Earned Income Tax Credit(EITC) – The EITC gained support this year and was close to becoming a reality until the budget crisis emerged. The Finance Committee, on April 1st, amended Senate Bill 657 “An Act Concerning A Taxpayer Relief Plan” to include a 10% state EITC. This means low income taxpayers will receive a state tax credit equivalent to 10% of their Federal Earned Income Tax Credit. The original request was for a 20% tax credit. This was reduced due to budgetary concerns. The vote was largely along party lines, with only a few Republicans voting in favor of the bill.
-------------------------------------------------------------------
LEGISLATIVE ACTION
2007
The 2007 General Assembly took the following actions on poverty related issues
- Creates financial incentives for municipalities to allow higher density housing
- Allocates $4 million for technical assistance and planning grants to towns
- Establishes a Blue Ribbon study to look at housing barriers and rental assistance
- Funds 375 new units of supportive housing over the next two years to help people who have been homeless.
The legislature made some substantial funding increases to several health care programs for low income residents, but fell short of enacting a more widespread health care reform measure. Approximately 400,000 working people in our state have no health care coverage. The budget:
- Expands the HUSKY health insurance program, allowing more low-income
people to be covered.
- Increases Medicaid reimbursement rates to medical providers, hopefully leading
to better service and coverage.
The enactment of a State Earned Income Tax Credit (EITC) failed to become part of the final budget. The Democrats supported the credit, but it was strongly opposed by the Governor and the Republicans. An agreement was reached to have an economic study done on the impact of the EITC by the 2008 legislative session.
LEGISLATIVE ACTION
2006
