Record High Investments in Financial Relief for Most Californians, but Equitable Economic Recovery for Households Excluded from Relief Still Unclear
FOR IMMEDIATE RELEASE
Tuesday, June 15, 2021
Anna Hasselblad, Public Policy Director
United Ways of California
Cadonna Dory, Director of Communications
Children’s Defense Fund-CA
Advocates call for targeted assistance for Californians who have been excluded from federal stimulus, building on the state’s investments in the CalEITC and Golden State Stimulus
(Sacramento, CA) — For months, the California Legislature has been debating and voting on a wide range of budget investments and so far there have been some truly incredible measures taken to invest in the financial security of California’s most vulnerable communities. Advocates from the California Earned Income Tax Credit (CalEITC) Coalition praise the actions taken this year to shore up households that have been hit hard by the COVID-19 pandemic and resulting economic crisis, but note that more targeted, equity-based investments are still needed.
The CalEITC is one of the state’s most powerful tools to combat poverty and it is critically important for the state to invest in its growth. This is why advocates championed SB 691 (Rubio) which would have provided an additional $100 in CalEITC benefits for people who use an Individual Tax Identification Number (ITIN) and reducing the income eligibility for the Young Child Tax Credit (YCTC) from $1 to $0 to avoid bureaucratic hurdles for this population. Funding to expand these credits is not included in the budget deal outlined by the Legislature today, and remains a critical issue for low-income households, not only to recover from the pandemic’s economic hardships, but also as ongoing equity measures for families.
“The CalEITC Coalition applauds the inclusion of $15 million for CalEITC Outreach, Education, and Free Tax Preparation Assistance in the budget bill,” said Pete Manzo, CEO & President of United Ways of California. “We are especially pleased to see the emphasis on assistance for Californian residents in applying for an Individual Taxpayer Identification Number (ITIN). Trusted community-based organizations will be at the forefront of ensuring more families have access and culturally appropriate resources to navigate filing their taxes and therefore more households will claim the CalEITC and Golden State Stimulus, as well as the federal Child Tax Credit.”
In California, job loss has been highest for noncitizens at 29.5%, and industries with the highest pandemic-related deaths also have some of the highest rates of undocumented immigrant workers. Even for those who can file taxes, recent research showed that 1 in 4 Californians (about 2.4 million people) who are enrolled in other benefits programs likely missed out on federal relief checks (as well as state tax credits and the GSS) because they do not file taxes. Therefore, there are structural barriers that prevent access to relief for many Californians, and noncitizens face compounded exclusion despite being a population with needs that exacerbated during the COVID-19 pandemic. In order to ensure an equitable recovery for the people of California, the governor and the Legislature need to do more for those who were impacted significantly more by this past year’s economic crisis, including a third round of economic stimulus and a system of delivery that is inclusive of all income-eligible households to receive relief replacement funds. In addition, we recognize that recovery for the hardest-hit communities will require bold short- and long-term investments.
“The CalEITC Coalition celebrates the efforts to provide financial resources for low-income communities and we recognize more needs to be done,” said Sevly Snguon, economic & health justice policy associate of Children’s Defense Fund-CA. “The road to recovery for our excluded Californians requires equitable investments that need to happen now and in the future.”
The CalEITC Coalition has now teamed up with over 100 policy advocates, low-income service providers, labor representatives, community-based and faith-based organizations, to propose a method for the state to deliver funds to workers and families that have been excluded from equitable relief and recovery funding calling for additional funds for excluded Californians. Specifically, we are requesting that California provide $1,800 per adult and child to families and individuals who file taxes with an Individual Tax Identification Number (ITIN) and who have incomes up to $75,000. This would replace or nearly replace all of the federal stimulus payments ITIN filers and their families were denied.
In addition to another round of stimulus for workers in California, there is also a need to consider wage replacement for those who lost their jobs during the COVID-19 pandemic, especially for those who were excluded from federal relief and other state resources such as unemployment insurance.
In order to ensure any investments in additional stimulus and wage replacement has a substantive impact for the intended communities, it is critical that there be a system of delivery that is inclusive of both tax filers and non-filers, as well as for those with or without an SSN or ITIN. A simplified one-stop filing portal managed by the Franchise Tax Board or contracted community based organization is a smart solution for the state to ensure people can claim credits and stimulus regardless of filing status. The CalEITC Coalition urges the legislature and Newsom Administration to establish such a portal so that communities most impacted by this past year are able to recover and afford basic necessities.
The CalEITC Coalition celebrates the hard work and dedication Governor Newsom and the state Legislature have provided to the communities our coalitions represent. We must also acknowledge the struggles our communities have had to endure this past year because they have been excluded from federal relief payments and other resources such as unemployment insurance. We look forward to our continued work with legislators and the governor to ensure those most impacted by the pandemic are equitably supported.
The CalEITC Coalition, co-led by Children’s Defense Fund California and United Ways of California, was formed in 2015 and is composed of over 60 policy advocates, immigrant rights, low-income service providers, labor representatives, and community-based and faith-based organizations.