Newsom proposes $600 pandemic relief for low-income Californians

Gov. Gavin Newsom announced Wednesday that he wants to give low-income Californians a $600 tax credit to augment the federal pandemic relief.

If approved by state lawmakers, the plan would give a $600 payment to California residents who qualified for the state earned income tax credit on their 2019 tax returns. Generally, California tax filers who earn less than $30,000 a year are eligible for that credit. Last year 3.9 million California returns applied for the credit.

Newsom said he will also propose extending the state’s eviction moratorium, which expires on Jan. 31.

Newsom unveiled the proposal for a “Golden State stimulus” during a video press conference Wednesday morning. One of the featured speakers during the briefing was Marin’s state senator, Mike McGuire.

Newsom thanked McGuire, D-Healdsburg, for his past efforts championing the earned income tax credit and his support for Assembly Bill 2088, the COVID-19 Tenant Relief Act of 2020.

McGuire said, “The bottom line is this: the Golden State stimulus is needed now more than ever. Millions of working families all across California are on the ropes. They are barely hanging on during this pandemic-induced recession.”

“We know that the earned income tax credit is one of the best poverty-busting tools that we have as a state,” McGuire said, “putting desperately needed dollars into the pockets of millions of vulnerable Californians.”

“This additional $600 in rapid cash relief will put food on the table for nearly 4 million vulnerable Californians,” he said. “It is going to help them pay their rent. These funds are also going to be a shot in the arm for our economic recovery and California’s economy.”

Based on 2018 data, the earned income tax credit kept 1,200 children living in Marin from falling into poverty.

Assemblyman Marc Levine, D-Greenbrae, wrote in an email, “A one-time check for low wage Californians will not solve our economic crisis. We need a Golden State Stimulus for California small businesses.”

The state earned income tax credit is only eligible for people with Social Security numbers. That excludes residents who are in the state illegally. Newsom’s proposal also includes “those filing with Individual Taxpayer Identification Numbers this year who meet the eligibility criteria,” which would allow such immigrants access to the stimulus checks.

Omar Carrera, executive director of Canal Alliance in San Rafael, said many undocumented workers use taxpayer identification numbers to pay taxes, because they believe it is the right thing to do, and because if they ever hope to become legal residents they will need to demonstrate that they have been paying taxes.

“The undocumented pay taxes, and the federal aid programs have not been recognizing that,” Carrera said. “I applaud the leadership at the state level for recognizing the contributions that the undocumented are making to our economy.”

Carrera said he was also heartened to hear that the governor will seek to extend eviction protections for renters. However, he said neither the tax credit nor eviction protection addresses the bigger question: Where will the money come from to pay months of overdue rent and put food on the table as the economy continues to languish?

“We welcome those measures,” he said, “but they’re not measures to move from crisis to recovery. We need to start thinking about recovery.”

Newsom estimated the stimulus program would cost the state $2.4 billion. In November, the state’s Legislative Analyst’s Office estimated the state budget would see a onetime $26 billion surplus in 2021 because tax revenues have come in higher than expected during the pandemic. That’s largely because high-income earners have done well in the stock market and have been able to continue working during the pandemic.

“This is perverse but California will be billions of dollars in the black by the end of this fiscal year,” McGuire said. “The bread and butter of California’s budget is focused on corporate and individual income tax. The wealthiest Californians are making more than they have in decades.”

Newsom’s goal is to have the checks go out in February or March, aiding families who have lost jobs or who earn very little money and are struggling amid the pandemic, particularly where a parent has the coronavirus and is unable to work.

McGuire said the Legislature will pass parts of the state budget containing the stimulus provisions no later than the end of this month.

“We can’t wait until June to adopt this portion of the budget,” he said.

The governor and lawmakers still must decide how long the eviction moratorium should remain in place. Newsom’s proposal lacks a specific date.

Late last month, Congress approved sending $600 stimulus checks to Americans to help with pandemic relief. President Trump had requested $2,000 checks in the final days of the negotiations, but Republican leaders led by Senate Majority Leader Mitch McConnell, R- Ky., blocked the larger amount.

President-elect Joe Biden, who takes office Jan. 20, said he supports the $2,000 checks. On Wednesday, Sen. Chuck Schumer, D- N.Y., who is expected to become the new majority leader this month following apparent Democratic victories Tuesday in the Georgia runoff election, said he will bring up a vote on the $2,000 checks.

The federal $600 stimulus checks were approved for people with an adjusted gross income of $75,000 or less in 2019. Under the federal stimulus program, U.S. citizens and green card holders are able to receive $600, even if they filed a joint tax return with an undocumented spouse, although undocumented residents are not by themselves eligible.