By Catherine Wilson
As a nation, we spend a lot of time talking about what doesn’t work. While that’s necessary, it can overshadow what does work and hamper our ability to strengthen and expand policies that make a difference in the lives of New Jersey residents.
In New Jersey, 800,000 people are food insecure and an alarming 200,000 of them are children, according to the Community Food Bank of New Jersey. Additionally, a 2021 study by Legal Services of New Jersey’s Poverty Research Institute shows a staggering 3 million people in our state, including 800,000 children, were living in poverty even before the COVID-19 pandemic.
These disturbing numbers reflect the sad reality that many families work full time and are still unable to consistently afford food, rent, and other basic necessities. They also underscore the urgent need for quick and effective policy action. That is why it is critical that we not only focus on developing new solutions but that we also strengthen and expand the policies that are working. One such measure is the Earned Income Tax Credit (EITC).
While little-known, this tax credit is one of the most effective poverty-fighting tools. EITC is a tax break for low- and moderate-income workers that can increase tax refunds or reduce the amount of taxes owed. It is a federal tax break, and New Jersey is one of 28 states that offer this tax benefit at the state level. EITC is estimated to lift nearly 6 million people out of poverty annually. When combined with the Child Tax Credit (CTC), EITC has lifted more Americans out of poverty than any other program except Social Security.
Additionally, as part of the American Rescue Plan passed in 2021, the federal government expanded CTC, which kept 3.7 million children above the poverty line. When Congress failed to renew the expanded credit in 2022, an equal number of children fell back into poverty.
According to a report by the Rutgers Center for Women and Work, more than 1 million New Jersey families benefited from the CTC. The study also found that higher-income households that received the funds used them to save and pay off debt, while those in lower-income households spent them on basic needs such as food, utilities, and rent. With inflation putting increased pressure on families, this relief is more important than ever.
As leaders of United Way organizations in New Jersey, we are focused on improving the lives of residents and working tirelessly to disrupt the cycle of poverty by convening, collaborating, and investing in strategies that ensure equal opportunities and better outcomes for children and families. The success of this work also relies on policy change, which is why we are united in our support for New Jersey General Assembly Bill A981 and its companion bill in the State Senate, S1946. The proposed bills would increase the New Jersey EITC benefit amount from 40% to 50%, allowing low-income workers to receive a higher refund.
Since EITC is already a part of New Jersey’s budget, expanding it would have a minimal impact while making a measurable difference in the lives of low-income working families, many of whom are essential workers facing hardships due to the public health emergency.
In addition to A981/S1946, we are calling on the New Jersey State Legislature to pass the Assembly and Senate companion bills, A1689 and S1946, which would extend EITC to undocumented workers who file taxes using an Individual Taxpayer Identification Number (ITIN). Combined with the EITC refund expansion bill, this legislation would lift many New Jersey families out of poverty, ultimately benefiting our entire state.
No one who works full time should have to struggle to buy food or pay their rent or mortgage. We ask everyone to join us at the next state Legislative budget hearing on Thursday, April 28 and testify in support of these bills to expand and enhance the EITC and demand a state-level CTC. Essential workers take care of us, so now it’s time to take care of them.
Catherine Wilson is the president and CEO of United Way of Greater Newark.
This opinion essay was also written by:
Dan Altilio, president and CEO, United Way of Hudson County.
Tom Toronto, president and CEO, Bergen County United Way
Yvonne Zuidema, president and CEO, United Way of Passaic County
Kiran Gaudioso, president and CEO, United Way of Northern NJ
James Horne, president and CEO, United Way of Greater Union County
Gloria Aftanski, president and CEO, United Way of Central Jersey
Sandra Toussaint-Burgher, president and CEO, United Way of Greater Mercer County
Bonnie Duncan, president and CEO, United Way of Hunterdon County
Lori Ann McLane, president and CEO, United Way of Monmouth and Ocean Counties
Michael Gower, president and CEO, United Way of Gloucester County
Michele Taylor, president and CEO, United Way of Delaware
Melissa Acree, executive director, NJ 211
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