When I joined The Rockefeller Foundation’s Equity and Economic Opportunity team in June 2019, I left behind a decade of experience, network-building and proven outcomes in the workforce development/adult education/higher education space. While I had already worked at two foundations and was a seasoned grant-maker, leaving a content area I knew well to direct an area of work as purportedly complex as tax policy was both exciting and scary. But as I learned during my first tour of The Rockefeller Archives, the Foundation’s philosophy has been to hire folks who know enough to make impactful bets, but not so much that their commitment to their expertise clouds their judgment of others’ ideas.
While some aspects of tax policy are indeed complicated, there are a few no-brainer steps that we could take tomorrow to clearly improve the stability of working people, such as showing the success of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) at the state and federal level, which provides the rationale for expansion of both. In late 2019, the Foundation began to award grants in this space, focusing first on supporting work happening in the states by providing research on the effects of existing tax policy.
We built our state portfolio a bit like you would build a personal investment portfolio – joined the EITC Funders Network Pooled Fund and supported national organizations that regranted to state-based organizations (our mutual funds), made some low-risk investments in states inclined to support extended safety nets (our bonds), and backed grantees in higher-risk states where passing EITC was less likely to happen quickly but would have significant impact (our equities).
While we headed into 2020 optimistic, the Covid-19 pandemic soon triggered an economic onslaught that decimated state budgets. We assumed efforts to expand the EITC would stall as states tried to devise how to raise revenue and manage deficits. However, I was happily proven wrong. Instead, our grantees’ research and education helped state governments see the value of leveraging tax credits and other means of unconditional cash to ensure those most likely to be negatively impacted by the pandemic would not be forgotten.
For example, Economic Security for Illinois and its EITC coalition quickly pivoted to educate Illinoisans on the benefits of state-based stimulus checks. Ultimately, the governor allocated $20 million in direct cash assistance for up to 20,000 undocumented workers ineligible for federal pandemic stimulus. And in California and Colorado, grantees saw the EITC eligibility expanded to undocumented residents. In New Jersey, the state lowered the minimum eligible age from 25 to 21 years, resulting in 58,000 young childless workers becoming newly eligible for the EITC, a group that will have an incredibly hard time finding decent work in an economic recession.
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