The recent economic recession had an enormous impact on Montanans, and even though there is a noticeable upswing for businesses, the economic recovery is slow. Credit unions across our state provide affordable financial services to thousands of individuals and families working hard each day to make ends meet.
Montana has over 27,000 families who maintain employment, but are below the poverty line. In addition to the struggles of working families trying to make ends meet, this is one of only five states to impose income taxes on the working poor. For example, Montana begins taxing a two-parent family with four children at a lower annual income than any other state, $12,500 in annual income, which is well below poverty.
Of all the ideas presented this legislative session to alleviate poverty, we believe one of the most promising opportunities to support working Montanans and boost our economy at the same time is a state Earned Income Tax Credit (EITC).
EITC was created by Congress in 1975 to provide a tax credit to those earning low incomes, but requiring employment. President Ronald Reagan called the EITC “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.” Since that statement, studies have shown that most access the credit for just a couple years.
EITC is not only good for families, it is great for our economy. In 2013, more than 80,000 Montanans received the federal EITC and pumped $151 million into Montana’s economy. We hope the Treasure state joins twenty-two other states in this successful program by creating a similar credit on a state-level to provide an additional boost for low-income families to help make ends meet.
Montana had the opportunity right now to pass a state EITC that would work similar to how the federal EITC works. The proposal was modest; the maximum benefit to families would be about $300. However, for those 80,000 Montanans, it could mean their ability to pay rent, fix their car, buy groceries, or pay a doctor bill.
The bottom line is these families and fellow residents will spend these dollars in our local communities, contributing an additional $17 million into Montana communities in the next two years. The federal EITC program has been the most effective anti-poverty program in history, and a state-level credit could provide the same benefits to Montana families. Please contact your legislator at 444.4800 and encourage him or her to join us in supporting a state EITC.
Jeremy Presta, President/CEO, Park Side CU
Diana Cannon, President, Mile High FCU
Jack Lawson, President/CEO, Missoula FCU
Emily Guldborg, Manager, McCone County FC
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