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WV Lawmakers to Consider Economic Stimulus 'In the Neighborhood'

January 26, 2009

Charleston, WV – "Neighborhood-level economic stimulus." That's what advocates of a state version of the federal Earned Income Tax Credit (EITC) propose as they outline ways in which updating state tax policy could help thousands of low- to middle-income families.

West Virginia Alliance for Sustainable Families Executive Director Calah Young says a refundable state EITC would reach at least 145,000 working families, and they'd likely spend the money locally and right away.

"Just like the federal Earned Income Tax Credit, it would actually be money back in the pockets of the people who need it the most, which is something that right now we don't have in West Virginia."

The federal EITC has often been called the "most effective policy in fighting poverty." Critics of a state refundable credit say it would put a pinch on state coffers in tough economic times.

A report from the West Virginia Center on Budget and Policy finds 97 percent of the working families that would qualify for a state EITC have children. Young points out that, with about 70 percent of those families living on incomes of under $20,000 a year, there's no doubt that kids will benefit the most.

"This money is going directly to support children who need food, and clothing, and shelter, and transportation, and child care, and all those critical things."

About half of the states have an EITC refundable credit.

Deborah Smith/Deb Courson, Public News Service - WV