When Dale and Carrie Fuller lost their son Landon, the hospital gave them a bereavement packet to help them get through their grief.
But there was no health insurance to cover the child, who was delivered without a heartbeat one week before his due date. And there was no coverage for an autopsy to see what went wrong during the pregnancy. The Fullers had bought diapers and clothes for their unborn child. They never expected to have to pay for a funeral and a headstone.
The Fullers are among a growing number of Minnesotans who have lost a child to stillbirth, the unintended death of a fetus after 20 weeks of pregnancy. Each year, there are about 400 stillbirths in Minnesota and 26,000 nationally — a number that’s gone up in recent years.
“If your child is stillborn, it’s this gray area; it’s not covered under anything,” Dale Fuller said, estimating they spent more than $5,000 when they lost Landon. “You still buried this child. You still bought things for this child. You are missing time away from work. All these things you had to go through as if you buried a living child you had to go through if you buried a stillborn child and there’s no financial coverage for that.”
To help cover some of those costs, the Fullers, along with a coalition of other parents who have lost children to stillbirth, got together in early 2016 to lobby the Minnesota Legislature for a one-time, $2,000 tax credit. It seemed like a good year to try. Democrats and Republicans both expressed interest in passing a tax bill, and legislators had a $900 million budget surplus to spend. What’s more, opposition to the tax credit was nonexistent: No one openly opposed the bill during the session, and it had sponsors from members of both political parties.
Even so, the proposal just barely made it to the finish line, an experience that shows just how difficult it is to get something — even something both parties agree on — accomplished in the current Minnesota Legislature. And now the tax credit’s advocates are having to do something they never expected to be part of the process: lobbying to make sure it doesn’t go away.
A bipartisan strategy
It was the night before Amanda Duffy’s scheduled Caesarean section when something seemed wrong. She hadn’t felt her baby move for hours, so she and her husband, Chris, went into the hospital for a checkup.
During an ultrasound, the doctor couldn’t detect a heartbeat, only a few blips of brain activity on the monitor. Amanda was rushed into an emergency C-section. When she woke up, the doctor told her she’d delivered a baby girl with red hair — like her father — but she had shifted in the birth canal and the umbilical cord wrapped twice around her neck, cutting off circulation to her brain. After 15 minutes, they couldn’t resuscitate her.
“It hit me, I have a dead daughter,” Amanda said. “They asked me if I wanted to see her. I was terrified. I didn’t know what a dead baby looks like, but I needed to see her. They wheeled her in and she just looked like a sleeping baby. She was still pink and I held her and I stopped crying. I was so proud.”
This spring, the Duffys went to St. Paul to describe the experience losing their daughter Reese, the name they gave her that day in the hospital, to the House Taxes Committee.
“Just hearing your story breaks my heart. I just gave birth to my first-born son about two months ago and I can’t even imagine,” Rep. Anna Wills, R-Rosemont, told the Duffys.
In committee, no one spoke against the credit and it was laid over for possible inclusion in a broader tax bill.
The measure’s supporters had secured a bipartisan set of bill sponsors for the credit: Rep. Roz Peterson, R-Lakeville, and Sen. Ann Rest, DFL-New Hope. But Republicans in the House and Democrats in the Senate were already fighting over issues they agreed on, like extending unemployment benefits to out-of-work miners on the Iron Range. No one was certain a tax bill — any tax bill — would pass.
Rest, a top Senate Democrat who chairs the chamber’s Tax Reform Committee, thought it might be safer to tuck the credit into the supplemental budget bill, which was less of a political football than the tax bill. The total cost of the proposal was $800,000 a year to cover the estimated 400 Minnesota families who experience a stillbirth, according to estimates from the Minnesota Department of Health, and the proposal would be retroactive to Jan. 1 to cover the entire 2016 tax year.
The strategy worked: The stillbirth tax credit was included in the budget bill, which was signed by DFL Gov. Mark Dayton shortly after the legislative session adjourned. The tax bill, on the other hand, managed to pass the Legislature but was vetoed by Dayton after legislators made a minor drafting error that would have cost the state $100 million over three years. Talks to bring legislators back for a special session to repass the tax bill have all ended without an agreement.
