Progress Illinois

Did you know that January 29 is Earned Income Tax Credit Awareness Day? It's an occasion we're glad to celebrate. The EITC is the largest federal aid program targeted at the working poor, providing refundable credits to offset the tax burden households face. In an ideal world, Illinois lawmakers could honor EITC Day by pledging to raise the state's criminally low matching rate. The Land of Lincoln only matches 5 percent of the federal credit, meaning qualifying households -- a family of four making about $42,000 a year or less -- can at most claim $240 from the state. All but one other state have higher rates.  Read more on efforts to improve the Illinois EITC here and here.

One of the most successful -- and virtually unheralded -- provisions of the federal stimulus package is the increased federal match rate for Medicaid funding. Thanks to the recovery act, the feds now cover 61.88 percent of Illinois' Medicaid spending, up from the normal rate of 50.32 percent. That's allowed the state to provide insurance to a growing number of poor residents without blasting even larger holes in the state budget. But after 2010, the rate will return to the lower level. Sen. Jay Rockefeller (D-WV) is now proposing the Senate jobs bill include an extension of the enhanced rate. However, some of his colleagues argue that such a provision would not directly create jobs. That's short-sighted. Pushing the cost back onto the states, with enrollment ballooning, could limit contracting and force more layoffs in state government. If lawmakers were to limit eligibility instead, it could also have a nasty ripple effect, especially for health providers that rely on Medicaid reimbursements for their livelihood. Check out our post from last week for more on the issue.