The California Teachers Association traces its roots to 1863, when state schools chief John Swett organized the California Educational Society with 100 members, all of them men. Over time, that organization grew into the CTA, now a union representing more than 300,000 members and widely viewed as one of Sacramento’s most influential political forces.

Long before California public employees won collective bargaining rights about 50 years ago, the CTA had already built substantial power at the Capitol. Through member dues, the union has spent heavily on campaign contributions, lobbying and ballot measures that affect public education funding.

Its signature victory came in 1988 with the passage of Proposition 98, which created a constitutional funding guarantee for K-12 schools and community colleges. The measure helped offset the erosion of local property tax revenue following Proposition 13, the 1978 initiative that capped property tax increases.

Today, Proposition 98 remains central to every state budget negotiation. Each year, lawmakers and the governor first determine how much money the formula requires for schools and community colleges before dividing the rest of the state’s revenue among other programs. If school funding is reduced, the state is generally required to restore the money later.

But education is no longer the only major budget priority competing for dominance. Medi-Cal, California’s health coverage program for low-income residents, now serves about 14 million people — more than one-third of the state’s population.

California is spending nearly $200 billion on Medi-Cal in the current fiscal year, according to the Legislative Analyst’s Office, and Gov. Gavin Newsom’s proposed 2026-27 budget would increase that amount to $217 billion. Most of the funding comes from the federal government, but the state’s share still totals roughly $50 billion, making Medi-Cal one of California’s largest commitments.

That has created growing tension as federal support declines and state leaders face pressure to fill the gap. Much of that pressure is coming from SEIU-United Healthcare Workers West, a union that represents about 120,000 members and has become one of the CTA’s strongest rivals in Sacramento.

The conflict is rooted in a basic budget reality: more money for schools can mean less flexibility for health care, and vice versa, unless voters or lawmakers approve new taxes.

The rivalry is already visible in this year’s governor’s race. The Service Employees International Union, the parent organization of SEIU-UHW, is supporting former Attorney General Xavier Becerra, a leading Democratic candidate. The CTA is backing billionaire Tom Steyer, who has repeatedly promised to pursue a long-standing teachers union goal: changing Proposition 13 to remove commercial property tax limits, a move that could raise more money for schools.

The unions are also split over budget proposals, including how California pays for preschool. The state Senate’s budget plan would move preschool funding into the Proposition 98 portion of the budget, which could free up money for health care programs. The CTA opposes that approach, viewing it as a diversion of school funding.

Their largest fight, however, is headed for the ballot. SEIU-UHW is sponsoring a measure that would impose a 5% tax on the wealth of California’s roughly 200 billionaires, with nearly all of the revenue dedicated to supporting health care.

CTA leaders oppose being left out of a potential new stream of tax revenue. They also fear the health care measure could weaken support for their own proposed ballot initiative, which would make permanent a surtax on the incomes of California’s highest earners. Voters first approved that tax in 2012, and keeping it in place could preserve as much as $15 billion a year in revenue.

The dispute marks an unusual public divide between labor organizations that often share allies and policy goals. But as California’s budget pressures grow, the state’s two heavyweight unions are increasingly competing for the same dollars — and for the political power to decide where those dollars go.

Original source: CalMatters

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The spending plan for the 2026-27 fiscal year carries major implications across the state, including for Southern California and the Inland Empire, where many residents rely on Medi-Cal and other health and social service programs. At the center of the negotiations are billions of dollars in disagreements over how much California should spend, what services should be preserved and whether new taxes should be used to help close ongoing budget gaps.

Newsom’s revised budget proposes $334.2 billion for health and human services, with Medi-Cal making up the largest share. About three-quarters of that funding comes from the federal government. But with federal aid reduced and the state still facing a persistent budget deficit, the governor’s proposal would scale back some services.

Those proposed reductions have drawn sharp criticism from advocates for Medi-Cal recipients, who have issued a series of objections since Newsom released his revised spending plan. Medi-Cal serves roughly 15 million low-income Californians.

