Read more: What no stimulus money means for schools, jobless
State’s jobless have been hoping for another round of federal checks
Last week, as federal stimulus talks crumbled and California’s unemployment system faltered again, Tracy Greer packed her car with recyclables and hoped the cash would pay for groceries.
Greer, 48, is an accountant by training who was furloughed from her job as a restaurant server in the high desert town of Phelan just as the pandemic hit. It took three months to get her first unemployment check, and with no back-to-work date in sight, Greer and many of the other 2.1 million jobless Californians have been hoping for a reprieve with a second round of federal stimulus money.
It’s a hope that has dwindled as President Donald Trump last week instructed his party “to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill.” Even after a reversal and call for more individual stimulus checks, small business loans and
an airline bailout, a deal has yet to materialize ahead of several looming political deadlines.
“Right now, they’re playing with fire,” Greer said. “They’re making it so people are going to be homeless. By the time restaurants reopen, people aren’t going to have cars to get there.”
California workers and small businesses are trying to stop the financial bleeding before rent moratoriums and an emergency Pandemic Unemployment Assistance program for contract workers are set to expire this winter. The state’s public schools, courts, parks and civil servants are already feeling the fallout after $11 billion in budget cuts and delayed payments took effect this summer, which lawmakers in Sacramento had hoped to reverse by Oct. 15 with funds from a new federal stimulus deal.
The mounting financial uncertainty comes as California grapples with a record year for wildfires and surging inequality, testing how much the nation’s most populous state and the world’s fifth-largest economy can do to save itself. After a historically unproductive year in Sacramento marked by labor groups crusading for new wealth taxes and moderates failing to deliver a promised state stimulus package, it will be up to voters to decide economic issues like a commercial property tax hike (Prop. 15), rent control (Prop. 21) and gig worker pay (Prop. 22).
“We like to talk about ourselves as a nation-state,” said Micah Weinberg, director of progressive advocacy group California Forward. “The implication of that is we need to start acting more like a nation and less like a state.”
But unlike a nation that can go into debt, California can’t print money and is required to balance its $202 billion annual budget. This constraint is why relief from Washington is crucial. Without federal stimulus money, high-tax California will be staring down a projected $8.7 billion deficit next year and have to either raise taxes or cut services that overwhelmingly benefit the poor. Already, there has been friction between Newsom and state finance officials over how to spend the $9.5 billion allocated to California by the federal CARES Act this spring.
Assemblyman Phil Ting said the state is still evaluating a new tax voucher system to generate revenue and reduce future cuts, with a report from the Department of Finance due in March. In the meantime, Weinberg said it’s also possible to make cheap-but-controversial regulatory changes to expedite economic recovery, like easing housing permitting requirements or immediately spending existing infrastructure funds.
“What an equitable recovery would require would be a very minimal investment from the perspective of the state budget,” Weinberg said. “You can’t do anything without a plan to do it, and right now we don’t have plans.”