Illinois lawmakers should pass a state child tax credit

Tens of thousand of Illinois children sank into poverty after monthly federal child tax credit payments ended. With inflation squeezing Illinois families, the General Assembly should take action. So should Congress.

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Young children enjoyed a ball pit activity Friday, Dec. 12, during the annual Lake County Winter Festival of Stories event sponsored by the YWCA.

Illinois lawmakers have introduced legislation that would create a state child tax credit.

Yadira Sanchez Olson/Sun-Times Media


That’s how many children in Illinois sank back into poverty after monthly federal child tax credit payments ended in December, according to one estimate. Another estimate pegged the number at 150,000. Nationwide, 3.7 million children are in families that lost these payments of $250 to $300 a month depending on the age of the child.

“Giving families that extra boost each month works,” as Joanna A. Ain, associate director of policy for Washington, D.C.-based Prosperity Now, told us. Her group and others have been pushing Congress to resurrect the monthly payments and make them permanent, a move we endorse. They aren’t hopeful Congress will act anytime soon, nor are we.

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Reinstating this vital lifeline for some of the country’s neediest people is unlikely because it’s tied up with President Joe Biden’s massive Build Back Better initiative, which is all but dead.

There is something state lawmakers can do, however: Pass a state child tax credit. This was a key component of Gov. J.B. Pritzker’s platform when he was running for governor and later when he tried unsuccessfully to get the income tax referendum on the ballot.

While what’s being proposed in Springfield is not as generous as what families had been receiving at the federal level, a $600 state child tax credit would help folks in need at a time when inflation is severely squeezing household budgets. Lower-wage workers usually spend, rather than save, any bump in income, so not only would this help struggling Illinois families, it would also stimulate private sector economic growth.

Dozens of lawmakers have signed onto the legislation in the Illinois Senate (SB3774) and House (HB4920), which would create a child dependent tax credit and expand the earned income tax credit. There’s ample evidence the federal “refundable” earned income tax credit has become one of the country’s more effective anti-poverty programs.

Helping families pay for basics

A state child tax credit would help Chicagoan Susana and her family. The extra $500 a month she and her husband received when the federal child tax credit payments were still flowing helped them pay for the basics, including utility bills and backpacks for her two middle school and high school children.

Some of the money also went to ComEd after the family received a disconnection notice. “We weren’t able to pay off all of the debt, but we were able to pay a lot of it,” she said through an interpreter.

The family was “really stressed economically” when COVID first hit because Susana’s husband lost his factory job, and that stress has not abated. Her husband got a job at a restaurant but has been getting at most, 32 to 35 hours a week, not nearly enough to pay all the bills.

“A lot of families are still living day to day,” said Susana, who works for a group that helps low-income families. “We and many families, we still have debt from last year that we’re still paying.”

She said the current narrative in the media is that jobs are plentiful and employers can’t find enough workers to cover shifts, but that has not been her family’s experience. Another common misperception is that the working poor won’t spend government assistance like this appropriately.

A boost to the economy

Research shows that recipients of the federal child tax credit spent the money immediately on everyday expenses, boosting the economy overall, helping small businesses stay afloat and bringing in additional sales tax that helps funds government.

“People want to be able to work, they want to be able to get to work, they want to be able to do their jobs,” Ain said.

A state child tax credit would provide critical assistance to Illinois residents who just want to do their jobs, by helping them get to and from work, pay for day care, buy groceries, and cover rising housing and utility costs.

If the General Assembly passes the bills as currently drafted, 4.8 million people in Illinois —1.9 million of them children — would benefit, according to Ralph M. Martire, executive director of the Center for Tax and Budget Accountability.

Once fully implemented, the $415 million annual cost of the legislation would be far less than the $1 billion economic benefit, Matire said. “It’s a pretty high return on investment” for people who’ve been greatly impacted by the pandemic, he added.

State lawmakers, before adjourning this spring, should pass this legislation — and help those 138,000 Illinois children and their families stay out of poverty.

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