Direct cash payments to families would dramatically reduce child poverty in New Jersey and be the most effective way to do so, according to a new report from New Jersey Policy Perspective, the progressive think tank.
“When we are talking about poverty, we are talking about $32,000 for a family of four. One in eight children are living at that economic deprivation,” said Peter Chen, senior policy analyst at NJPP. “The solution is straightforward: We can give families money to meet the costs that come with raising children.”
In “Freedom from Want: An Economic Guarantee for New Jersey’s Kids,” released, Wednesday, NJPP outlines two approaches: expanding tax credits — doubling the earned income tax credit and child tax credit would cost an estimated $1.84 billion a year — or introducing a new $5,000 annual child allowance to be paid by the state to Medicaid-eligible families. It would start with the youngest children and eventually cover all kids up to age 17, costing $3.21 billion annually.
Chen noted the expanded child tax credit under the American Rescue Plan reduced child poverty nationwide by 40% before it expired.
Support and opposition
“We all want to eliminate poverty and elevate people’s standards of living,” said Sen. Declan O’Scanlon (R-Monmouth). “But the way to do it isn’t through a massive wealth transfer. These programs would add $5 billion to New Jersey’s $60 billion budget. We already have a $4 billion structural deficit. Stop — it’s impossible.”
Advocates point to successful guaranteed-income programs in Newark and Paterson. JennyMarie Idrobo, a participant in Newark’s pilot program, was one of 400 residents chosen from 4,700 applicants to receive $12,000 over two years, no strings attached. “It wasn’t like I went to Atlantic City and dropped it all on a spin,” Idrobo said. “All of my money was invested into myself, my future, my family and the things I could do with it.”
Similar experiments are underway in other states. In Flint, Michigan, the Rx Kids program provides new mothers with $1,500 during pregnancy and $500 a month until their child turns one. “Families use it to buy cribs, food, diapers, even transportation to prenatal appointments,” said Luke Shaefer, director of poverty solutions at the University of Michigan. “We’ve seen healthier babies, reductions in postpartum depression, fewer evictions and more stability for families.”
