Governor Kathy Hochul is taking bold steps to tackle the pressing issue of the high cost of living by unveiling key proposals from her State of the State message. Recently, Governor Kathy Hochul of New York introduced a significant expansion to the state’s child tax credit, potentially more than doubling the benefits that some families currently enjoy.
This initiative is part of a series of strategies aimed at alleviating the state’s affordability crisis. Under this plan, eligible families could receive a tax credit of up to $1,000 for each child under the age of 4. Additionally, for children aged 4 to 16, families would be eligible for a tax break of up to $500 per child.
In recent years, the state has been providing financial relief of up to $330 per child to support the poorest families in New York. Ms. Hochul is set to include this proposal in her upcoming State of the State address and will advocate for its inclusion in her executive budget.
Addressing Affordability Amid Rising Concerns
The issue of high cost of living has become a significant concern among voters, especially highlighted during the 2024 elections. Many Democrats, reflecting on the unexpected Republican victories, expressed that there was a need to focus more on addressing the challenges of affordability.
Both Ms. Hochul and Mayor Eric Adams of New York City have unveiled plans for tax reductions or refunds. They are urging the Legislature to adopt these measures this year:
- Mr. Adams’s Proposal: Aims to eliminate New York City income taxes for over 400,000 of the lowest-wage earners, providing much-needed relief.
- Ms. Hochul’s Plan: Announced in December, she proposes to allocate approximately $3 billion to distribute checks ranging from $300 to $500 to about 8.6 million New Yorkers, utilizing funds from sales tax revenue.
During a news conference on Monday, Ms. Hochul expressed her ongoing commitment to enhancing affordability for families. She emphasized that initiatives such as boosting the child tax credit are influenced by her personal experiences of raising children and understanding the financial challenges that families face.
Child Tax Credit Increase to Help Struggling Families
“I will continue doing this,” she affirmed. “I’ll do it independent of elections. It’s the right thing to do.” Her dedication to supporting families isn’t just a campaign promise; it’s a core value she intends to uphold regardless of political cycles.
Ms. Hochul highlighted the urgent need to listen to the struggles of families, stating, “People are hurting right now, and we cannot be tone-deaf as a party, as a nation, or as a state to those cries for help. This is how to respond to them.”
Investment in Child Care and Tax Credits
The state has invested billions in recent years to improve child care and expand eligibility for family subsidies. Tax credits, such as the one Ms. Hochul proposed, have been both popular and effective. Notably, during the early stages of the coronavirus pandemic, the expansion of the federal child tax credit significantly reduced adolescent poverty. Unfortunately, this expansion expired, and bipartisan efforts to renew it were unsuccessful.
Ms. Hochul’s proposal is set to impact over 2.75 million children across the state, extending eligibility to families with an income of up to $200,000 annually. According to a recent news release from Ms. Hochul’s team, the average tax credit for these families is poised to double, reaching nearly $950 under this new plan.
Legislative leaders, who have previously introduced similar initiatives during budget discussions, seemed open and supportive of the proposal.
“We are very glad the governor is supporting these important tax credits, which we have long championed in the Assembly majority,” expressed Mike Whyland, a spokesperson for Assembly Speaker Carl E. Heastie.
In a recent statement, State Senator Andrea Stewart-Cousins, the majority leader, expressed pride in being both a mother and grandmother while serving in her role, similar to Ms. Hochul. She emphasized that funding for child care remains a primary focus for this legislative session.
Addressing the Rising Costs of Child Care
“I understand from personal experience how expensive raising children has become in this great state,” she remarked. “While we are eager to delve deeper into this proposal, we are also acutely aware of the need to tackle the escalating costs of child care. It poses a significant burden that can overwhelm families, and it’s imperative that we take action to make affordable child care accessible to all New Yorkers.”
Interestingly, some Republicans in Albany are showing openness to this proposal. State Senator Jacob Ashby, a Republican from Rensselaer County, highlighted the necessity for the state to make “structural changes to our state economy” by broadening tax reductions. However, many of his colleagues have criticized Ms. Hochul, contending that her administration has not sufficiently addressed the reduction of costs for New York families.
“As someone who has actively sponsored bipartisan legislation aimed at providing new parents with specific relief and advocated for an increase in the child tax credit across the board, I am genuinely optimistic about this proposal,” expressed Mr. Ashby in a statement.
A Generous Proposal for Families
If enacted, Ms. Hochul’s proposal could become one of the most generous child tax credits across the nation, according to experts from the Center on Poverty and Social Policy at Columbia University.
In 2023, New York, along with 15 other states, offered some form of this credit, varying in the amounts provided to families and the income thresholds at which it phases out. These Columbia researchers estimate that once the proposal is fully implemented, it could potentially reduce child poverty by approximately 9 percent over the coming years.
“During the pandemic, when the federal child tax credit was expanded, we witnessed a remarkable decline in child poverty, reaching historic lows,” noted Richard Buery Jr., the chief executive of the Robin Hood Foundation, a nonprofit organization in New York City dedicated to combating poverty.
