As Congress hammers out President Joe Biden’s $1.9 trillion stimulus package, California has worked out its own plan to get more cash into the hands of struggling Californians, particularly undocumented families left out of federal assistance.
After weeks of public hearings and closed-door negotiations, Gov. Gavin Newsom, Senate leader Toni G. Atkins and Assembly Speaker Anthony Rendon on Wednesday announced $600 one-time payments to households receiving the state’s earned income tax credit, along with an extra $600 for undocumented taxpayers earning less than $75,000 who were ineligible for previous federal stimulus payments and other assistance for low-income residents.
The deal is a compromise version of Newsom’s Golden State Stimulus package and would help an estimated 5.7 million Californians. It now needs formal approval in the state Legislature as part of a $9.6 billion California economic stimulus package aimed at helping workers and small businesses. A vote could come as soon as Monday (Feb. 22).
‘People are hungry and hurting’
“People are hungry and hurting,” Atkins, a San Diego Democrat, said in a statement. “I’m proud we were able to come together to get Californians some needed relief.”
Under Newsom’s original $2.4 billion proposal, California would have sent $600 payments to the families of approximately 4 million workers with annual incomes below $30,000, including some undocumented workers. But some advocates and lawmakers argued that the money would be better spent on filling gaps in federal relief, rather than trying to jumpstart the economy. Instead, they pushed for two alternatives that would send much larger cash payments payments to California’s nearly 1 in 10 workers who are undocumented.
Wednesday’s $3.8 billion Golden State Stimulus deal took those concerns into account. California will now send $600 tax rebates out to 3.8 million workers who made less than $30,000 last year. On top of that, an estimated 575,000 undocumented workers who make up to $75,000 a year will get an extra $600, in some cases bringing their total aid to $1,200.
Grants of $600 will also go out to 405,000 very low-income families with children enrolled in CalWORKs, as well as 1.2 million elderly, blind and disabled recipients of Supplemental Security Income or the state’s Cash Assistance Program for Immigrants.
Sending out more cash
California’s coffers have grown since Newsom’s January proposal, likely increasing lawmakers’ appetite to send out more cash. The state now expects $10.3 billion more in revenue than was projected in January, driven by the pandemic gains of the state’s wealthiest residents.
Sending thousands in relief to undocumented immigrants would be a political nonstarter in most other parts of the country. But not in California, which has used its growing Democratic super majority of legislators — of which 1 in 4 are Latino — to break economic barriers for those without legal status, granting them driver’s licenses, sending them low-income tax refunds, and expanding health care for undocumented children and young adults.
“I think about my community and the 2 million people across the state who have been left out of any type of assistance,” said Assemblywoman Wendy Carrillo, a Democrat from Los Angeles who was formally undocumented herself, in a hearing on the proposal.
Ineligible for federal aid
Undocumented Californians, many who work in industries ravaged both by pandemic closures and the coronavirus itself, don’t qualify for federal stimulus payments and unemployment benefits. They are also largely ineligible for other safety net benefits, like food stamps. Newsom created a program to send $500 to undocumented immigrants last spring, but there was only enough money for about 150,000 people.
Over the summer, Newsom also created Housing for the Harvest to provide hotel rooms for farmworkers who can’t safely quarantine at home. But as of late January, just 119 rooms had been reserved. Earlier Wednesday, Newsom acknowledged that the program has been “underutilized.” The early action deal doubles down on the program, investing $24 million in financial assistance and services for farmworkers.
Newsom’s stimulus will act like a boost to the California’s Earned Income Tax Credit, which is already available to undocumented workers who file taxes with an Individual Taxpayer Identification Number, thanks to a new law passed last year.
During legislative hearings, the nonpartisan Legislative Analyst’s Office recommended sending $1,800 payments just to the low-income ITIN filers, cutting the plan’s price tag to under $1 billion. Then distribute the remaining funds to the approximately half of undocumented workers who don’t have ITINS or other very low-income Californians.
Target aid to undocumented
Fiscal and policy analyst Chas Alamo said Newsom’s $2.4 billion proposal was too small to stimulate California’s $3.1 trillion economy. By contrast, he noted Californians received about $4 billion in unemployment benefits each week during 2020.
The LAO alternative had gained support from a group of 17 Assembly Democrats.
“We must continue to work together to address the void created by years of inaction by the federal government that has left our undocumented worker population in the cold, without any viable economic support to survive this pandemic,” the lawmakers wrote in a letter to the budget committee.
Meanwhile, a coalition of pro-immigrant and anti-poverty advocacy groups had called for lawmakers to build immigrant relief on top of Newsom’s original proposal: For most workers, they wanted to keep the $600 tax credits. For households making less than $50,000 last year that file taxes with ITINS, they asked California to send $1,200 per parent and child.
The compromise with Newsom was less. Advocates applauded lawmakers for sending extra help to undocumented immigrants, but said it didn’t go far enough.
“With a multi-billion dollar surplus we should be creating a real California for All,” said Sasha Feldstein, economic justice policy manager at the California Immigrant Policy Center. “And that means filling in all of the gaps left by exclusionary federal relief efforts, not just pieces.”
* This story has been updated with details of the stimulus agreement.
This article is part of the California Divide, a collaboration among newsrooms examining income inequality and economic survival in California.
CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.