Lifting Louisiana’s economy starts with helping children | Neva Butkus

Louisiana is again ranks near last in children’s well-being

July 1, 2021 6:30 am
Children play with building blocks with an accompanying adult

The $1.75 trillion spending plan includes $400 billion to pay for a new, six-year program to guarantee free preschool for 3- and-4-year-olds. The proposal also would limit child care costs to no more than 7% of income for families earning up to 250% of a state’s median income. (Shutterstock)

The Annie E. Casey Foundation, as it does every year around this time, recently delivered some bad news about Louisiana’s children. According to its Kids Count Data Book, Louisiana ranks 48th in the country for child well-being. Louisiana has never ranked higher than 46th in the 31-year history of this project. 

At the root of these unacceptable outcomes is poverty. More than 1 in 4 Louisiana children live below the federal poverty line. Our state’s legacy of systemic racism and discrimination have made this worse for children of color: 43% percent of Black children and 33% of Hispanic children in Louisiana live in poverty compared to 15% of White children. 

The only way to reverse this legacy is through sustained public investments in children and families. Unfortunately, the Louisiana Legislature missed an historic opportunity to do just that during its recently concluded session. In a year when policymakers had abundant resources at their disposal, they failed to direct enough of them to where they are needed the most. 

House Bill 659, for example, would have created Louisiana’s first child tax credit. As originally introduced by Rep. Matt Willard (D-New Orleans), the bill would have provided a refundable credit of between $200 and $500 for every Louisiana child in a family earning less than $100,000 per year. A scaled-down version of the bill would have provided $300 for every child under 7 in a family earning below $40,000 (or $80,000 for joint filers). 

Why is this important? Refundable tax credits put more money in the pockets of Louisiana families with children. And child tax credits are one of the most effective policies at reducing child poverty. 

Years of research has shown that lifting children out of poverty, particularly young children, is the best investment governments can make. It improves education and health outcomes and leads to higher lifetime earnings – areas where Louisiana struggles.

According to the United Way’s ALICE Report, ven before the pandemic, more than half of Louisiana households didn’t make enough to cover basic necessities such as housing, food, transportation and childcare. The pandemic only made matters worse for families as layoffs and sub-par unemployment benefits left families having to choose between paying the light bill or putting food on the table. 

This child tax credit, dubbed the Strong Families Tax Credit, could have helped hundreds of thousands of Louisiana families with young children make ends meet after this tumultuous year. 

Of course, Louisiana is required to balance its budget each year, so any new investments in children must be paid for — either by cutting other programs, or by reforming our convoluted tax structure. This year was a “fiscal” session, which meant lawmakers had a perfect opportunity to prioritize children as part of a broader tax reform plan. 

Legislators took a promising step down that path by voting to get rid of the federal income tax deduction – a roughly $800 million per year tax break that primarily benefits large corporations and wealthy households. But instead of using some of the revenue gained by eliminating this tax break to help children, legislators elected to cut income tax rates. Simply put, they traded a tax break for a tax cut — with the end result being that most households will see little change in their tax situation. 

This strategy won’t work. We know this because it’s been tried before. Putting the interests of wealthy people and corporations ahead of low-income families is what’s landed our children in 48th place. If our elected officials want to get serious about improving Louisiana’s economy, they should focus on making strategic investments in our future through investing in our children.

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Neva Butkus
Neva Butkus

Neva Butkus is a Senior Policy Analyst at the Louisiana Budget Project, a nonprofit research and advocacy organization that evaluates how public policy impacts low- to moderate-income families in Louisiana. At the Louisiana Budget Project, Neva researches and advocates on behalf of tax policies that reduce poverty, prioritize race equity and ensure wealthy Louisianans and corporations are paying their fair share.