Analysis: Proposed Ohio child tax credit has $740M benefit
Mar. 3—Gov. Mike DeWine's newly proposed Ohio child tax credit program could create $740 million in net economic benefits to the state each year, according to a new economic projection from the group Scioto Analysis.
As proposed, the program would grant Ohio families up to $1,000 in refundable tax credits per child under seven years old. The actual value of the credit is tied to a tax filer's income.
According to the legislature's nonpartisan Legislative Service Commission, the credit would only be available to individual filers making below $69,000 and joint filers making below $94,000 each year.
State documents show an expected cost of $910 million to fund the credits over the next two fiscal years, if it were to be approved by the legislature as written.
"Using previous literature on the relationship between tax credits and outcomes for households," Scioto Analysis projects this would lead to a net benefit of $740 million per year for the Ohio economy.
The group also estimates the program could lead to $500 million in higher future earnings and $190 million in reduced costs associated with future crime for children receiving the credit.
"There is a robust body of research that shows how investments made in early childhood are beneficial both to the families who receive them and the broader community" said Scioto Analysis Principal Rob Moore. "Children who grow up with access to more resources have an easier time in the short term, which often translates to better wage, health, and criminal justice system involvement outcomes later in life."
On an individual basis, Scioto Analysis said the credit applied to a single parent making just over $58,000 a year could get about $560 worth of tax credits per qualifying child.
DeWine pitched the plan as a way to help families with their rent, mortgage or child care expenses, which have grown significantly more burdensome across the board in recent years.
About half of Ohioans and parents with young children rate their financial situation as only fair or poor, according to polling done by Groundwork Ohio, an advocacy group focused on young children.
"More than one third of parents with children under five report serious problems with paying their rent or their mortgage," said Lynanne Gutierrez, president and CEO of Groundwork Ohio.
Groundwork Ohio also found 82% of parents with young children have had to cut back on groceries due to inflation.
"One in five young children live in poverty, and one in 10 live in extreme poverty," Gutierrez said.
Families have many different expenses, so the child tax credit could help alleviate some of the financial burdens on families, she said, such as food, housing and/or child care.
This is also an initiative that has support from both Republicans and Democrats, she said.
"Our polling really showed that there's a lot of bipartisan support for action on the child tax credit," Gutierrez said.
About 84% of Ohio voters support a child tax credit, according to Groundwork Ohio's polling. Voters who approve of a child tax credit include 83% of Republicans, 78% of Independents and 94% of Democrats.
"That support only grows in the poll to 87% when voters learn that both President (Donald) Trump and (former President Joe) Biden have backed expanding the child tax credit," Gutierrez said.
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