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Policymakers are preparing to make decisions on the 2021-22 state budget — and just as there are signs the pandemic is starting to ease in California. Still, data and experience show the economic and health effects of the recession will linger on for Californians, especially people in low-wage jobs, families in low-income households, and Californians of color. How can policymakers address the challenges and barriers for Californians now and meet their ongoing needs, look beyond this budget year to equitably allocate the state’s resources, and confront the widening wealth and income inequality in our state? 

On March 12, President Biden signed the American Rescue Plan (ARP) Act to provide much needed assistance to tens of millions of people, including millions of Californians. The $1.9 trillion federal aid package will bring approximately $150 billion in federal aid to California to help reduce economic hardship for low- and middle-income households, support workers, help schools address learning needs, boost early care and learning, combat housing instability and homelessness, and bolster the economy. This latest round of federal fiscal relief will help reduce hardship as a result of the pandemic, particularly for Californians with low incomes and people of color, and begins to set the stage for a more equitable economic recovery. This report outlines key provisions of the plan and what it means for Californians.