By Josie Hathway
October 7, 2002

Conference President Boston Mayor Thomas M. Menino led a lively Friday morning session at the Fall Leadership Meeting in Santa Barbara on the mayors' action agenda for working families with the support of the Annie E. Casey Foundation. The Annie E. Casey Foundation has partnered with the Conference to continue to build national attention and support on the challenges facing working families in America today. The Working Families session included a best practices exchange on the implementation of Earned Income Tax Credit (EITC) campaigns and the development of a policy paper on working families.

Best Practices Exchange: Earned Income Tax Credit (EITC) Campaigns

In tax year 2000, about 19 million working families received more than $31 billion in EITC benefits, yet there are still millions of dollars left unclaimed. The EITC, which was enacted by Congress in 1975, is a refundable income tax credit designed to make work pay for working families. Workers with two or more children can qualify for roughly $4,600 back from the government each year. With the assistance of the Annie E. Casey Foundation, The U.S. Conference of Mayors is calling for EITC campaigns in cities across the country to make sure that working families reclaim their hard earned dollars.

Chicago EITC Campaign

Chicago Mayor Richard M. Daley has inspired mayors across the country with his successful EITC campaigns. Chicago has been conducting a vigorous outreach program on EITC since January of 2000. "We-re doing this because the EITC puts money in the pockets of people who need it most," said Mayor Daley. "And the money moves quickly into the Chicago economy, because these people spend it for necessities, rather than salting it away in the bank."

The program is directed by the Chicago Tax Assistance Center, which helps taxpayers apply for all forms of tax relief, including the EITC. They have enlisted two non-profit organizations to provide free tax preparation assistance for low- and moderate-income families at 21 sites in Chicago and 15 in the surrounding suburbs. The Internal Revenue Service (IRS) provided $370,000 of computer equipment for the effort.

In early December of each year, the City contacts major businesses, other units of local government, social service agencies, community organizations and federal and state agencies to ask them to inform their employees and clients about the program. In early January, the City gives them promotional materials to distribute, recruits volunteers for the tax preparation work and conducts an outreach campaign. The City distributes public service announcements and has experts available for radio interviews. Businesses mention EITC on paycheck stubs. The electric, gas and telephone companies include EITC information with their utility bills, which brings the message to more than 3 million Chicago area households.

Daley said, "In 2002, the tax preparation program obtained $17.7 million of refunds for almost 13,000 clients — an increase of 25 percent over the previous year."

Chicago has a "Keeping Chicago Affordable" website which has various icons to allow residents to determine whether they are eligible for financial assistance or tax relief for child care, child health care, food stamps, family nutrition, energy and taxes. The website is .

Campaign

Indianapolis Mayor Bart Peterson was inspired by Mayor Daley to start his EITC campaign. He reported that in Indianapolis an estimated 15,000 — 20,000 families were eligible but not claiming the EITC credit, which equals approximately $22 million in unclaimed benefits. He started last tax season with a pilot EITC program in three targeted neighborhoods with three primary goals: 1) educate taxpayers about the EITC; 2) provide free tax preparation to working families who are eligible for the EITC, and 3) provide families with information about financial literacy/education opportunities. They met and exceeded their goals. Over 3,000 families claimed $500,000 in EITC. Also a savings of an estimated $138,000 in tax preparation costs was generated by using 79 volunteers who went through comprehensive training.

"This puts money into the pockets of the working poor. And when combined with financial education and financial literacy training, it becomes a real opportunity for asset building," said Mayor Peterson.

In 2003, Mayor Peterson plans to take the campaign citywide and will invest city dollars in a publicity campaign, increase the number of partners, and work with employers to advertise. Peterson reported that working families, who have claimed their hard earned dollars in EITC and made wise decisions about spending, have become eligible to become homeowners. Because the campaign goes far beyond just EITC, Mayor Peterson has named the campaign, "Indianapolis Asset Building Campaign." He estimates that the citywide campaign in 2003 will result in $6 to $8 million in EITC that otherwise would not be obtained.

Denver EITC Campaign

Denver Mayor Wellington E. Webb described Denver EITC campaign and said, "It's important to realize that we are talking about the nation's poor — the working poor." In order to enhance the assets of the working poor, Mayor Webb established the nation's first ever-local EITC program called the Denver Earned Income Tax Credit. The Denver EITC is available for residents of Denver who have received the federal EITC. It provides a 20 percent match of the federal EITC. Mayor Webb funded the Denver EITC by setting aside $5 million in under-utilized Temporary Assistance for Needy Families (TANF) funds.

In the first three months of the Denver EITC initiative, more than 4,600 families benefited from the credit, with an average check of $430. The Denver EITC campaign has increased the number of claimants for the federal EITC because they have combined the application process. This decreases overhead costs so that 99 cents of every dollar allocated to the Denver EITC program goes directly to working poor people. Mayor Webb will renew the Denver EITC campaign in 2003. He said, "We need to keep people employed, giving them assets to keep their jobs."

