Support for Working Families

Montana taxes working families living in poverty at a higher rate than almost any other state

By Minkie Medora and Fran Viereck

In the final days of our state session, Montana legislators passed a bill that will strengthen the economic security of thousands of Montana families who work hard for low pay. HB391 will create a state Earned Income Tax Credit (EITC) starting in 2019, helping low-income families keep more of the money they earn.

Montana taxes working families living in poverty at a higher rate than almost any other state. Many families working one or more jobs do not earn enough to live on, and struggle to keep up with the rising cost of living and the lingering effects of the economic recession. A state EITC will offset some of these costs and help working families better make ends meet.

Montana’s EITC will build on the federal EITC to further incentivize work, support families, and stimulate the local economy. The federal EITC is our nation’s most effective anti-poverty program, lifting more than 6 million people, including 3 million children, out of poverty every year. Our state credit is small, just 3 percent of the federal with a maximum benefit of $188, but this is money that families can put toward vehicle repairs, school supplies, or winter heating bills.

In a recent study of hunger in Montana, the Montana Food Bank Network surveyed more than 250 households receiving assistance from a food pantry. Nearly 45 percent of the households were employed but continue to struggle with hunger. One family included a mother named Kim and her two boys from Lake County. Despite working three part-time jobs, Kim regularly skips meals when there isn’t enough to go around and has had to make the difficult choice between paying for heat and paying for food. With an income just above the poverty line, Kim will be one of the many families benefitting from a Montana EITC, putting a little extra money back in her pocket.

Programs like EITC are essential steps forward in our work to end hunger in Montana. Thanks to Rep. Tom Jacobson of Great Falls for sponsoring the bill, Gov. Steve Bullock for his leadership, and the many legislators who helped move the effort forward.

Minkie Medora is chair of Montana Food Security Council; Fran Viereck is executive council member of AARP Montana.

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