Oftentimes when Louisiana is mentioned, we are at the top of bad lists and at the bottom of good ones. One of the reasons for this is that far too many of our citizens, especially children, live in poverty.
Nearly 1 in 4 Louisiana kids live below the poverty line. In my New Orleans district, it is one in three. Furthermore, the poverty rates are worse for Black children in Louisiana where 43% live below the federal poverty line. These numbers have only exacerbated during the pandemic, which has taken the heaviest financial toll on communities of color and families who were already struggling to pay for basic needs.
Child poverty is costly, and it charges interest. A 2019 report from the National Academies of Sciences, Engineering and Medicine found that child poverty costs America between $800 billion and $1.1 trillion each year. The reason for this is simple: Children who grow up in poverty complete fewer years of schooling, face higher medical costs as adults, and are more likely to become incarcerated as adults.
The time to address this issue is now. The Legislature must start investing in kids by providing a new tax credit targeted at families with children. Reducing child poverty is not only a moral necessity, it is an investment in families that will pay long-term dividends for all of Louisiana when today’s kids grow up to become healthy and productive adults.
This is why the expansion of the federal Child Tax Credit, included as part of the American Rescue Plan Act, is so important for Louisiana. Early estimates show this tax credit will help cut child poverty in half this year.
However, the federal Child Tax Credit expansion is temporary and will expire at the end of the year. While there may be pressure on Congress to ratify this expansion permanently, there is no guarantee it will happen. More importantly, we must realize that Louisiana does not have to wait for Washington to take the lead.
A tax credit at the state level would make Louisiana a national leader in the fight against child poverty. My House Bill 659 would create the Strong Families Tax Credit, worth $200 to $500 per child. Under this legislation, the largest benefits would go to those who need it the most. These are our families with the lowest incomes and those with children under 5, which is when the costs of child care are the most expensive.
The Louisiana Budget Project estimates that the Strong Families Tax Credit would flow to 473,000 low and middle-income households in Louisiana, benefiting nearly 900,000 children. Though it may cost the state up to $150 million, this refundable credit would provide resources that families could use to pay bills, purchase healthier foods, get their car fixed, and buy uniforms, school supplies and other necessities.
Money from this tax credit would benefit every Louisiana community. Our state has more than $7 billion worth of tax credits, deductions, and other tax breaks on the books. We subsidize everything from petrochemical corporations to the sale of gold bullion; however, we do not have a tax credit for children. The research shows that investments in our kids and communities will usher in the long-term results we need to finally move Louisiana forward and to the top of the good lists.
Matthew Willard is a state representative from New Orleans.