Push for state child tax credit begins, could face uphill battle

[February 08, 2023]  By PETER HANCOCK
Capitol News Illinois
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SPRINGFIELD – A group of Democratic lawmakers on Tuesday called for creating a state-level child tax credit that would give low- and middle income families up to $700 per child each year in tax relief.

But whether Gov. JB Pritzker includes such a plan in his budget proposal, scheduled to be delivered Feb. 15 – and whether it receives the endorsement of top Democratic leaders in the General Assembly – remains an open question.

Erion Malasi, director of policy and advocacy at the advocacy group Economic Security for Illinois, pegged the plan’s cost at somewhere between $700 million and $800 million annually.

State Sen. Mike Simmons, D-Chicago, said passage of such a measure would benefit about half of all children in Illinois.

“It puts money in the pockets of struggling moms and dads all across the state,” he said during a Statehouse news conference. “And when we put money in the pockets of those working parents, we know that they can’t afford to save so they’re going to go out and spend that money on shoes for their kids, on health care that they've put off for too long, on food for their teenagers who love to eat.”

Illinois already offers an earned income tax credit, or EITC, which is available to people who meet certain income guidelines, even if they have no children. A child tax credit would be an additional payment to parents. Like the EITC, the child tax credit would be refundable, meaning if the amount of the credit exceeds the filer’s total tax liability, the excess amount would be repaid to the taxpayer.

The language of the proposal is contained in Senate Bill 1444, which Simmons introduced Tuesday. Under the legislation, individuals with income below $50,000 and married couples filing jointly with incomes below $75,000 would be eligible for a $700-per-child tax credit.

For tax filers with incomes above those limits, the amount of the credit would be reduced by $24 for each $1,000 of additional income.

Sen. Mike Simmons, D-Chicago, joins advocates at a news conference Tuesday to call for the creation of a state child tax credit. (Capitol News Illinois photo by Peter Hancock)

Simmons was joined at the news conference by other supporters of the idea, including Sen. Robert Peters, also a Chicago Democrat, whose district, he said, includes some of the wealthiest, and some of the poorest, ZIP codes in Illinois.

“No ZIP code should have that level of inequality,” he said. “This is a step for us to move away from income inequality and to something that says equity and equality itself is a necessary part of life.”

But the idea comes at a precarious time for Illinois, and it could face resistance due to its estimated annual price tag.

Although the state has been running multi-billion dollar surpluses in each of the last two years, the Governor’s Office of Management and Budget has projected that state finances could start running deficits as soon as Fiscal Year 2025.

Meanwhile, Illinois Comptroller Susana Mendoza has cautioned lawmakers not to use the current surpluses to enact new, permanent programs that would obligate the state to fund long into the future.

“What I would be opposed to is seeing new funding items – unless you can really sell that this is an extreme necessity for the state at this time – we want to stay away from funding new programs that are going to have to be funded year to year,” she told Capitol News Illinois during an interview in January.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to more than 400 newspapers statewide, as well as hundreds of radio and TV stations. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.