Report suggests child poverty decrease is due to a number of COVID-era policies
Newly released data from the Michigan League for Public Policy suggest some COVID-era policies over the last two years decreased child poverty.
The annual report, Kids Count in Michigan, comes shortly after Governor Gretchen Whitmer signed the state budget, leaving a $7 billion surplus. Both Whitmer and the Legislature say this should go towards tax relief but are negotiating plans on how to do so.
“What we've seen over the last decade, and certainly from last year to this year, is a decrease in child poverty in our state,” said Kids Count in Michigan Director Kelsey Perdue “There were a number of COVID-era policy changes that were made over the last two years, that really lifted a number of children, and even young adults out of poverty.”
The report found that Federal Child Tax Credit expansions lifted 114,000 Michigan children out of poverty and benefited another 1,968,000. The federal and Michigan Earned Income Tax Credits were also expanded to 571,000 working adults without children, including young adults ages 18-24 with low incomes, according to the report.
“Both of those COVID era policy changes really brought income and support to families with children and to working folks with low incomes that might not have otherwise qualified,” Perdue said.
The report recommends an increase Michigan’s Earned Income Tax Credit from its current 6% to 30% of the federal credit — that would be a difference of $150 to $749 in credit.
Both the Legislature and Whitmer’s tax cut plan calls would raise it to 20%, or $500 — a $350 increase. Whitmer said it would deliver a tax refund of $3,000 to 730,000 state residents. It used to be 20% of the federal credit, but in 2011 was lowered to 6%.
From 2010 to 2020, there was a 28.2% decrease in the child poverty rate statewide, according to the MLPP data.
According to the data, over 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 allocation in 2022 using federal relief dollars.
Child poverty sees similar trends with COVID-era tax credits nationally.
The American Rescue Plan’s expanded Child Tax Credit monthly payments expired in January of this year and child poverty rates spiked, according to researchers at Columbia University.
The data from the Center on Poverty and Social Policy at Columbia University shows child poverty rates dipping with the delivery of tax credits and increasing after those payments end.