Revamped sales tax hike provides $25 checks to working poor

Up to 370,000 families would receive at least $25 from the state in 2010 and 2011 under the revamped sales tax hike referendum getting pushed by House Democrats.

That’s one of the biggest changes made in a striking amendment to House Bill 2377 which is the proposal to ask voters to increase the sales tax by three-tenths of a penny for three years starting this January.

[NOTE: to read the amendment, scroll to the bill number and click]

The revised bill replaces the Working Families Tax Exemption, a program that may take a couple of years to set up, with a Working Families Tax Rebate that can begin next year.

Under the legislation, eligible families would receive $25 or an amount equal to 5 percent of their federal earned income tax credit, which ever is larger. Starting in 2012, the amounts would rise to $50 or 10 percent of the federal credit, again which ever is larger.

This revision will allow more money gained from the sales tax increase to be spent on healthcare and human service programs slated for cuts in the next state budget.

For example, it boosts funding to the Basic Health Plan by $20 million to $187 million, enough to cover 40,000 enrollments in the state-subsidized medical care program.

Other effects of the striking amendment are:

-Increases the appropriation for the Mental Health Division by $4 million and allows it to be used for critical services at state hospitals.
-Increases the appropriation for the Department of Health by $7.1 million and allows the Department of Health to use that for tobacco prevention programs as well as local health jurisdictions.
-Appropriates $5.4 million for the Medical Assistance program for vision and hearing services.
-Allows the appropriation for the Aging and Disability Services Administration to be used for adult family homes and boarding homes