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As California’s Economic Outlook Improves, Governor’s Revised Budget Proposal Offers Hope with Earned Income Tax Credit but Fails to Restore Cuts to Vital Programs

As California’s Economic Outlook Improves, Governor’s Revised Budget Proposal Offers Hope with Earned Income Tax Credit but Fails to Restore Cuts to Vital Programs

On Thursday, May 14th, Governor Jerry Brown released his revised budget proposal for the 2015-16 fiscal year. Despite a rosy economic picture with $6.7 billion in additional revenues, the revised budget does not restore any of the devastating cuts made during the recession to health and human services programs on which millions of Californians rely. The majority of the additional revenues ($5.5 billion) will go to K-12 education, but the remaining $1.2 billion will be split between the Rainy Day Fund and paying down debts.

Just as our state endures an historic drought, millions of Californians also face extreme needs and can’t afford to wait for that rainy day! Locking these funds away won’t help Medi-Cal recipients who are struggling to find a doctor because of low reimbursement rates or can’t access dental care due to limited dental benefits; or those on CalWORKS whose benefits were cut so severely that they remain in deep poverty. The budget proposal also fails to include funding for Health for All legislation to extend coverage to the over one million undocumented immigrants left out of the Affordable Care Act. Senator Holly Mitchell put it best when she said, “The budget is not simply a math problem…The Legislature has options to use a significant portion of the funds to meet human needs.”

On the positive side, the Governor’s revised budget proposal does include funding for immigrants with Deferred Action for Parental Accountability (DAPA) and Deferred Action for Childhood Arrivals (DACA) status to enroll in the Medi-Cal program. In addition, acknowledging that California must take steps to reduce poverty, the Governor is proposing an Earned Income Tax Credit (EITC) for low income families. Over 825,000 California families would qualify for the new EITC – meaning they have household incomes between $6,000 and $13,000 a year. While this is an important first step forward, we need more ambitious strategies to lift the state’s most vulnerable residents out of poverty.

As positive revenue projections show that the state is in economic recovery, it is critical to ensure our health and human services programs are not stuck in the recession. We look forward to working with fellow advocates and policymakers to better utilize our resources to improve the health and wellbeing of all Californians.

For a detailed analysis of the revised budget, visit our Policy Center.

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