There is much to be pleased about and proud of in the compromise agreement on the budget that the Governor and leaders from the Senate and Assembly have reached, in early childhood education, housing and health, as we discuss further below. But we are concerned that the agreement may fumble a critical opportunity to help low-income families move up.

We are concerned that the package for the California earned income tax credit (CalEITC) remains unresolved. The CalEITC is one of the most effective tools we have for helping California families move out of poverty. Going into conference, the budget proposals from the Governor, Senate and Assembly all called for significantly expanding the, to increase the eligibility of the credit to track with full-time minimum wage earnings as the minimum wage increases, and to provide an enhanced credit to families with young children. Importantly, the Senate and Assembly proposals included providing access to the CalEITC to taxpayers who file with, or whose households merely include, an adult using a federally assigned Individual Taxpayer Identification Number (ITIN). 

For Immediate Release                                                        

Contact: Unai Montes-Irueste, 213 476 8742

June 10, 2019                                                                                                                                 

California’s Budget Agreement Increases Funding for CalEITC, Key Population Hangs in the Balance; Early Childhood Education and Housing and Homelessness Offer Strong Outlook

(Los Angeles, Calif.) – Statement from Peter Manzo, President and CEO, on behalf of United Ways of California (UWCA), regarding the proposed State Budget agreement:  

There is much to be pleased about and proud of in the compromise agreement on the budget that the Governor and leaders from the Senate and Assembly have reached, in early childhood education, housing and health, as we discuss further below. But we are concerned that the agreement may fumble a critical opportunity to help low-income families move up.  (Please see: California For All means #CalEITC4All).

We are concerned that the package for the California earned income tax credit (CalEITC) remains unresolved. The CalEITC is one of the most effective tools we have for helping California families move out of poverty. Going into conference, the budget proposals from the Governor, Senate and Assembly all called for significantly expanding the, to increase the eligibility of the credit to track with full-time minimum wage earnings as the minimum wage increases, and to provide an enhanced credit to families with young children. Importantly, the Senate and Assembly proposals included providing access to the CalEITC to taxpayers who file with, or whose households merely include, an adult using a federally assigned Individual Taxpayer Identification Number (ITIN).  

With so much agreement going into the conference, there should be a way forward on CalEITC that expands the credit to track full-time minimum wage earnings, adds a credit for families with young children and also includes eligibility for ITIN filers, and we urge the Governor and Legislators to do all three.

We believe that all working Californians who pay taxes should have access to the CalEITC. Working men and women filing taxes with ITINs are doing everything right — they work, pay taxes and file tax returns. Yet, under current rules, if even one parent in the household files their taxes using an ITIN, then the entire household is excluded from the CalEITC, even if their children are American citizens. While we support and applaud the Governor’s May Revise increase of the credit for households with young children, it cannot be overlooked that an estimated 74 percent of households who have ITIN filers are households with children.  Excluding ITIN filers from the CalEITC and the Governor’s proposed expansion, would mean denying its proven poverty-fighting impact to as many as 300,000 children according to estimates by California Budget & Policy Center.     

California United Ways support and applaud smart and necessary investments in a number of critical issues that our state faces including early childhood education, housing and homelessness and access to health coverage and care. While there is always more to do and galvanizing goals to set for our state, the framework as outlined carries a number of key investments, and we highlight a few below:  

Early Childhood Education: We are pleased to see $80.5 million in ongoing Proposition 64 funding for Alternative Payment slots starting July 1, 2019 and $50 million in one-time General Fund for ongoing General Child Care slots (to be funded in future years with growth in Proposition 64 funds). $195 million in one-time General Fund for the Child Care Early Learning and Care Workforce Development Grant.

Health: We applaud the expansion of full-scope Medi-Cal for the inclusion of young adults ages 19-25, regardless of immigration status in the latest budget agreement. However, California missed another opportunity to reach full coverage and extend health care and services to middle and older aged low-income people otherwise left out of the healthcare system. California is stronger when everyone is healthy, and we will continue to support health coverage for all people in all communities. In addition, we are pleased that $17.4 million of the General Fund in 2019-20, and $40.5 million ongoing, is allocated to restore optional Medi-Cal benefits including audiology, incontinence creams/washes, optical, podiatry, and speech therapy. These services are critical for supporting optimal health and well-being for our most vulnerable populations. 

Housing/Homelessness: The overall housing and homelessness package agreed upon includes: 1. $250 million in one-time funds for planning grants to help local jurisdictions work through the Regional Housing Needs Assessment 6th Cycle 2. $500 million in one-time funds for housing-related infrastructure 3. $650 million in one-time funds to help local jurisdictions to combat homelessness 4. $500 million in one-time funds for a mixed-income loan program through CalHFA 5. $500 million in one-time funds to expand the state's Low Income Housing Tax Credit program.  

UWCA will continue our work with the Legislature and Governor to advance opportunity for our children, their families, our communities, and our future.  

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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.