Newsom Wants Extra $600 Stimulus For Low-Wage Californians

Nigel Duara | CalMatters

Gov. Gavin Newsom wants to double stimulus aid by putting an additional $600 into the hands of low-wage Californians, and extend the state’s eviction moratorium, which is set to expire at the end of the month.

The Democratic governor announced the two proposals today as part of his upcoming budget for 2021. Newsom made a virtual appearance with Democratic lawmakers in a show of support to target aid to low-income families that have been most financially affected by the coronavirus pandemic. He said he would ask lawmakers to pass urgency legislation in order to get stimulus checks out much sooner than the mid-year budget deadline.

“We don’t want to wait until July,” Newsom said. “We want some immediate actions to distribute $2.4 billion in what we call the Golden State stimulus. This is our version of what the federal government just did. But we want, instead of $600 checks landing in people’s pockets based upon what the feds just did, we want to double that. We want to get $1,200 into people’s pockets.”

Newsom also proposed distributing a total of $2.6 billion in federal rental relief dollars to low-income renters and small landlords. 

Researchers have found the virus-induced recession has hit low-income workers the hardest while higher-income workers, largely able to work from home, have escaped relatively unscathed, widening the state’s income inequality. Even as California’s unemployment rate moderates from a high of 16.4% in April and May to 8.2% in November, the current rate is still more than twice the pre-pandemic unemployment rate in November 2019, which was 3.9%. 

If legislation is passed to send a stimulus to low-income Californians, Newsom said the state could send approximately 4 million checks within weeks of passage. The stimulus checks would send $600 to both taxpayers and people without Social Security numbers who received the California Earned Income Tax Credit, which is available to households earning less than $30,000 annually. 

Assemblymember Eloise Gómez Reyes, a Democrat from Colton, applauded Newsom’s effort to build on the state’s EITC program, which has been expanded in recent years.  

“It’s a core policy effort to help address the inequities in our state that have been so exasperated by COVID,” said Gómez Reyes. “This tool will provide needed aid to those who need it the most to pay back rent and meet the necessary household expenses now that so many have lost their jobs or had their hours reduced or interrupted.”

Newsom also pledged to address the state’s impending eviction crisis, which has left more than 2 million people at risk of eviction and could put more renters at risk of the deadly virus. The current eviction moratorium is scheduled to lift on Jan. 31 without legislative intervention.

“Yes, we will get a deal done to extend these renter and eviction protections,” Newsom said. “It’s foundational, it’s fundamental. We all recognize the need to do that.”

However, the governor did not indicate how long he was proposing extending the eviction moratorium even though San Francisco Democratic Assemblymember David Chiu has proposed extending the moratorium for the year.

After the California Supreme Court’s eviction moratorium expired Sept. 1, Newsom and state lawmakers extended protections for residential renters and forestalled evictions until Feb. 1 for people who declared that they lost income due to the coronavirus pandemic. 

Without a larger national bailout, the state deal is essentially a short-term fix that will convert back rent to civil debt, meaning landlords will still be able to pursue repayment in small claims court.

This article is part of the California Divide, a collaboration among newsrooms examining income inequality and economic survival in California.