“We were a little afraid of that because of the political environment that nothing would get done,” Dale Fuller said. “They could see the writing on the wall that the tax bill wasn’t going to go anywhere.”
The public-relations campaign
With the governor’s signature, Minnesota became the fifth state to offer the stillborn tax credit to families. But for the Fullers and others who pushed to get the credit passed, the work wasn’t over.
Tax policies can come and go: After being one of the first states to pass the stillbirth tax credit in 2006, Michigan Gov. Rick Snyder eliminated it in 2011 as part of a massive tax overhaul. In Minnesota, legislators regularly rework the state’s tax code as part of major reforms.
The Fullers and Duffys knew Minnesota’s new stillbirth credit could potentially go away too, but maybe not if they could make a good case for it to stay. They launched their own grass-roots public-relations efforts to make sure families across the state knew the tax credit was an option.
“It’s been added to the tax software and the Department of Revenue has communicated out to tax professionals about this,” Dale Fuller said. “So, from a state perspective, they’ve communicated what they can, but we all know at the end of the day, people do their taxes in various ways. We want the families to be able to advocate for themselves.”
With the help of the Star Legacy Foundation, which advocates for stillbirth research and education, the families have called more than 40 hospitals across the state and created information cards about the credit and how to claim it. To get the tax credit, parents need to provide a Certificate of Birth Resulting in Stillbirth from the hospital where their baby was delivered. If families don’t get it immediately, the process can take weeks, which can dissuade some from filing for the credit, Duffy said.
It’s been a long process, and advocates hope the numbers will show that Minnesota families used the tax credit this year. That will make it harder for legislators to eliminate it if the discussion ever comes up again.
“I didn’t know quite what we were getting into,” Amanda Duffy said. “But whatever it meant and whatever we had to do, we were going to push forward.”
Why
Interesting article but it doesn’t really tell us why bills are hard to pass. This one passed because it was remarkably lacking in controversy, and was carried by a capable bi partisan managers who found a way to put it in the budget as opposed to the tax bill. But looking at bills that bills that pass doesn’t necessarily tell us a lot about why bills fail. We are told that budget bills are safer than tax bills, but not really told why. Neither are we told why, if this is a strategy that works, it isn’t used more often.
As an outside observer, I just am not surprised when uncontroversial bills such as the one discussed here are passed. That seems the natural order of things. What I don’t understand, and what I would like someone to explain to me is why uncontroversial bills with wide support, don’t pass.
Odd
What I find odd is that they have to shove it into another bill at all. We are paying a lot of people for a lot of hours each year. I think they can take the time to pass more individual laws.
Unfortunately both sides like to load up big bills with a lot of “really wanted by all” bills so that they can get unpopular partisan bills passed. And please remember that it was a typo and Dayton who stopped the tax bill.
I also somewhat agree with Mike’s comment below. I am not sure when the government became an insurance company. Now they are into reducing the negative cost consequences when hundreds of bad things happen, from floods to still birth now.
Omnibus bills
Minnesota’s reliance on an omnibus bill system to get laws passed isn’t something that’s examined much. It’s not the way you have to do it, and other states don’t do it that way, but that is the way things are done in Minnesota.
Hiram…
I was thinking the same thing. Here’s an article about a bipartisan law that passed with relative ease claiming to be an article about a how difficult it is to pass bipartisan laws easily.
What’s interesting is the fact that everyone seemed to know so far in advance that the actual tax bill was dead on arrival in one way or another, but that’s a different story.
Stillbirth Tax Credit???
This is nuts. No wonder that the tax code is so convoluted that no one can understand it. How about tax credits for pedestrians killed in crosswalks, motorcyclists hit by drunks, etc……
Why should stillbirths get special treatment vs a kid that dies from cancer?
Politicians need to quit pandering to every special interest group that has a sob story and start saying NO.
Good Point
Or if the child dies 1 day after birth and the Parents did not buy life insurance…
Who is going to pay for the casket, plot, service, etc?
I probably should not ask, or we may need to pass another credit.
