Family Income Support Policies Are Especially Important in Maryland
Recent Census Bureau data demonstrate that it is possible to reduce poverty and prevent hardship through government action—support that is especially needed in Maryland as the poverty rate in the state increased significantly between 2019 and 2021. While relief measures such as the federal and state Child Tax Credits and the eligibility expansion of the state Earned Income Tax Credit (EITC) helped mitigate hardship associated with the COVID-19 pandemic, policymakers must extend and restore such measures to reduce the economic burden that continues to harm Maryland families and children.
Percentage of Marylanders living in poverty increased compare to pre-pandemic levels
Alarmingly, the percentage of people living in poverty in Maryland increased from 9.0% in 2019 to 10.3% in 2021. Specifically, poverty rates for children under 5 years old saw the greatest change from 11.7% in 2019 to 15.2% in 2021, with children living in single female-headed households seeing the largest increase in poverty. As a result of historic and ongoing policy choices that created barriers to opportunity, particularly for Black, Indigenous, and other people of color, ethnic and racial disparities persist when examining poverty and income data, with Black and Latinx Marylanders more likely to be living on poverty level incomes compared to white Marylanders.
These findings derive from the American Community Survey (ACS), which provides detailed information about population changes, and housing and health insurance coverage data across all states. Unfortunately, the measures in the ACS do not reflect the impact of tax credits on poverty and income such as the CTC, stimulus payments, or in-kind benefits such as SNAP. However, given that Maryland’s unemployment rate in 2021 was among the highest in the country—ranking 40th in the US—it is paramount that state policies prioritize those first and hardest hit by economic and life disruptions.
Federal CTC played a pivotal role in decreasing child national poverty
According to the Supplemental Poverty Measure, a measure that takes into account living expenses and government assistance, the national child poverty rate decreased by more than half from 12.5% in 2019 to 5.2% in 2021, reaching historic lows. The biggest difference can be attributed to the 2021 federal Child Tax Credit (CTC) which ensured that low-income families received the full credit, raised the amount allotted, and created monthly advancement payments for immediate use.
However, findings from a recent national survey administered to CTC recipients (earning no more than $75,000) showed parents experienced financial stress and greater food insecurity resulting from the termination of the monthly credit. Income supplements such as the CTC allow families to pay for basic necessities, child care, housing, and other costs needed for children to develop in healthy environments and succeed academically. Now that monthly CTC payments have expired, many families are looking towards other forms of relief such as food banks to supplement what their income cannot afford. Consequently, it is likely that child poverty rates will increase again this year without continued support. There is no better time to ameliorate this situation through increased funding and support for social safety net programs.
At the state level, maintaining the expanded Earned Income Tax Credit, which provides a refundable tax credit to low- and moderate-income working families, and strengthening Maryland’s new state level CTC are important tools to help support families as they navigate continuous change. There is extensive research demonstrating the effectiveness of both the EITC and the CTC at boosting work and income, and increasing health and educational benefits at various life stages for children and families. The recent example of the briefly expanded federal Child Tax Credit demonstrates that consistent federal and state-level public investments will bolster positive life outcomes and expand opportunity for the families that are still struggling to afford the basics.
