The Californians were able to see new stimulus checks and tenant support as part of this proposal. Here’s who would qualify
A bartender and patron in a San Francisco bar on May 6, 2021.
David Paul Morris | Bloomberg | Getty Images
Californians could see an additional financial boost after Governor Gavin Newsom presented a proposal to send new stimulus checks and tenant support to residents.
The $ 100 billion comeback plan announced on Monday by Newsom, a Democrat, provides roughly $ 12 billion in direct payments to local residents and roughly $ 5 billion in renter benefits.
The plan also provides $ 2 billion to help citizens pay overdue water and electricity bills.
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Newsom’s proposal, expected to face a recall vote in November, comes as the state posts a record budget surplus of $ 75.7 billion.
The plan would have to be passed by California legislators for the aid to be approved. Legislators have until June 15 to react to the budget.
Under the terms of the plan, 2 out of 3 Californians would receive stimulus checks.
The new payments would apply to residents with adjusted gross income of $ 30,000 to $ 75,000, according to HD Palmer, assistant director of the California Department of the Treasury.
California is already in the process of sending $ 600 payments to residents who earn less than $ 30,000 and are eligible for the state’s tax credit. These first payments were also made to residents who file their taxes using individual tax identification numbers (ITINs) instead of social security numbers.
Under the terms of the proposal, those in the $ 30,000 to $ 75,000 income bracket who have children would receive an additional $ 500. However, that $ 500 sum is per family, not per dependent, Palmer said. Families earning less than $ 30,000 who received the initial stimulus payment of $ 600 are also eligible for the payment of $ 500 if they claim a dependent.
Under the plan, ITIN applicants would receive an additional $ 500 for paying taxes in California and participating in the state’s economic activity but not being eligible for state economic reviews due to their enrollment status, Palmer said.
The total of $ 12 billion for the direct checks includes the previous payments that were already on their way to the Californians. The proposed stimulus checks are expected to cost $ 8.1 billion, according to Palmer.
According to Newsom’s office, the plan also advertises “the largest tenant aid package in any state in America” with a total volume of 5.2 billion US dollars.
The proposal would help low-income tenants cover both the return rent and the rent payments for several months in the future. It also includes aid for legal services provided by tenants.
More details on how Californians can access this aid are expected to be included in a legislative proposal later this week.
That California may consider providing this type of aid reflects both its progressive income tax and the dual nature of the impact the Covid-19 downturn has had on people, according to Richard Auxier, senior policy associate at the Urban Brookings Tax Policy Center.
California’s income tax structure allowed him to collect dues from the rich, many of whom did really well last year, creating the budget surplus, Auxier said. Now it can pass that money on through programs targeting lower and middle class residents who have been financially damaged by the pandemic.
“The thrust makes sense,” said Auxier.
Residents of other states are unlikely to receive the same level of assistance. Hawaii and New York, for example, also have progressive income taxes, but are hard hit in the tourism, leisure, and hospitality industries that they rely on. Texas has many wealthy residents but no income tax.
“The success story of one state is by no means a symbol of what is going on in the other 49 states,” said Auxier. “It has to do with what their economies look like and what their tax structures look like.”
Other states could instead opt for smaller measures to help residents. That could include expanding state tax credits or sending out stimulus checks only to the unemployed, Auxier said.