This law does not result in people who have stillborn babies getting special treatment. It is not some unevenly applied “child loss bonus.” Practically speaking, if my baby died two minutes before he was born, he’s stillborn and, before this law, I got no tax break whatsoever. If my baby dies two minutes after he was born, he is a qualifying child for the earned income credit and the child tax credit and is also a dependent for that year as well. This bill levels the playing field for the people who happen to have their babies die on the wrong side of being delivered.
Intent
Amy Ann,
Please remember that I don’t think anyone is insensitive to the loss of the child. I think we are more frustrated with the never ending growth in complexity of the tax code.
Many people feel that the tax code should be much simpler and not used to reward, punish, compensate, etc people and businesses for problems that occur and/or events that happen. Currently the code is set up to do thousands of things unrelated to purest role of collecting money to fund or government and society.
This generates tons of bureaucratic, lawyer and accounting costs into our country that could be avoided, and spent elsewhere. Though I am certain that it is great business for Public Employees, Lawyers, Accountants, etc…
Complications
Ok, the article really wasn’t about the merits of the legislation, but it’s hard for me to resist commentating on the topic of tax complications.
To start with, this is a tax credit, which means a pretty huge tax savings. If anyone feels that the process required to receive any tax benefit is too complex or too onerous, they are free to forego it, along with the cash the government is willing to hand over. The government never forces you to pay less in taxes.
Everyone always complains the tax code is too complex, but it never gets any simpler. Why is that? Well I have an explanation. It is almost always the case that measures which complicate the tax code are measures that reduce your taxes. We complain about the complexity tax code, but we are still willing to spend time and energy hunting up receipts, which reduce our tax burden. In terms of politics, lowering taxes is easy, and raising taxes are hard. And since politicians have a tendency to do the easy thing as opposed to the hard thing, they are often willing to pass bills that reduce taxes even if the effect is to make tax forms more complicated.
Simplicity is something that a lot of people pay a lot of lip service to in politics. But it is something that never happens because when you get down to specifics, simplicity has no lobbyists and it has no constituency.
Certificates of Birth Resulting in Stillbirth
Thank you for the article about the new tax credit.
As the State Registrar, I wanted to clarify information in the article. Minnesota requires fetal deaths at 20 or more weeks gestation to be reported to the Minnesota Department of Health, Office of Vital Records. Hospitals report fetal deaths as part of their role in the vital records system. Parents who experience a stillbirth may request a Certificate of Birth Resulting in Stillbirth from the Minnesota Department of Health, Office of Vital Records. Only the state Office of Vital Records issues these certificates. Hospitals do not issue or give parents these certificates. Once a parent requests a Certificate of Birth Resulting in Stillbirth, staff at the Office of Vital Records process the request. Generally, these requests are fulfilled in less than 10 business days. Information about the Certificate of Birth Resulting in Stillbirth can be found online at: http://www.health.state.mn.us. Information about the new tax credit can be found online at http://www.revenue.state.mn.us.
Dogs that don’t bark
I think this article points to a larger issue in the way we understand news.
The fact is, it is much easier to cover things, to treat as news, things that happen as opposed to things that don’t. In this case, the article gives us a pretty fair understanding of why something happened. The bill was uncontroversial. It found support in both parties and was managed by capable and knowledgeable legislators with many years of experience in getting things done. And so, it was enacted into law.
But most bills aren’t like that, and that includes many things the people of our state really need. Strangely enough, that also includes many measures that have support from from members of both parties and if considered on their own would be passed by both houses of the legislature and would be signed by the governor. But these things don’t happen, and the challenge for any news organization is how to treat something that doesn’t happen as news.
I’d be far more interested
in hearing the rationale for this tax break as opposed to the thousands of other misfortunes that families face every day. The fact that the cost is relatively small is of no consequence to me.
To put this in perspective: a $2,000 tax credit for a family in the 8% marginal rate bracket is the equivalent of a $25,000 tax deduction.
True, but:
I don’t believe that is relevant here. The credit is a flat benefit regardless of bracket, more targeted to the sudden and typically non-reimbursed expense (assuming MN income taxes are due). The credit is more “fair” to mostly all stricken recipients. In any case, this benefit is one of compassion and (one would hope) limited in need.
But why this loss and not others?
