Costa says EITC funding depends on economic recovery
Monday, October 19, 2009 at 10:14AM Sen. Jay Costa, D-Allegheny, threw his support behind the EITC last night, during a Q&A at the Regional Jewish Prison Chaplains Conference being held in Squirrel Hill yesterday and today. Costa called it a "great program," and "a program I believe in," and credited it with saving St. Bartholomew School by increasing enrollment more than 25 percent, preventing a potential merger with another Catholic school in the area.
Costa said the 20 percent cuts to the EITC could have been much worse. At early budget votes in May, lawmakers planned to cut around $215 million from all the tax credit programs. Costa said that would have "wiped out" the EITC program, as well as other tax credit programs like the film production tax credit and the neighborhood assistance grant. Costa said the support for the tax credits during those initial budget votes in May split roughly along party lines, with Democrats for cutting tax credits and Republicans against it.
"As we went through that process, we were able to whittle away at the cut of those tax credits," Costa said.
Ultimately, lawmakers reduced tax credit funding by $39 million this year, and $75 million next year. That means a $15 million cut in EITC funding this year and an additional $10 million reduction next year. But Costa called that latter figure a "target amount" that depends on how much money is available in the future.
“We got our work cut out for us to keep it going," Costa said about the EITC. "Our hope is that we’re going to get it ramped back up again." That hope is apparently based on the economy and state revenues: “If the economy turns around, that is one area where we will not have the reductions as large," he said.
To my mind, part of the reason the EITC got cut is because its lumped together with other tax credit programs, seen as being economic stimulators that are not essential services during a recession. For comparison, many education programs either maintained funding levels from last year, or saw additional money. The budget increases funding for general education by $300 million, apparently the largest increase in state history.
What that says to me is that proponents of the EITC should try to get the program moved from the Department of Community and Economic Development to the Board of Education. I don't know if that is allowed under state law, or if that change would create any meaningful difference, or if trying to make that change would rile up opponents of the programs. It just seems like an idea worth discussing.