California lawmakers on Monday cleared the way for 5.7 million people to get at least $600 in one-time payments, part of a state-sized coronavirus relief package aimed at helping those with low-to-moderate incomes weather the pandemic.
Gov. Gavin Newsom signed the bill into law Tuesday, one day after it passed the state Legislature by a wide margin.
Fewer people will get the payments as compared to the federal relief checks Congress approved last year. But state lawmakers are aiming the money to reach the pockets of people who were left out of those previous checks, including immigrants.
People who are eligible for the money should get it between 45 days and 60 days after receiving their state tax refunds, according to the Franchise Tax Board.
One of those people is Judy Jackson, a 75-year-old former teacher and cancer survivor who lives off of about $1,000 a month from other government programs. Jackson said she would use part the money to pay off a freezer she bought so she could have food delivered to her home and avoid going out to shop for groceries during the pandemic.
“Most months I’m worried at the end of the month whether the money is going to run out before the month does,” said Jackson, who said she is at higher risk for COVID-19 because of her age and a number of underlying health conditions. “This will make it possible to have a little extra and maybe buy an ice cream occasionally.”
The payments are part of a broader aid package the state Legislature approved Monday worth $7.6 billion. It includes more than $2 billion in grants for small businesses, waives about $25.6 million worth of business fees for struggling restaurants and hair salons and provides $30 million in aid for food banks and another $5 million for diaper banks.
Most people will get the checks by claiming the California earned income tax credit on their individual income tax returns. In general, this covers people who earn $30,000 a year or less.
Each year, more than 20% of of people who are eligible for the credit don't claim it, according to the nonpartisan Legislative Analyst's Office. The spending plan lawmakers approved Monday includes $5 million for “outreach” to let people know how to apply for the money. People who have already filed their 2020 returns can file an amended return, said state Sen. Nancy Skinner, a Democrat from Berkeley and chair of the Senate Budget and Fiscal Review Committee.
Others eligible for the checks include people who earn a maximum of $75,000 per year after deductions and use an individual taxpayer identification number to file their income taxes. These are mostly people who don’t have Social Security numbers, including immigrants.
Most of them were not eligible for the federal relief checks Congress approved last year. Because of that, the Democratic-controlled Legislature wrote the bill in such a way that some of these people could get $1,200, not $600.
The final group eligible for the checks are people who already get help from state programs targeting low-income families, the elderly, the blind and the disabled. They should get the money automatically.
California has the money to do this in part because the state — the nation's most populous with nearly 40 million residents — has lots of wealthy people who have been less impacted by the pandemic and continue to pay taxes.
The result is California has an estimated $15 billion one-time surplus to spend this year, a number that could grow even higher later this year once more people file their tax returns.
“We need to acknowledge that this pandemic has not hit us all equally,” said state Assemblyman Joaquin Arambula, a Democrat from Fresno.
California has some of the most stringent coronavirus business rules in the country, banning indoor dining in much of the state and ordering retailers to limit the number of people allowed inside their stores.
Last year, Newsom used his emergency authority to set aside $500 million for grants of up to $25,000 for small businesses impacted by the pandemic. But in the first round of funding, the state received more than 334,000 applications totaling more than $4.4 billion in grants.
On Monday, the Legislature added another $2 billion to that program. Businesses that have between $1,000 and $2.5 million in revenue are eligible, and they must be open or at least have a plan to reopen when they are allowed.
Assemblyman Mike Gipson, a Democrat from Carson, said small business owners in his district have been “praying for an answer.”
“This is the answer to their prayers,” he said.
But some Republicans, while voting for the bill, criticized Newsom for “the hurt and harm” he caused businesses by ordering statewide shutdowns during the height of the pandemic.
“This bill didn't have to be as big as it is today,” said Assemblyman James Gallagher, a Republican from Yuba City. “This governor arbitrarily and unilaterally decided to shut down most of the small business in this state. As a result, many businesses have already gone out of business and that should be a problem for every one of us.”