SACRAMENTO, Calif — A new state report suggests changes to Gov. Gavin Newsom's proposed Golden State Stimulus plan. The Legislative Analyst's Office (LAO) says lawmakers should consider changes that would increase the amount of the stimulus payment but limit the number of people who receive it.
The Governor's current plan calls for $600 stimulus payments to about 4 million people in the state, at a cost of $2.4 billion. It would automatically be sent to 2019 taxpayers who received the California Earned Income Tax Credit (Cal EITC), along with 2020 taxpayers with individual tax identification numbers (ITINs) who receive a Cal EITC.
The report from the LAO finds the Governor's approach doesn't help many people who lost income during the pandemic and suggests that lawmakers use a different approach to get the money to populations in need.
"Due to enhanced unemployment insurance (UI) benefits and stimulus checks, income in 2020 for most EITC workers was similar, if not higher, than their 2019 income," the report states. "In contrast, ITIN taxpayers and other undocumented workers have faced significant income losses but have not received UI benefits or stimulus checks."
The LAO suggests instead of the $600 payments, the state could provide $1,800 payments to ITIN filers with incomes below $30,000. ITIN filers were not eligible for the federal stimulus payments. The LAO approach would pay them the same amount that other taxpayers received from the federal government.
The LAO approach would cost between $700 million and $1 billion, less than half the price of the Governor's stimulus plan. The report suggests lawmakers could use the remaining funds to help undocumented workers who do not use an ITIN.
A state assembly subcommittee will discuss the LAO's report on Tuesday.
