Ohio Gov. Mike DeWine gives his 2024 State of the State address in the Ohio House chambers at the Ohio Statehouse on Wednesday afternoon. (Pool photo by Barbara J. Perenic, Columbus Dispatch.)
I will have to admit: I’m kind of stunned.
This week, Ohio Gov. Mike DeWine proposed a policy that would both reduce child poverty and save lives. His final biennial budget proposal includes a $1,000 child tax credit for low-income and middle-class families with young children, paid for by a tobacco tax increase that would nearly double the state’s cigarette tax.
This policy couples a proven poverty-fighting tool with a tax that discourages smoking, the leading preventable cause of death in Ohio. I am not exaggerating when I say this could be one of the most consequential anti-poverty and public health measures in recent memory all wrapped up in one policy change.
As a policy analyst who focuses on taxes, poverty, and public health, I think a lot about these two policies, and there are few policies I think could be more transformative on their respective fronts than child tax credits and tobacco taxes.
Child tax credits are incredibly effective tools to tackle poverty head-on. They’re so effective that during last fall’s presidential election both campaigns embraced the idea.
From an economic standpoint, child tax credits are effectively giving cash to families who are supporting children. In 2019, a consensus group of economists from across the political spectrum released a report commissioned by Congress on how to reduce child poverty. Child allowances like child tax credits were their top recommendation.
At the time it seemed like a “maybe someday” sort of policy, but with the COVID-19 pandemic, a policy window opened. Congress passed the American Rescue Plan, which nearly doubled the federal child tax credit for young children and increased the child tax credit for other children by 50%. This policy pushed poverty rates down to their lowest rates on record and nearly cut the U.S. child poverty rate in half.
Due to Joe Manchin’s unwillingness to extend the credit beyond 2021, however, the expansion expired in 2022 and poverty rates rebounded that year.
Since then, states have embraced child tax credits as tools to support families with children. A total of 16 states have their own child tax credits, including states like Arizona, Idaho, Oklahoma, and Utah.
From a public health perspective, tobacco is one of Ohio’s worst problems. Tobacco kills three times as many Ohioans per year as drug overdoses and Ohio is in the top five states in the country for tobacco use prevalence.
Tobacco use also has economic consequences, costing our state health care system billions of dollars a year and hampering statewide productivity by billions of additional dollars each year.
Tobacco taxation is well-established as the most effective and efficient way to reduce tobacco consumption, particularly among youth. So for those of us who care about fewer people dying prematurely in Ohio, we tend to get excited about any talk of tobacco taxes.
Ohio has a chance to take a bite out of poverty and finance it with a tax that will save lives. Now we have to wait to see if the General Assembly likes this idea as much as the governor, and poverty and public health researchers do.
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