Governor’s May Revise Includes Hope for Low Income Households by Increasing Investment in CalEITC and Addressing California’s Housing Crisis
Los Angeles, CA – Below is a statement from Peter Manzo, President and CEO, on behalf of United Ways of California (UWCA), regarding the Governor’s May Revise budget proposal:
United Ways of California is delighted to see the Governor’s May Revise include more workers in the state earned income tax credit and also the proposed commitments to lifting up low-income households and ensuring that more investments are made to address the growing housing and homelessness crisis.
The Governor’s proposal to strengthen the California Earned Income Tax Credit (CalEITC) is a big win for low-income working Californians. The May Revise proposes to extend the credit to working individuals previously excluded - 18 to 24 years old as well as over age 65. Taking effect for the 2018 tax year, this change will go a long way to lifting more families out of the cycle of poverty. The May Revise also increases the CalEITC’s income eligibility range so that more employees working up to full-time at the 2019 minimum wage of $12 per hour would qualify for the credit. That translates to a proposed income eligibility limit up to $24,960 for taxpayers with dependents and $16,800 for taxpayers with no dependents. This expansion is expected to benefit an additional 700,000 well-deserving households at a cost about $60 million in 2018-19. With 1 in 3 California families earning less than required to meet their basic needs, according to our Real Cost Measure report, this is a welcome boost for families.
It is important to note how many households are impacted by the CalEITC - about $350 million in credits are expected to go to 1.5 million households this year alone. We know from our work in communities across California how powerful this tax credit is, with it helping working families pay for school supplies, health care, and securing and keeping their housing. CalEITC is one of the most effective tools we have to combat poverty and lift up children and families.
Importantly, the May Revise continues the state’s commitment to maintain critical funding for children’s health coverage, including the Health4All Kids expansion to cover undocumented children. We must be vigilant, however, because the Children’s Health Insurance Program (CHIP) funding that was reauthorized by Congress for 10 years is again under threat by the federal administration. Two million California children and pregnant women rely on CHIP for their health coverage, so we urge California to protect CHIP coverage for all children and pregnant women, regardless of federal action.
We are heartened by the clear prioritization of mental health investments in the May Revision, especially as our local United Way’s grapple with the challenges of mental illness, homelessness, and substance use disorder in the communities. We applaud the one-time $50 million in funding for targeted funding for multi-disciplinary teams to support intensive outreach, treatment and related services for homeless persons with mental illness. This is a much-needed infusion into reaching our most vulnerable populations, as part of the state’s broader proposed funding package of $359 million to assist local governments in their immediate efforts to address homelessness. Notably, while the May Revise does include modest investments in the CalWORKs housing and homelessness assistance programs, it falls short of increasing grant amounts for families living in deep poverty.
The budget continues the January proposal to provide $167 million on a one-time basis to increase the availability of inclusive early education and care for children aged 0 to 5 years old, especially in low-income areas and in areas with relatively low access to care. This is a small step in the right direction, but we can do better – California should assure universal access to early childhood education for all California kids.
Another welcome investment in education in the Governor’s May Revise is an additional $286 million to top up more than $2 billion in total one-time discretionary funding to schools in 2018-19, which bolsters the budget’s prior commitment of $3 billion to fully fund the Local Control Funding Formula. Further, the Administration proposes $15 million one-time Proposition 98 General Fund to expand the state’s Multi-Tiered Systems of Support (MTSS) framework to foster positive school climate. These funds will focus on both academic and behavioral areas, including positive behavior interventions and support, restorative justice, bullying prevention, social and emotional learning, trauma-informed practice, and cultural competency. This proposed funding aligns closely with UWCA’s budget priority on investing in the Healthy Start Initiative.
While we are excited about the investments in education and the Governor’s continued commitment to health care, we would have liked to see additional investments in fighting poverty by committing more funds to income support programs, such as CalWORKs grants, which would make a substantial difference in family financial stability and strengthen California’s economy. Governor Brown maintains his measured response to California’s growing surplus, which is now at $8.8 billion, and proposes dedicating a majority of those funds to California’s Rainy Day Fund. While we can appreciate the need to prepare for an economic downturn in the future, the fact remains that too many Californians are experiencing severe poverty today.
UWCA will continue our work with the Legislature and Governor to pass a final budget that protects our children, their families, our communities and our future.
United Ways of California improves health, education and financial stability results for low-income California families by coordinating the statewide advocacy and community impact work of 31 California United Ways. California’s United Ways know that success in any one of these areas is affected by progress or lack thereof in the others.
Peter Manzo, President & CEO
Judy Darnell, Vice President of Public Policy