COVID-era policies lifted many Michigan families with children out of poverty and helped them secure affordable housing, according to a new report by the Michigan League for Public Policy (MLPP), a Lansing-based think tank.
Now advocates are worried about what it will mean for children in the state if those extra resources end.
The new report, the MLPP 2022 Kids Count in Michigan Data Profiles, released Thursday, identifies trends in economic security, education, health and safety, family and community.
Some of the biggest “wins” that the MLPP identifies from the data include declines in rates of child poverty, teen births and children placed in out-of-home care because of abuse or neglect.
The report shows that the child poverty rate decreased nearly 17% statewide between 2010 and 2020, and child poverty rates declined in 82 counties over the same decade.
“We saw pre-COVID that we were trending in the right direction around measures of economic security. This year is no different,” said Kelsey Perdue, Kids Count in Michigan Director for the MLPP. “We were in the midst of a pandemic, and there were a lot of COVID-era policy changes that really benefited children and families, particularly as it relates to economic security.”
Namely, the federal child tax credit, which was included in President Joe Biden’s pandemic stimulus package last year, was increased and extended to children in families with low or no earnings, and advance monthly payments were provided to increase income stability.
The MLPP says this increased credit lifted 114,000 Michigan children out of poverty and benefited another nearly 2 million kids across the state.
The federal and state Earned Income Tax Credit (EITC) also were expanded to over 500,000 working adults in Michigan. Eligibility for the EITC was expanded in recent years to allow people who were unemployed during the pandemic to file their 2019 income when applying for the credit.
To see continued benefits for Michigan children, the League recommends that Congress make these changes to the federal CTC and Earned Income Tax Credit permanent and state lawmakers raise Michigan’s Earned Income Tax Credit, which is currently at 6% of the federal tax credit, to 30% of the federal tax credit.
Perdue said that change in the state EITC could equal a $600 increase in credit to working people.
“If those increases and extensions aren’t continued, there is a real fear around the need for children and families,” Perdue said.
The state’s Fiscal Year 2023 budget, which was signed by Gov. Gretchen Whitmer earlier this month, set aside $7 billion that will be negotiated with the GOP-led Legislature for potential tax changes, including increasing the state EITC.
The MLPP also pointed to another COVID-era policy change that benefited children — the state reinstating funding of the Housing and Community Development Fund.
The fund coordinates public and private resources to meet the affordable housing needs of low income, very low income and extremely low income households and to revitalize downtown areas in Michigan.
According to the report, over a quarter of Michigan households pay over 30% of their income on housing costs.
“Those high housing costs can impact the purchase of other necessities, like medical bills, education opportunities and groceries. And it can also lead to substandard housing and frequent moves,” Perdue said.
This year, the state has funded the Housing and Community Development Fund for the first time since 2012.
The MLPP recommends state lawmakers find a dedicated revenue stream for affordable housing for families with low incomes.
Perdue said the state’s funding of the HCDF is another “win.”
“That really ties in together economic security, housing, health and wellbeing,” Perdue said. “But it also shows what the state can and did do around it and is beginning to address that challenge.”
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