Boost the EITC, improve social and economic circumstances for Oregon children

June 10, 2019By Juan Carlos Ordóñez

[This commentary first appeared in The Statesman Journal.]

State lawmakers have much to be proud of, having enacted Oregon’s largest investment in education in memory. This and future generations of Oregonians will be better off for it.

But to maximize the benefit of the landmark Student Success Act, lawmakers need to make an additional investment to lift up Oregon’s working families.

By boosting the Oregon Earned Income Tax Credit (EITC), lawmakers can increase the odds the Student Success Act will improve the academic outcomes of Oregon’s children. The EITC gets to the root cause of why many kids struggle academically. Before session adjourns, lawmakers should renew and significantly increase the Oregon EITC.

It’s no secret that children who grow up in poverty face serious obstacles to learning. Compared to better-off children, kids living in poverty are more likely to experience housing and family instability, frequent school changes, as well as hunger and violence. Kids living in poverty also are more likely to be exposed to pollution, toxins, noise, and crime.

“Fifty years of social science research has confirmed, over and over again, that the best predictor of student achievement is not teacher quality or any other school influence, but the social and economic circumstances of the children,” says Richard Rothstein, a research associate with the Economic Policy Institute.

Thus, improving the social and economic circumstances of children would seem the most direct route to improving student achievement. And that’s where the EITC comes in.

The EITC has long been recognized as one of the most effective anti-poverty programs in existence. People may be most familiar with the federal EITC, but Oregon has an EITC of its own. It works exactly like the federal EITC, except that it amounts to 8 percent of the federal credit in most cases.

The federal and state tax credits boost the take-home pay of workers whose jobs pay too little to support a family. With that extra cash on hand, workers can cover rent, get the car fixed, catch up on bills, or even make modest investments in the education of their children. In Oregon, four out of every 10 children are in a family that benefits from the EITC.

The EITC, the research shows, helps children succeed in a number of ways. The tax credit leads to improved health, which in turn means students miss fewer days of school. It leads to higher test scores, greater rates of graduation, and increased college attendance.

Ultimately, those who benefited from the EITC in their childhood tend to earn significantly more when they become adults.

“[T]here is robust evidence of quite large effects of the EITC on children’s academic achievement and attainment, with potentially important consequences for later-life outcomes,” a study by the National Bureau of Economic Research concluded.

Oregon lawmakers have an opportunity this month to strengthen the Oregon EITC. House Bill 3028 would significantly increase the size of the Oregon tax credit while extending it to working families currently excluded from its benefits. Yet, it remains stalled.

Lawmakers should act now to boost the Oregon EITC. Doing so would maximize the impact of the Student Success Act, putting in place the conditions that will help children do well academically. And in that case, all of Oregon comes out a winner.

Posted in Education, Poverty & inequality, Taxes.

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