“It makes a lot of sense to save for a rainy day,” said Kristin Schumacher, a researcher at the California Budget & Policy Center. “But I think what a lot of people would argue is that for many families in California, it’s already raining. So, to put those dollars away, it doesn’t do anything for Californians who are struggling to afford the basics right now.”
The cost of living is a particular challenge in Orange County, where a single adult would need to make about $33,000 a year to meet a basic monthly budget, according to the California Budget & Policy Center, a Sacramento think tank. Roughly 38 percent of the county’s 1.5 million workers earn less than that.
“The whole credit [CalEITC] is designed to encourage and reward work, because the more you work and the more you earn, the larger credit you can receive,” said Alissa Anderson, senior policy analyst at the California Budget & Policy Center. Research on the long-standing federal program shows the tax credit can make a difference. “That research shows that the credit significantly cuts poverty,” said Anderson. “It also has been shown to significantly boost employment – particularly among single mothers, because single mothers are the largest beneficiary of the credit.”
Our revenues can fluctuate pretty dramatically with changes in the stock market,” said Chris Hoene, executive director of the California Budget & Policy Center. Hoene said Californians can be somewhat reassured by the state’s rainy day fund. It has been growing in recent years, thanks in part to a booming stock market. “If this is just some short-term correction, the fact that we’re still in overall good economic conditions will likely still mean that the state’s revenues are pretty healthy,” Hoene said.
Alissa Anderson, senior policy analyst with the California Budget & Policy Center, said there are a number of good policy options for reducing child poverty in the state. “Among the best approaches would be further strengthening the California Earned Income Tax Credit to reach more working families and provide larger credits,” she said, “increasing CalWORKs grants to help families moving from welfare to work, and funding more early care and education slots, which would free up family income for other expenses and help mitigate poverty’s effects on children.”