The Plan
To get money to families that need it, Governor Blagojevich is proposing a one-time, refundable tax credit of $300 per child for all Illinoisans who qualify for the federal economic stimulus package.
To qualify you must be an Illinois taxpayer and:
- Have a dependent child younger than 18
- Earn at least $3,000 a year
- Earn up to $75,000 annually for an individual, $150,000 for joint filers, then credit phases out.
This plan will help 1.3 million families and 3 million kids.
The child tax credit could put $900 million into the Illinois economy this year.
Together with the federal credit, the Illinois child tax credit will also generate approximately $50 million in state sales tax.
Funding and Benefits
To support the Protecting Illinois Families plan, the State will use a one-time revenue source. One option is to securitize revenues into up-front payments. Eighteen states, including California, New Jersey, Ohio, West Virginia, and Virginia have completed securitizations.
One example of a securitization is tobacco settlement funds. In 1998, Illinois along with 45 other states signed a settlement with four major tobacco companies who agreed to pay hundreds of billions of dollars in damages for the ill effects of smoking. The amount Illinois receives is based, in part, on national tobacco consumption. Decreased consumption and other factors are expected to lower future revenues. Doing an up-front securitization transfers this risk for declining revenues to another party.
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