New & Noteworthy
Hartford Foundation Submits Testimony in Support of Refundable Child Tax Credit Proposals
On Wednesday, February 25, the Hartford Foundation for Public Giving submitted written testimony to the legislature’s Finance, Revenue and Bonding Committee in support of Senate Bill 740, An Act Establishing a Refundable Child Tax Credit and House Bill 5986, An Act Establishing A Refundable Child Tax Credit Against The Personal Income Tax. The foundation offered its support for these two proposals which seek to provide families with children with direct financial assistance to meet basic needs, including the cost of quality childcare, and to support parents who need to work.
As a member of the Connecticut Urban Opportunity Collaborative (CUOC), a partnership among the Hartford Foundation, The Community Foundation for Greater New Haven, and Fairfield County’s Community Foundation the foundation has invested in UpTogether to launch a multi-regional Direct Cash Pilot Program to promote social and economic mobility while studying the impact of direct cash assistance in Connecticut. The pilot program is designed to support 120 leaders from New Haven, Hartford, and Bridgeport who are facing economic hardship and collaborating to build community power and improve their lives and neighborhoods. Over three years, participant households will receive monthly payments totaling $12,600 to help alleviate financial challenges and foster community improvements.
A growing body of evidence from hundreds of direct cash programs operating across the country demonstrates that direct cash can lead to increased food security, improved health, more stable employment and housing, and increased family incomes and savings. Recent studies have documented that funds help pay for basic needs, utilities, and rent, but can also be used for paying off debt or building emergency savings, investing in education or a business, and paying for school supplies. Recognizing and trusting in people’s strengths, abilities, and self-determination also lightens the administrative burden of operating public support programs, making the use of taxpayer dollars more effective and efficient. This child tax credit represents a modest effort on the part of the state to provide households with flexible support to meet their families’ needs.
As part of our strategic priorities to dismantle structural racism and advance equity in social and economic mobility in Greater Hartford's Black and Latine communities, the Hartford Foundation supports basic human needs in our region, applying an equity lens to the systems and programs that address access to food, stable housing, physical and mental health care, and the digital divide.
The Hartford Foundation and other philanthropic organizations have supported efforts to address residents’ basic human needs for many years. To advance efforts to ensure children and families throughout Connecticut have what they need to thrive, the state must lead efforts to address the interconnection across basic human needs programs and systems to increase access to healthy food, physical and mental health, and housing services to provide adequate support to the nonprofit organizations and state agencies delivering these services.
Through our grantmaking and broader work with nonprofits, we have seen increased needs among families with children to access adequate food, health, and other basic services. High grocery prices and the rising number of families with limited income struggling to make ends meet require the state to provide a safety net that ensures that families have access to food. We want to share what we are learning from the research supported by the foundation and work with nonprofit providers supporting the basic needs of the families they serve.
As reported in DataHaven’s 2023 Greater Hartford Community Wellbeing Index, with rising inflation, many Connecticut families have struggled with food and housing insecurity. In 2022, the food insecurity rate in Connecticut was 17 percent, with Latino households experiencing the highest rates of food insecurity at 34 percent and Black households at 25 percent, compared to 11 percent of White households.
For many years, the foundation has provided annual grants to address basic human needs (totaling approximately $7 million each year) to support both regional and local nonprofit agencies across Greater Hartford in providing direct services and addressing systemic challenges. Our grants tackle a range of related issues, including food security, housing security and other supports for wellness. This past year, the foundation’s investments included more than $688,000 in Emergency Assistance Grants to 71 nonprofit organizations throughout the region. More than half of these grants were focused on addressing access to food or food assistance. These grants prioritized nonprofits that serve neighborhoods and towns in the region with a higher percentage of residents living in poverty and seek to reduce barriers to equitable access to basic needs. Our investments have helped to address a portion of the enormous need, but philanthropy cannot adequately these challenges without state investment programs to support families.
For the past eleven years, the foundation has worked to support seven of Greater Hartford region’s Alliance Districts (Bloomfield, East Hartford, Hartford, Manchester, Vernon, Windsor, and Windsor Locks). These districts have schools where the majority of its students—in many cases the entire student body—are eligible for free and reduced school lunches. Many of the districts the foundation works with have asked us for assistance with supporting basic human needs for their students and their families, including access to food.
Each year, the foundation awards approximately $1 million to local nonprofit organizations that provide access to emergency shelter, warming centers, housing subsidies, case management, eviction prevention and other services to residents at risk of or experiencing homelessness. In 2021, the foundation began more fully supporting the mission of service providers of people who are homeless by offering multi-year core support. Core support grants can be used flexibly to broadly support work aligned with an organization’s mission and the foundation’s strategic goals. Core support and targeted program grant investments in homelessness prevention and housing security have been critical in responding to growing need to address housing insecurity in Greater Hartford. The foundation’s investments also include smaller annual emergency assistance grants made to proximate organizations providing urgent food, clothing, financial assistance (i.e., rent and utility expenses).
