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Related Topic: Human Services

State economies are dealing with significant worker shortages across most industries. Nationwide, the U.S. Bureau of Labor Statistics reported 10.3 million job openings in October 2022 with a low unemployment rate of 3.7% (6.1 million) during this same time. This trend has been largely attributed to low rates of labor participation as workers reevaluated pay, benefits, flexibility and career advancement during COVID. Notably, women’s participation in the workforce has reached historic lows (56.1% as of 2021) last seen in the late 1980s. In 2022, 29 state legislatures passed 75 bills addressing workforce shortages to strengthen state economies and increase economic security for individuals and families.

Across the U.S., states worked to engage historically underrepresented populations into the workforce, including incarcerated and formerly incarcerated individuals. Maryland (H 158) established the New Start Grant Program in its Department of Labor and the New Start Microloan Program in its Department of Commerce to assist formerly incarcerated persons by providing collateral-free loans to establish businesses. Mississippi (H 920), Colorado (S 50) and Connecticut (S 101) all created inmate incentive-to-work programs to increase employment upon reentry into society.

State legislatures also passed policies to increase collaboration and examine cross-system coordination. Kentucky (S 207), Louisiana (S 107), Maine (H 654), Pennsylvania (H 723) and West Virginia (S 582) established offices, commissions, committees and/or boards to study and coordinate workforce development. Additionally, Hawaii (H 1561), Iowa (H 2165), New Jersey (S 525) and South Carolina (H 3144) enacted laws addressing workforce readiness through technical colleges, associate degrees, pre-apprenticeship certification for high school students and apprenticeships.

Factors ranging from supply chain issues, inflation and war overseas have made it more difficult for families to afford food, housing, gas and other basic needs. In response, state policymakers prioritized tax relief. Legislatures in 24 states passed 71 bills related to tax credits and tax deductions.

To help cushion families’ budgets, many states enacted one-time tax credits, refunds and rebates. Georgia (H 1302) lawmakers provided taxpayers with a one-time tax refund of $250 for individuals, $375 for head of households and $500 for married joint filers. Hawaii (S 514) enacted a one-time income tax refund of $300 for individuals earning less than $100,000 and couples earning less than $200,000. The refund decreases to $100 for individuals earning more than $100,000 and couples earning more than $200,000. Idaho (H 436) passed a one-time income tax rebate for every individual state taxpayer who filed taxes in 2020 and 2021. The rebate is equal to 12% of the state income tax paid for 2021. Illinois (S 157) created a one-time individual tax rebate for individuals who earned under $200,000 and couples who earned under $400,000. The rebate totals $50 for single filers and $100 for couples, who also receive an additional $100 per dependent.

Expansions to the federal child tax credit and earned income tax credit expired in 2022. In response, many states established or enhanced their state child tax credit, earned income tax credit and other tax credits. New Mexico (H 163) established a refundable state child tax credit for tax years 2023 through 2031. The credit ranges from $25 to $175 depending on family income. Utah (S 59) enacted a nonrefundable state earned income tax credit equal to 15% of the amount of the taxpayer’s claimed federal earned income tax credit. Idaho (H 509) increased the state’s refundable grocery income tax credit to $120 for tax years 2023 and later. The tax credit is available to residents even if they are not required to file an income tax return.

With additional income through tax credits and other economic supports, some states sought to mitigate benefits cliffs by exempting these income increases from recipients’ eligibility calculation for various forms of public assistance. Vermont (H 464) increased the amount of income disregarded to calculate a TANF recipient’s financial assistance grant from $250 to $350 of subsidized or unsubsidized earnings per month, in addition to 25% of the family’s remaining unsubsidized earnings. Indiana (H 1361) ensured that qualified TANF recipients do not become ineligible for assistance due solely to an increase in assets, so long as they do not exceed $10,000.

The COVID-19 pandemic illustrated the precarious economic stability of many individuals and families. State legislatures responded by establishing studies, work groups, task forces and commissions to better understand the impact of state economic programs and the administration of safety net supports. Legislatures in 23 states enacted 52 bills to better understand and address their state’s economic landscape as it relates to stability and mobility.

