New York state senators and assembly members want $500 million in the final budget for a new tax credit package to help lift low- and middle-income families across the state out of poverty.

Inflation has cooled, but New Yorkers continue to feel the pinch of higher food and utility costs and increasing rent prices.

"Affordability is absolutely a problem across the board – low, middle [and] upper income," Patrick Orecki, director of state studies with the Citizens Budget Commission said Thursday. "There are different reasons for why this state is unattractive across the board."

The Senate wants to replace the state's Empire State Child credit with the higher Working Families Tax credit – or $550 per child to single taxpayers who make under $75,000 annually, or married couples earning under $130,000 per year.

The credit gradually tapers off, or declines by $20 for each $1,000 of additional income over the set thresholds. The program would be phased in over five years.

"It can go toward clothing, food, school supplies, to help pay utility bills, I mean, all the things that families need to get by," Sen. Andrew Gounardes said.

Brooklyn Democrat Gounardes sponsors the legislation to create the credit and said the benefit would help lift needy families out of poverty and would have rippling economic effects.

The Strong Economy for All Coalition estimates the credit will lead to a billion dollars in new spending across the state.

The Assembly's $500 million proposal boosts the existing Empire State Child and Earned Income credits, but expands eligibility to thousands more people by eliminating gaps like capping the number of children who get the benefit.

"These tax credits are proven poverty reducers," Assembly sponsor Andrew Hevesi said. "The Senate has added the Working Families Tax Credit, which is the goal I'd like to get to as well. ... But it's a great jumping off point to come to some real agreement to reduce the number of kids and families in poverty."

Democratic lawmakers are touting provisions in their one-house budgets – proposals totaling near a quarter of a trillion dollars – that address affordability and support New Yorkers struggling to make ends meet. Legislators argue their proposed record spending is a necessary investment for services New Yorkers need, including assistance like the Working Families Tax Credit to reduce poverty rates.

"The number of kids growing up in poverty are unconscionably high," said Hevesi, a Democrat from Queens. "If you go to Syracuse for example, 45% of the kids are under the poverty level. So we just can't take that."

This session marks the first time the Working Families Tax Credit, or provisions of it, were included in the budget priorities for both legislative chambers.

The legislation to establish the credit was first proposed three years ago, and was amended to implement the program over five years. The Senate's proposal would fund the credit for the first year of the program.

Families who pay taxes in New York qualify for the benefit, which includes immigrants and non-citizen tax filers who file with an Individual Tax Identification Number.

"To us, this is an equity issue," said Liza Schwartzwald,  director of economic justice and family empowerment with the NY Immigration Coalition. "The money goes directly to the families and then the family spends it directly in their communities. It's going right back into the local economy as well, so it's really a benefit for everybody."

Legislative leaders tout their budgets make large investments in education, health care other subsidy programs to boost the working class. But budget officials argue the state's shortage of affordable housing is one of the leading culprits keeping New York's cost of living high, and achieving a housing deal is most important to reduce expenses for residents.

"...By boosting housing supply and affordability, you solve a big problem that's No. 1 in pretty much every household budget," Orecki said. "So housing should be a priority in the budget and after budget."