Boston EITC Campaign

Mayor Menino kicked off a very aggressive EITC campaign in Boston last October 2001 with over 50 community and business leaders who formed the coalition know as the Boston EITC Action Committee. The prior year more than $9 million in EITC refunds went unclaimed in Boston. His 2001 EITC campaign increased claims by 18 percent.

The coalition has recruited more than 200 volunteers who have been trained by the IRS and are ready to assist Bostonians in a variety of languages including Chinese, Haitian Creole, Spanish and Vietnamese. Over 26 tax preparation sites have been set up in Boston neighborhoods. The number of volunteers and tax preparation sites far exceeded the coalition's goals, which also include helping families and communities use the EITC to promote asset-building and financial literacy.

"Today, everyone is talking about different ways to stimulate our economy — especially tax cuts. But we have to make sure that those dollars go to the people who need them the most," said Mayor Menino. Mayor Menino urged mayors, "It's important to implement these campaigns early. Start your EITC campaigns next month."

EITC Resources

Representatives from the Internal Revenue Service (IRS) are ready to assist mayors with EITC campaigns. For more information and resources to start an EITC campaign in your city, contact Joan Crigger of the Conference staff at (202) 861-6726.

Working Families Policy Paper

Mayor Menino led the mayors in a discussion of the Conference's working policy paper that will become an "Action Plan for Working Families". The report summarizes the serious challenges facing working families and summarizes Conference of Mayors policy positions, which call for national responses to these challenges. The report includes information on income support, workforce education and training, childcare, access to health care, community economic development/job creation and transportation to jobs.

Mayor O-Neill said, "For many years, The U.S. Conference of Mayors has called for Congress and the Administration to invest in skills training for workers. Last year, I led the mayors in hosting a series of skills summits that brought together the private sector, educators, unions and workforce professionals to address the growing skills gap. The findings are loud and clear — there must be a solution to this "silent crisis" in order to maintain our nation's economic security. The recession has intensified the need to invest in workers." Mayor O-Neill outlined the employment picture across the country including the record numbers of layoffs, long-term unemployment — more severe than in the past four recessions, high unemployment rates in urban areas — exceeding the national unemployment rate of 5.7 percent, and the staggering employment rates for youth including the lowest summer employmeMayor O-Neill also discussed the tremendous change in demographics in California with a growing immigrant population. "This is not about a shortage of laborers. We have laborers. This is not about jobs. We have jobs. This is about laborers who need skills," said Mayor O-Neill.

Mayor O-Neill also discussed the tremendous change in demographics in California with a growing immigrant population. "This is not about a shortage of laborers. We have laborers. This is not about jobs. We have jobs. This is about laborers who need skills," said Mayor O-Neill.

Mayors discussed the difficulty of retaining local businesses due to the lack of skilled workers and expressed concern that the Administration cut job training funding in the FY 03 proposed Budget and overnight, top appropriators cut $400 million in job training funds for laid-off workers from the FY 02 Supplemental Appropriations agreement.

Minneapolis Mayor R.T. Rybak discussed the immigration issue, which is just as real in the Midwest as in California and the East Coast. "Finite job training funding dollars are being spread thin with new immigrants. We need to look at the new populations and how they impact job training funding needs," said Mayor Rybak.

Fremont Mayor Gus Morrison talked about his visit to China where he witnessed first hand the competition for American jobs. "Workers in China are trained for entry level jobs that pay 89 cents per hour. We need to train people for better than entry level jobs," said Mayor Morrison.

Trenton Mayor Douglas Palmer pointed out that many potential workers cannot read and write and need substance abuse treatment. The need to address the growing numbers of unskilled and uneducated young adults and to invest in occupational and soft skills development to train them for jobs beyond entry level where they can support their families was discussed.

Santa Clara Mayor Judy Nadler called for best practices, which is a part of the Casey Grant, to share creative ways to address the skills gap. Mayor Nadler mentioned her partnership between the Community College and Intel where workers who complete training are placed directly in a job with Intel. Miami Mayor Manuel A. Diaz talked about the real need to identify skills needed by local industries and to design training programs to meet those needs.

New Orleans Mayor C. Ray Nagin talked about need for direct funding for job training and other funding for working families to flow to local areas and not get held up at state level.

Arlington Heights (IL) Mayor Arlene J. Mulder emphasized the need to include before and after school programs in the working families policy discussion. Mayor Mulder also called for a look at private sector partnerships. Palatine Mayor Rita L. Mullins discussed how our future workers, who are the products of our nation's schools, are not prepared adequately for the workforce.

Richmond, (CA) Mayor Irma Anderson, Chair of the Mayors Standing Committee on Children, Health and Human Services, talked about TANF reauthorization and how five years ago when TANF was passed, President Clinton acknowledged to the mayors that not all of the pieces were in place and that we would need to revisit provisions of the law. Now, six years later we are revisiting with reauthorization and where are we? Mayor Anderson said that we are still in dire need of transportation, childcare, health care, substance abuse treatment, income supports and skills training for working families and families moving off of welfare.

At the conclusion of the discussion, mayors directed Conference of Mayors staff to send out letters to all mayors with information about the EITC and asking for Best Practices on local EITC programs, asset building programs, job training and other partnership programs, and other things that mayors are doing for working families.