Testimony in Support of Expanding the Minnesota Child Tax Credit

Chair Gomez, Chair Davids, and Members of the Committee,

I am Jason Adkins, executive director of the Minnesota Catholic Conference.

We are encouraged by all the child tax credit bills being heard here today, but want to testify in support of HF 2502 to expand the phaseout threshold for the credit, especially for married filing jointly households. We are also advocating another bill to expand the phaseout threshold of the credit by 20 percent, HF 2339, which has strong bipartisan support in both chambers, but believe this bill is just as good. 

When we proposed the creation of a nation-leading child tax credit in 2022, we did so on the principle that budget and tax decisions should make the well-being of families the number one consideration.  Families are our state’s most valuable asset.  They are creating and nurturing our future. 

Yet low and middle income families are struggling to afford the cost of living.  

We know that economics plays a role in family formation. As a state we should provide tax relief to remove as many financial barriers as possible to the cost of raising children, and even incentivize where prudent.  And we should do so in a way that trusts them to make the best judgments for their children by putting money back in their pocket, rather than make them make them access benefits through the state’s preferred provider.

The child tax credit has already been a huge lift to over 580,000 Minnesota kids.  Over 80 percent of eligible households have obtained the credit, and the average household credit is around $2400, accounting for the average credit size of $1200 per child, with an average of two children.

Undoubtedly this is making a dent in child poverty, and helping families stay out of poverty.  But we need to expand the eligible households who qualify for the credit because many do not have the same breadth of access to the programs available to lower-income families. 

Make no mistake, the households who will qualify should in no way be considered wealthy.  Rather, this bill expands the credit deeper into the middle class, offering greater assistance to those who are doing the important work of raising the next generation.  The bill wisely expands eligibility in a way that affirms the importance of marriage and household stability for children by making the phaseout threshold significantly higher for married joint filers.

We understand the long-term fiscal impact is cloudy.  But our state’s families need help now, especially when we read that our we are already having population problems, and policy reports from places such as the Chamber and the Center for Rural Policy note that population increases are due to largely to migration.  We need children and we need to make Minnesota a state where families want to stay and thrive. 

There are more pieces to the family economic security puzzle, including housing costs.  But let’s trust families and get out of the way of the important work that they are doing. 

A budget that accrues savings while also providing reasonable and targeted tax relief to our state’s families can be a great bipartisan victory this year.  We would encourage members to work together to help Minnesota’s families.  Thank you for your consideration.