Governor Malloy’s spending plan for the next two years, unveiled last week, includes a reduction to Connecticut’s EITC:
The working poor would receive less money back as part of a program known as the earned income tax credit, according to Malloy’s proposal. Last spring, 182,000 poor families claimed the credit and received an average of $601; under Malloy’s plan, they would receive about $500.
The federal government also provides a tax credit for poor families that earn income, and the state’s credit is equal to 30 percent of the value of the federal credit — the largest of any state’s program. Under Malloy’s proposal, the state’s credit would be reduced to 25 percent of the federal credit, or a cut of about 16 percent. The maximum credit would drop from $1,767 to $1,473.
Barnes said the cut would be temporary. The administration’s plan calls for increasing the credit after the coming tax year to 27.5 percent in the 2014 tax year, and return to 30 percent in 2015.
Governor Malloy’s plan cuts the EITC to 25% of the federal in 2013, 27.5% in 2014, and restores it to 30% in 2015. Although the temporary nature of this cut is encouraging, it still means a tax increase for low-income families in the state.
We need to change this - it is important for lawmakers to hear from their constituents on this issue, and it is important to explain far and wide that the EITC is one of the most effective anti-poverty programs Connecticut has ever devised.
It is for this reason that CAHS has created a dedicated website, Connecticut EITC, with information on the EITC, detailed data on who receives it and its effectiveness, research and resources, and the latest, most up to date information on how the state budget on this issue. You can also sign up for updates and e-mails, volunteer, contact your legislator or tell us your story on how important the EITC is for you and your family.
The Connecticut EITC is the cornerstones of how our state helps low income families get out of poverty. It is a key social mobility program. Make your voice heard.