This morning, Scioto Analysis released a new cost-benefit analysis estimating the impact of a state child tax credit for Ohio. We find that depending on the size of the credit, the state could generate between $60 million and $300 million in net benefits.
A child tax credit is a program that provides cash support for families with children. In addition to the federal child tax credit, 12 states have child tax credits of varying levels and availability, with credit amounts ranging from $100 to $1,000. A November 2022 Census Bureau analysis found that the federal child tax credit expansion in 2021 lifted 2.1 million children out of poverty.
“The expansion of the federal child tax credit in 2021 was the most significant antipoverty policy change in the United States since Lyndon B. Johnson’s Great Society,” said Scioto Analysis Principal Rob Moore.
According to the analysis, the majority of the benefits of a state child tax credit would be realized as increases in future earnings for children who qualify for the tax credit today. This means that in addition to lifting children out of poverty today, a child tax credit could help disrupt the cycle of intergenerational poverty.
Additionally, there are major social benefits in the form of reductions in future crime and healthcare expenses.
“Programs like this that reduce child poverty are not just band-aid fixes that help people get by today, they are investments in the future that have major positive impacts for society” said Michael Hartnett, policy analyst. “Everyone in our society, even those who never see a dollar of this tax credit stand to receive major benefits.”
This study is the most recent cost-benefit analysis conducted by Scioto Analysis. Previous cost-benefit analyses include research on water quality programs, municipal tree planting, volunteer programs, and school closures for COVID-19.