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Update on the 2020-21 California Budget

On Monday, June 15th, the California Legislature met the state constitutional deadline for passing the 2020-21 budget by approving a new state budget. At this time, it is unclear if the Governor will support the budget, as no deal has been announced.

The Legislature approved this budget to uphold its constitutional duty, but it is not the final version. The COVID-19 pandemic has caused unprecedented economic and public health uncertainty, and it has highlighted and exacerbated every existing inequity the state has failed to address. On top of the pandemic, social unrest calling for justice and equality for Black people has created a demand for leaders at every level to do things differently to dismantle entrenched white supremacy. If the Governor and Legislature simply ram through a budget deal, it will disproportionately harm Black people and other communities of color – as the economics of this state always do.

Forthcoming actions on this budget by the Legislature and Governor must take into account the needs of ALL Californians. The state’s economics must change — that includes increasing revenue through taxes on extreme wealth, and not making cuts to the programs millions of Californians rely on.

The budget approved by the Legislature rejects the vast majority of cuts proposed in the Governor’s May Revision budget, and includes several program expansions sought by advocates. The Legislature’s budget includes a trigger mechanism that is substantially different than the one proposed by the Governor. The trigger approved by the Legislature would not take effect until October 1, 2020, and will be “triggered” if the U.S. Senate and President fail to approve the $14 billion in assistance to states that the House of Representatives approved last month, on a bi-partisan basis.

To bring the budget into balance if federal leaders fail to deliver additional funding, the Legislature’s trigger would utilize reserve funding, deferrals of school funding, delays in previously approved spending, and state employee compensation reductions. It would not include most cuts to health programs, CalWORKs, SSI, IHSS, or programs for elders, which were proposed by the Governor. More details are available here.

The Legislature’s budget does include some program corrections, restorations, and expansions — notably, it ends the exclusion of immigrant workers with Individual Tax I.D. Numbers (ITINs) for the state Earned Income Tax Credit (CalEITC), restores the CalWORKs lifetime limit for adults to 60 months, provides another $350 million for homeless programs, and provides COVID-19 inspired CalFresh program simplifications and out-of-office technology advancements. All of these proposed changes are subject to ongoing negotiations, and until a “deal” is announced, we won’t know if they are in the final budget.

For health care, Western Center supports the Legislative budget’s rejection of cuts proposed in the Governor’s May Revision. The Legislature’s budget protects the health of California’s elders and communities of color in several ways. It does not reinstate the senior penalty by raising the Medi-Cal Aged & Disabled income limit, per last year’s budget. It rejects Medi-Cal benefit cuts and limits estate recovery, which disproportionately seizes homes from Black, Latinx, and API families. It also restores funding for the Black Infant Health program and for health navigators, and expands Medi-Cal to elders regardless of immigration status, though, Western Center would like to see that implemented sooner.

The Legislature’s budget recognizes the need to address the state’s homelessness crisis for unhoused community members, while also preventing additional homelessness. The budget allocates resources for traditional interventions, as well as funds to increase permanent housing options through the expansion of the low income housing tax credit, acquisition of hotels and motels which may appropriately serve as longer-term housing resources, and funds for the provision of legal assistance to low-income households that may be threatened with displacement or eviction. Given the magnitude of California’s housing challenges, which are compounded by the COVID-19 pandemic and ensuing responses, we look forward to building on this foundation.

PRESS RELEASE: Campaign across California launched to demand state leaders craft a budget for justice by taxing the privileged

FOR IMMEDIATE RELEASE

Coalition challenges state leaders to stop further budget cuts and invest in communities suffering from racism, inequality, recession, and COVID-19 

Sacramento, CA – Thirteen organizations representing frontline workers, teachers, seniors, environmentalists, and advocates for racial and social justice announced a Summer campaign – Commit to Equity – to demand the governor and state lawmakers tax the privileged to fund real systemic changes that lift up communities of color and vulnerable groups. The campaign also announced a “week of action,” with a series of events in Sacramento, San Francisco, Fresno, Los Angeles, and San Diego to demand leaders build a budget for justice, informed by weeks of protest against racism.

As state leaders have yet to reach a final budget agreement, Commit to Equity demands they:

  • Dismantle the systemic inequities created by underfunding our communities’ needs, inequities deepened by a cuts-only budget, which disproportionately harms Black and brown people;
  • End the systemic inequity of our tax code, which gives billionaires and corporations a pass from paying their fair share;
  • Put up a plan to tax the privileged to preserve and improve schools, healthcare, and vital community services, since people need them now more than ever to endure the impact of recession and pandemic; and
  • Invest in real systemic change in communities of color.

“Budgets reflect our values, and California needs to commit today to racial justice and economic justice as our guiding lights,” said Joseph Bryant, President of SEIU Local 1021 and member of SEIU California’s Executive Board. “It starts with rejecting racially disparate cuts, but it requires much more. We need to invest in Black and brown communities and economically struggling communities and require the most privileged and wealthy in our state to contribute more.”

“In this unprecedented moment, many people are asking, ‘How can I stand up for Black lives and racial justice?,’” said Marc Philpart, Principal Coordinator of the Alliance for Boys and Men of Color and Managing Director at PolicyLink. “We need extraordinary investments in health, housing, education, jobs, and social services, not austerity measures or investments that diminish our communities rather than strengthen them. Budget justice is essential for racial justice, and for finally creating a society in which Black Lives Matter.”

