Bill 8-13 Working Families Income Supplement
Council President Navarro and members of the Montgomery County Council,
Maryland CASH Campaign promotes programs, products, and policies that protect and grow the financial security of working families by improving the availability of financial education, providing practitioner trainings and professional development, conducting research, and advocating for policy change. Maryland CASH partners with local nonprofits, government agencies, the financial services industry, higher education institutions, elected officials, and private foundations to help more than 18,000 taxpayers annually to get their taxes done for free and free financial education to almost 3,000 people.
Low-income families struggle to meet their needs due to the high cost of living in Montgomery County. While the official Federal poverty guideline for a family of four is $23,050,[1] this family would need to have an income of $82,877 to be self-sufficient in the county, according to a widely-used standard.[2] A regressive tax structure, high housing costs, and the longest commute in the nation[3] are some of the factors contributing to families struggling to meet their needs with low-wage jobs.
One of the most effective resources for low-to-moderate income families achieving economic success is the Earned Income Tax Credit (EITC).This refundable credit incentivizes work and helps working families get on the first rung of the economic ladder. The income support helps workers who hold the low-wage, entry-level jobs maintain economic stability in high-cost areas where their wages are insufficient to meet the cost of living.
Maryland taxpayers may be eligible for both the federal and state EITC, and Montgomery County residents are also eligible for the Working Families Income Supplement (WFIS), essentially a county-level EITC matching a percentage of the taxpayer’s state EITC. Maryland taxpayers claiming the EITC received an average of $2,180 in 2011 to supplement their income,[4] while 33,840 county residents received an average of $381.81 from the WFIS[5].
The county should be applauded for its actions to support the economic stability of low-to-moderate income families. Historically the WFIS matched 100% of the state EITC refund, though the county council passed a measure to decrease the match in 2010.[6] Returning the match to its historic level would mean an extra $124 per family receiving the WFIS,[7]which would help to offset the cost of the new gas tax, a regressive tax that disproportionately impacts these families. Maryland CASH strongly urges the council to support Expedited Bill 8-13, which assists working families to maintain a foothold in the world of work, meet the needs of their families, and begin to build a strong financial future.
Sincerely,
Robin McKinney
Director, Maryland CASH Campaign
443-692-9422
[1] Department of Health and Human Services (2012). 2012 Poverty Guidelines. Retrieved from http://aspe.hhs.gov/poverty/12fedreg.pdf
[2] Maryland Community-Action Partnership (2012). The Self-Sufficiency Standard for Maryland 2012. Retrieved from http://www.selfsufficiencystandard.org/docs/Maryland2012.pdf
[3] Halsey, A. (September 22, 2011). Census: More Maryland and Virginia drivers commute to another county than other people in the U.S. Retrieved from http://articles.washingtonpost.com/2011-09-22/local/35273666_1_commuter-connections-census-data-american-community-survey
[4] Internal Revenue Service (2013). EITC Statistics. Retrieved from http://www.eitc.irs.gov/central/eitcstats/
[5] Drummer, R. H. (2013). Introduction: Expedited Bill 8-13, Working Families Income Supplement – Amount. Retrieved from http://www6.montgomerycountymd.gov/content/council/pdf/bill/2013/Packets/20130319_5A.pdf
[6] Sherer, C. H. (2010). Recommendations from the Management and Fiscal Policy Committee regarding the
FYll Operating Budget for the Working Families Income Supplement NDA. Retrieved from http://www6.montgomerycountymd.gov/content/council/pdf/agenda/col/2010/100511/20100511_19.pdf
[7] Drummer, R. H. (2013).