Data recently released by the Michigan League for Public Policy suggests that some COVID-era policies over the past two years have reduced child poverty.
The annual report, Kids Count in Michigan, comes shortly after Governor Gretchen Whitmer signed the state budget, leaving a $7 billion surplus. Whitmer and the Legislature say it should go toward tax relief, but are to negotiate plans on how to do it.
“What we’ve seen over the past decade, and certainly over the past year to this year, is a decrease in child poverty in our state,” said Kelsey Perdue, director of Kids Count Michigan. “There have been a number of policy changes in the age of COVID that have been made over the past two years that have really lifted a number of children and even young adults out of poverty.
The report found that the expansion of the federal child tax credit lifted 114,000 Michigan children out of poverty and benefited 1,968,000 others. Federal and Michigan earned income tax credits have also been extended to 571,000 working adults without children, including low-income young adults ages 18 to 24, according to the report.
“These two COVID-era policy changes have really provided income and support for families with children and low-income workers who might not otherwise have qualified,” Perdue said.
The report recommends an increase in Michigan’s earned income tax credit from its current 6% to 30% of the federal credit — which would be a difference of $150 to $749 in credit.
The Legislative Assembly and Whitmer’s Tax Cut Plan Call would bring it to 20%, or $500 — an increase of $350. Whitmer said he would provide a $3,000 tax refund to 730,000 state residents. Previously it was 20% of the federal credit, but in 2011 it was lowered at 6%.
From 2010 to 2020, there has been a 28.2 percent decrease in the statewide child poverty rate, according to MLPP data.
According to the data, more than 42,000 more children had Internet access at home in 2020 compared to 2019 due to new investments supported by federal COVID relief funds such as Whitmer’s Michigan High-Speed Internet Office . The office received its first stipend in 2022 using federal relief funds.
Child poverty is seeing similar trends with COVID-era tax credits nationwide.
Expanded monthly child tax credit payments from the US bailout expired in January this year and child poverty rates have soared, according to researchers at Columbia University.
The Data from the Center on Poverty and Social Policy at Columbia University shows that child poverty rates decrease with the provision of tax credits and increase after these payments end.