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All Californians — regardless of income, race, or zip code — deserve to feel secure in their ability to put food on the table and make their rent or mortgage payment. Yet high costs of living are straining the budgets of Californians with low incomes, who have long been struggling to make ends meet.

More than half of California households with incomes below $50,000 had difficulty paying for basic expenses such as food, housing, and medical costs in March and April. Black, Latinx, and other Californians of color were more likely to struggle with basic expenses, being more likely to have low incomes due to past racist policies and ongoing discrimination.

Californians with low incomes are hit hardest by the rising costs of necessities. Policymakers should make sure state efforts to give Californians relief prioritize meaningful assistance to these families and individuals, who have long been blocked from opportunities and have been hit hardest by the health and economic impacts of COVID-19.

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Safe and stable housing is a fundamental need for every child and adult. Yet state legal protections that have kept California renters with low incomes housed throughout the pandemic expire at the end of March 2022. Applications for emergency rental assistance will close at the same time.

Half of California renters with low incomes report facing housing hardship. While thousands of California households have been helped by emergency rental assistance as of mid-March 2022, other families and adults are still waiting for the state to process their applications and have not yet received payments.

State policymakers can extend legal protections for California renters, provide opportunities to still apply for emergency rental assistance, and help people avoid the devastating effects of eviction and potential homelessness. The health and economic effects of COVID-19 are not over for families and individuals — rental support must continue to keep Californians housed.


Support for this report was provided by the Conrad N. Hilton Foundation.

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The purpose of the CalEITC is to reduce poverty among working Californians, but most people
get less than $200 from the credit
– far too little to achieve this goal. The credit for workers
without dependents – who comprise 74% of CalEITC beneficiaries – ranges from just $1 to $255
per year. Plus, the majority of these workers likely don’t qualify for the federal EITC.

This helps explain why 35% of CalEITC-eligible working-age adults without dependents live in
poverty
– based on the California Poverty Measure – even after accounting for the tax credits
and public benefits they get.

Establishing a much larger minimum CalEITC for all eligible workers would help Californians
who are paid low wages better meet basic needs.
It would also help make the tax code more
equitable by strengthening a credit that largely benefits Californians of color.

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Nearly 1.7 million California children are at risk of falling back into poverty or deeper into
poverty this year because federal policymakers failed to extend the expanded federal Child Tax
Credit (CTC).
Researchers already estimate that 3.7 million children nationwide fell into poverty
in January 2022.

California could take action this year to reduce the harm to families who will lose the most money from the expired CTC.

Families with children will lose thousands of dollars they need for food, diapers, and other
basic needs
because the CTC expansion ended. For example, a family with earnings of $15,000
and two children ages 0 to 5 will see their federal CTC drop from $7,200 to $1,875. A family with
lower earnings will lose even more money.

California could take action this year to reduce the harm to families who will lose the most
money from the expired CTC.
Options include sending additional cash payments to CalEITC-
eligible families with children, expanding California’s Young Child Tax Credit to be more like the
federal CTC, and increasing CalWORKs grants.

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