress toward the state’s most important goals.

The rise of unfunded earmarks bears considerable resemblance to the decision made by an earlier generation of policy makers in 1996 to divert Education Fund revenues to fund higher education as well as K-12 education.

The report concludes with a call for a return to best practices in the annual budgeting process so as to allow policymakers to adapt to changing circumstances in good times and bad. Read the complete report:
What's Still Eating Utah's General Fund?

What Does the General Fund Do?
All Utahns benefit from an adequate General Fund. The state programs it pays for provide functional and efficient courts, a statewide system of colleges and universities, and the enforcement of rules regarding commercial transactions, environmental protection, water safety, control of contagious diseases, and much more. The GF also provides a safety net for families in need, including the disabled and those in need of drug treatment and mental health services.