Gotham Gazette

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New York’s Child Tax Credit Choice

Gov. Hochul in the classroom (photo: Kevin P. Coughlin/Governor's Office)

When does childhood begin? For at least a half-century, that question has been one of the most contentious in American politics, with participants in debates over abortion and reproductive rights variously arguing that conception, viability, birth, or any number of other milestones marks the point at which a fetus becomes a child entitled to the full protection of the law.

But pretty much everyone agrees that whenever childhood begins, it’s well before age 4.

Yet under New York law, children under the age of 4 are categorically ineligible for the state child tax credit, making New York the only state in the nation with a child credit that excludes infants and toddlers. Both the State Senate and Assembly endorsed proposals this month that would fix that flaw, but Governor Kathy Hochul’s budget for fiscal year 2024 maintains the exclusion of New York’s youngest children from the credit, which maxes out at $330 per year.

As the governor and Legislature race to finalize the fiscal year 2024 budget by the April 1 deadline, Hochul and state lawmakers face a choice: Will they seize the opportunity to extend the full child credit to New York’s youngest and poorest kids? Or will infants and toddlers lose out once again to well-heeled industry groups in the Albany budget scrum?

The exclusion of infants and toddlers dates back to 2006, when New York lawmakers first enacted a state credit for families with kids in the 4-to-16 age range. No one has offered a plausible rationale — other than cost saving — for the exclusion. Social science research indicates that early childhood is the period in which material deprivation is most harmful to a child’s long-term development — and thus the life stage at which low-income families are most in need of financial support.

New York’s child credit has another curious feature: low-income families with kids ages 4 through 16 receive a smaller amount than middle- and upper-middle-income families with children in that age range. As a result of this “phase-in” — which the Senate and Assembly proposals would leave in place — a family with two children must earn at least $16,333 to receive the full credit. The neediest families — those with no income — receive only $100 per eligible child.

The Center on Poverty and Social Policy at Columbia University estimates that extending the credit to children under four and eliminating the phase-in feature would cost $270 million to $320 million per year. That’s a drop in the bucket relative to Hochul’s $227 billion budget plan — well less than 0.2% of the total.

In the short-term, that investment would make a meaningful dent in New York’s childhood poverty problem, lifting roughly 40,000 kids — and their families — above the poverty threshold, as defined by the Census Bureau’s supplemental poverty measure.

And in the long-term, as the Columbia researchers showed, child tax credits for low-income families yield benefits to society that far exceed the costs. Kids whose families receive credits and similar cash transfers are more likely to finish college and less likely to end up in prison. Their lifetime earnings rise as well.

So why has the governor rebuffed proposals to expand the state credit thus far?

Hochul hasn’t said she opposes the extension of the credit to infants and toddlers, and she hasn’t defended the phase-in feature that prevents low-income families from claiming the full amount. Instead, she has decided that other tax and spending items take priority — such as her proposal to increase the state’s film and television tax credit by $380 million a year.

It’s no exaggeration, then, to say that the governor is putting film and TV producers before infants and toddlers. For the price tag of her film and TV tax incentive plan, she could extend the child credit to the youngest New Yorkers, eliminate the income phase-in, and still have tens of millions of dollars to spare.

Unfortunately, infants and toddlers can’t hire high-priced lobbyists to do their bidding in Albany. And low-income families lack the political power that industries like film and television wield.

Hopefully, the governor will decide that even if the political benefits are small, there is a compelling moral case for extending the child credit to low-income families with young children. If she decides instead that favored industries should take priority over low-income families, she might not face significant political blowback. But she will have to face her conscience.

Daniel Hemel is a law professor at New York University. On Twitter @danieljhemel.

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