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The Iowa Policy Project is pushing for three new reforms for working class families

BY ALYSSA GUZMAN | NOVEMBER 06, 2014 5:00 AM

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Reforms could be coming to the state through the Iowa Policy Project, which officials said could bring sustainability to working-class Iowa families.

Officials are looking to reform the Iowa Childcare Assistance Program and to expand the Earned Income Tax Credit and the Child and Dependent Care Credit.

“The reason the reforms are important is because the cost of living has continued to go up for the last several years,” said Lily French, a clinical assistant professor of social work at the University of Iowa and a senior policy consultant to the Iowa Policy Project.

The wages Iowans are earning have not been able to keep up with the increased cost of living, French said.

“They simply do not earn enough to cover their basic living expenses,” she said. “That’s why [the Childcare Assistance Program and] the Earned Income Tax Credit exist, to support and encourage work.”

Two years ago, the Earned Income Tax Credit was at 7 percent. It was increased to 14 percent last year and increased again to 15 percent this year. Now, the project hopes the credit will continue to expand.

“The Earned Income Tax Credit is widely regarded as one of the most successful antipoverty and asset-building tools in the nation,” Lauren Pescatore, the director of Tax Credits for Working Families said.

Just last year, the Earned Income Tax Credit lifted more than 6 million people out of poverty.

Three million of the 6 million people were children. Pescatore said continuing to increase the Earned Income Tax Credit would help prevent poverty.

Though the Earned Income Tax Credit is a prevalent issue looking to be reformed, French said, she believes the Childcare Assistance Program is the reform that is most urgently needed, because people in Iowa have high childcare costs and not a lot of help.

Mike Owen, the executive director of the Iowa Policy Project, said the problem is that there is a gap.

One in six Iowa families do not make family-supporting incomes, Owens said. These programs, called work supports, help with the issue.

“As you make more money, your eligibility either declines or is eliminated,” Owens said “When people have low-wage jobs, we have these various tools in place to get them closer to what they need to meet a bare-bones budget.”

Similarly, the Child and Dependent Care Credit also aims to help Iowa families balance work with childcare.

“[It helps] to cover the cost of raising children and caring for dependent adults,” Pescatore said.

“Expanding the Child and Dependent Care Credit is vital for helping Iowa families build a foundation for economic success.”

French said the goal of any sort of policy changes would be to better reward Iowans for their work efforts, and right now, that’s not the case because many people are working but are unable to support themselves due to the cost of living.

French said the reforms will, hopefully, change that for Iowans.

In order for the reforms to take effect, she said, she believes things will only change if Iowans talk to their elected officials on what they want to see happen.

“If people don’t go to their elected officials and say it’s critical for childcare help, it won’t happen,” French said. “There really does need to be a public support, and that hasn’t been present.”


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