The Community Economic Development Association of Michigan (CEDAM), an NLIHC State Coalition Partner, and the Michigan League for Public Policy are coordinating advocacy efforts to save the Michigan supplement to the Earned Income Tax Credit (EITC). On June 10, the Michigan House of Representatives narrowly passed a bill eliminating the state EITC supplement as part of tax adjustments intended to finance $1.1 billion in road building. The bill was voted out of committee in the State Senate with support from Majority Leader Arlan Meekhof (R) and is now awaiting a vote by the full Senate.
The Michigan EITC supplement was established in 2006 as a compromise proposal that enjoyed wide support from both parties. The original EITC legislation passed unanimously in the State Senate and by a 103-to-3 margin in the House. At the time it was created, the program provided a credit to state taxes equal to 20% of the value of a tax filer’s total federal EITC benefit. The benefit rate was reduced to 6% in 2011, lowering the average value of the credit from $430 to $143.
The Michigan Department of Treasury reports that approximately 780,500 Michigan households claimed the state EITC in 2013. They had an average federal adjusted gross income of $17,725. Advocates argue that eliminating the EITC will result in a tax increase for low income households who are least able to pay. CEDAM notes that the $143 average benefit is enough to purchase approximately 52 gallons of gas, 14 hours of childcare, or one week of groceries. In order to make up for this tax increase, a minimum wage worker in Michigan will have to work an additional 17.5 hours.
Advocates are working to increase public awareness of the threat to the Michigan EITC and have launched a website, www.saveeitc.com, where fellow advocates can find talking points, background information, and recent media coverage. Organizers recently placed several op-ed pieces in local Michigan new media, including The Detroit News, Lansing State Journal, and Bridge Magazine. Advocates are also working to ensure lawmakers know that eliminating the EITC is unpopular among voters. A recent poll of Michigan voters shows that 65% oppose eliminating the EITC, with only 18% in favor. EITC supporters are focusing efforts on those Republican Senators who supported establishing the program in 2006, about half of the Republican Senators serving in the chamber today.
“Every day in Michigan we see families struggling to make ends meet,” said Ross H. Yednock, Program Director of the Michigan Economic Impact Coalition at CEDAM. “The Michigan EITC encourages and rewards work, helps working families meet their basic needs, and stimulates local economies, all while lifting thousands of families and children out of poverty. Rather than discussing its elimination, the legislature should be looking at ways to make it stronger.”
For more information about the ongoing effort to save the Michigan EITC, contact Ross Yednock at [email protected].
Learn more about the campaign at www.saveeitc.com.