Legislative leaders in both the Senate and Assembly have put forward budget outlines that would restore many of the services Newsom seeks to reduce or eliminate. The two legislative plans vary in details, but both would increase spending by at least several billion dollars. Neither plan lays out a precise final bottom line.

Lawmakers are also weighing tax increases, particularly those aimed at corporations. Proposals include changing how multinational companies calculate taxable income and imposing a $285 monthly fee on large employers for each worker enrolled in Medi-Cal.

The Senate has proposed adopting that employer fee instead of renewing the state’s long-standing Managed Care Organization tax, which is supported by Newsom and the Assembly. The current tax on health plans generates about $4.5 billion per year and has helped California draw additional federal health care dollars. It is set to expire at the end of the year.

The future of that tax is complicated by new federal limits and by Proposition 35, a 2024 ballot measure approved by California voters that requires proceeds from the tax to be used for medical services rather than non-medical programs.

The California Association of Health Plans opposes renewing the managed care tax, arguing that doing so would conflict with the 2024 ballot measure and increase consumer health care costs by $1.5 billion annually.

The debate reflects the broader challenges facing Newsom and legislative leaders as they decide whether to offset federal funding cuts, restore services targeted for reductions and raise taxes to help pay for it all.

Health and welfare programs are expected to dominate the budget talks because of their size and cost, but they are not the only unresolved issues. The spending plan will be Newsom’s eighth and final budget as governor.

Newsom has said his revised proposal would close the gap between state revenues and spending, a problem that first emerged in 2022 and has continued since. He has argued that the plan would prevent his successor from inheriting a structural deficit when the next governor takes office in January.

Still, many of the tools used to balance the proposal are temporary. They include drawing from emergency reserves, relying on loans outside the main budget framework and using revenue that may be tied to a short-term boost from taxes connected to the artificial intelligence industry.

Legislative Analyst Gabe Petek has cautioned that the state remains financially vulnerable. In a review of Newsom’s budget, Petek wrote that California’s reduced reserves and growing debt leave it poorly positioned if revenues fall below expectations.

As the June 15 deadline approaches, the remaining question is whether state leaders will craft a long-term solution or once again rely on short-term measures to keep the budget in balance.

Original source: CalMatters

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Newsom is eager to safeguard programs that have defined his tenure as the leader of the nation’s most populous state and one of the world’s largest economies. As he gears up for a possible presidential run in 2028, the Democrat is promoting the budget as fiscally responsible, saying it protects California’s values but also builds up the state’s rainy day funds — a pointed rebuke to critics who say the state spends more than it has.

The state’s spending has grown more than $100 billion since 2020, according to legislative budget analysts.

“We’re cutting deficits. But we’re not cutting corners,” Newsom said.

Newsom can’t seek a third term and will leave office in January.

Revenues, driven mostly by the booming stock market and the artificial intelligence industry, are $16.5 billion higher than projections in January. That will help the state avoid a $2.9 billion deficit projected in January, guarantee no budget hole next year and cut the shortfall the following year in half, his office said. Newsom also wants to set aside $9.7 billion in a holding account to help balance future budgets.

California faced tens of billions of dollars in budget deficits several years in a row, forcing painful cuts last year such as a rollback on a promise to provide free healthcare to low-income immigrants without legal status. Nonpartisan budget analysts previously projected the state will see budget holes upward of $20 billion each year in the next few years. Newsom and the analysts sometimes differ in their estimations.

Still, Democrats are bracing for federal funding cuts in healthcare and the impacts of high costs on everything from gas to energy because of the war in Iran. State officials repeatedly have said California can’t backfill all the federal dollars.

Republican lawmakers said Newsom’s plan didn’t go far enough to address future budget problems. Republicans are largely excluded from budget negotiations because Democrats have supermajorities in both chambers.

“Governor Newsom appears to define fiscal success narrowly: if the budget doesn’t collapse on his watch, it’s a balanced one,” Assemblymember David Tangipa said in a statement.

