As inflation continues, California lawmakers are urging Newsom to spend more on the poorest citizens
As state leaders weigh how to spend a record $ 97.5 billion budget surplus, they are also struggling to best support many vulnerable Californians from poverty as federal incentives fall and high inflation absorbs household budgets.
Some advocates say Governor Gavin Newsom’s revised budget opened on Friday will not do enough. To combat inflation, Newsom proposes to allocate $ 18.1 billion in public funds.
His flagship proposal is estimated to cost about $ 11.5 billion, returning $ 400 to most state car owners to ease the burden of high gas prices. Newsom also included $ 750 million to fund free public transportation for three months.
Activists said the return to the car owner would not be sufficiently targeted at those in need of the most assistance.
“Ultimately, the state budget should focus on ensuring that every California citizen can afford housing, food, child care, health care, and educational opportunities,” said Chris Hohen, executive director of the California Center for Budget and Policy.
Experts say low-income Californians are most struggling with a volatile economic recovery overshadowed by high housing prices and more expensive necessities. And critics have said the budget proposal does not go far enough to help low-income families survive high inflation.
Myra Paniagua, a tax officer in Ventura County, whose family of five lives frugally on a total income of $ 44,000, said she would welcome any relief, as she has seen spending rise this year.
“It was hard,” Paniagua said. “We stretch the money and try to save as much as possible, especially on what we need.”
But California Democrats, who control the state government, argue about how they should spend on the state’s poorest people.
Some are in favor of the state extending federal incentive programs that are coming to an end. Others say the suitability of the programs should be expanded to include more people.
They have about a month to come to an agreement, as the legislature is constitutionally required to adopt the budget by June 15th. Newsham then has 15 days to act before the new budget takes effect on July 1st.
Republican lawmakers, who are such a small minority that they have little or no right to vote on spending, blame inflation on the majority party’s policies. “The Democrat government has made the state inaccessible,” said James Gallagher, the leader of the Republican Assembly in Yuba, last week.
Gallagher and other Republicans have blamed a state tax on gas that Democrats introduced in 2017 under Brown’s leadership to repair roads and bridges and expand public transportation as the cause of rising pump prices. Gallagher also accused the state’s climate change program of raising the cost of utilities.
Federal incentives are attributed to raising the status of the poorest states.
According to the California Institute of Public Policy, the state’s poverty rate fell from 16.2% in 2019 to 12.3% in 2020.
But experts warn that inflation and the end of federal programs could threaten that progress. Without a tax credit for children, for example, 1.7 million children are at risk of falling into deeper poverty, according to the Center for Budget and Policy.
More than half California residents with incomes below $ 50,000 struggled to pay for food, shelter, and medical expenses in March and April. Black, Hispanic and other colored families were among those most likely to fight, the center said.
“We have a strong job market,” said Sarah Kimberlin, a senior analyst at the center. “But even if you can find a job, it doesn’t mean you can afford to pay rent and food at the table.”
The governor presented a number of other measures, which he said are aimed at easing the burden of inflation. These proposals included $ 2.7 billion in rental assistance and $ 1.4 billion in overdue utility assistance. He also proposed waiving childcare fees for low-income families, valued at $ 157 million.
Newsom also offered to use $ 933 million to pay $ 1,500 in cash to hospital and nursing home workers, saving $ 304 million to help families with health insurance.
To offset freight costs, the governor proposed suspending $ 439 million in state tax on diesel fuel.
The governor also reported that the state’s minimum wage should increase to $ 15.50 an hour next year due to rising inflation.
Some Democrat lawmakers and their allies are pushing News to a different approach.
MP Miguel Santiago, a Democrat from Los Angeles, plans to promote an author’s bill that would allow the state to extend the federal tax credit for children, which has expired. The Santiago bill, backed by United Ways of California, provides for $ 2,000 per child to families earning $ 30,000 a year or less.
“This is a chance for the legislature to send a clear message about priorities,” said Anna Hasselblad, director of public policy at United Ways of California.
Panyagua, a 38-year-old mother of three who lives with her husband in a two-bedroom apartment in the coastal city of Port Ueneme in Ventura County, will welcome any form of assistance.
In a phone interview, Paniagua said her family survived the pandemic only because her husband stayed to work at a local nursery. According to her, he has no documents and therefore would not be eligible for federal aid in 2020.
In 2021, her family won government incentive checks for the undocumentedshe said, as well as from goods from the local food pantry and some CalFresh benefits available to her because her son was enrolled in school.
This year, she said, the high cost of living has stretched her family. As her rent increased by $ 200 in July to $ 2,100 a month, she began using the Flipp phone app to search for deals on essentials such as milk, yogurt and baby formula for her 7-month-old girl.
Gone are neither the movie trips nor the occasional waste of In-N-Out burgers loved by her children, she said.
This article is part of California Gap project, collaborative editorials studying income inequality and economic survival in California.