California has billions more in tax revenue than projected. It should be used to keep people out of poverty.

In an unanticipated but not completely surprising series of events, California’s wealthiest residents have seen significant boosts in income during the pandemic, with many making good money because of the pandemic. Meanwhile, on the other end of California’s 40 million people, Californians don’t have enough to eat, don’t have a reliable place to live, and are at high risk of COVID exposure because they have no choice but to work in close proximity to others. Most jobs that were lost or had reduced hours from the state’s COVID shutdown mandates are low wage jobs. People in those positions are already just making it – pandemic-induced income loss is pushing them into deeper uncertainty.

The good news is that since wealthy Californians are making so much money, the state is experiencing a spike in revenue. Last month, the non-partisan Legislative Analyst Office estimated that California may have a surplus of $26 billion in the 2021-22 budget. This illustrates the virtue of a progressive tax system like California’s, since the point of taxes is to provide for the structural needs of a society to help stabilize it – but it also requires taxes to be used efficiently and wisely. Unfortunately, many are already calling for California to hoard this tax windfall for a “Rainy Day,” because apparently, a global pandemic plunging millions into poverty doesn’t fit that category.

If California wants to be a leader in the United States and in the world, it cannot ignore the obvious call here – make sure people can eat, have access to shelter, and access to health care — make sure people can actually live here.

Widespread poverty is everyone’s problem because the deeper into poverty a society goes, the harder it is to get out. Fortunately, California has wealth, so we can address these fundamental, deeply destabilizing problems – the question is, will we? This is where conversations about economic and racial justice and equity in California reach their limit. This is a stark, straightforward situation; state policy makers and administrators have to put money where the talk is, and make the tax revenue from the 5^th largest economy in the world work for the people who hold it up.

The state must invest in the people the state’s pandemic polices most negatively effect. With as much directness and immediacy as possible, people need:

1. Direct food and cash assistance.
   • In September Governor Newsom vetoed AB 826, which would have provided one-time food aid to those most in need during the pandemic. He cited cost for the veto. The money is here now. Food should be the very first item on the agenda, especially since in many cases, the people who don’t have enough to eat are the same people supplying the majority of California and U.S. agriculture. It shouldn’t need to be said, but the people producing our food should have enough to eat.
   • With unemployment still at record levels, many people need income. As extended unemployment benefits end due to a lack of federal empathy, California must step in and provide cash so people can afford basic necessities. California needs extended unemployment, increased grants to people on CalWORKs, and restoration to cuts made to elders and people with disabilities on SSI. Every dollar the state provides will go right into the economy, providing a boost to business.
2. Direct rent relief and housing assistance.
   • People can’t work, so they can’t pay rent. Without stable housing, every part of life is harder. It’s harder to keep a job, educate kids, rely on steady meals, and have safe harbor from the pandemic.
   • We are seeing an increase in homelessness on top of the crisis we already have. In Sacramento for example, the Sacramento Bee reported that “During the first six months of this year, 3,790 people in Sacramento County escaped homelessness, but another 3,736 became homeless.” The state expanded shelter capacity, but that funding is drying, and so is the housing. We need to keep people who are already housed in their homes so they don’t slip into homelessness.
3. Health4All and a fix for the Medi-Cal asset test.
   • At the start of 2020, Governor Newsom promised to expand Medi-Cal to undocumented elders. That hasn’t happened, and the delay is causing further instability for those hit hardest by COVID-19: immigrants and people over age 65.
   • Similarly, AB 683 would have fixed an outdated rule that limits the cash savings elders and people with disabilities can have and still be able to enroll in Medi-Cal. Forcing people to choose between health care and saving for an emergency is a particularly shortsighted policy during a pandemic that this money should be used to fix.

The Legislature is due to return next Monday, December 7^th. When they do, the first order of business must be to pass an emergency relief package to prevent more suffering. We think the steps above are concrete, doable first steps.