State Budget Helps Low-Income Californians and Children by Expanding CalEITC and Denti-Cal
California’s United Ways applaud Governor Jerry Brown on signing a state budget that takes two major steps to helping the working poor in California.
First, the budget significantly expands the California Earned Income Tax Credit (CalEITC), a refundable state tax credit that increases the economic security of low-income working families. It increases the income eligibility for, working families with children up to $22,300. The budget also extends the CalEITC for the first time to the self-employed.
Previously, the credit was only available to families with annual earnings below $10,078 for a family with one child or $14,161 for a family with two or more children. Initial estimates from the Institute of Taxation and Economic Policy indicate that more than one million additional families could benefit under the expansion. The annual income eligibility threshold for adults without qualifying children also will increase from $6,717 to approximately $15,000.
“Expanding to include the self-employed is big and brings the California EITC into alignment with the federal and other state EITCs. It's time we started rewarding the self-employed with the same benefits the rest of the workforce gets,” said Pete Manzo, CEO of United Ways of California. "California is a driving force behind the growing ‘gig’ economy. If you’re an Uber or a Lyft driver or other independent contractor and your family makes less than $22,300 per year, getting a tax credit is like getting a bonus. It's going to make a huge difference for a lot of people."
The second major step to help working Californian’s is the budget’s inclusion of $140 million to raise the compensation rates for providers accepting Denti-Cal, California’s dental insurance program for low-income Californians. The rate increase will address a severe lack of dentists accepting Denti-Cal patients, especially in rural areas. A state audit found that more than half of children enrolled in Denti-Cal did not have a dental visit in the past year, and a 2016 Little Hoover Commission report identified low reimbursement rates as a key reason dentists do not accept Denti-Cal patients.
“Dentists, insurers and advocates have all known for years that California’s Denti-Cal rates are too low, and because of that, too few dentists want to accept Denti-Cal patients,” said Manzo. “Dental issues are the number one reason kids miss school. This rate bump will be a step towards better health, better school performance, and better job opportunities for the children who are California’s future.”
United Ways of California is the state membership organization for the 32 local United Ways across the state and part of a national network of 1200 United Ways. We improve the health, education and financial stability for low-income children and families by enhancing and coordinating the advocacy and community impact work of California’s United Ways. Throughout California, United Ways advance opportunities for low- and moderate-income people to lead successful lives by focusing on our three priority areas: health, education and financial stability. United Way runs, partners with or funds 17 Volunteer Income Tax Assistance programs with over 600 sites across California and offers free online tax assistance through myfreetaxes.org.
1107 Fair Oaks Ave. #12
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Peter Manzo, President & CEO
Judy Darnell, Vice President of Public Policy