Despite New Jersey's status as one of the wealthiest states in the nation, 1 in 8 children in the state continue to live in poverty. A new report from New Jersey Policy Perspective (NJPP) suggests that direct cash payments to families could significantly reduce child poverty rates.
The NJPP report presents two main strategies for addressing this issue. The first approach would expand existing tax credits and benefit programs at a cost of $1.84 billion. This includes doubling the benefit amounts for New Jersey’s Child Tax Credit, Earned Income Tax Credit, Work First New Jersey, and adding monthly SNAP supplements. The second proposal would introduce a new program called the New Jersey Family Guarantee, which would provide $5,000 annually to families with children eligible for Medicaid. The estimated cost for this initiative is $3.21 billion, and it would begin by covering children ages 0-3 before expanding up to age 17.
For context, New Jersey currently spends $4.88 billion each year on property tax relief.
Evidence cited in the report indicates that direct cash assistance is effective in reducing poverty levels. For example, when the federal Child Tax Credit was expanded, child poverty was cut nearly in half nationwide. Additionally, guaranteed income pilot programs conducted in Newark and Paterson demonstrated that families primarily used additional funds for essentials such as rent, groceries, and medical expenses.
“New Jersey thrives when all residents have dignity, opportunity, and economic security,” said Nicole Rodriguez, President at NJPP. “These proposals show that with political will, we can end child poverty in one of America’s wealthiest states.”
Both proposals outlined by NJPP aim to address racial disparities as well; Black and Hispanic/Latinx families experience child poverty rates more than twice those of white families within the state.
According to research referenced by NJPP, every dollar invested in child allowances yields ten dollars in long-term economic benefits due to improvements in health outcomes, educational attainment, and future earnings potential.
The full report is available at NJPP.org.