Newsom also blasted President Donald Trump and his policies, including in his budget presentation a photo depicting the president and Treasury Secretary Scott Bessent as characters in the movie “Dumb and Dumber.” Trump “doesn’t particularly give a damn about the financial situation of the average American,” Newsom said.

The budget proposal will officially kick off the final stretch of negotiations between Newsom and Democrats in the Legislature, who have to pass a budget by the end of June.

State lawmakers this year are considering several proposals to increase taxes on corporations to help with budget problems. Newsom has largely avoided raising taxes to boost revenues in past years. Now, he wants to cut fees for new small businesses, limit some tax credits starting in 2027 and impose a sales tax on some digital software and cloud-based services.

The two tax measures could generate more than $1 billion the first year of implementation, according to the governor’s estimation. Newsom is against a ballot initiative for a one-time tax on billionaires that will likely go before voters in November.

He also proposed to increase the monthly premiums for adult patients without legal status in the state-funded healthcare program, up to $50 from $30. The premiums were part of last year’s budget and are set to take effect in July for adults under 60 years old. Democrats in the Senate already signaled they will fight the plan.

California has a progressive tax system that relies on rich people, meaning it gets about half its revenues from just 1% of the population. When the economy is good, rich people pay more in taxes and revenues can soar quickly. When the economy is bad, they pay less and revenues can drop just as fast.

The state could also see a revenue boost from expected upcoming initial public offerings by several major artificial intelligence companies, which are expected to be the largest IPOs in history. But legislative budget experts warned of a potential AI bubble that could worsen the state’s finances.

Newsom’s Thursday proposal also includes a $300 million plan to backfill some of the loss of government-sponsored health subsidies, a $5 billion education grant for teacher training and $100 million to help Los Angeles-area homeowners rebuild after the devastating wildfires last year.

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That is the body language of a man who knows how to wield a magic wand, and how to cast a spell. Trump is a wizard, a very powerful one, and he has magical powers. He will use his magic to make all these complicated issues disappear as soon as he is elected as our next president. We know his magic is very effective, because for the last decade or so, he has kept millions of people spellbound, worshipping him, thinking of him as a divine being, doing whatever he’s commanded them to do, even committing crimes in his name. He has made them drink the Kool-Aid and show unquestioning obedience to him. A whole party has disgraced itself in his loyalty. Some of the smartest and most intelligent politicians have ruined their own legacies to propagate his lies and to defend his most indefensible acts. Even hardcore Christians have ignored the teachings of the Bible, just to kiss his behind, in a totally hypocritical way. All those people tolerating his morally, spiritually, ethically, and legally bankrupt actions, must be under a spell. Otherwise, they’ll see right through his crimes against this nation.

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California will ban people from carrying firearms in most public places while doubling the taxes on guns and ammunition sold in the state under two new laws Gov. Gavin Newsom signed Tuesday that will test the limits of the U.S. Supreme Court’s new standard for interpreting the Second Amendment.

The federal government already taxes the sale of guns and ammunition at either 10% or 11%, depending on the type of gun. The law Newsom signed adds another 11% tax on top of that — making California the only state with a separate tax on guns and ammunition, according to the gun control advocacy group Brady.

The money will pay for security improvements at public schools and a variety of gun violence prevention programs, including those geared toward young people in gangs. The money from the federal tax, which has been in place for more than 100 years, pays for wildlife conservation and hunter education programs. The laws were some of nearly two dozen gun control measures Newsom signed on Tuesday. But he acknowledged many of these laws might not survive legal challenges now that the U.S. Supreme Court has imposed a new standard on interpreting the nation’s gun laws.

Just last week, a federal judge struck down a California law banning guns with detachable magazines that carry more than 10 rounds — one of three major pending cases challenging California’s gun restrictions. “It may mean nothing if the federal courts are throwing them out,” Newsom said. “We feel very strongly that these bills meet the (new standard), and they were drafted accordingly. But I’m not naive about the recklessness of the federal courts and the ideological agenda.” The California Rifle and Pistol Association has already sued to block one new law Newsom signed on Tuesday that bans people from carrying guns in most public places.