As critical is our support of work to address systemic barriers to quality, stable, affordable housing, including the Greater Hartford Coordinated Access Network and the policy agenda of CT CAN End Homelessness.
The foundation also invests in efforts designed to increase the stability, availability, and quality of affordable housing in the Greater Hartford region; align and leverage additional investment in Hartford neighborhoods; and increase the social strength and connectedness of Hartford neighborhoods. This work includes supporting efforts to increase the number of Hartford residents living in higher opportunity neighborhoods by working with nonprofit, government, and other community partners.
According to the 2023 Hartford Foundation Equity Profile produced by DataHaven, with increasing housing costs, 34 percent of Connecticut households (homeowners and renters) report being housing cost burdened or severely cost burdened. In Greater Hartford, Latino households experience the
highest rate of housing cost burden at 48 percent and Black households at 46 percent, compared to 27 percent of White households.
Connecticut households have also been experiencing significantly increased costs for utilities. The foundation is a long-time funder of Operation Fuel which partners with 58 agencies across Connecticut to provide emergency assistance for residents who fall through the gaps of government assistance programs and remains a primary source for low-to-moderate-income households that have exhausted all other options to keep their lights on, water running, and homes warm.
Connecticut's energy costs are among the highest in the nation. In May 2023, Operation Fuel published, Mapping Household Cost Burdens: A study of energy, transportation, water, and housing affordability in Connecticut, which was conducted by the Vermont Energy Investment Corporation. According to the study:
- Approximately 424,000 families struggle to afford their energy costs (that is one in four households in Connecticut).
- Statewide, average household spending on building energy (including electricity, natural gas, propane, and other fuels) is $3,800 annually.
- Electricity and natural gas prices increased 9 percent between 2016 and 2021 and an additional 12 percent in 2022.
- Fuel prices increased 14 percent between 2016 and 2021. Low-income families have a higher energy burden and pay more on their utility and oil bills than they can afford. Energy burden is the percentage of a household’s income spent on energy costs.
- Connecticut households earning less than 60 percent of statewide median income (SMI) have an energy burden of 13 percent.
- The poorest households, those with incomes of less than 30 percent of SMI, have an energy burden of 19 percent (19 percent of their income goes toward energy costs).
Another part of the foundation’s strategic work is to increase stable employment opportunities for Black and Latine adults and youth facing barriers to employment. In Greater Hartford, there are a number of good paying jobs available, but access to affordable, quality childcare remains a barrier for many working parents. The foundation’s efforts focus on preparation, hiring and retention of residents with significant barriers to employment. This work includes 2Gen programs that take a family-centered approach and considers childcare and supports for parents, as well as young adults and children in their households, allowing parents to focus on their education and job training and working.
Ensuring that all children, especially those most vulnerable, have access to high quality early childhood experiences is a critical step to ensuring their safety and well-being, and removing this barrier to employment.
Since 1987, the foundation has invested more than $40 million in early childhood development across the Greater Hartford area. The foundation has supported early childhood policy, funding, and program quality, recognizing their importance in ensuring optimal safety and learning outcomes for children and pathways to economic security for their families and caregivers. Part of our early work continues to include participating in the Connecticut Early Childhood Collaborative, funders supporting early childhood education.
The Hartford Foundation’s early work included convening local childcare providers to support licensing and organizational development. As part of its COVID response efforts, the foundation awarded financial support to childcare providers, including assistance in applying for federal Paycheck Protection Program funds. With the possible exception of rent and mortgage payments, the cost of childcare is one of the largest expenses facing Connecticut working families.
The foundation offers its support for Senate Bill 740 and House Bill 5986 which both seek to establish a permanent refundable child tax credit. We support the intent of the proposals to provide financial
support and look to experts to weigh in on the best mechanism for providing equitable assistance to families with children. We recognize that the cost of living in Connecticut is high, and our state is the only state with a personal income tax not adjusted for family size, making affording basic needs for families with limited income more challenging.
A Child Tax Credit would benefit 550,000 children and 75 percent of Connecticut families. These funds would allow households with flexible resources they can use to respond to their most pressing needs and also boost local businesses and support the state’s economy. Refundable tax credits are particularly valuable to families who do not earn enough to pay state income taxes but still contribute a significant share of their limited income on sales tax.
The Hartford Foundation is ready to partner with legislators, the administration, advocates, philanthropy, and other stakeholders to ensure that all residents have the resources they need to thrive. We invite policymakers and other stakeholders to meet with us to explore public-private partnerships and ways philanthropic dollars could complement existing resources to help address funding gaps and foster equitable strategies to support Connecticut residents with significant unmet needs.