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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, California legislators voted Monday to pass $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 bipartisan deal is a compromise version of Gov. Gavin Newsom’s Golden State Stimulus package and will help an estimated 5.7 million Californians. Part of a $9.6 billion California economic stimulus package, Newsom is expected to sign it. Previously, Newsom said the payments could go out within weeks of passage.
“This pandemic has not hit us all equally. There are those who have have done quite well because of capital gains. It’s the reason we have this windfall. But there are communities like mine who are struggling,” said Assemblymember Joaquin Arambula, a Fresno Democrat. “This Golden State Stimulus will help to rise up our working poor. This stimulus will allow us to address equity directly.”
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 one in 10 workers who are undocumented.
The $3.8 billion Golden State Stimulus deal that lawmakers passed 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 one in four 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 Assemblymember Wendy Carrillo, a Democrat from Los Angeles who was formerly 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. Acknowledging the program had been “underutilized,” Newsom’s early budget deal with lawmakers also invests $24 million in financial assistance and services for farmworkers.
Housing for the Harvest
The stimulus payments 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 lawmakers passing the stimulus agreement.
This article is part of the California Divide, a collaboration among newsrooms examining income inequality and economic survival in California.