Child care tax credit expansion to boost Oregon families
Anita Sawaneh, a mother who runs Sierra Leone Child Care out of her home in Milwaukie, supervised 20 kids a day before the pandemic. Now, that number has dwindled to two.
Though she loves her job, bills and stresses have mounted.
So, along with helping pay overdue utility bills, Sawaneh said the increased child tax credit passed through the American Rescue Plan will provide her and the kids with small sources of joy — like occasionally going out for ice cream or buying a new toy.
"It's been hard on them this last year, so I'm just trying to find a way to celebrate the little stuff," she said.
Framed by The New York Times as having "the makings of a policy revolution," the new child tax credit will increase the amount of money families with children under the age of 6 receive from $2,000 to $3,600 per child and to $3,000 per child above age 6. It also expands the reach of the credit to those who earn little-to-no income by making the credit fully refundable. The provisions are set to expire at the end of 2025 but advocates are hoping for them to become permanent.
For now, according to the Oregon Center for Public Policy, the new credit will lift about 40,000 people above the poverty line in the state while 92,000 people will move closer to the poverty line. Previously, low income families with low-to-no tax burden could not receive the credit, and the OPP indicates that 292,000 Oregonians will benefit from this provision.
The child tax credit was first introduced in 1997, at the time providing $500 per child and aimed at upper and middle class families according to an article by the Brookings Institution. It was altered many times in the years leading up to this most recent change.
"I certainly think the most groundbreaking aspect of this change is the elimination of the income requirement to have access to the credit. By doing that is to say that all children regardless of their income, we are investing in as a community and not picking and choosing who is worthy of it and who is not deserving," said Janet Bauer, a policy analyst for the OCPP. "I think the exclusion of the lowest income households, or partial exclusion, was probably the most regressive and problematic aspect of the child tax credit."
Bauer also liked that the policy provides a monthly payment to families rather than a lump sum.
"That can better help support the day-to-day budget of households," she said. "I think that innovation is really important."
Andrea Paluso, the executive director of Family Forward Oregon, believes the tax credit changes are a good start but still insufficient — particularly compared with the generous direct payments some other affluent countries provide.
"The U.S. is really behind other rich nations in the way it has prioritized and invested in real family support structures," she said.
Paluso noted that child care costs exceed what most families can afford and that every county in the state is considered to be a child care desert for young children.
"Oregon has historically been rated one of the least affordable states for child care," Paluso said.
She added that women are often forced to quit their jobs due to child care responsibilities and they have also disproportionately borne the brunt of pandemic job losses. Paluso also pointed out that families merely inching above the poverty line doesn't mean they can afford things like housing and transportation in the Portland metro area, let alone child care. She surmised that instead, most families will use the money to pay for basic necessities.
"For an infant and toddler, you're talking about maybe on average $12,000 a year (for child care). Is a $3,600 credit going to cover the cost of that? No, but it may help," Paluso said.
She added: "Families need more income. People with kids need more money to afford many things: housing, food, diapers. And we also need to build a child care system that's more universal and publicly funded."
James Hieb, the director at Building Blocks Early Learning Center in Wilsonville, noted that many low income parents qualify for child care subsidies from the Department of Human Services. Families with incomes below 185% of the federal poverty level can qualify, and the caretaker must be employed and need child care to remain employed.
"As far as child tax credit, it's not going to really impact low income families (in terms of child care) because they are already receiving state-sponsored child care," he said.
Wilsonville resident Beth Marshall, who has two kids, has seen her job as a fitness instructor at Edge Family Fitness fluctuate significantly due to restrictions to prevent the spread of COVID-19. And she said the tax credit could help her family pay for expenses associated with her two children's year-round track and field pursuits.
"My income would go toward paying for my kids' activities because it's still hundreds of dollars a month that we pay for that," she said. "However, with my husband still working we were able to make it work. We're fortunate enough that the last year really hasn't been hard on us. It's been tighter, but we've been able to make it all work. Compared to others I feel like we've had it pretty easy."
Similarly, Sue Anne Williams, a Wilsonville resident who lost her job during the pandemic, said her family has saved up enough money to get by and that she has gotten a lower-paying job since. She worries about other families, however.
According to the West Linn-Wilsonville School District, 17% of local families were on free or reduced lunch, which the district said is the most common statistic associated with students experiencing economic distress, in 2018-19.
"I think about all the moms that may have had to quit their jobs to stay home with their little ones — I worry about people like that," she said.
Sawaneh loves her job for many reasons: the kids rushing in to give her a hug, the look on their face when they complete a science project or the satisfaction of helping a kid learn how to spell their name for the first time.
But she said that pandemic has made running a business that much harder: Restrictions have limited capacity, an employee quit for fear of contracting the virus and some families are behind on payments.
"I run a business but I also understand the struggle. It's stressful on everybody," she said.
The tax credit bump won't solve her problems but it could provide a needed boost.
"This child credit could give me a cushion," she said.
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