Dear Senator Fonfara, Representative Horn, Senator Martin, Representative Cheeseman, and members of the Finance, Revenue and Bonding Committee:
Thank you for the opportunity to testify in support of creating state tax policies that advance the needs of Connecticut’s ALICE families.
I am the President of United Way of Western Connecticut, which represents a 15-town region that includes Stamford, northern Fairfield County including Danbury, and Southern Litchfield County including New Milford. We support hard-working households called ALICE® (Asset
Limited, Income Constrained, Employed) to help ensure that they have every opportunity to succeed and thrive in Connecticut. ALICE families make more than the federal poverty limit but not enough to afford basic necessities like housing, food, child care, healthcare, transportation,
etc. ALICE is a data-driven approach to provide reliable and realistic information on the cost of
living specific to regions in Connecticut.
Statewide, nearly 40% of households were living at or below the ALICE survival threshold before the pandemic. ALICE lives in every city and town in Connecticut. More than 85% of Connecticut municipalities have at least 1 in 5 households that are ALICE. According to the
2020 ALICE Report, a family of four with one infant and one toddler needed a household income of more than $90,000 a year to afford just their basic needs - that is $45.33 per hour. Adjusting for inflation, that same family now needs more than $110,000 a year just to afford the
basics.
Establishing a permanent, refundable Child Tax Credit and increasing the Earned Income Tax Credit to 40% of the federal credit would serve as targeted support for ALICE families. Together, these two credits will provide immediate relief to the hundreds of thousands of families in Connecticut who are struggling to make ends meet. I applaud Governor Lamont’s budget for proposing an increase to the EITC. But the EITC eligibility squeezes out two groups ̶ families with very low or no work income and families who earn more than $60,000 annually but
who are still living paycheck-to-paycheck. More than 341,000 ALICE Connecticut households will not get the help they need to afford life's necessities because they either earn too little or too much income.
Every day we hear from people who, despite their best efforts, simply cannot make ends meet. Brandon and his wife worked in a warehouse that closed during the pandemic and never reopened. Brandon searched for a job for months before he finally obtained a new position where he could begin to get his family’s finances back on track. For Sandra and her husband, the story is similar. They worked for the same employer so when the business closed, the family lost both incomes at the same time. Early on, while searching for employment, they were able to manage with their unemployment benefits. Unfortunately, most of the jobs they could apply for were part-time and didn’t pay enough for the family to survive. Eventually, Sandra’s husband was able to secure a second-shift position that was full-time and allowed him to be home during the day to take care of the kids while Sandra was at work. These are just two stories of thousands, where people in Western Connecticut work hard and yet cannot afford the basic cost of living. For Brandon and Sandra and tens of thousands of ALICE families, the EITC and CTC would be life-changing.
Over the last several months, federal benefits have shrunk, including the federal Child Tax Credit and the Child and Dependent Care Credit. Families have less money to spend, the cost of household essentials like food, rent, and transportation are rising due to inflation, and many
people are receiving smaller tax returns. These losses add up. This is a perfect storm for families who are working hard to get by.
Connecticut can and must act to help families. By implementing a Connecticut Child Tax Credit and increasing the Earned Income Tax Credit, more ALICE families will have the opportunity to thrive and as a result, our communities and state would too.
For these reasons and more, I urge the committee to pass these two critical bills.
Thank you for the opportunity to testify on this important issue.
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Isabel Almeida
President, United Way of Western Connecticut