Sept. 15, 2022
For Immediate Release
ALBUQUERQUE, NM — Despite the pandemic-caused recession, child poverty in New Mexico improved from 24.9% in 2019 to 23.9% in 2021. Nationally, child poverty worsened slightly from 16.8% in 2019 to 16.9% in 2021. That’s according to data released today by the U.S. Census Bureau from its American Community Survey (ACS). This improvement was largely due to several government programs, including the federal expansions of the Child Tax Credit (CTC), unemployment insurance, and health coverage, as well as state expansions of tax credits for families earning low incomes.
“A lot of the states can expect to see these improvements fade over time as the federal programs expire, but New Mexico should see lasting improvement from policy changes made over the last few years,” said Amber Wallin, executive director of New Mexico Voices for Children, which has long advocated for these policies. “In addition to increases in the minimum wage and tax credits for New Mexicans earning low incomes, New Mexico also created a Child Tax Credit and expanded child care assistance to nearly all families with children. Due to timing, the benefits of those changes don’t show up in this data, but we should see them next year.”
New Mexico increased its Earned Income Tax Credit (EITC), the Working Families Tax Credit, in 2019 and 2021, and the Low-Income Comprehensive Tax Rebate in 2021. Both of these credits go to low-income New Mexicans. Between those changes and the creation of a new dependent deduction in 2019, some $169 million a year is expected to go into the hands of New Mexicans, who will spend it quickly and locally. A one-time state tax rebate that passed in 2021 put another $109 million in the hands of New Mexicans at all income levels. And the new CTC will add another $74 million.
“Tax credits for families earning low incomes are one of the most effective ways to reduce child poverty and improve outcomes for children and their families,” Wallin said. “And because they are spent on basic necessities like housing and food, they create economic activity that’s good for the whole state.”
These kinds of effective state-level policies are the subject of two briefs by the Institute on Taxation and Economic Policy (ITEP) that were also released today. The two briefs detail the progress that states like New Mexico are making and point to best practices for crafting inclusive, effective state tax credits moving forward.
“State tax credits like the CTC and the EITC are some of the most effective tools in the policy toolbox for lawmakers looking to help families struggling to put food on the table, pay their bills, and make ends meet,” said Aidan Davis, ITEP’s State Policy Director and the author of the briefs. “Enacting or expanding these credits is a surefire way to chip away at racial and wealth inequality, blunt some of the regressivity of state and local tax systems, and help families meet their basic needs.”
The two ITEP policy briefs, “More States are Boosting Economic Security with Child Tax Credits in 2022,” and “Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2022” are available at itep.org
More information about today’s data release from the Census is available here
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New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. 625 Silver Ave. SW, Suite 195, Albuquerque, NM 87102; 505-244-9505 (p); www.nmvoices.org