SACRAMENTO – As millions of Californians struggle to make ends meet as a result of the COVID-19 pandemic, Governor Gavin Newsom on Wednesday announced two immediate action items in his 2021-22 State Budget proposal to help low-income Californians.
First, the Golden State Stimulus would provide a $600 rapid cash support directly to roughly four million low-income Californians who, coupled with the federal stimulus, could receive at least $1,200 of direct relief.
The state’s stimulus will also reach low-income Californians who are excluded from the federal stimulus, like undocumented households that file taxes with an Individual Taxpayer Identification Number, including parents with U.S. citizen children.
Second, the governor is calling for immediate action to protect more Californians from eviction by extending critical eviction protections enacted by AB 3088 and ensuring that California’s $2.6 billion share of federal rental assistance is distributed according to greatest need and with accountability.
“Through the Golden State Stimulus, Californians who have been impacted by this pandemic will get help to provide for their families and keep a roof over their heads,” Newsom said. “This plan will provide relief for Californians in need by distributing $600 rapid cash support – for some, at least $1,200 when coupled with federal relief – and extend the eviction moratorium.”
Golden State Stimulus
The COVID-19 pandemic brought immediate and unprecedented financial challenges to working families that continue to struggle as the country and state experience the most intense surge of the virus. The Golden State Stimulus would refund $600 to all 2019 taxpayers who received a California Earned Income Tax Credit (CalEITC) in 2020, as well as to 2020 taxpayers with Individual Taxpayer Identification Numbers (ITINs) who are eligible for and receive the CalEITC in 2021. Californians with annual incomes of $30,000 or less may be eligible for the CalEITC.
Focusing on CalEITC recipients allows for a timely identification of and distribution to the population that likely started 2020 with few financial resources and disproportionately lost their jobs or work hours during the pandemic.
The payments would be sent out to tax year 2019 CalEITC recipients in February and March 2021. ITIN taxpayers, who are newly eligible for the CalEITC, would receive the additional tax refund after they file their 2020 tax return, typically in February through April of 2021.
The timing of these refunds is meant to immediately help low-income households with expenses like food and rent. Last year, nearly 3.9 million CalEITC tax returns were filed, and the program put $1.1 billion back in the pockets of hardworking Californians.
Eviction Moratorium Extension
In August, the governor and Legislature worked in partnership to enact AB 3088 – the nation’s strongest statewide eviction protections. While that protection was critical as a public health measure to keep people housed during the worst of the pandemic, it was temporary – without immediate action, the moratorium expires on January 31st.
After months of advocacy, California now has significant help with $2.6 billion in federal stimulus money, targeted to stabilize the lowest-income at-risk renters and small property owners.
The governor is proposing that the state quickly and accountably deploy all $2.6 billion in federal renter relief as early action – $1.4 billion of which is allocated directly to the state and $1.2 billion of which is allocated to entitlement jurisdictions – all targeting low-income California households, while helping stabilize small property owners who are also struggling.
This $2.6 billion, combined with hundreds of millions in other investments through the National Mortgage Settlement and tenant legal defense, and strengthened foreclosure protections, will keep as many people housed as possible and help get California’s economy back on its feet. The Governor is also proposing that the AB 3088 eviction moratorium be extended.
Under this proposal, California renters who are experiencing financial hardship related to the COVID-19 pandemic and pay at least 25 percent of their monthly rent cannot be evicted for unpaid rent.
“The Golden State stimulus is needed now more than ever. Millions of working families are on the ropes, barely hanging on during this pandemic-induced recession. This additional $600 in rapid cash relief will put food on the table for millions of vulnerable Californians, help pay rent and these funds will be a shot in the arm for our economy. The EITC has been a priority for the Senate for many years now and we look forward to partnering with the Governor to get these dollars into the pockets of struggling families as quickly as possible,” said Senator Mike McGuire (D-Healdsburg).
“Too many families have been financially devastated by this pandemic including countless families in the Inland Empire. We can and we must do more to provide assistance to get them through this difficult time, particularly those most impacted. The Golden State Stimulus will put $600 into the pockets of those who need it the most, and when added to federal relief, could mean $1200 in quick support for low-income Californians. We are proud to collaborate with the Governor on this important proposal,” said Assemblymember Eloise Gómez Reyes (D-San Bernardino).
Wednesday’s announcement builds on the Governor’s Equitable Recovery for California’s Businesses and Jobs plan, the business and workforce recovery elements of his 2021-22 State Budget that will help California through the COVID-19 pandemic and advance an equitable, broad-based recovery with more than $4.5 billion in investments.
The COVID-19 pandemic brought unprecedented challenges to California. However, prudent fiscal management in the past and present has allowed the state to provide ongoing support to impacted Californians where they need it most.