Child poverty soared after Congress refused to act; California leadership needed now
SACRAMENTO, CA – In response to new budget projections from the Legislative Analyst’s Office (LAO), the California Earned Income Tax Credit (CalEITC) Coalition, a leading statewide advocacy coalition for economic prosperity and equity, issued an urgent message to Governor Newsom and state lawmakers: poverty is not an inevitability, but a failure of our policy choices!
“The LAO’s report clearly indicates we need to consider new bold, progressive ways to build a budget that meets the needs of all Californians, including revenue-raising proposals like SB 220,” said Shimica Gaskins, President & CEO of GRACE, End Child Poverty in California. “We are hopeful that lawmakers will protect the progress we’ve made going forward and continue to build a more equitable California for all.”
Coalition members point to the enhanced federal Child Tax Credit as an example of a policy choice the federal government made to prevent poverty during the economic downturn brought on by COVID-19. This bold action reduced poverty to historically low levels; however, when Congress failed to renew these benefits, poverty rates soared, particularly among children and Black and Latinx communities.
“We know what works to lift families and children out of poverty — putting cash in their household budgets. Family tax credits are also the most targeted and effective way to help families deal with inflation, boost local economies, and improve lifelong results for children,” said Pete Manzo, President & CEO of United Ways of California. “California leaders have stepped up before to prioritize Californians who are struggling to get by and they must continue this in 2024.”
The coalition is urging state leaders to strengthen proven tax credit programs — the California Earned Income Tax Credit (CalEITC) and Young Child Tax Credit (YCTC) — to prevent even more children and families from falling into poverty, as documented in recent reports by the California Budget & Policy Center and United Ways of California.
“We can’t have a prosperous California when working families can’t afford to pay their rent, put food on the table, or keep the lights on,” said Amy Everitt, president of Golden State Opportunity. “State lawmakers have a choice: support working families by protecting and strengthening our successful tax credit programs or watch as even more families fall into poverty. The choice is clear.”
CalEITC Coalition members recognized and thanked Senate pro Tem Toni Atkins, Assembly Speaker Robert Rivas, budget subcommittee chairs, and other legislative leaders who called for protecting the safety net in a revenue downturn.
Quick Facts:
According to the California Budget & Policy Center’s recent reporting on the Supplemental Poverty Measure:
- California’s poverty rate surged to 16.4% in 2022, up from 11.0% in the previous year.
- The child poverty rate more than doubled from 7.5% in 2021 to 16.8% in 2022 after Congress refused to renew the enhanced federal Child Tax Credit.
- Poverty increased drastically for Black Californians, nearly doubling from 9.5% in 2021 to a staggering 18.6% in 2022. Similarly, poverty spiked for Latinx Californians, jumping from 12.6% in 2021 to 21.6% in 2022.
- Nearly 1 in 5 Black Californians and more than 1 in 5 Latinx Californians were thrust back into poverty as pandemic-era policies and financial supports like the expanded federal Child Tax Credit expired.
According to United Ways of California’s recent Real Cost Measure study, which takes a comprehensive look at the real costs to make ends meet in California, including housing, food, health care, child care, transportation, and other basic needs:
- More than one in three households — over 3.7 million (34%) — do not earn sufficient income to meet basic needs in California; 97% of which have at least one working adult.
- 7 in 10 single mothers in California, over 576,000 households, fall below the Real Cost Measure.
- 51% of Latino households fall below the Real Cost Measure compared to 45% of African American households, 30% of Asian American households, and 23% of White households.
- More than half of households with Young Children Struggle — 54% of households in California with children under the age of six fall below the Real Cost Measure.
Media Contact: Randall Echevarria, randall@paschalroth.com
*Courage California is a part of the CalEITC Coalition.