We in Michigan have become so accustomed to various groups complaining about the effect state budget cuts will have on their constituency that it’s a bit startling to hear any activist or advocate refer to a major funding reduction as “an important victory.”
But that’s the case today as the state’s leading proponent of the Earned Income Tax Credit for the working poor expressed satisfaction with a budget struggle that led to a 70 percent cut in the EITC.
Gilda Jacobs, leader of the Michigan League for Human Services, is telling supporters that the $108 million that was preserved, which will be divided among nearly 800,000 EITC recipients, shows that “what seemed to be an impossible task turned out to be achievable.”
The League for Human Services was a longtime advocate for a state credit to piggyback on the federal EITC, which recognizes that low-income workers pay a disproportionate percentage of sales taxes and other basic levies. The Michigan Legislature finally agreed, and the program was put into place just three years ago. But Gov. Snyder put the low-income credit near the top of his hit list, prompting liberals to warn that eliminating the EITC would plunge 14,000 more children into poverty.
With the help of faith, labor and child advocacy groups, the League argued that preserving the credit was a “moral imperative” and lawmakers should not “balance the budget on the backs of the poor.”
The final compromise reached in the Legislature provides about $170 a year to a family with two children, compared to the previous average family allotment of $560. Nonetheless, that was a big improvement over the miserly $50 stipend – less than $1 per week – favored by the House Republicans.
The deal worked out by the GOP-led Senate maintains the EITC program but limits the allocations to 6 percent of a worker’s federal payout, rather than the previous 20 percent.
In other words, Snyder’s plan to eliminate the program and save $360 million was whittled down to a $108 million budget item – a 70 percent cut.
Jacobs, a former state legislator, said the effort by the pro-EITC coalition is a “remarkable story.”
“We saved the ‘spirit’ of the state Earned Income Tax Credit,” she said.
I’m sorry, but that sounds to me like the equivalent of the coach of a losing football team declaring a “moral victory.”
