For Immediate Release: April 13, 2022
Contact: Traci Gleason
Groups Encourage Lawmakers to Strengthen Economic Relief Proposal
Current Proposal Leaves Out Missourians Struggling to Make Ends Meet
A coalition of groups led by the Missouri Budget Project appreciate House leadership’s efforts to provide direct assistance to families as in House Bill 3021. However, the proposed one-time economy recovery payment that the House Budget Committee will hear today currently leaves out the very Missourians who most need it. Legislators have an opportunity to help an additional 400,000 Missouri households by making the credit refundable, providing a lifeline to Missourians struggling to make ends meet.
House Bill 3021 would provide a one-time economic recovery tax credit of up to $500 for individuals and up to $1,000 for married couples. However, at least 400,000 Missouri households whose pay is so low that they don’t owe income tax wouldn’t see any benefit – even though the total state and local taxes they pay make up a higher portion of their incomes than most taxpayers. What’s more, many of these Missourians are the very ones who were hit hardest by the pandemic and are still struggling to recover.
“Missourians whose pay is so low that they don’t owe income tax are still paying taxes,” said Amy Blouin, President & CEO of the Missouri Budget Project. “In fact, the lower your earnings, the more you pay in state and local taxes as a share of what you make.”
According to the most recent analysis, Missouri families in the bottom quintile of income pay 9.9% of their income in state and local taxes, compared to just 6.2% for the wealthiest 1% of families.
“Many older adults have low enough incomes that they don’t owe income taxes,” said Jay Hardenbrook, Advocacy Director for AARP Missouri. “But they still pay sales taxes, they still pay property taxes, and they still pay gas taxes, all of which take a big bite of your budget when you have limited income.”
All Missourians are seeing increased costs for food, gas, and other products they need. As the costs of those goods increase, so do the associated sales taxes, which are applied as a percentage of the total.
What’s more, the economic fallout from COVID hit workers with low wages and families with fixed incomes the hardest, and many families are still trying to get back on their feet, with more than 30% of Missourians still reporting difficulty meeting their normal household expenses.
“The very households struggling the most with both rising costs and the consequences of the pandemic are left out of this relief,” Blouin continued. “We encourage Missouri lawmakers to modify this credit so that the Missourians most struggling to afford gas and put food on the table aren’t left behind.”
The pandemic particularly upended the lives and budgets of families with children, who are more likely to report challenges like not having enough to eat.
“Providing families with a one-time benefit would combat against rising household costs and ensure they are able to make ends meet,” said Craig Stevenson, Director of Policy & Advocacy for Kids Win Missouri. “We look forward to working with House Budget leaders in working towards refundability of the credit or adding an enhancement for those families with children, structured similar to the federal stimulus payments.”
Missouri Budget Project is a nonprofit public policy analysis organization that analyzes state budget, tax, and economic issues.