Californians recently learned of alarming estimates of the state’s budget shortfall as a result of the economic effects of the COVID-19 pandemic. Gov. Gavin Newsom announced that the state faces a $54 billion budget shortfall for the current and next fiscal years – a 37% decrease from the current state funding level. This stark news comes just ahead of his revised 2020-21 budget proposal. We can’t ignore how quickly COVID-19 has changed California’s fiscal outlook. Nor can we look away from the high price Californians are paying as they shoulder the economic impact of this crisis.
Another day ticks by in the COVID-19 health and economic crisis, and it becomes more evident than before that this pandemic is not affecting all Californians equally. A disproportionate share of Latinx Californians have tested positive for the disease, while Black and Asian Californians have been more likely to die from it. In addition, Californians of color are being hit hard by the economic crisis, as they comprise the majority of workers in industries most affected by business closures.
As widely reported, California is expected to receive billions from the three federal aid packages approved by Congress last week in response to the COVID-19 economic and health crisis. The California Budget & Policy Center will issue a breakdown on what these packages mean for Californians and the outstanding questions to be addressed between federal and state policies. These federal relief packages were necessary to start moving support to workers, households, businesses, and local governments who are dealing with the economic fallout of the fast-moving coronavirus.
We’re a month out from Tax Day and more than 1 million California families with low earnings have already received tax refunds from the California Earned Income Tax Credit (CalEITC), with many more expected to get refunds in coming weeks. These tax refunds couldn’t come at a better time. With state public health officials calling for “social distancing” measures to slow the spread of COVID-19, events, and conferences — including the California Budget and Policy Center’s own Policy Insights 2020 — have been canceled, tourism and travel has slowed, and large tech companies have asked their employees to work from home.