Some state lawmakers are driving an effort to invest $4 billion in child tax credits for families in the next state budget, but that wasn't a plan included in Gov. Kathy Hochul's executive proposal.
The Working Families Tax Credit would provide families $500 credit per child regardless of income, and up to $1,500 per child for single parents making under $25,000 a year or $50,000 for two-parent households.
Payments would be sent to households quarterly and would begin in 2024.
"With the passage of this tax credit, we project that we can reduce child poverty by 20%," sponsor Sen. Andrew Gounardes said Tuesday. "It'll be a game-changer for families all across the state."
The push for a new tax credit for families with children under 18 comes after the federal expanded child tax credit funded in the American Rescue Plan expired. The federal program was estimated to have lifted 2.9 million children out of poverty, according to U.S. Census Bureau data. Sen. Gounardes' tax credit is modeled after that six-month program for the next state budget to pick up where the federal program left off.
"In the course of that six months, when eligible families got $300 a month per child, we saw child poverty in this country be cut in half," Gounardes said. "So we're going to take the successful model of the federal program, which no longer exists, and we're going to try to do that same thing here in New York."
The tax credit would be expanded to families with children under 3 years old, and include all New Yorkers regardless of citizenship status to help families pay for groceries, utilities or other bills.
It would combine and expand the state's existing child tax credit with the Earned Income Tax Credit program funded with less than $1 billion in last year's budget.
The proposal would require doubling investments for child and dependent tax credit programs to about $4 billion annually, according to the Citizens Budget Commission.
"We need a clear understanding of what the fiscal impact actually would be," said Patrick Orecki, Citizens Budget Commission's director of state studies. "...The questions of how any proposal, including this one, would fit into the budget comes down to what the Legislature and the governor's priorities will be."
Orecki said the state's fiscal outlook remains difficult, with budget gaps expected between $7 billion and $9 billion over the next several years.
State spending has increased about $50 billion since before the pandemic, he said.
But the Legislature will have to juggle its desires, affordability and keeping the state economically competitive as the next budget takes shape.
"Those are the decisions that will have to be made over the next few weeks," Orecki added.
Assembly Republicans are against including the expanded credit in the budget because undocumented immigrants are eligible for the program.
But Sen. Gounardes argues with a $227 billion budget, the state can afford the credit to reduce child hunger and poverty for everyone.
"There is no good reason not to help people get out of poverty," the senator said.
Representatives with the Senate and Assembly on Tuesday said legislative leaders are continuing to conference these issues before they release their separate one-house budgets in the middle of next month.
"Gov. Hochul's Executive Budget makes transformative investments to make New York more affordable, more livable and safer and she looks forward to working with the legislature on a final budget that meets the needs of all New Yorkers," a spokesperson with the governor's office said in a statement Wednesday.
Budget hearings will continue when lawmakers return to Albany next week.
More than 1.4 million checks totaling more than $386 million were sent to low-income New Yorkers and families through the state's child and earned income tax credit program funded in the last budget, according to the governor's office.
Hochul signed legislation last year requiring the state to decrease its rate of child poverty by 50% over the next decade. Lawmakers in support of funding the Working Families Tax Credit in the upcoming budget argue the governor didn't include specific plans in her executive budget to reduce child poverty in the state in keeping with the law, and the expanded credit would be a way to do it.
In October, Gov. Hochul launched the first ever statewide Child Poverty Reduction Advisory Council aimed at cutting child poverty in half in the next decade. The advisory council’s next meeting is scheduled for March, according to the governor's office.