Report is first in a series looking at how programs and tax credits impact poverty in New Mexico

PRESS RELEASE
Wednesday, Nov. 20, 2024
FOR IMMEDIATE RELEASE

ALBUQUERQUE, NM—New Mexico’s child poverty rate is either the highest in the nation or better than the national average – depending on which poverty measurement is used. Both poverty rates come from the U.S. Census Bureau, but take very different factors into account. In order for state lawmakers to make informed decisions about public policies affecting children, they must understand the factors that influence these poverty measurements.

That is the central message of a new report, “Understanding the Impact of Income Supports in the Data,” released today by the child advocacy organization New Mexico Voices for Children. The report is the first in a series titled “From Poverty to Prosperity.” This initial publication explains the two most commonly known poverty measurements used by the U.S. Census Bureau and how they can lead to different assessments of child poverty.

Future reports in the series will examine how key policies—such as tax credits, SNAP benefits, and child care assistance— impact child well-being.

“New Mexico’s Legislature and Governor have done a great deal of work over the past several years to lift up our hard-working families who are earning low wages,” said Emily Wildau, MPP, the report author. “We know that too many families are still feeling the impacts of poverty, but the tax credits, child care assistance, and other support systems they’ve put in place or increased are helping. And there’s nothing like seeing it in the data to really understand how it makes a difference for many families every day.”

The Census has two commonly used poverty measures. The official poverty measure (OPM) is the one most often quoted. It also forms the basis for the federal poverty level (FPL), which is the threshold used to determine eligibility for most federally funded programs, such as SNAP, TANF and Medicaid. The OPM includes only a household’s cash income – such as wages, tips, Social Security payments, child support payments, and the like. The Census has used the OPM since the 1960s. Advocates have long believed that the OPM greatly underestimates true poverty, and that most families need to earn double the FPL – expressed as 200% of FPL – in order to meet basic needs.

Another shortcoming in the OPM is that, since it neither includes the non-cash benefits of anti-poverty programs nor the income support benefits of refundable tax credits, it cannot be used to determine if those policies are having the desired impact. Also, the OPM does not take into account regional costs of living – such as housing or transportation.

In part to address these shortcomings in the OPM, the Census created the supplemental poverty measure (SPM) in the 2000s. The SPM includes not only additional forms of income – such as SNAP benefits, housing assistance, and refundable tax credits – it also takes into account household out-of-pocket expenses such as child care and medical costs, and income taxes paid. In addition, the regional cost of living is considered when determining the poverty threshold. Until this year, the Census only released an SPM poverty rate by state for the total population. But, in September of this year, the Census released an SPM poverty rate by state for children.

The SPM poverty rate for children in New Mexico is 8.9%, which is lower than the national average of 10.4%, and ranks the state 17th in child poverty under this measure for 2021-2023. Contrast that against the OPM for that same time period. New Mexico’s OPM child poverty rate is 27.5%, or the worst in the nation, while the national average OPM for children is 11%.

“It’s striking to compare the two different measurements of child poverty in New Mexico, and what they show us is that we are making progress in helping families meet the needs of their children through bold public policy,” said Gabrielle Uballez, executive director for NM Voices. “There is, of course, much more work to be done to improve poverty by both measures, but this shows us that we can build on our progress while we continue investing in the poverty-fighting programs we already have in place and work toward building generational prosperity for all New Mexico’s kids.”

The full report, “Understanding the Impact of Income Supports in the Data,” is available online at https://www.nmvoices.org/archives/19479

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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