The law overhauls the state’s rules for concealed carry permits in light of the U.S. Supreme Court’s decision in New York State Rifle and Pistol Association v. Bruen. It specifically bans people from carrying guns in 26 places, including public parks and playgrounds, public demonstrations and gatherings, amusement parks, churches, banks, zoos and “any other privately owned commercial establishment that is open to the public” unless the owner puts up a sign saying guns are allowed. “These laws will not make us safer.

They are an unconstitutional retaliatory and vindictive response to the Supreme Court’s affirmation that the Second Amendment protects an individuals’ right to choose to own a firearm for sport or to defend your family,” said Chuck Michel, president of the California Rifle and Pistol Association. “They are being challenged, and the second they are signed, the clock starts ticking towards a judgment striking them down.” Newsom — a potential Democratic candidate for president beyond 2024 — has a reputation as one of the country’s most liberal governors.

But he has often refused to raise taxes, even for causes he supports like combating climate change. However, Newsom said he viewed this tax differently than the other general increases he tends to oppose. He argued that gun violence already costs taxpayers a lot of money in health impacts and in the criminal justice system. “I think this is a pretty modest investment in prevention and reducing those costs, ultimately,” he said, later adding, “The carnage, it’s too much. We can’t normalize it, we can’t accept it. This is a small price to pay.” California has some of the lowest gun death rates in the country, ranking 43rd out of 50 states with 9 deaths for every 100,000 people, according to 2021 data from the Centers for Disease Control and Prevention. But violent crimes have increased recently.

The violent crime rate increased by 6.1% in 2022, according to the California Department of Justice. No other state has a special tax just for guns and ammunition, although some local governments do. Tennessee once had a 10-cent tax on shotgun shells, but that tax was repealed in 2019. Pennsylvania collects a $3 surcharge on gun sales to pay for background checks. Fees on California gun purchases currently total more than $37, with most of that money paying for background checks. “Taxing firearm sales to fund violence intervention programs is essential to interrupting the cycle of violence and stopping gun violence before it begins, and we encourage other states to follow suit,” said Kris Brown, president of Brady.

The tax has some exceptions. It would not apply to police officers and it would not apply to businesses with sales of less than $5,000 over a three-month period. State officials estimate it would generate about $159 million annually. The law says the first $75 million of that money must go to the California Violence Intervention and Prevention Grant Program. The program has funded projects targeting young people in gangs, including sports programs, life coaching and tattoo removal. The next $50 million would go to the State Department of Education to boost security at public schools.

That includes things like physical security improvements, safety assessments, after-school programs for at-risk students and mental and behavioral health services for students, teachers and other school employees. That brought comfort to state Sen. Catherine Blakespear, a Democrat from San Diego, who said she was on the Senate floor earlier this year when she got a text message from her ninth-grader saying they were hiding under their desk. No one was injured. “I know that there are thousands of families that are going through this and normalizing the hardening of our schools,” she said. “The reality that we have to protect people by doing things like that is something that we don’t want in this state and in this country.”

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SACRAMENTO, Calif. (AP) — California will double the taxes on guns and ammunition and use the money to pay for more security at public schools and various violence prevention programs under a new law Gov. Gavin Newsom signed Tuesday.

The federal government already taxes the sale of guns and ammunition at either 10% or 11%, depending on the type of gun. The law Newsom signed adds another 11% tax on top of that — making it the only state with its own tax on guns and ammunition, according to the gun control advocacy group Brady.

Newsom — a potential Democratic candidate for president beyond 2024 — has a reputation as one of the country’s most liberal governors. But he has often refused to raise taxes, even for causes he supports like combating climate change.

But it would have been difficult for Newsom to veto this tax increase, given his outspoken support for gun restrictions at the state and national level. Newsom is in the middle of a national campaign to amend the U.S. Constitution to restrict gun sales to people over 21, require extensive background checks, impose a waiting period for purchases and ban the sale of assault-style weapons. Restrictions like that are in place in some states, but not in the Constitution.

