The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

The Illinois General Assembly got it right when it voted in December to double the state’s earned income tax credit (EITC). As the 2012 tax season approaches, low-income taxpayers in Illinois will receive, on average, $100 extra per year.

The EITC is a refundable income tax credit, which is available to low-income families on their federal income taxes. The American Recovery and Reinvestment Act (ARRA) provided a temporary increase in EITC and expanded the credit for workers with three or more qualifying children for the 2009 and 2010 tax years. Many states also provide a state EITC, usually based on a percentage of the federal credit. Previously, Illinois had one the smallest EITCs among all the states at only 5% of the federal EITC.

In 2010, 46 million Americans lived in poverty, the highest number in our country’s history. The EITC, the government’s largest anti-poverty program, has been credited with lifting millions of people out of poverty. In fact, when President Reagan signed the federal EITC into law, he called it “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.” In Illinois, for example, over 950,000 families benefited from the EITC in 2010, and experts estimate that number will climb to 1 million this year due to the economic downturn.  

We commend Illinois and Governor Quinn for taking such concrete steps by increasing the EITC. Unfortunately other states are not being so wise. Oklahoma, Indiana, Kansas, and others are proposing legislation to eliminate the EITC, while Michigan is attempting to reduce the program by 70%.

Oklahoma, for instance, has created a tax task force that has recommended that the state abolish personal income taxes all together, along with the EITC. If this tax package passes, 67% of Oklahoma’s citizens will pay higher taxes, and the 80% who rely on EITC refunds for a boost at tax time won’t receive them. Abolishing the personal income tax would further impoverish these families since sales and use taxes or other taxes might be increased to cover this lost tax revenue.

A similar story is unfolding in Indiana, where the EITC has proven to be a successful measure in stabilizing the incomes of nearly 500,000 low-income working Hoosiers who have felt the devastating affects of increased poverty and decreased wages as a result of the Great Recession. In Kansas, Governor Sam Brownback claims that fraud is the reason to eliminate the EITC; however advocates and legislators strongly disagree. Without this tax credit, 4,000 more Kansas children will live under the poverty line, and families will be denied the $90 million in credits. The result would be devastating for these families and children.

The EITC is beneficial not only because it puts extra money in the pockets of those in need, but also because it includes work incentives, grows the economy and can help lift families out of poverty. The country has not yet recovered from the recession’s economic fallout, and now is not the time to cut such vital support for the most vulnerable populations.

EITC Awareness Day is today, January 27, 2012. This is a national, grassroots effort spotlighting this potentially life-changing tax credit. Join with other charitable organizations, elected officials, state and local governments, employers, and other interested parties to educate your communities about the EITC, encourage those who are eligible to apply for it, and prevent it from being cut.  

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All too often, the news about low-income people and technology is bad. Low-income communities trail the rest of the country in their ability to access the internet. As a result, low-income Americans have less access to information, job opportunities, and public services than other citizens. Moreover, the bureaucracies that have an impact on low-income Americans’ lives—namely, the city, state, and federal agencies that distribute public benefits—usually lack the most current technological innovations, and efforts to modernize program administration are frequently delayed. In New York, for example, the New York City Housing Authority’s recent attempt to modernize by installing a new $36 million computer system has been plagued by delay and lost information. Additionally, some attempts to modernize public benefits administration have unintended adverse consequences for certain populations. As Cary LaCheen wrote in a recent Clearinghouse Review article, many public benefits agencies are using call centers to interact with clients in an effort to reduce face-to-face time and streamline operations. Unfortunately, this efficiency comes at a cost for deaf and hard-of-hearing individuals, who face multiple barriers when they try to communicate remotely with benefits agencies.

Against this dispiriting backdrop, Single Stop USA’s successful use of technology to benefit low-income Americans is especially welcome. Single Stop USA, which recently received a $1.1 million grant from the White House Social Innovation Fund, began in New York City as a project of the Robin Hood Foundation. Single Stop USA uses its revolutionary benefits enrollment network, or “BEN,” to help low-income people understand the public benefits maze and make sure that they are receiving all of the assistance for which they are eligible. 

BEN is proprietary software that Single Stop USA counselors access over the internet on their office computers. After Single Stop USA counselors are trained to use the BEN technology, they are placed in local organizations such as hospitals, churches, public defenders’ offices, and community colleges. When clients go to these organizations to meet with their attorneys, go to class, or get check-ups, they can also meet with Single Stop USA counselors. The counselors interview the clients, enter some basic information into BEN, and then provide the clients with information about city, state, and federal benefits that they are entitled to receive. Finally, the counselors either guide clients through the benefits application process or provide the clients with referrals to service providers who will help them, free of charge. BEN is constantly being revised and updated; just in time for tax season, BEN now has a “tax tab” that can provide clients with free tax preparation. This is particularly essential for low-income clients, many of whom think that they do not need to file income taxes when, in fact, there are often credits that they are eligible for, such as child care credits and the Earned Income Tax Credit.

Until recently, Single Stop USA’s work has focused on New York and California, but the White House Social Innovation Fund Grant will help it to expand nationwide. The BEN concept is well-suited for nationwide expansion, because the software can be custom-designed for every organization that Single Stop USA partners with and work with the particular array of state and local services available to clients in a given location. The White House grant is designed to help Single Stop USA with its efforts in community colleges, on which Single Stop USA plans to focus as it continues to grow. Community colleges are an ideal location for the Single Stop USA model, because the benefits that students receive from a Single Stop USA consultation can help them on multiple fronts. Obviously, students who meet with Single Stop USA counselors get immediate assistance with their taxes and benefits. Improved benefits and tax returns also help the students achieve their long-term goal: higher-paying jobs.

Single Stop USA is not the only organization using technology to benefit low-income Americans. Indeed, Pine Tree Legal Assistance in Portland, Maine, recently launched Stateside Legal. Stateside Legal acts much like Single Stop USA’s benefits calculator, but for U.S. military veterans. Any veteran can go to Stateside Legal, enter some basic personal information, and receive legal information about state and federal programs he or she might be eligible for, as well as general information regarding foreclosure, consumer debt problems, and health diagnoses common to veterans. Veterans can also use the site to find an attorney, if necessary. Stateside Legal has already received about 79,000 page views since its launch in November 2010. Stateside Legal received a $300,000 grant from the Legal Services Corporation’s Technology Initiative Grants Program, which “promotes full access and high-quality legal representation through the use of technology.” In fact, the Technology Initiative Grants Program funds many noteworthy uses of technology on behalf of America’s poor, including I-Can! E-File, a free electronic tax-filing system that helps low-income Americans file for the Earned Income Tax Credit. The I-Can! program has 560 partners in 49 states.

As more and more organizations follow the example set by Single Stop USA, and the Technology Initiative Grants Program’s grantees, hopefully we will begin reading more headlines about advocates successfully using technology to close the income gap and fewer headlines about the dearth of innovative technologies available to low-income Americans.

Editor's Note: The Editorial Team of Clearinghouse Review: Journal of Poverty Law and Policy would like to know more about how legal aid and other public interest law advocates use technology to stay informed. Please respond to our brief online survey by May 6, 2011.

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