Testimony in Support of a New Minnesota Child Tax Credit Taxes Conference Committee (H.F. 1938)

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May 9, 2023

Chair Rest, Chair Gomez, and Members of the Tax Conference Committee:

Minnesota is a prosperous state, yet our resources are not infinite.  Like all budgets, Minnesota’s next biennial state budget will allocate those resources in a manner that reflects what our society most values.  The Minnesota Catholic Conference, the public policy voice of the Catholic Church in Minnesota, understands weighty decisions that must be made as you work to craft the most influential component of the budget—the 2023 Omnibus Tax Bill (H.F. 1938). 

We write to encourage you to make families the foremost beneficiaries of those decisions. We hope that what emerges from your Conference Committee is a new Minnesota Child Tax Credit (CTC) that leads the nation in the number of households with minor children that receive the direct, flexible, and ongoing economic relief that they deserve.

Supporting Families, Minnesota’s Most Vital Infrastructure

A stable workforce, vibrant communities, and a sustainable tax base are all biproducts of economically secure families.  Parents with minor children are doing the hard work of raising the next generation of contributors and taxpayers amid immense economic pressures.  Money is tight, especially for larger families with lower incomes. Families across the state need economic relief. Governor Walz opened the year by issuing a bold commitment to make Minnesota the best state in the country to raise children.  It is encouraging that many legislators have pledged to help achieve that goal, but the preeminence of families must go beyond rhetoric.  Policies that remove economic barriers to family formation and sustainability must be pursued with a sense of urgency. A robust state-level CTC, modeled after the now expired 2021 Expanded Federal CTC, would empower families, and elevate Minnesota as one of the best states in the nation to raise a family.  The time is now. Minnesota has the resources; it is up to you to direct them to families.

MCC’s Recommended Components for a Nation-Leading Child Tax Credit in 2023

• Fully refundable annual tax credit of $900 per child for children ages 0-4 and $600 for children ages 5-17
• Income thresholds and phase-outs set at levels to allow all families through the 8^th Population Decile to receive some portion of credit[1]
• No cap on the total amount of credit that a household can receive per year i.e., no “child cap”
• No minimum earnings requirement to qualify for the full value of the credit
• Credit amount and income phase-out levels indexed annually to inflation
• A commitment by DOR to work towards providing the credit in periodic installments

Thank you for your consideration and for your service to all Minnesotans,

Ryan Hamilton
Government Relations Associate, Minnesota Catholic Conference
[email protected]

[1] See, page 42 of 2021 Minnesota Tax Incidence Study