That campaign is unlikely to succeed, given the political makeup of the other state Legislatures Newsom needs to convince. But it has put him at the forefront of an issue at the top of many Democratic voters’ lists.

Newsom said he viewed the tax as different than other general tax increases that he tends to oppose. He argued that gun violence already costs taxpayers a lot of money in health impacts and in the criminal justice system.

“I think this is a pretty modest investment in prevention and reducing those costs ultimately … The carnage, it’s too much. We can’t normalize it, we can’t accept it. This is a small price to pay,” he said.

Also on Tuesday, Newsom signed a law overhauling the state’s rules for carrying concealed weapons. The new rules are a reaction to a new standard for interpreting the nation’s gun laws that the U.S. Supreme Court issued last year. California’s new law bans people from carrying guns in nearly all public places — including public parks and playgrounds — public demonstrations and gatherings, amusement parks, churches, banks and any place where alcohol is sold.

Newsom also signed a law that, starting July 1, 2028, would require all semiautomatic pistols sold in California to have microstamping technology. That means each bullet would have a unique marking making it easier for law enforcement to trace the gun it was fired from back to its owner.

Chuck Michel, president of the California Rifle and Pistol Association, criticized the new laws — calling them unconstitutional.

“These laws will not make us safer. They are an unconstitutional retaliatory and vindictive response to the Supreme Court’s affirmation that the Second Amendment protects an individuals’ right to choose to own a firearm for sport or to defend your family,” he said. “They are being challenged, and the second they are signed, the clock starts ticking towards a judgment striking them down.”

No other state has a special tax just for guns and ammunition, though some local governments do. Tennessee once had a 10-cent tax on shotgun shells, but that tax was repealed in 2019. Pennsylvania collects a $3 surcharge on gun sales to pay for background checks. Fees on California gun purchases currently total more than $37, with most of that money paying for background checks.

“Taxing firearm sales to fund violence intervention programs is essential to interrupting the cycle of violence and stopping gun violence before it begins, and we encourage other states to follow suit,” said Kris Brown, president of Brady.

The federal tax on guns has been in place since 1918 and has survived multiple lawsuits. The money from that tax goes to the states, who use it to pay for wildlife conservation and hunter safety programs.

The California Rifle and Pistol Association has promised to challenge California’s new tax in court. A legislative analysis of the law Newsom signed on Tuesday said it is now an “open question” whether a lawsuit challenging the tax would be successful.

The tax has some exceptions. It would not apply to police officers and it would not apply to businesses with sales of less than $5,000 over a three-month period. State officials estimate it would generate about $159 million annually.

The law says the first $75 million of that money must go to the California Violence Intervention and Prevention Grant Program. The program has funded projects targeting young people in gangs, including sports programs, life coaching and tattoo removal.

The next $50 million would go to the State Department of Education to boost security at public schools. That includes things like physical security improvements, safety assessments, after-school programs for at-risk students and mental and behavioral health services for students, teachers and other school employees.

California has some of the lowest gun death rates in the country, ranking 43rd out of 50 states with 9 deaths for every 100,000 people, according to 2021 data from the Centers for Disease Control and Prevention.

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President Joe Biden and his wife, Jill, made $579,514 last year and paid $137,658 in federal income taxes. That works out to a 23.8% tax rate, more than the average of roughly 14% for all U.S. households.

The Bidens’ earnings have trended slightly downward over the past three years, after averaging more than $600,000 in 2020 and 2021.

The median U.S. household income was $69,717 in 2021, according to the U.S. Census Bureau. The White House on Tuesday released the tax returns of the Bidens and Vice President Kamala Harris and her husband, Doug Emhoff.

This once routine rite of passage for presidents and aspirants to the Oval Office became a source of controversy under Biden’s predecessor, Donald Trump, who declined to release his taxes and ultimately had six years’ worth of returns released last year by a House committee.

The Bidens’ income has dropped since 2019, when they earned nearly $1 million, primarily from book sales, speeches and their teaching positions at the University of Pennsylvania and Northern Virginia Community College. The former vice president and Delaware senator often notes in speeches that he was once the poorest lawmaker in the Senate, so much so that he could not afford a home in Washington and had to commute by Amtrak.

