HELENA (LEE) -- The federal earned-income-tax credit has been one of the best anti-poverty programs Congress has ever passed, and it's time for the Montana Legislature to enact its own tax credit to help the working poor, a Helena legislator said Wednesday.

"This bill rewards people who work," Sen. Christine Kaufmann, D-Helena, told the Senate Taxation Committee. The committee took no immediate action on the bill.

Her Senate Bill 400 would provide a 15 percent earned-income-tax credit to eligible Montanans. That would amount, on average, to a credit of about $250 for each of the nearly 75,000 qualifying Montana households. The program would cost about $18 million a year.

A tax credit is a dollar-for-dollar reduction of a person's income tax liability. Even if the taxpayer owes no taxes, a person could still receive the tax credit in the form of a refund check.

Twenty states already have their own earned-income tax credits, Kaufmann said, and Montana needs one.

"Quite simply, we have an economy that doesn't work well for everyone," she said.

Although $250 per household each year may not seem like much to legislators, Kaufmann said it could go a long way to help the working poor, who would spend the money in their towns.

Olivia Riutto of Working for Equality and Economic Liberation, an anti-poverty group, said $250 could help a working family buy snow tires or four months of diapers or start a savings account.

"The American dream isn't knocking at their door, yet they're working hard and raising their kids," she said.

Judy Smith, director of Homeward, a program in Missoula and Billings to build affordable housing, said while Montanans' median income is stagnant, housing costs have risen rapidly and are unaffordable in many parts of the state. The tax credit would help, she said.

"It also lets you pay a back rent bill so you don't have to go to a predatory lender," she said.

Yellowstone County Commissioner Bill Kennedy agreed, saying: "This doesn't sound like a lot of money, but it's a way to help working families. These are working families that aren't asking for a handout. This is a hand up to help them."

Endorsing the bill on behalf of Montana's two Catholic bishops who serve 140,000 Catholics in the state, Moe Wosepka said the church "tends to put the need of the poor and the vulnerable first."

Tara Veazey, an attorney for Montana Legal Services, called Montana one of the worst states when it comes to taxing poor people. Passing SB400 would help.

No one opposed SB400, and the Schweitzer administration was neutral.

"I'm not sure the governor's budget does a very good job in helping these folks at all," Kaufmann said.

As for the federal earned-income-tax credit, Kaufmann said it has brought $118 million annually to Montana's working poor families in recent years. It was proposed by President Nixon and every president since has supported and increased it, she said.