There is no meaningful difference in my mind between the loss of a child 30 days after birth and 30 days before birth. Both are tragic and both are sudden and unreimbursed expenses.
I pointed out the equivalency between the tax credit and the tax deduction merely to illustrate the size of the credit when compared to other tax exemptions. To put it another way, it’s the equivalent of a more than $2,000 a month mortgage interest deduction.
I consider this a totally arbitrary law, advanced solely for the financial benefit a few and enacted by legislators afraid to offend members of the public. It is not sound public policy.
Complications
If Amy Ann is correct above. The Parents are losing some big benefits that many lower and medium income households receive by having children. These were passed 15+ years ago, apparently society’s attempt to offset the child rearing costs.
“If my baby dies two minutes after he was born, he is a qualifying child for the earned income credit and the child tax credit and is also a dependent for that year as well.” AmyAnn
Understood
This is a very targeted law, not necessarily arbitrary. I view it simply as a public gesture of compassion in a rare but devastating circumstance–simple burial benefit to show the greater “we” care. I did not know of this benefit until this morning, and find it a small and rare bit of legislation with hearts behind it. Is it wrong that we collectively help some specific citizens through a time of incredible devastation and isolation? I’m fine with this, and reasonably sure it has caused no trend. Someone please tell me if this measure has created a wave of compassion legislation in St. Paul.
in hearing the rationale for this tax break as opposed to the thousands of other misfortunes that families face every day.
Parents of stillborn children incur expenses just like parent who give birth to living children. It makes some sense to treat them in similar ways.
We do for the most part.
The only difference is that one family receives a tax deduction for an additional family member and the other does not. That $4,000 deduction is taken on the Federal 1040 and passes through to the Minnesota Form M1. We do not provide tax credits or deductions for funeral expenses of family members, lost work time, or any of the other expenses cited in this piece as justification for the credit.
If you want to treat them similarly, give them a one-time $4,000 tax deduction rather than a one-time $2,000 tax credit.
I should add that this is a fully refundable tax credit, meaning that if the taxpayer’s tax liability is less than $2,000 the balance is paid to the taxpayer.
The only difference is that one family receives a tax deduction for an additional family member and the other does not
And that’s the issue the legislature is addressing.
“We do not provide tax credits or deductions for funeral expenses of family members, lost work time, or any of the other expenses cited in this piece as justification for the credit.”
One way to prevent legislation from passing which is after all the subject of this article is to complain that while a given bill solves one problem but it doesn’t solve another. Since no bill solves all problems, it’s always an argument that can be made should people choose to make it. But that does make bills tougher to pass. Capable and experienced legislators such as the ones who got this bill passed understand the advantages of keeping bills clean and narrow.
Well, Hiram
you may be just simply too clear and concise here. Thanks for avoiding the weeds of amendments.
I post this as reply, in hopes your comment is determined to be the closer.
“No Bill Solves All Problems”
Exactly. It’s jsut a red herring to list the problems a bill does not try to solve..
If you don’t believe there is any meaningful difference between the loss of a child 30 days after birth and 30 days before birth, your suggestion that this is an arbitrary law is completely illogical. If there is no difference, why should those deaths before birth be treated differently under the tax law? Like I said above, “If my baby died two minutes before he was born, he’s stillborn and, before this law, I got no tax break whatsoever. If my baby dies two minutes after he was born, he is a qualifying child for the earned income credit and the child tax credit and is also a dependent for that year as well. This bill levels the playing field for the people who happen to have their babies die on the wrong side of being delivered.” Sure it is another complexity in the tax code like many have mentioned but this isn’t some kind of special interest “child loss bonus.” Having a child who died after taking his first breath would have been a lot more beneficial to me tax wise than having a baby born dead–even considering this new $2,000 credit.
It’s a subsidy for insurance companies
The only reason families get stuck with this is their health insurance doesn’t cover it even though it’s clearly a medical expense. I don’t have a problem with covering it but let’s ask why we didn’t pass a law requiring insurance coverage instead of creating a tax subsidy? Who are we really subsidizing?
In this case I’m OK with either method I just think it interesting that legislators almost never consider placing the “burden” on the private sector that profits from denying a necessary service or coverage.