TBF Policy Update: Support for Guaranteed Minimum Income

On January 13, 2022, Boston Indicators submitted testimony to the Legislature's Joint Committee on Revenue in support of S.1852: An Act providing a guaranteed minimum income to all Massachusetts families. Senior Research Manager Trevor Mattos submitted the testimony, citing research into how reforms to the Commonwealth's earned income tax credit could support establishment of a guaranteed minimum income.

Chairman Hinds, Chairman Cusack, and distinguished members of the Joint Committee on Revenue:

Thank you for the opportunity to submit testimony on behalf of Boston Indicators, in strong support of S.1852: An Act providing a guaranteed minimum income to all Massachusetts families.

Boston Indicators is the research center at the Boston Foundation, where we strive to advance a thriving Greater Boston for all residents across all neighborhoods. We do this by analyzing key indicators of well-being and by researching promising ideas for making our region more prosperous, equitable and just. In 2020, we released A Guaranteed Income for Massachusetts, a report in collaboration with the Massachusetts Budget and Policy Center and the Healthy Families EITC Coalition, which detailed a range of reforms to overhaul and expand access to the state EITC in an effort to establish a guaranteed minimum income.

Our state has long struggled with high levels of inequality, as well as a high cost of living, which has been exacerbated by a recent spike in inflation. The pandemic, of course, made things much worse. After the onset of the crisis, Massachusetts saw record high unemployment, widespread business closures and a great deal of financial instability in our communities. Among those affected, it has been low-income communities of color and immigrants who have been hit the hardest by the recession and by the virus.

To address mounting hardships, one thing the federal government did was to give people cash directly (through economic impact payments and expanded unemployment assistance). Cash supports are unique in that they offer flexibility and they empower people to decide for themselves how best to use their resources. We believe the state legislature should pass S.1852 to overhaul the state EITC and put cash into the hands of those in need.

This bill would do several things to improve the state’s EITC and ultimately provide assistance to an estimated 1.8 million individuals statewide. By establishing a minimum $2,400 credit even for families with very low or no taxable income, the bill ensures that substantial cash assistance flows to families struggling the most. And while the bill provides access to a more robust EITC in all communities, data show that Latinx and Black communities will especially benefit, as they tend to have lower incomes.

S.1852 would also expand eligibility for the state EITC to several new groups who make important contributions in our state. Among the newly eligible would be immigrants who pay taxes with an Individual Taxpayer Identification Number (ITIN), many of whom are frontline workers. The bill also recognizes the vital work of unpaid caregivers who care for children or elderly members of their household, making them eligible to receive the state EITC as well.

Research shows that the EITC is highly effective in reducing poverty and improving health, in addition to stimulating the local economy. The cost of these EITC expansions represents a small fraction of the state budget, but the benefits would be transformative. S.1852 is bold and timely, and it sets our state on a course towards greater economic security, inclusivity and racial equity. I respectfully urge you to favorably pass S.1852 out of Committee.