These studies predominately focused on access to and supply of affordable housing as a means of economic stability and family well-being. Other areas of inquiry by legislatures included direct cash assistance and/or bonds, public benefits and other poverty-reduction tools. Louisiana (HCR 94) requested its Department of Children and Family Services and Department of Health conduct a joint study regarding the potential establishment of a “baby bonds” program to provide children born to low-to-moderate income parents with a savings account. At maturity, funds could be used for postsecondary education, a home purchase or business formation. The District of Columbia (DC B 740) enacted legislation to study and evaluate the direct cash assistance program, Strong Families, Strong Future DC. The pilot program provides monthly, direct cash assistance for one year to 132 new and expectant mothers in Wards 5, 7 and 8.

Maine (H 127) established an advisory committee to implement a strategic plan to end hunger in the state by 2030. New Mexico (SM 1) required its Workforce Solutions Department to convene a task force to develop recommendations for a paid family and medical leave program that includes a trust fund. Kentucky (H 7) established a task force to study the impact of the public assistance benefits cliff on labor force participation, employment, wages and benefit duration and usage. The task force is also charged with developing policy recommendations to help working families transition off public assistance into gainful employment and self-sufficiency. Kentucky (H 708) further directed its Cabinet for Health and Family Services to develop a benefits cliff calculator to better understand the potential impacts of changes to income or employment. Maryland (S 828/H 1043) lowered the number of hours its Department of Human Services may require an individual in the Family Investment Program (Maryland’s TANF program) to participate in certain work activities.

States also enacted legislation to establish new administrative programs to focus on economic mobility for individuals and families. Colorado (S 182) created an economic mobility program within the Department of Public Health and Environment to improve health and educational outcomes associated with reduced poverty and improved economic mobility. Maryland (H 1026) increased the membership of its Two-Generation Family Economic Security Commission by requiring one member have experience living in poverty and receiving public assistance in the state within the past three years.

From technological advances to inflation and market volatility, families are navigating an increasingly complex economic landscape. Financial literacy, which includes budgeting, maintaining credit and building wealth, are the skills people need to manage their finances effectively and increase their economic security and mobility. Legislatures in 20 states and the District of Columbia enacted 31 bills and resolutions addressing financial literacy.

Given the fundamental nature of financial literacy, some states modified academic standards to ensure students develop these skills before adulthood. California (A 181) established a block grant program for county offices of education, school districts, charter schools and state special schools to obtain standards-aligned professional development and acquire instructional materials in financial literacy. Florida (S 1054), Georgia (S 220) and Michigan (H 5190) now require high school students earn at least one half credit in financial literacy to qualify for graduation.

States also sought opportunities to increase financial literacy among particularly vulnerable populations. Colorado (H 1107) established the Inclusive Higher Education Grant Program to provide grants for state institutions of higher education to establish and expand programs for students with intellectual and developmental disabilities, including programs and supports to develop financial literacy. Colorado (H 1389) also created the Colorado Financial Literacy and Equity Exchange Program to help people receiving housing assistance obtain financial security by providing access to financial mentoring, life-skills training and asset management. Arizona (H 2860) established a community treatment program to help incarcerated women and their children develop financial literacy and other skills.

Current estimates peg the available housing supply deficit at 3.8 million units, which primarily impacts low- and middle-income families. Until recently, the supply and affordability of housing was largely in the hands of cities and counties. Increasingly, state legislatures are seeking policy solutions for the extreme lack of safe, stable and affordable in urban, suburban and rural communities. In addition, no state has an adequate supply of affordable rental housing for extremely low-income renters. Cultivating homeownership among renters can reduce displacement, strengthen credit, promote asset-building and improve economic mobility.  

In 2022, many legislatures established committees and task forces to study affordable housing. Maine (S 408) established a commission to review housing shortages for low-income and middle-income households and the impact of short-term rentals. Georgia (HR 1149) and Louisiana (HR 107) passed resolutions to study housing affordability and availability and understand policies that address housing stock shortages and the rising costs of rent and mortgages.

State legislatures also used tax credits, incentives, loan funds and other financial supports to increase homebuyers’ and renters’ ability to access and afford housing. California (S 649) established a statewide policy to extend the low-income housing tax credit program and tax-exempt bonds for qualified residential rental property used for affordable housing. It allows households at risk of displacement to remain in the community. To spur economic development, Kansas (H 2237) enacted tax credits for qualified housing projects, established a tax credit for older structures and increased the amount of the tax credit for historic structures in cities with a certain population. Vermont (S 226) reserved funding and adopted guidelines to provide grants to first-time homebuyers who are also first-generation homebuyers. Alabama (H 171) extended the ability to create a first-time and second-chance homebuyer savings account, allowing deposits for 10 years.

