California Budget -Inequality

The 2020-21 budget is signed, but state leaders' work to ensure the health and economic well-being of Californians is far from over. As COVID-19 continues to sicken people — young and old — and so many Californians are still out of work, one thing is clear: policymakers must do more to rebuild a California where everyone can be healthy, safe, and care for their families.  How can policymakers create a more equitable California? California is home to alarming inequality — and that’s a result of choices policymakers have made and ways they've avoided opportunities over the years. Black, Latinx, and undocumented Californians are suffering the highest rates of infection and death, and significant job losses. These health and economic disparities are not new or accidental. Meanwhile, corporations continue to pay far less of their California income in state taxes than a generation ago and, despite seeing large gains in their income and wealth, very wealthy Californians are paying approximately the same share of their income in taxes as low- and-middle income Californians due to tax breaks and loopholes. This, along with recent federal tax cuts and a decade of disproportionate economic growth, means that corporations and the very wealthy entered this recession in far better shape than California’s workers. In the coming weeks, state policymakers can make a choice: benefits for corporations and the very wealthy or supporting the vast majority of Californians. There's still time to act. Policymakers have the opportunity to fix inequitable policies and secure the revenue needed to invest in the health and economic well-being of Californians who carry our communities forward, today and beyond COVID-19.  Sincerely, Chris Hoene, Executive Director

California’s state budget would have received $11.2 billion more revenue in 2017 had corporations paid the same share of their income in taxes that year as they did in 1981. State policymakers have enacted several corporate tax breaks – many without expiration dates – totaling $5.7 billion for corporations in 2019-20. Corporations are also paying significantly less of their income in federal taxes due to the federal Tax Cuts and Jobs Act signed by President Trump in 2017.

In just two months – between February and April of this year – California lost 2.6 million jobs. That’s twice as many jobs as California lost during the Great Recession over almost three years.  Employment for both women and men who are immigrants declined far more than for their non-immigrant counterparts during the first three months of the recession. Immigrant women saw the steepest decline in employment. The majority of jobs California lost in the first three months of the COVID-19 recession were in low-paying industries.

California's 154 billionaires saw their net worth jump by 25.5% ($175.4 billion) during the first three months of the COVID-19 pandemic. Between 1987 and 2017, the richest 1% of Californians have seen their incomes increase by 134.4% on average, while the middle fifth of Californians saw their incomes decrease by 14.6% on average.

Your support makes our work possible to advance public policies that help improve the economic and social well-being of Californians with low and middle incomes. Thank you.