California Considers Stimulus for Undocumented Workers

As Congress hammers out President Joe Biden’s $1.9 trillion stimulus package, California lawmakers are working out their own plan to get cash into the hands of struggling Californians, particularly undocumented families left out of federal assistance.

In recent weeks of public hearings and closed-door negotiations, a number of lawmakers and coalitions of immigrant advocates have pushed for two alternatives that would target Gov. Gavin Newsom’s $2.4 billion Golden State Stimulus proposal to send larger cash payments to California’s nearly one in 10 workers who are undocumented. 

Under his record-breaking January budget proposal, Newsom proposed sending $600 tax refunds to the families of approximately 4 million workers with annual incomes below $30,000, including some undocumented workers. But some lawmakers argue that money would be better spent on filling gaps in federal relief, rather than trying to jumpstart the economy. Newsom and legislative leaders are expected to announce a deal today.                   

Sending thousands in relief to undocumented immigrants would be a political nonstarter in most other parts of the country. But it might just work in California, which has used its growing Democratic super majority of legislators — of which one in four are Latino — to break economic barriers for those without legal status, granting them driver’s licenses, sending them low-income tax refunds, and expanding health care for undocumented children and young adults.

“I think about my community and the 2 million people across the state who have been left out of any type of assistance,” said Assemblymember Wendy Carrillo, a Democrat from Los Angeles who was formally undocumented herself, in a hearing on the proposal.

Californians left out

Undocumented Californians, many who work in industries ravaged both by pandemic closures and the coronavirus itself, don’t qualify for federal stimulus payments and unemployment benefits. They are also largely ineligible for other safety net benefits, like food stamps. Newsom created a program to send $500 to undocumented immigrants last spring, but there was only enough money for about 150,000 people.

Still, it’s unclear whether the governor will embrace the progressive proposal. Newsom faces mounting recall efforts over his handling of coronavirus restrictions, which might make him squeamish about fueling more conservative backlash. Meanwhile, California’s coffers have grown. Newsom announced earlier this month that the state now expects $10.3 billion more in revenue than was projected in January, driven by the pandemic gains of the state’s wealthiest residents.

Newsom’s proposal would function like an early, one-size-fits-all version of California Earned Income Tax Credit. Numbers are fuzzy, but according to an analysis by the left-leaning California Budget and Policy Center, the $600 payments could reach the families of roughly 250,000 undocumented workers who file taxes with an Individual Taxpayer Identification Number, thanks to a new law passed last year that allowed ITIN holders to get the CalEITC.

But analysts, lawmakers and advocates argued in legislative hearings that California should do more for those families.

Alternative plan

The nonpartisan Legislative Analyst’s Office recommended an alternative: send $1,800 payments just to the low-income ITIN filers, cutting the plan’s price tag to under $1 billion. Then distribute the remaining funds to the approximately half of undocumented workers who don’t have ITINS or other very low-income Californians.

Unlike Newsom’s proposal, which would send $600 to each household, the LAO’s proposed payments would go to each ITIN filer in the household.                   

Fiscal and policy analyst Chas Alamo says Newsom’s $2.4 billion proposal is too small to stimulate California’s $3.1 trillion economy. “Although large by state standards, (it’s) much smaller than the federal actions that have been taken to date,” said Alamo. 

By contrast, he noted Californians received about $4 billion in unemployment benefits each week during 2020.

The LAO alternative has gained support from a group of 17 Assembly Democrats. 

“We must continue to work together to address the void created by years of inaction by the federal government that has left our undocumented worker population in the cold, without any viable economic support to survive this pandemic,” the lawmakers wrote in a letter to the budget committee.

Additional relief

Meanwhile, a coalition of pro-immigrant and anti-poverty advocacy groups have called for lawmakers to build immigrant relief on top of Newsom’s original proposal, raising the Golden State Stimulus price tag to $3.6 billion. 

For most workers, they want to keep the $600 tax credits. For households making less than $50,000 last year that file taxes with ITINS, they want California to send $1,200 per parent and child. This would reach the families of over 430,000 undocumented workers, the policy center estimates.

Take the example of a single citizen mom with two children, who would have qualified for unemployment and received $4,000 in stimulus payments so far. But a single undocumented mom would have received no aid. Under Newsom’s proposal, her family could receive $600. Under the LAO’s proposal, the family could receive $1,800. Under this proposal, they could receive $3,600.

“One of the most compelling points for us is that California has a huge surplus,” said Anna Hasselblad, public policy director at United Ways of California. “We keep getting more of our surplus.”

This article is part of the California Divide, a collaboration among newsrooms examining income inequality and economic survival in California.

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