The Earned Income Tax Credit: Strengthening Working Families

The Earned Income Tax Credit (EITC), the nation’s most effective tool for reducing child poverty and supporting working families, would be strengthened for workers without children in President Obama’s 2015 budget.  Congress should take a serious look at this proposal. Furthermore, working Montana families would benefit from a state credit tied to the federal EITC

In 2011, 86,646 Montana households received the federal EITC, pumping over $169 million back into the pockets of working Montanans earning low wages.  

 However, the current EITC provides little to no help for working adults without children.  The President’s budget proposes to double the maximum credit for childless workers to $1000 and lower the age limit to 21.  Under this proposal, 52,000 Montana workers without children would either become newly eligible for the EITC or receive a larger EITC, and see the taxes they pay reduced. 


 We’ve written before about the benefits of investing in Montana’s working families, by building upon the federal EITC at a state level.  Montana is one of only a few states to impose income taxes on working families living in poverty.  Over 33,000 Montana families are working, but remain below or near the poverty line. 

So what would a state EITC mean for Montana’s working families?  A state tax credit set at 20% of the federal EITC could provide Montana low-income working families with a boost in income of up to $1,178.  For a single mother in Great Falls, that income boost could pay for over a month of her child care and transportation costs, so that she can keep working.  A state credit in Montana would build on the federal credit to lift more Montanans from poverty and improve the future for Montana’s children

The federal EITC has been a success in lifting working Montana families out of poverty. A state credit could work with the federal credit to do even more.  Both Congress and state lawmakers should think seriously about expanding EITC and investing in hard-working Montanans. 

One million dollars – gone.

Montana lost out on a million dollars this month. And last month, and the month before that.

And we’ll keep on losing that money because last November Congress allowed a temporary increase in Supplemental Nutrition Access Program (SNAP) benefits to expire and these dollars left our state. They flew off the dinner tables of Montana families. They disappeared from the cash registers of local grocery stores. They went missing from the fields of our farmers and ranchers.

When these dollars left Montana, a large number of families were still struggling to recover from the recession, and relying on SNAP benefits to help put food on their tables. After the cuts, households had an average of $22 less a month to spend on groceries.

$22 a month might not sound like a lot. But for a low-wage family on a tight budget, it is.

This cut means three fewer chuck roasts to put on the table at the end of a long day’s work. It means six fewer gallons of milk for kids to pour over their breakfast cereal. It’s seven fewer loaves of bread for a mom to make sandwiches for school lunches this month.

Milk bought in Montana grocery stores, and wheat grown in Montana fields. SNAP dollars flow through our local grocery stores, our farms, and our ranches. They strengthen not only families who need help putting food on the table, but our entire state.

The effect of this cut is still rippling through our state. Food banks, soup kitchens, and homeless shelters are bearing the burden as families who can’t afford enough to eat must rely on other options.

SNAP provides vital help for Montana families. We can’t let Congress take food off the tables of hungry Montanans again. 

The Impact of the Government Shutdown on the National Parks

For my family, and many across the country, as the snow melts and the first signs of spring are coming to Montana, we are starting to plan trips to visit our national parks. For some, spring can’t come too soon, as chances to visit the parks were cut short last fall due to the shutdown of the federal government in October.

Photo courtesy of Glacier National Park Service

A new study by the National Park Service (NPS) demonstrates the damage the shutdown inflicted on communities that are the gateways to these natural treasures, offering visitors lodging, meals, outdoor gear, and other amenities. Glacier National Park was one of 45 parks whose neighboring communities saw a drop in visitor spending of over $2 million in October 2013. Compared to October averages, visitor spending decreased by $2.6 million, significantly less than the normal $4.7 million. The number of visitors was down by 55%.

Unlike Montana, six states used state funds to keep national parks in their borders open.  These states saw visitor spending in gateway communities ten times greater than the amount states’ spent to keep the parks open during the month of October.

Montanans are proud to share our state’s remarkable natural beauty with the rest of the country, and tourism is a vital industry in many of our communities. Federal funds greatly benefit our state, helping to generate even more revenue for our local communities. As we saw this past October, the absence of these federal dollars can create a loss even deeper than the face value. Because of their importance to communities in Montana, Congress should not jeopardize these federal funds again.

