The General Assembly’s tax-writing committee heard positive feedback Monday on the impact of a temporary child tax rebate program, which will need to either be extended or shelved in the legislative session beginning next month.
The Finance, Revenue and Bonding Committee held an informational hearing to assess the status and effect of a one-time tax rebate that was included in this year’s state budget. The Department of Revenue Services cut the last checks in the $250-per-child program late last week.
While the initiative received praise from both advocates and a working mother during the roughly hour-long hearing, DRS Commissioner Mark Boughton told the panel that his agency had distributed $84.5 million, or roughly two thirds, of the $125 million allocated to the program by the budget.
Boughton said the program impacted around 353,000 Connecticut children, an outcome he called both “impressive” and “broad-reaching,” but also complicated by a cumbersome application process that failed to reach all its intended beneficiaries. The agency expects data from the federal Internal Revenue Service later this month to help clarify which eligible households did not receive the benefits.
Rep. Sean Scanlon, an outgoing co-chairman of the finance panel who will take office next month as state comptroller, said it was still unclear what would happen to the leftover funds. Scanlon said he was continuing to engage state officials in talks aimed at ensuring those dollars reach eligible families rather than lapse.
“The commissioner and I and other stakeholders are talking through the ability for us to do that,” Scanlon said in an interview. “I think everyone is committed to try and find a solution to get the money to those who were eligible that didn’t apply.”
Much of Monday’s hearing seemed aimed at shoring up support for extending or expanding the program in the next state budget package. Among the speakers to address the panel of lawmakers was Krystal Williams, a supervisor at the non-profit Continuum of Care and single mother of two from New Haven.
“It’s really difficult here in Connecticut with the rent increasing, the food increasing and people aren’t able to make ends meet,” Williams said. “I think the result of not increasing the tax credit would result in a lot of families being hungry, homeless, and kind of hopeless because they won’t have anywhere else to turn.”
Other speakers pointed to the high costs of child care, the rising costs of goods and energy as well as the expiration of an expansion to the federal child tax credit. Tiffany Donelson, president and CEO of the Connecticut Health Foundation, told the committee that the extra dollars sent to households with children often enable them to pay for basic necessities like health care.
“When people are getting more money, they are spending it on the things that they need like going to the dentist, going to the doctor and paying off past medical bills and this is important for us because we as an organization that’s looking at how people can access health care,” Donelson said.
However, the program’s future remains unclear. Policymakers adopted it as one of several one-time and ongoing provisions that together total more than $600 million in tax relief in the current state budget. As Scanlon, one of the initiative’s chief proponents, prepares to step away from the legislature he said his co-chair Sen. John Fonfara, D-Hartford, would continue to support the rebate.
After the hearing, Rep. Maria Horn, a Salisbury Democrat who will succeed Scanlon as the panel’s House chair, declined to take a position on the future of the program, saying she was still working to get a handle of the state’s overall tax position and which programs are most effective. She said Monday’s hearing was a helpful step towards understanding the impact of the child tax rebate.
“I’ve already had a couple follow up conversations coming out of that forum, trying to assess actually the impact on families that are most vulnerable and most in need of support,” Horn said. “It’s on my list but I can’t tell you where it would be on the list.”
Republicans, meanwhile, expressed interest in being included in conversations over the child tax credit’s future as well as discussion about potentially more tax relief proposals.
“We have seen so many struggles over the course of the past few years,” Rep. Holly Cheeseman, R-East Lyme, said. “As we move forward we need to bear in mind that there are many people in Connecticut who need our help. We need to look at the best way to help as many of them in the fairest way possible.”