Brookings study: Vegas’ poor deserve tax credits

By Timothy Pratt (contact)

Sunday, June 8, 2008 | 2 a.m.

A Brookings Institution analyst says the Las Vegas Valley has a greater cross section of poor people than most metropolitan areas, including working couples, large families and adults without children.

Alan Berube spoke to the Sun after releasing a report Thursday that proposes to expand Earned Income Tax Credits to those three groups, which currently don’t get the benefit, or get less than the Washington, D.C.-based policy group says they should.

Berube, one of the report’s authors, says if changes were made to reach those groups, about 86,000 people in Las Vegas could receive nearly $70 million in extra benefits yearly, an average of more than $800. That translates into the 10th highest rate of increase under the proposal, in the nation.

That jump highlights an aspect of the valley that may be overlooked: It is “one of the areas with the most diverse low-income populations,” Berube said.

“In some areas of the Midwest, you don’t see as many low-income couples. In coastal metropolitan areas, you don’t see as many low-income large families.”

In Las Vegas we have many of both, in addition to having many low-income single adults, he said.

The notion adds to the information the Sun uncovered recently about how the economy’s troubles have hit more people at the bottom of the economic ladder here than in other areas nationwide. A May 25 story revealed that four federally funded Nevada programs to help the poor had shown greater year-to-year increases than other states.

“Based on other numbers we’ve seen in the recent past, this (report’s conclusion about Las Vegas) is not surprising,” said John Ball, executive director of the Southern Nevada Workforce Investment Board. His agency gets federal money to train people for jobs.

Dan Goulet, president and chief executive of the United Way of Southern Nevada, said the report’s observations about the local economy are insightful. His organization gave money for the first time this past tax season to 19 free tax-preparation clinics valleywide that encouraged low-income people to seek Earned Income Tax Credits. The result: $1.2 million in credits came back to the community.

Goulet said that the area’s magnet, jobs, has long drawn a wide swath of people from all over the country. But many of those jobs pay so little that those people then join the ranks of the working poor, he said. In the past year many workers have taken cuts in pay, deepening those ranks, he added.

Ball said the diversity seen in the valley’s working poor is also due to the “skill threshold” being lower here than in other labor markets.

He said the idea that the Las Vegas area could benefit more than most other areas from expansion of the tax credit program also “seems to reinforce the notion that our labor market is suffering more than most in the nation.”

Berube’s study used U.S. Census Bureau figures from 2005. Because the economy has taken a nosedive since then, the range of working poor in Southern Nevada is likely to be even broader now.

The study’s author said the “incidence of poverty may be going up perhaps higher than joblessness (in Southern Nevada) and that tends to move more of the workforce into the range where they’re eligible for Earned Income Tax Credits.”

Regardless of whether the Brookings Institution proposal, or some variation, catches on in Congress, Ball said another inference can be drawn for Southern Nevadans: “We have increasing challenges in front of us.”