Federal stimulus check won’t stabilize struggling families
Although Connecticut has a higher percentage of affluent individuals and families than most other states, far too many of our residents face a very different reality. Hardworking people who are essential to every community’s success — child care workers, home health care aides, restaurant workers, car mechanics, office assistants — struggle to make ends meet on what their jobs pay. Connecticut needs a policy and a plan to support these workers and their families. We need to increase our state earned income tax credit and create a child tax credit.
How much does a family of four need to make ends meet in Fairfield County?
The 2020 Connecticut United Ways ALICE Report provides realistic and reliable data on what it costs working people to live in Connecticut for households that are Asset Limited, Income Constrained, Employed. The ALICE Household Survival Budget (a barebones budget that includes only the essentials, based on the real costs of life in our region — with no additional cushion for saving), tells us that just covering the basics in Fairfield County requires an annual income of nearly $115,000 each year for a family of four (two adults, one infant and one preschooler). By contrast, a home health aide makes $29,000/year, a child care worker makes $29,000/year, and a bus driver makes $52,000/year. Earnest people, whose labor we need and value, have a nearly impossible task of making ends meet.
Even before the onset of COVID-19, 38 percent of Connecticut households had earnings below the ALICE Household Survival Budget and struggled to make ends meet. In Fairfield County, 41 percent of families struggled every month to keep a roof over their heads, food on the table, and to cover other necessities — such as transportation, clothing, and medicine. The consequences of this stress are many: from creating a home environment that stacks the deck against the success of children, to the emotional and physical toll on adults. In addition to these human costs, these consequences carry fiscal impacts as multiple systems (emergency rooms, schools, hospitals, substance use treatment programs) bear the costs.
As we consider how best to support our struggling families in Fairfield County and across Connecticut in the wake of COVID, we have to start by acknowledging the high cost of living in our state. The new round of federal stimulus payments and the temporary expansion of the federal child tax credit are welcome — and at the same time inadequate to stabilize the finances of Fairfield County Families. Federal benefits are equal for any American family — but the cost of living is not. A $1,400 stimulus payment will go a lot further in Arkansas — where the cost of living is about half of Fairfield County’s, according to the ALICE Research.
Our state has seen first-hand what happens when families living on the edge suddenly have the rug pulled out from under them. ALICE households are experts at managing their household budgets and finding creative ways to support their families. But when you live paycheck
Connecticut must take meaningful action to help ALICE families. This action includes increasing our state’s Earned Income Credit (EITC) from 23 percent to 40 percent and creating a state Child Tax Credit (CTC).
to paycheck and are unable to save, in income, any unexpected additional expense can send your finances spiraling. COVID and its impacts have brought many to the brink. Providing financial assistance, to people who need it, can reduce stress on families and empower them to address their needs as they encounter them — a car repair, a security deposit, groceries or a utility bill.
Connecticut must take meaningful action to help ALICE families. This action includes increasing our state’s Earned Income Credit (EITC) from 23 percent to 40 percent and creating a state Child Tax Credit (CTC). Combined, these proposals would help more than 1 million low- and moderate-income families in Connecticut by providing them with additional, flexible income to meet their needs. And both steps would boost our economy at this time when we need it most, on the heels of the COVID. Every year, EITC brings back billions of dollars to local communities. Moody’s Fiscal Multiplier Estimates indicate that for every EITC dollar a recipient earns, they return $1.24 to the economy. For every CTC dollar a recipient earns, they return $1.38 to the economy.
As Connecticut’s legislators and leaders put together our biannual budget, we ask that you remember that our state budget is more than numbers — it is our values statement. And it sets the stage for the state we want ours to be. If we value the child care worker who looks after our daughter, the bus driver who brings our son to school and the home health care aide who kept our aging loved ones healthy during COVID, then we must create a budget that demonstrates our support for these workers.
We all have a vested interest in improving conditions for ALICE. These families — our families — need our support.