ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, February 27, 1996 TAG: 9602270066
SECTION: EDITORIAL PAGE: A-4 EDITION: METRO
SAY ``poor children'' and people tend to think ''welfare.'' Whatever else they may think about welfare reform, most people also share a hope that if recipients of Aid to Families with Dependent Children can be helped and/or required to go to work, there will be many fewer children living in poverty.
Reality check: In Virginia, poor children living in households where at least one parent works outnumber poor children living in households receiving welfare by better than five to one.
All told, more than a half-million Virginia children live in working-poor families - and won't be helped one bit by welfare-reform initiatives put in place by the General Assembly last year.
At the state capitol, it's hard to find anyone who doesn't agree that these working, struggling families need help. Yet one proposal that would benefit them - a Virginia Earned Income Tax Credit - is shunted aside by the legislature year after year.
First recommended in the early '90s by an anti-poverty commission headed by Lt. Gov. Don Beyer, such a credit would provide tax relief for people who are working but living in poverty. It would marginally improve the incentives, still grossly inadequate, to go to work rather than take welfare.
It would cost the state an estimated $60 million a year - about the same amount that Motorola can expect in state-financed ``incentives'' for its new plant near Richmond. Legislators insist no money is available for the tax credit, even though it might help some 433,000 eligible families stay off the dole. Is anyone doing cost-benefit analysis?
The $60 million is also less than half of the $150 million it will cost the state to give tax credits to Virginians who are age 62 and older this year - an amount that will increase to nearly $190 million in 1998.
The elderly poor? Retirees struggling to get by on a meager pension? Not necessarily. Regardless of annual taxable income - $100,000, $500,000 - they get a tax break. An ``incentive'' for celebrating their 62nd birthday? No, a payoff, pure and simple, for having entered the ranks of a politically potent voter bloc.
Unfortunately, there is no AAWP - American Association of Working Persons.
The Virginia Coalition for the Homeless, one of several groups that have lobbied for the Virginia EITC, estimates that means-testing the tax credit for those 62 and older would ensure that low- and modest-income seniors still get the tax break. And eliminating eligibility for the affluent elderly would provide enough savings to give token tax relief to working-poor families.
The average proposed Virginia EITC benefit, 10 percent of the federal EITC benefit, would be $311. Not much - but enough, perhaps, for a family living on $15,000 a year to pay a month's rent or keep growing children in shoes that fit and warm overcoats.
Means-testing the tax-credit program for the elderly makes fiscal sense in any case. Age alone is no rationale for tax relief. And it is reprehensible to provide benefits to many of Virginia's wealthiest residents while denying help to many of its poorest.
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