April 4, 2024
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Prioritizing solutions to poverty will bring in revenue to our regional economy

IN THIS ARTICLE

By Laura Capps

Costs of living on the Central Coast are skyrocketing, and poverty maintains a tight grip on the lives of too many of our residents. The 2020 Census calculated a 15.2% poverty rate for Santa Barbara County, one of the highest rates in the state that has the highest rate in the country. That is 15% of our neighbors, friends, and family.

Poverty is a policy issue – not a partisan one. We know what works to alleviate it: smart policies like the Earned Income Tax Credit (EITC) that for decades have demonstrated effectiveness. With Tax Day approaching, it is a good time to understand this powerful anti-poverty tool and the resources it brings to our region. 

Enacted in 1975 under President Nixon, the EITC was part of an economic stimulus package to pump dollars into all parts of the country, including rural areas. 

The program works by rewarding those working hard at the bottom of the economic ladder. 

It gives cash to low-income workers – the more you work, the more money you get back. 

Expanded under President Reagan and President Clinton, the program has successfully provided financial security for millions of people over decades. President Ronald Reagan described the EITC as “the best anti-poverty bill, the best pro-family measure, and the best job-creation program ever to come out of the Congress.”   

Governors realized the power of the EITC and began offering their own version to complement the federal credit. There are now 29 state tax credits. 

Governor Brown created California’s version of the tax credit called the CalEITC.  Governor Newsom has significantly expanded the program allowing younger and older workers to receive it as well as those who have an Individual Taxpayer Identification Number (ITIN). In 2020, he introduced the Young Child Tax Credit California Credit (YCTC) to provide qualifying families with children under the age of six​ an additional $1,000. That year our state reached the remarkable milestone of more than $1 billion in refunds to hardworking families.

In Santa Barbara County, according to Golden State Opportunity, last year, 37,801 low-income households claimed $12,198,233 from the California Earned Income Tax Credit and the Young Child Tax Credit.

That’s $12 million from the state to help pay for the essentials such as car repairs, paying down debt, medical expenses, and childcare. A total of 58,000 individuals are eligible for the EITC credit in Santa Barbara County; imagine if we reached 100% of those eligible; that is a potential of an additional $3.8 million into our regional economy while providing additional financial safety for our neighbors and friends. 

For me, there is no rational reason that any person working hard should be suffering from the chaos, health ramifications, loss of dignity, and so much more that is associated with poverty. Poverty impacts every aspect of our community: housing, homelessness, education, transportation and health.

As a County Supervisor for Santa Barbara, I am committed to addressing this challenge and have made combating poverty my top goal. Join me in spreading the word; you can go to CalEITC4Me.org to learn more, see if you qualify, and earn your credit today.

•Laura Capps is the Santa Barbara Court Supervisor for District 2. She started her term on Jan. 10.