Not only is keeping the parks open to families like mine wanting to experience Montana’s natural beauty, it’s important to the families and communities who depend on them for their livelihood.

Which costs more: A year in college, or a year in preschool?

Parents of a college student in Montana can expect to shell out between $6,350 – $6,750 a year in college tuition, depending if you’re a Griz or a Bobcat. But parents with a four year old in full-time preschool might be less prepared for the price tag – $7,518 a year, according to a new study from Child Care Aware.

Despite the numerous benefits of pre-kindergarten for both children and the state, Montana is one of only ten states without any state funding for pre-k. Out of these ten states, paying for child care places one of the highest burdens on Montana parents.


With costs higher than that of a year at college, many parents find themselves spending an unrealistic portion of their income on childcare. Those parents that can’t afford it often are forced to leave the workforce or place their children in substandard care. Parents who want or need to work should be able to afford to do so, and children deserve safe and quality childcare.

Early childhood is a critical time in a child’s life. By supporting state-funded pre-k, Montana could improve the lives of not only children, but working parents as well.

If you are interested in learning more about how state funded pre-k could benefit Montana’s budget, economy, and our children, read our report here.

Farm Bill Includes Provisions for Indian Country

On February 4, 2014 Congress passed the “Farm Bill” which authorizes funding for federal agricultural and nutrition programs for the next five years.  Although it was disappointing that the SNAP program was cut by $8.6 billion dollars, hurting millions of families that struggle to put food on the table, there were other parts of the bill that will help Indian Country.  Here is a highlight of some of those changes shared by the National Congress of American Indians:

Feasibility Study, Report, and Demonstration Project for Tribal Administration of Federal Food Assistance Programs-Section 4004

With tribal consultation, the Department of Agriculture will study the potential for tribes to administer federal food assistance programs for their respective communities, which are currently administered by the states.  The study and a written report will be completed within 18 months.

Food Distribution Program on Indian Reservations Traditional Foods Demonstration Project (FDPIR)-Section 4004

This project will allow the FDPIR program to include foods produced locally by American Indian farmers, ranchers, and producers, rather than solely relying on USDA food purchased outside of reservation economies that is shipped to tribal communities for distribution.

 These are just some of the provisions for Indian Country included in the Farm Bill.  You can read the full NCAI alert here

Top Five Reasons Montana Should Expand Health Coverage Through Medicaid

Montana has the chance to provide 70,000 people with high-quality health coverage by accepting federal funding to expand Medicaid to those whose incomes are less than 138 percent of the federal poverty level.  For a single person, this means earning less than $15,857, and for a family a three, less than $26,951.

Here’s why it’s such a good idea:

1. It will support our economy and help create jobs.

Offering more people health coverage through Medicaid would bring in nearly $6 billion in federal funds to Montana between now and 2021. This will help strengthen our economy, by providing insurance to workers in Montana’s key industries, such as tourism, construction, and ranching. Additionally, expansion will help bring 12,000 jobs to our state annually.

 2. It will benefit Indian Country.

Over half of Montana’s American Indians between the ages of 18-64 lack health coverage. But with expansion, nearly 20,000 American Indians in Montana will be eligible to enroll in Medicaid. Expansion will also provide a much needed economic boost to tribal communities. Additionally, it will help to improve services at Indian Health Services (IHS) facilities by freeing up funds for essential services such as mammograms that had been previously spent on the uninsured.

3. Veterans and their families will have better access to health care.

Montana has the highest percentage of uninsured veterans (17.3 percent) in the country.  Even for those with coverage through Veterans Affairs, Montana VA facilities are few and far between, making it difficult for many veterans to get the care they need. With expansion, approximately 9,500 veterans and their families will gain access to health care.

4. Medicaid is quality health care.

Medicaid is an effective and efficient program. Not only does it improve access to health care and the health of those who use it, it also delivers high-quality insurance with significantly lower administrative costs than private insurance.