In a Rose Garden speech about child care Tuesday, Biden said he couldn’t keep a home in Delaware and also afford a home for his family in Washington during his 36 years as a senator. As president, Biden earned a salary of $400,000. His wife, Jill, was paid $82,335 for her job teaching at Northern Virginia Community College. They paid state taxes of $29,023 in Delaware and $3,129 in Virginia. The Bidens gave $20,180 to 20 different charities.

The largest gift was $5,000 to the Beau Biden Foundation, a nonprofit that works to combat child abuse and is named for their son Beau, who died of brain cancer in 2015 at age 46. They gave $1,680 to St. Joseph on the Brandywine, the church in Delaware that the president attends.

The Bidens also donated $2,000 to the Fraternal Order of Police Foundation. The tax filings of the vice president and her husband showed them earning $456,918. They paid $93,570 in federal income tax for a rate of 20.5%. They also paid $17,612 in California income tax, while Harris’ husband paid $9,697 in District of Columbia income tax for his work at Georgetown University’s law school.

They contributed $23,000 to charity. Biden campaigned on the transparency of his personal finances, releasing 22 years of tax filings ahead of the 2020 election. It was a direct challenge to Trump, who argued for years that an audit prevented him from releasing his taxes — though the IRS had mandated for four-plus decades that the tax returns of sitting presidents and vice presidents be audited. Tuesday was the deadline for paying federal taxes.

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Tax season approaches: Cue dread, confusion, and mentally preparing to part with a chunk of your money.

At least, that’s how many people think of taxes.

But in recent years, especially after payments related to the pandemic and rising gas prices in California, submitting a tax return has also become key to receiving money.

Adam Kuhn learned this the hard way. His wife, who is a contractor, lost all of her work early in the pandemic. She received some unemployment benefits, but even with Adam’s work as a software trainer, the couple’s earnings in 2020 were low enough that they didn’t owe taxes. “So why would we bother?” Kuhn, a Sacramento resident, said. They didn’t bother.

Then, in 2021, California started sending out its own pandemic stimulus payments, which reached up to $1,200. To get the payments, you had to have filed a 2020 tax return. The state did a second round of payments in late 2021, also predicated on having filed a 2020 return.

In 2022, with gas prices soaring and a massive budget surplus on their hands, state lawmakers decided to send out another round of payments to help with the rising cost of living — again tied to 2020 tax returns.

“I wish I had filed taxes especially because, you know, it’s not that much trouble to file taxes, and especially when you don’t owe anything,” said Kuhn. “We do okay for two people with no kids, but we certainly don’t make a ton of money,” they said. They were late on their rent several times in 2020, but luckily their landlord was “gracious” about it, Kuhn said. If they had received some of those payments, they said, the couple probably would have spent the money on food.

It’s a recurring problem. One of the main ways California helps people financially — and redistributes wealth — is by passing money through the tax system. It’s not just one-time pandemic payments; there are also yearly payments, called refundable tax credits, that provide thousands of dollars to lower-income people through the tax system.

But some of the people eligible for those programs earn little enough that they don’t owe any taxes. So, many don’t file a tax return. And if they don’t file, they can’t collect what is essentially free money on the table.

“Your best bet is to file your taxes, because there may be things like stimulus payments or the [gas payments] that we can’t anticipate,” said Anna Hasselblad, director of public policy at United Ways of California, a network for dozens of organizations across the state which, among other things, provide free tax prep.

That’s especially true for any Californian earning less than $30,000, Hasselblad said, because they are likely eligible for cash back, in the form of a tax credit.

The official line, from the state’s Franchise Tax Board, is essentially the same: Filing your taxes, even if you don’t owe any, can be beneficial, because it allows you to potentially get tax refunds, payments via tax credits if you qualify, and potential future one-time payments like the pandemic stimulus packages. You can file a state tax return even if you have no income from work — this includes seniors living off of Social Security — wrote tax board spokesperson Andrew LePage in an email.