“We have legislators taking knees, state and local leaders calling for systemic change – all in response to recent mass demonstrations. But we’ve been ringing this alarm for years – especially in California, Western Center has called out systemic, racial, and economic injustice for decades,” said Michael Herald, Director of Policy Advocacy at Western Center on Law & Poverty.  “This moment can be different, but not without putting money where the talk is. We need a dramatic resource shift — tax the extraordinary wealth exacerbating inequality in California, and use it to heavily invest in the Black, brown, and low-income communities that are suffocated by systemic inequality.”

“Now more than ever, it’s critical for California lawmakers to invest in integrated programs that not only create and maintain union, family-sustaining jobs, but also protect us against the climate crisis and uplift our Black, Indigenous, and communities of color,” said Mary Creasman CEO of the California League of Conservation Voters.  “The Climate crisis is not just an environmental issue – it is an economic and justice issue as well. It’s not a coincidence that those hardest hit by economic and climate crises are black and brown communities. We need to do better and budget cuts to core services and critical environmental programs is not the answer.”

“As one of the world’s largest economies, California can no longer stand for a budget and tax system that is balanced on the backs of Black and brown communities, seniors, children, and our most vulnerable,” said Ronald Coleman, Director of Policy and Legislative Advocacy at Health Access.  “The COVID-19 pandemic has only exacerbated existing inequalities, and a budget system that relies on cuts, as we saw this year, puts our long-term health, economic recovery, and needed investments towards equity, all at risk. This campaign calls for a new vision for revenues that support the health and financial well-being of all Californians struggling to recover through the pandemic, while helping us thrive into the future.”

State budget cuts are not equally felt and exacerbate inequities laid bare by the pandemic and recession.

  • Cuts to CalWORKs are over 700% more likely to affect African Americans
  • Cuts to child care slots are over 730% more likely to affect African American children than white children
  • Cuts to home care are over 300% more likely to affect African American seniors and people with disabilities and 300% more likely to affect African American workers
  • Cuts to K-12 education are 230% more likely to affect Latinos than white Californians.
  • Black people dying from COVID-19 in numbers that are nearly twice their share of the population.
  • 76% of COVID-19 deaths in California are individuals 65+.
  • Older adults of color are dying at rates up to 3x their share of the population.
  • Residents and staff of nursing facilities and residential care facilities accounting for 46% of COVID-19 deaths in California.
  • Since COVID-19 impact began in mid-March, over 6 million Californians have filed for unemployment and $26.2 billion in benefits have been paid to workers in need.
  • Job losses have been most acute in sectors not able to telecommute, such as leisure and hospitality, retail, and personal services.
  • Lower-wage workers have disproportionately been impacted by job loss.

For more information about the impact of state budget cuts on communities of color, see this list.

A recent report found corporations pay far less in state taxes than a generation ago.

  • California’s state budget would have received $11.2 billion more revenue in 2017 had corporations paid the same share of their income in taxes that year as they did in 1981.
  • State policymakers have enacted several corporate tax breaks – many without expiration dates – adding up to $5.7 billion for corporations in 2019-20.
  • California spending on tax breaks for corporations far exceeds the amount the state spends on tax benefits for low-income Californians: In 2019, California was projected to spend just $1 billion on the state’s two largest tax credits targeted to Californians with low incomes – the California Earned Income Tax Credit (CalEITC) and the Young Child Tax Credit.

Follow the campaign this summer on social media: Twitter @CommitToEquity, Instagram @committoequity, and Facebook.com/CommitToEquity.

The Commit to Equity campaign includes the following organizations:

  • AFSME California
  • Alliance for Boys and Men of Color
  • California Environmental Justice Alliance
  • California Federation of Teachers
  • California League of Conservation Voters
  • California Teachers Association
  • Health Access California
  • PICO California
  • PolicyLink
  • SEIU California
  • Sierra Club
  • TODCO
  • Western Center on Law and Poverty

The announcement of this campaign occurs alongside other efforts calling on leaders to have the values of justice and inclusion guide efforts to craft the state budget.  Last month, over 50 organizations signed onto a letter to state legislative leaders urging them to mitigate inequality, build a balanced economy, and generate more state revenues by creating a fair and equitable tax system.

See virtual press conference footage here.

CONTACT: Anthony Matthews, (202) 297-3830

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STATEMENT: NO CUTS on Californians in our State Budget  

Today, California’s Department of Finance announced significant revenue declines in the wake of the COVID-19 pandemic. The announcement makes very clear the need for Congress and the President to immediately pass the proposed relief package for state and local governments.

Any attempt by California or other states to cut programs will lead to immense human suffering, and deepen and lengthen the recession. Cuts will worsen income inequality and harm people who are already most marginalized in our society.

Those disproportionately impacted by COVID and its economic implications — primarily Black, Latinx, and low-income people (many of whom are essential workers on which California relies), are the same people who will be most negatively impacted by state cuts, if that’s the route California takes. That is absolutely unacceptable, and it is not the correct strategy for California For All.

This is an extraordinarily difficult time, and we appreciate the tremendous responsibility the Governor and Legislature has right now. But it is our responsibility at Western Center on Law & Poverty to protect the Californians with the lowest incomes who bear the brunt of the economic burden in this state.

The only priority the Legislature and Governor should have right now is to protect every PERSON who lives here — from the pandemic, from homelessness, from hunger, and from financial ruin. The overall economy comes second, human lives come first.

It’s time for Washington to accept their responsibility and pass state relief now. Congress must enact a fourth Coronavirus response package ASAP, so states aren’t forced to make cuts that will turn this recession into a full blown depression.

California, NO CUTS on Californians in our state budget.

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