Minnesota Lawmakers Back Child Tax Credit Over Stimulus Checks

Minnesota Lawmakers Back Child Tax Credit Over Stimulus Checks

Democratic lawmakers support spending the state's budget surplus on a child text credit program instead of the governor's "Walz checks" proposal. 

Pandemic-era direct federal aid, including stimulus checks and the extended child tax credit, is largely a thing of the past, with no new stimulus checks under consideration and the child tax credit expired.

In the meantime, many states have stepped up with similar plans, albeit usually at a smaller scale than what the federal government was offering. In many cases, these plans are being paid for from state budget surpluses, which were often built up from federal pandemic aid to states.

One such state was Minnesota, where Democratic Gov. Tim Walz proposed “Walz checks” directly to Minnesota taxpayers. According to a version of the proposal from late March, Minnesotans would receive $500 per person, with 2.7 million households receiving the benefits.

"With a historic surplus, we have an opportunity to provide direct relief to Minnesotans and invest in the future of our state. Amid global economic uncertainty, direct payments are one of the best ways to make it easier for Minnesotans to pay their bills,” the governor said in a March press release. “Right now, we have the resources to send $1,000 to Minnesota families." Republicans have proposed tax cuts instead.

However, a new report states that legislators in Minnesota have come up with a different proposal. According to the Minnesota Reformer, House Democrats and Senate Republicans have both come up with proposals, both of which would “kill” the Walz checks plan. Instead, the Democrats have proposed a child tax credit.

“House Democratic lawmakers have proposed a refundable child tax credit of $325 for each child 16 or younger for single parents earning up to $70,000 and married parents up to $140,000,” the Minnesota Reformer’s report said, adding that the credits would apply to 2021.

“We’re going to do something that is targeted and significant to really make a difference,” House Taxes Committee chair Paul Marquart told Minnesota Reformer. Minnesota’s House has a Democratic majority, while its Senate is controlled by Republicans. Minnesota’s legislative sessions adjourn in May, so if any of the plans are to come to fruition, a compromise between the governor and the leaders of each chamber will need to be negotiated in the coming weeks.

“The governor appreciates the House plan to provide tax cuts to those who need it most, without giving money to the top 1 percent,” a spokesperson for the governor told the Minnesota Reformer. “He continues to believe direct payments to all working families are one of the best ways to help millions of Minnesotans fight inflation and afford the things they need.”

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist, and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters.