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Mo Terry of Gorham is the Maine House Majority Leader.
Last week, the U.S. Census Bureau announced that child poverty in the United States doubled in 2022 to 12.4 percent, just one year after hitting a record low of 5.2 percent. This sharp rise can largely be attributed to the end of the pandemic-era expansion of the federal Child Tax Credit (CTC), which increased the credit amount from $2,000 to $3,600 for qualifying children under age 6, and to $3,000 for other qualifying children under age 18 from July to December 2021.
This boosted credit was estimated to have benefitted 142,000 Maine families with 229,000 children, leading to a 40-percent reduction in Maine’s poverty rate. It made it easier for more parents to pay for necessities like rent, groceries and child care, and it meant that more children could get the resources they need to be safer, better nourished and receive a better education, both now and into adulthood. According to a Columbia University study, every dollar spent had the potential to generate an additional $10 in benefits to society in improved health and future earnings — a staggering 1,000-percent return on investment.
Unfortunately, Congress allowed the expanded credit to expire at the end of that year, and families across the country who depended on it have again been thrown into poverty as a result. But while Congress has been unable to agree on how to move forward, this year, the Maine Legislature took meaningful action by creating a new state child tax credit — a measure that will put money directly back into the pockets of hard-working families, lower rates of food insecurity and lift thousands of children out of poverty throughout Maine.
The new, fully refundable credit will replace the state’s existing dependent exemption credit, providing eligible Maine families with $300 per child when they file their state tax returns. The Legislature also indexed the credit to inflation and removed minimum income requirements, expanding eligibility for families with the lowest incomes who have not been able to access the full credit. Not being able to benefit from this type of tax credit because you don’t make enough money doesn’t make any sense, and this change will be crucial in expanding the credit’s impact.
While not as robust as the expired federal child tax credit, the new state credit will play a critical role in helping to reduce hunger here in Maine. According to data from the U.S. Department of Agriculture, we have the second-highest rate of food insecure households in New England, and the highest rate of very-low food secure households. Nearly one in 10 Mainers are currently facing hunger, including one out of every six children. It’s affecting families in our rural communities the hardest, and this credit will directly help more folks put food on the table, giving their kids a more stable foundation from the start.
Additionally, the credit will do more than just help families with children. Those caring for adult dependents will also be eligible — an important provision that will ensure that families with parents caregiving for a loved one with a disability don’t fall through the cracks, too. Often, these parents have to drop out of the workforce entirely to focus on caregiving due to a lack of available services. This financial support will help more of these families pay their bills and make ends meet.
The way we structure our tax code and prioritize our shared investments makes a powerful statement about what matters most to us. The Legislature’s creation of a new state child tax credit this year loudly and clearly shows that, as Mainers, we believe in supporting families. We believe in investing in our children, particularly our most vulnerable. And we believe that setting kids up for success early on benefits us all — creating a better Maine for future generations.