One caveat: High fees charged by paid tax preparers might make the trade-off of filing taxes if you don’t owe any not worth it. But many people qualify for free, individualized tax prep through an IRS program — more on that later.

Kim Kaufman, a retiree in Los Angeles, hasn’t paid California taxes for several years; she paid off her house a handful of years ago, she said, and the state doesn’t tax the Social Security checks she receives.

When she heard about the gas payments and learned they were based on 2020 tax returns, “I thought ‘Well, shit. I could’ve used that money,’” Kaufman said. It would have chipped away at her property tax and home insurance bills.

She plans to file a return this year, “in case something like this comes up again,” she said.

“I’ll do it early. I’m not gonna wait until, you know, April.”

More and more aid programs are being delivered as tax-based benefits, said Elizabeth Linos, a public policy professor at Harvard who has studied how people interact with the tax system. “What we’re seeing is that people will be missing out on benefits if they’re not filing their taxes.”

“IT’S YOUR MONEY, GO GET IT”

California’s biggest cash back credit for low-wage people is CalEITC, or the state’s earned income tax credit. That credit alone can give tax filers as much as $3,417 cash back, and combined with the federal credit, the sum can grow larger. There’s also federal cash-back credit for people with kids under 17, and another California credit for families with kids under 6.

So, for example, if you’re a single parent in California making $25,000 with two kids under 6, you could receive $9,990 when you file your taxes in 2023, according to figures provided by the California Budget and Policy Center.

“We like to say, ‘It’s your money, go get it,’” said Hasselblad, with United Ways of California. “And going and getting it means also: Ask for help if you need it.”

Despite all the money on the table, lots of people don’t file their taxes and miss out. It’s difficult to know exactly how many people are in this group. Nationally, about one fifth of the people who are eligible for the federal earned income tax credit don’t receive it, according to the U.S. Department of Health and Human Services. When researchers looked at California households who receive food assistance and are eligible for CalEITC, they found that about 400,000 households that qualified for credit didn’t receive it, largely due to low-income families not filing taxes.

It’s hard to convince people they should file a tax return even if they know they could get cash back. In 2020, Berkeley researchers partnered with California state agencies to research whether small “nudges” — including sending text messages and letters with information about the tax credits to 1 million people — aimed at people who were probably eligible, but who might not claim the benefit, would increase filing. The nudges had no effect.

Another approach was slightly more successful. Researchers reached out to households with emails and voice messages explaining they could receive stimulus payments and directing them to a simplified filing tool designed by Code for America, but the largest boost was only from 0.43% to 2.4%.

California saw an uptick in low-income tax returns in 2020, which the state’s Franchise Tax Board attributed to pandemic-related factors. In 2021 the number of tax returns from people or households making less than $30,000 went down again.

TRYING TO MAKE IT EASY TO FILE

This summer the state Franchise Tax Board plans to send letters to two groups of Californians.

For people who filed a timely 2022 return and appear to qualify for CalEITC but didn’t claim the credit, the tax board will make them aware of the credit and allow them to fill out just one form to receive it. For people who worked and have filed taxes recently but missed 2021, they will potentially receive a letter explaining how much money they might qualify for, as well as how to receive free help filing a return.

Illinois has run a promising pilot with another approach: Sending people forms that are already filled out. The state sent tens of thousands of letters to people who had filed a federal tax return and claimed the federal earned income tax credit, but who hadn’t filed an Illinois state tax return. Those people received letters explaining that they might be eligible for an Illinois tax credit, as well as a form with their tax information already filled out, which they could review for accuracy. Recipients could simply sign the letter and mail it back, or take a photo of their signed letter and email it to the Illinois Department of Revenue. Almost half responded and got refunds in the first year of the pilot.

“I don’t understand why — if the IRS and the California tax board, kind of broadly knows how much I owe in the first place, or if I owe anything at all — why they don’t just send me a letter?” Kuhn, the Sacramento resident said. “Why have to go through Intuit, or, you know, Turbo Tax or whatever?”

