Bread New Mexico Blog: "The Best Anti-Poverty Program We've Had"

It was one of those beautiful Saturday mornings in Albuquerque. This was the type of early-Spring day when locals usually start yard work or go on bike rides or hikes or take the kids or grandkids to a soccer game. But how many Albuquerqueans spend the morning indoors learning about the Earned Income Tax Credit?

Believe it or not, 25 people gave up their Saturday morning to attend the 2010 Offering of Letters workshop at St. Andrew Presbyterian Church.

There were representatives from Roman Catholic, Lutheran, Episcopalian, Unitarian, United Methodist, Mennonite, United Church of Christ, and Presbyterian congregations. One person even drove about 2 1/2 hours from Gallup to attend the workshop!

They listened to a University of New Mexico economist and the communications director for the New Mexico Voices for Children speak to us about the issue.

Our speakers were very informative, and their presentations sparked much discussion. Rather than publish a full summary of their comments, I just want to share a couple of highlights.

Why the EITC is so popular in Congress

Melissa Binder (pictured at left with a conference participant), a labor economist at the University of New Mexico, enlightened us with background information about the Earned Income Tax Credit, and why it gets so much support from members of both parties.

Why does [the Earned Income Tax Credit] get so much bipartisan support? What this does, it makes minimum-wage jobs pay 40 percent more. So if a minimum wage job is $7.25/an hour...that makes the minimum wage actually about $10 hour, she said.

Dr. Binder pointed out that another reason why the EITC gets so much support, as opposed to direct assistance programs like TANF, is that it rewards people who work. But she also suggested that our country lags far behind other wealthy nations in providing for the overall well-being of their citizens.

If a minimum wage job is $7.25/an hour...the Earned Income Tax Credit makes the minimum wage actually about $10 hour.
-Melissa Binder, Associate Professor of Economics, UNM

How New Mexico came to have a state-level EITC

New Mexico is one of 23 states, plus the District of Columbia, that have enacted their own state-level Earned Income Tax Credit. The state EITC is applied on top of the federal credit.

The New Mexico Voices for Children played a significant role in getting our state to adopt an EITC. Here is an account from Sharon Kayne (pictured below), the organization's communications director.

In December 2005, our policy director Bill Jordan went up to Santa Fe and spent five minutes with Gov. Bill Richardson, and said, "You know, it would be really great it we had a state-level Earned Income Tax Credit that returns some state money to the people that qualify for the federal program..."

Gov. Richardson knows all about the federal Earned Income Tax Credit because he had been a member of the U.S. Congress. He knew that it had a lot bipartisan support, so he got that right away. And he said, that's one of the best anti-poverty programs we've ever had. And he asked, "Do other states do this on this same level?" And Bill Jordan said, "Yeah they do." And the governor turns to his assistants and says "Go talk to Bill and work this out. Get some legislation typed up for me." And that's what happened.

The [federal] Earned Income Tax Credit is one of the best anti-poverty programs we've had. -Gov. Bill Richardson

Initially it was worth 8% of the federal tax credit, but when oil and gas prices were up in 2007 or 2008, and we were awash in money, they raised it to 10%

The presentations from our two guest speakers sparked very informed questions and also lively discussion among participants, as evidenced by the photos posted below.