Walker proposes raising tax credit for working poor

 Also plans to spend $1 million telling kids to graduate h.s., get job, and wait to have kids until over 21 and married.

MADISON, Wis. (AP) — Gov. Scott Walker wants to increase a tax credit for Wisconsin’s working poor that he cut in 2011, which could help 130,000 families.

“Families are the foundation of our society,” Walker said Wednesday in announcing the proposal. He called it a “vital component to move children out of poverty” and to ensure that work is rewarded, not penalized.

Walker wants to liberalize benefits in the maximum Earned Income Tax Credit while also softening penalties under the program for newly married, dual income, couples. The proposals will be included in the budget he will release next week.

Walker proposes to increase the maximum benefit for low-income workers with one child from $135 to $371. His office estimated that would benefit about 130,000 small families and bring about 850 families over the poverty line. It would cost more than $20 million in the second year of the state budget and take effect in 2018, meaning the benefit would come for tax filers in 2019.

Democrats assailed Walker when he and the Republican-led Legislature voted to cut the EITC in 2011 by more than $20 million a year. At the time, the state faced a roughly $3 billion budget shortfall, but the latest positive revenue estimates show Wisconsin will have a surplus.

Walker has also said finding more workers to fill existing jobs is his priority this year. The state’s unemployment rate is 4 percent, which is the lowest it’s been in 15 years.

His proposal to make the EITC more generous was already winning bipartisan support. Freshman Democratic Rep. Jimmy Anderson, of Fitchburg, called it smart tax policy.

“It should be a place where both Democrats and Republicans come together,” Anderson said. “It rewards work.”

Jon Peacock, research director for Wisconsin Children and Families, which was critical of the governor when he cut the credit six years ago, applauded his move to bolster it.

“The EITC is a very important part of welfare reform because it increases parents’ participation in the workforce and has also been shown to boost children’s health and educational achievement,” Peacock said.

Walker’s proposal to mitigate penalties for newly married working couples in the state Earned Income Tax Credit program would benefit about 8,000 filers in the first year, his office said. Walker’s change would give married filers a three-year “honeymoon period” starting in 2018 to take the larger of the credit they would have received had they filed when they were single or as a married couple.

Walker also proposed requiring parents to comply with child support orders to receive food stamps through the state’s FoodShare program. That would reverse a change made in 2007 under Democratic Gov. Jim Doyle.

He also wants to require the Department of Public Instruction to incorporate “The Success Sequence” into school academic and career planning programming starting in the 2019 school year. He would also spend $1 million on a public messaging campaign on the sequence, which says to be successful a person should graduate high school, get a job and wait to have children under they are older than 21 and married.

“These reforms are based on the principle that both parents have a responsibility to support their children,” Walker said. “Our public programs should offer assistance to those in need, but they should also ensure that both parents are asked to fulfill their responsibilities.”

The latest proposals come after Walker already called for other welfare reforms, including requiring parents receiving food stamps to work or be receiving job training and forcing them to be tested for drugs.