Additionally, legislatures connected workforce development and middle-income housing to support working families and grow the economy. Idaho (H 701) established the Idaho Workforce Housing Fund to provide financial assistance for workforce housing development. Colorado (S 232) created the Colorado Workforce Housing Trust Authority to acquire, construct, rehabilitate, own, operate and finance affordable rental housing projects for middle-income workforce housing.

To learn more about how legislatures are addressing the accessibility and affordability of housing, visit NCSL’s Housing and Homelessness Legislation Database.

Supplemental Nutrition Assistance Program

SNAP was essential for many families during the height of the pandemic. As the end of the public health emergency approaches, some state lawmakers tried to enhance their states’ SNAP programs to combat food insecurity. Fourteen states enacted at least 31 bills regarding SNAP.

Many states focused their efforts on outreach and awareness. New Hampshire (S 404) and New Jersey (A 2361) established SNAP outreach programs to target eligible and potentially eligible individuals. California (A 2810) enacted a requirement that each public college and university campus use Free Application for Federal Student Aid data to identify students who meet the income requirements, alert them of their eligibility and provide them with resources.

Equity & Economic Opportunity

To address economic mobility efforts and create economic equity between different abilities, races and genders, 16 states passed 28 bills.

Kentucky (S 104) declared competitive integrated employment shall be considered the first and primary option for persons with disabilities of working age who desire to become employed. California (A 316) required that each agency establish a plan to recruit, attract and retain employees identified as belonging to diverse and underrepresented groups. Virginia (H 814) directed its Department of Small Business and Supplier Diversity to annually review and provide feedback on state agencies' plans to enhance procurement from small, women-owned or minority-owned businesses.

Illinois (H 4645) created the Equity and Representation in Health Care Workforce Repayment Program, allowing healthcare and behavioral health providers to apply for loan repayment assistance. Further, the bill also created the Equity and Representation in Health Care Workforce Scholarship Program, which provides an individual or medical facility to apply to receive scholarship funds. These scholarship and loan repayment programs are intended to encourage health care providers to practice in areas of greatest need and to support efforts for health care providers to reflect the communities they serve. Utah (S 62) expanded eligibility for its Special Needs Opportunity Scholarship Program to include siblings of scholarship students and ensures that eligibility for a scholarship does not affect eligibility for individualized education programs.

Other state legislatures used credit, lending and banking policies to increase financial and economic equity in their states.

Credit, Lending & Banking

Lack of access to a bank account, affordable credit or other financial services often is a barrier to economic mobility. Access to banking can increase homeownership, help build wealth, accumulate savings and promote education. Fourteen states and the District of Columbia enacted 28 bills related to credit, lending and banking.

Substantial amounts of debt can prohibit families and individuals from achieving economic security and self-sufficiency. Many states focused their efforts on protecting students carrying education-related debt. Illinois (S 3032) prohibited institutions of higher education from refusing to provide an unofficial transcript to a current or former student because the student owes educational debt. The bill also prohibits colleges and universities from reporting a current or former student’s past due debt to any credit reporting agencies if the debt is sent to a debt collection agency. Kentucky (H 494) established licensing requirements for some student loan servicers and prohibited servicers from engaging in abusive acts or practices against student debtors. The bill also grants the state the authority to investigate student loan servicers.

Legislatures likely will continue to explore opportunities for economic stability and mobility in 2023. As pandemic aid programs end, discussions about direct cash assistance, tax credits, deductions and paid family and medical leave will likely appear in upcoming sessions. In parallel, policymakers may continue to discuss innovative strategies to shore up workforce shortages and connect workers to industries in need. Further, legislatures will grapple with the increasing severity of the nation’s housing crisis and a growing recognition of stable housing as a precursor to economic mobility. As interest rates continue to impact housing affordability, housing will be top of mind for policymakers.

Related Resources

Child Welfare Fellows Program

NCSL Child Welfare Fellows program is designed to support legislators and legislative staff who are experienced or emerging leaders in child welfare policy. Fellows will focus on important federal legislation, and find ways they can improve their state's child welfare program.
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