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Brown's New Budget Proposal Includes Tax Credit For Poor

May 14, 2015

California Governor Jerry Brown (file photo)
Credit Andrew Nixon / Capital Public Radio

California Gov. Jerry Brown will include a state earned income tax credit in the revised budget proposal he'll release Thursday morning, according to information provided by the Brown administration to Capital Public Radio.

The proposed tax credit would benefit an estimated two million Californians in deep poverty while reducing state budget revenues by $380 million a year. It was first reported by the Los Angeles Times.

The governor has been criticized for not doing enough for the more than six million Californians in poverty. And Assembly Democrats called for a state earned income tax credit earlier this month.

Brown is still expected to take an overall tone of fiscal restraint in his budget proposal. State tax revenues have surged past projections by more than $3 billion through April. But under California's constitution, nearly all of that money will be set aside for schools.

Under the governor's proposed earned income tax credit, households without dependents would be eligible if their income is less than $6,580. Those with three or more dependents would be eligible if they earn up to $13,870.

The tax credit would be refundable. That means Californians who owe less money on their taxes than they would qualify for in this credit would get a refund from the state.

"Our state has the highest poverty rate in the nation, so we should absolutely consider every policy that helps the most economically vulnerable, especially those that are working and still struggle to make ends meet," says Amanda Fulkerson, a spokeswoman for Assembly Republican Leader Kristin Olsen. "The EITC is one policy that merits discussion, but it will not end widespread poverty."

The governor proposes that the credit take effect beginning with the 2015 tax year.

The federal government already has an earned income tax credit. But not all Californians who receive the federal credit would be eligible for Brown's proposed state credit, which would be targeted at the lowest-income Californians.

l struggle to make ends meet," says Amanda Fulkerson, a spokeswoman for Assembly Republican Leader Kristin Olsen. "The EITC is one policy that merits discussion, but it will not end widespread poverty."

The governor proposes that the credit take effect beginning with the 2015 tax year.

The federal government already has an earned income tax credit. But not all Californians who receive the federal credit would be eligible for Brown's proposed state credit, which would be targeted at the lowest-income Californians.