Finance, Revenue and Bonding Committee Written Testimony Submission
Public Hearing: Wednesday, March 6, 2024
In Support of S.B. 36, An Act Establishing a Refundable Child Tax Credit In support of H.B. 5113, An Act Increasing the Highest Marginal Rate of the Personal Income Tax and Establishing a Capital Gains Surcharge to Provide Funding For Certain Child-Related Municipal and Higher Education Initiatives.
Dear Co-Chair Senator Fonfara, Co-Chair Representative Horn, Vice Chair Senator Miller, Vice Chair Senator Moore, Vice Chair Representative Farrar, Senator Martin, Representative Cheeseman, and members of the Finance, Revenue, and Bonding Committee,
As the President and CEO of the United Way of Coastal and Western Connecticut, I am asking you to support the creation of a permanent refundable child tax credit for $600 per child. Both S.B. 36, An Act Establishing a Refundable Child Tax Credit, and H.B. 5113, An Act Increasing the Highest marginal Rate of the Personal Income Tax and Establishing a Capital Gains Surcharge to Provide Funding For Certain Child-Related Municipal and Higher Education Initiatives, address the creation of a Child Tax Credit (CTC). The creation of a CTC has the potential to be among the most transformative, impactful, and targeted legislation you pass this session.
The 2021 expansion of the federal Child Tax Credit led to a historic reduction in poverty across the United States, marking a particularly significant decrease in child poverty. The immediate and substantial impact of this expansion cannot be overstated. According to the U.S. Census Bureau, child poverty fell to its lowest level on record in 2021, showing the direct benefits of providing families with the financial support necessary to cover essential expenses.
In Connecticut, nearly 40% of households live at or below the ALICE (Asset Limited, Income Constrained, Employed) threshold, grappling with the high cost of living and the challenge of meeting basic needs. In Fairfield and Southern Litchfield Counties alone – the service region for our United Way – this statistic closely mirrors the state average, with 40% of households struggling to afford necessities like housing, food, child care, and transportation. These are not abstract numbers – they represent families in our communities who are working hard every day to provide for their children. These are our child care providers, medical assistants, paraprofessionals, grocery store clerks, cleaning and automotive professionals, Uber drivers, and more – they are the essential workers of our communities
Given the stark realities of this data, the need for this legislation is undeniable. Our latest data reveals that in the 27-town Coastal and Western footprint of Fairfield and Southern Litchfield Counties alone, a staggering 60,360 households are eligible for the Child Tax Credit, with a total potential refund amounting to $68,930,000. These figures highlight a compelling economic and social argument for the permanence of the Child Tax Credit in our state.
Beyond the immediate financial relief for families, the infusion of nearly $69 million into our local economy through the Child Tax Credit will stimulate growth, support local businesses, and contribute to the vibrancy of our communities. For every dollar of the CTC that families receive, we see a return of $1.38 to the economy, magnifying the impact of this investment and reinforcing the interconnectivity between the well-being of our families and the health of our local economies.
In the face of an 18% inflation in the cost of household basics since 2021, as reported by the ALICE Essentials Index, the Child Tax Credit emerges as a pivotal mechanism to alleviate financial pressures and ensure that every child in Connecticut has the opportunity to grow up in a stable, secure environment. SB 36 and HB 5113 offer a way forward, ensuring that the Child Tax Credit becomes a vital support system for families struggling to balance the cost of living with the need to provide for their children.
By making the Child Tax Credit permanent, we are not only addressing the immediate needs of our families but also investing in the long-term prosperity of our state. I urge your strong support for the creation of a Child Tax Credit through SB 36 and HB 5113. This legislation represents a significant step toward reducing child poverty, bolstering economic growth, and providing a lifeline for the more than 60,360 eligible households in the Coastal and Western regions of Connecticut. Thank you for the opportunity to submit this testimony and for your dedication to the children of Connecticut.
Sincerely,
Isabel Almeida, President & CEO