California bill would use $97 billion surplus to expand child tax credit for the state's lowest-income families

A California assemblyman thinks the state's massive state budget surplus could be put to work helping the state's low-income families.

AB 2589, from Los Angeles-area Assemblyman Miguel Santiago, would expand the Young Child Tax Credit to provide a one-time $2,000 tax credit per child to families earning $30,000 or less per year. The bill would also raise the minimum amount for California Earned Income Tax Credit from $1 to $255 to keep more low-income workers and families from falling deeper into poverty.

"California has a chance to lead the way in fighting poverty," Santiago said in a statement. "Our $97 billion surplus provides a critical opportunity to support our lowest income families."

During the pandemic, the federal American Rescue Plan expanded the Child Tax Credit from $2,000 per child in 2020 to $3,600 per child under the age of 6. More critically, it sent half of the credit as monthly payments of $300 per child under the age of 6 and $250 per child between the ages of 6 and 17, putting more cash in the hands of parents. However, the Build Back Better Bill, which would make the higher credit permanent, has stalled in the U.S. Senate.

According to Santiago, 1.7 million kids in California are at risk of falling back or further into poverty.

AB 2589, which is scheduled to be heard by the Assembly Appropriations Committee on May 19, could be a lifeline to California's lowest-income families, United Ways of California President and CEO Pete Manzo said in a statement. 

"One in three California households struggle to get by, despite an overwhelming number having at least one working adult," Manzo said. "These families are hamstrung by low-wage jobs, the high cost of living, and are disproportionately at the mercy of COVID-19. California needs to step up to ensure that children and families on the brink of poverty are prioritized first."