California Senate Panel OK’s $214 Billion Spending Plan
Tuesday, May 28, 2019
California wants to give more benefits to people living in the country illegally as lawmakers in the state Senate advanced a $214 billion spending proposal that would expand health coverage and tax credits for immigrants.
The proposal would let low-income immigrants living in the country illegally get government-funded health coverage if they are 65 and older or between the ages of 19 and 25.
The Senate’s budget writing-panel also agreed to let some people who don’t have Social Security numbers qualify for the state’s earned income tax credit — a program for the poor that boosts people’s tax refunds. The credit would apply to people who have an individual tax identification number, which includes immigrants in the country legally and illegally.
“These are people who are working, who are paying taxes,” Senate Budget Committee chairwoman Holly Mitchell, D-Los Angeles, said. “That’s a population we ought not leave behind.”
Some Republicans have opposed the proposals, especially since the state is also considering imposing a tax penalty on people in the country legally who refuse to purchase health insurance. But they likely don’t have the votes to stop it.
The proposals build on the spending plan Democratic Gov. Gavin Newsom released earlier this year that would extend Medi-Cal eligibility to young adults and double the tax credit to $1,000 for every family with at least one child under the age of 6, making about 3 million households eligible to receive it.
Newsom’s proposal did not include expanding eligibility for the tax credit to immigrants. It’s unclear how much money that would cost.
Newsom wanted to pay for the expanded tax credit by selectively conforming California’s tax code with portions of the tax changes President Donald Trump signed into law in 2017. That would have generated about $1.7 billion in new revenue for the state, mostly from businesses taxes.
The Senate rejected those tax changes.
“We’ve just got to figure out where else to get that money from,” Mitchell said.
The Senate proposal is the first indication how the Democratic-controlled legislature will react to Newsom, who took office in January. The Assembly plans to finalize its budget proposal, which trigger negotiations with the Newsom administration.
Lawmakers must pass a budget by June 15. If they don’t, state law requires them to forfeit their salaries.
The Senate plan does not deviate much from Newsom’s proposal, adopting his revenue projections that include a $21.5 billion surplus.
The Senate plan rejects a proposed new tax on most residential water bills to pay for drinking water improvements. Instead, they opted to use $150 million of existing tax dollars to help some struggling public water systems make improvements.
In 2017, more than 450 public water systems covering more than half a million people failed to comply with safety standards. That number doesn’t include people who use private wells or public systems with fewer than 15 connections, which are not regulated by the state.
Newsom has argued for the tax, saying it would protect the money by making it harder for lawmakers to divert the spending elsewhere. But lawmakers from both parties have balked at implementing a new tax while the state has a projected surplus of $21.5 billion.
Still, some Republicans were wary the tax could return once Democratic leaders conclude their budget negotiations next month.
“My issue is trust,” said Sen. Jim Nielsen, R-Gerber. “Republicans have been duped, at their political peril, by placing and misplacing their trust.”
Category: Economic News