by Will Petrik, Director of Policy & Advocacy
Every family in Central Ohio should be able to put food on the table and have a roof over their heads.
But today, too many kids go to bed hungry, and too many working people are underpaid. Wages haven’t kept pace with increasing housing costs. The average fair market rent for a 2-bedroom apartment has increased from $886/month in 2017 to $1,302/month in 2024. Today, seven of the ten most common jobs in the Columbus metro area don’t pay enough for a renter to afford a 2-bedroom apartment.
A staggering 39% of households in Franklin County are struggling to just get by and pay for necessities each month.
It doesn’t have to be this way. All of us should have the resources and opportunities we need to thrive.
That’s why I was excited to see Governor DeWine’s proposal to change the tax code to support families with young children. Governor DeWine’s proposed budget includes a refundable Child Tax Credit (CTC) worth up to $1,000 per child under age seven for families with an annual income under:
$94,000 (married filing jointly)
$69,000 (single filers)
$56,500 (married filing separately)
This will provide families with children age 0-6 with up to $1,000 per child each year. For example, a single parent making $50,000 annually with a 2-year-old and a 4-year-old would get a $2,000 tax credit to help with car repairs, groceries, or childcare.
This would provide relief for tens of thousands of families in Central Ohio. We estimate roughly 46,000 children and their families would be eligible for the credit in Franklin County. If all of the families received the maximum credit of $1,000 per child, that would mean an additional $46 million in resources supporting families, with much of that being spent at grocery stores and childcare providers in the local economy.
Research shows that refundable tax credits improve children’s health and education, increase family financial stability, and reduce child poverty. At the height of the pandemic, federal lawmakers expanded the federal Child Tax Credit, which expanded peace of mind for millions of families. It provided 1.2 million families in Ohio an average payment of $442 per month for six months. As a result, families had more money to pay the rent, put gas in the car, and food on the table.
Nationally, child poverty fell to a record low of 5.2% in 2021 and fewer families reported that they didn't have enough to eat. 70% of parents said the payments helped them better manage rising prices, according to a survey from the Brookings Institution.
Researchers at Columbia University have done significant work on the benefits and costs of federal Child Tax Credits. Their research found that Child Tax Credits awarded to children at young ages led to higher earnings, better health, and less criminal activity later in life. In their latest research, they estimate a total social benefits of $15 for every $1 of costs of the program. Investing in families with young children ought to be common sense.
It is important to note that the scale of Gov. DeWine’s proposal (in terms of number of children and families impacted and the amount of financial relief) is much smaller than the 2021 federal CTC. As outlined in the chart below, the total value of the federal expanded CTC was $3,600 per child age 0-5 compared to DeWine’s proposal of up to $1,000 per child age 0-6 annually.
While Gov. DeWine’s Child Tax Credit proposal is a great starting point, this is just the beginning of the legislative process to determine the future priorities of the state of Ohio. State lawmakers must present a budget to the Governor to sign into law before the budget is set to go into effect on July 1, 2025. Throughout the next several months, it's important for our state lawmakers to know that a "Child Tax Credit to provide tax relief to working families with children" is wildly popular. 84% of likely voters across party lines support it, according to a poll released by Groundwork Ohio.
The same poll highlighted that the most important issue to parents is “getting inflation and [the] cost of living under control.” A whopping 94% of parents said it was important. Families clearly need relief.
Let’s make that happen. Let’s encourage our state lawmakers to prioritize relief for kids and families in the budget. A refundable Child Tax Credit is a step toward making sure more kids have the resources they need to thrive.
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