5. It will improve the lives and health of tens of thousands of Montanans.

Most importantly, expanding Medicaid would improve the lives and the health of 70,000 Montanans, helping to build healthy communities and a stronger state. It’s time for Montana to act.

Welcome to “Charted Territory”

MT road sign

Welcome to Charted Territory, the new blog from the Montana Budget and Policy Center.

Montana is at a crossroads. We face many challenges – reducing poverty, growing our economy, creating jobs, and ensuring access to health care. There are so many possible directions we could turn that sometimes it feels like we are lost in uncharted territory.

We aim to give Montanans a map to these crucial issues, using accurate information and clear, non-partisan analysis to provide timely commentary. Here, you will find straightforward talk about events and decisions that impact the lives of Montanans, and our nation as a whole. We’ll discuss trends in the Montana economy, the role that state and local taxes play in building strong communities and a vibrant economy, the difference that safety net programs make in helping families meet basic needs and giving them opportunities to move up the economic ladder, and much more. Of course, we’ll throw in a few charts along the way.

Any journey is more pleasant with companions, and we want you to share your thoughts and comments with us along the way. Check back often. You can also find us on Facebook and Twitter, and get regular updates through e-mail.

We hope you will enjoy the journey with us as we venture into Charted Territory.

Chambers of Commerce on Medicaid Expansion: In Their Own Words

At least 25 Chambers of Commerce across the country have supported Medicaid expansion, recognizing it as critical to businesses, workers, health care providers, and local economies.

Arizona – Arizona State Chamber Letter to Governor Brewer, signed by 12 other local Chambers (See also, Arizona Chamber of Commerce Foundation, Policy Brief: The Business Case for AHCCCS Expansion)

“A strong healthcare system is crucial to the economic health and vitality of the entire state. Thousands of good paying jobs with benefits depend on our state moving down the path [Governor Brewer] articulated. We stand with [Governor Brewer] and are prepared to strongly and vocally support [the] decision throughout this endeavor.”

Illinois- Laura Minzer of the Illinois State Chamber

“The expansion of Medicaid as originally envisioned by the Affordable Care Act is the best way to mitigate additional cost pressures on employers and consumers in the near term… if the state were to forgo expansion, employers would face greater penalty exposure.”

Missouri- Governor Nixon, speaking on behalf of Chambers of Commerce in Kansas City, Independence, Springfield, Lee’s Summit and St. Louis, as well as the Civic Council of Greater Kansas City, Kirksville REDI, and the Associated Industries of Missouri

“The Missouri Chamber of Commerce supports the Medicaid expansion – not because they’re big supporters of this President and his agenda – but because it’s the smart thing to do. For these business leaders, this is not a political decision. It’s an economic one. And we shouldn’t let last year’s politics get in the way of next year’s economic growth.”

Ohio- Press Release, “Ohio Chamber Backs Medicaid Expansion” (also supported by Greater Cleveland Partnership (a regional Chamber of Commerce) and the Columbus Chamber of Commerce)

“The question of whether or not to expand Medicaid is a complex one; however, doing so is ultimately the right decision… Due to cost shifting resulting from uncompensated care, employers are already paying a hidden tax that makes their health insurance premiums higher than they should be. Without expansion, this cost shifting would be even more severe.”

Tennessee- Nashville Area Chamber of Commerce, release of 2013 legislative agenda (see also the Chamber’s Briefing Paper on Medicaid Expansion)

“Chamber officials say their support for Medicaid expansion is based on the ideas that it would bring billions of new federal dollars that are already obligated for health care into Tennessee — helping to create jobs and consumer spending — and that the move will help hospitals better absorb reimbursement cuts and the cost of uncompensated care they provide.”

Virginia: Opinion by Barry E. DuVal, president and CEO of the Virginia Chamber of Commerce

“As the state’s leading business organization, the Virginia Chamber of Commerce views itself as the guardian of our state’s reputation for being the best for business. . . . In the case of Medicaid reform and extension of coverage to the uninsured, the best path in our judgment is to move forward with reforming our state’s largest health insurance program and extending health care coverage to hundreds of thousands of uninsured Virginians, primarily from working families.”