HARTFORD, CT – The United Way of Connecticut released its latest “ALICE” Report for 2024 on Tuesday showing that 13% more state residents – or an additional 65,000 households – are struggling to make ends meet despite being employed and not earning enough to cover the basic cost of living.
ALICE is an acronym for Asset Limited, Income Constrained, Employed, and according to Eric Harrison, President and CEO of United Way of Central and Northeastern Connecticut, it’s a statewide problem.
“This data driven initiative really reveals the true cost of what it takes to live in this state and unveils the financial struggles that families incur in every single township across our state, from every background and in every type of lived experience,” Harrison said. “Connecticut families need to earn $128,000 per year to cover the cost of housing, childcare, food, transportation, and other essentials like healthcare and technology.”
The ALICE Report is used by the United Way and its partners to help advocate for legislation and to urge the General Assembly and governor to use the data in their policy decisions, one of which is a permanent child tax credit that would benefit families in the sum of up to $600 per child.
According to the National Conference of State Legislatures (NCSL), only the federal government and 15 states have a child tax credit of some kind, including Arizona, California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah, and Vermont.
The NCSL also reports that 14 other states have proposed legislation to start offering a child tax credit since 2019, including Connecticut, Hawaii, Illinois, Iowa, Kansas, Michigan, Missouri, Montana, Nebraska, New Hampshire, North Carolina, Oregon, Virginia, and West Virginia.
Connecticut previously established a one-time child tax rebate that expired in 2022.
Lisa Tepper Bates, CEO of United Way Connecticut, said the momentum for changing this is building and more than fifty organizations have pledged their support to see a change in the law around the subject of child tax credits. She said Connecticut is the only state in the nation that taxes a family’s income but does not adjust the tax rate based on the number of children in the family.
To further the point about the high cost of living in Connecticut, Dina Sears-Graves, CEO of United Way of Southeastern Connecticut, said that even with the state continuing to increase the minimum wage, which is scheduled to increase to $16.35 an hour in January, it still left many residents struggling financially.
“50 percent of the most common jobs in Connecticut pay $20 an hour,” Sears-Graves said.
She added: “Let me put that into perspective. A single parent in Connecticut needs to make $35 per hour to buy the basics. That’s no extras, no savings. And for a family with two adults and two children, they need a combined wage of $57 per hour.”
Sears-Graves pointed to a poster beside her with the 13% figure of those affected from 2019 to date, saying, “When you hear this data, we’re talking about people. Four out of every 10 households are living under the housing threshold. We have hit a record number of ALICE families in our state, and we must act now if we’re to turn this trajectory around.”
State Rep. Anthony Nolan, a Democrat from New London, was among the speakers at Tuesday’s event. New London is among those Connecticut communities considered to be “distressed.”
Nolan said he and his fellow legislators understand the problem, but it’s time for them to stop talking and start doing. He talked about the state’s budget surplus.
“It’s now $4 billion. The rainy day fund is at its fullest capacity. We’re not allowed to add more to it. He said that for the last six years the state has had an annual budget surplus.
He said he understands why the money is set aside by the state under its volatility cap, to help pay down unfunded pensions and other debts. But he said the money has accumulated to a much larger amount than anyone expected and it’s time to put it where it helps people most.
“If we can take $400 million from our surplus and we can raise the income tax for the higher income community, the 1% and just raise it 1%, we can gross about $1 billion. If we can raise it 2% we can gross about $2 billion,” Nolan said. “So, what we can do with that funding? I think that would be a mechanism for our child tax credit. I think that figure is about $400 million, approximately. That’s three years that we can help with our child tax credit.”
Nolan said the wealthy shouldn’t be expected to take on the full burden of what’s needed financially to help solve these problems, but he added: “I think we can pour the money in from the place that we are in right now.”
During the legislative session earlier this year, budget negotiations between the Lamont administration and the General Assembly’s Democratic majority were about $300 million apart on spending without the inclusion of the child tax credit, when House Democrats called a news conference to pitch the child tax credit.
Statewide projections from DataHaven and the United Way of Connecticut indicated at the time that 75% of households with children would benefit, translating to $306 million in refunds distributed to 268,000 eligible families.
The House Democrat’s news conference pitching the credit appeared to take Senate Democrats by surprise and turned a $300-million impasse into something closer to $600 million. But the credit did not survive those negotiations.
Tepper-Bates said Tuesday that “70% of Connecticut voters support a child tax credit because they understand that it is critically important to invest in our children, to invest in our families, and it’s also about our workforce.”
She said there are about 90,000 jobs available in Connecticut at the moment.
“Part of that is people who could be working can’t afford to enter the workforce because they can’t afford the cost of living, the cost of childcare,” Tepper-Bates said. “So, if we can lift up our communities, then we lift up our state.”A list of all the ALICE reports for Connecticut and other states can be found here.
The Senate Republican caucus released a statement following the release of the ALICE report Tuesday:
“Under one-party Democrat rule, Connecticut becomes tougher and tougher for families to make ends meet. From electricity bills to groceries to insurance, the financial burdens only grow and grow. Republicans continue to offer common sense solutions to lower those burdens. Just last year, we proposed a $2,000 per child tax deduction in addition to the largest across the board tax cut in state history.”