GETTING FREE TAX HELP

One big reason people don’t file tax returns is that taxes are hard.

“It’s entirely too complicated, it’s entirely too difficult, and there’s a lot of fear around, you know, getting it wrong,” said Teri Olle, California campaign director for Economic Security Project Action, an advocacy organization. “We, as a country and as a state, do not make it automatic in the way that a lot of other countries do,” she said.

But there is a network of over 100 sites across California that offer free tax prep. The help is provided by trained volunteers and the program is funded in part by the IRS. It’s generally for people making $60,000 or less, people with limited English, and folks with disabilities; California has a lookup tool for finding a site near you, and many sites offer multiple languages.

Anna Perez manages United Way of Kern County’s free tax prep program, which typically operates at 10 sites across the county during tax season. People who visit a site, Perez says, will generally get checked in, chat with a volunteer who will ask them questions about their situation and collect their paperwork, and then that information will get passed on to another volunteer who is certified to prepare their tax return. Then the return will get double-checked by yet another volunteer, reviewed by the client who came in, and then a return will get filed — all for free. The whole process typically takes 45 minutes to an hour, Perez says.

There are also locations that provide free tax help specifically for people over 60. And if you want to file yourself, the Franchise Tax Board recommends some free online tools.

“The bottom line is, a lot of Californians qualify for tax credits,” said Hasselblad, “and none of them should have to pay a tax preparer to get those credits.”

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SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom and his wife made $1.7 million in 2019 during his first year as governor, about half a million dollars more than they earned the year before, according to tax returns his campaign released Monday.

The Newsoms paid roughly $712,000 in federal and state taxes. Their income gain came primarily from Newsom’s winery and restaurant businesses that he put in a blind trust when he became governor. The returns don’t name each individual business, making it impossible to know which ones gained and lost money. The returns show the Newsoms gave about $100,000 to charity, four times what they gave the year before, or about 6% of their income.

Newsom, a Democrat facing a likely recall election later this year, pledged to release his tax returns every year when he was elected in 2018. His competitors may be forced to release their returns too under a law Newsom signed in 2019 requiring candidates for governor to publicly disclose their last five years of returns, though it’s not clear how the law applies to a recall.

The Newsoms typically get an extension and file their returns in October, campaign spokesman Nathan Click said. That means they have not yet filed their 2020 returns, which would show how the family fared financially during the pandemic, when Newsom’s administration set rules that shut down businesses and put significant restrictions on restaurants and wineries.

Newsom made $175,000 as governor, up from his $151,000 salary as lieutenant governor, the job he held for eight years. Jennifer Siebel Newsom, a documentary filmmaker, made about $151,000 through her nonprofit, The Representation Project, which explores gender representation in the media. She also earned roughly $50,000 through her production company, Girls Club Entertainment, and more than $1,000 in residual payments from previous acting jobs.

But most of the couple’s income — an additional $1.3 million — came through passive sources, compared to $775,000 in 2018. Newsom owns The PlumpJack Group, which includes a suite of wineries and restaurants now run by his sister and cousin. He put them in a blind trust run by a family friend after he was elected, and the names of the individual holdings are shielded on the tax returns. The couple has several other trusts and businesses.

Newsom additionally made $39,000 after expenses for a children’s book he is writing about dyslexia, a condition he’s had since childhood that can make it harder to read. The Newsoms made $146 in gross income from other countries through Siebel Newsom’s blind trust, though the returns show they did not have financial accounts or trusts in foreign countries.

The couple has four young children, and in 2019 the family moved into a home in a Sacramento suburb. They rented out their prior Marin County home for $140,000, the returns show, but reported a nearly $250,000 loss on the property. The Newsoms put the home up for sale for almost $6 million in 2019 but are still renting it, Click said. Newsom made $79,000 on the sale of a Napa property he co-owned with his sister and father. They earned $3,000 on a property in Hawaii.

They paid $288,000 in wages to employees at their home, but Click did not comment on how many people the family employs. They paid more than $69,000 in “household employment taxes.”

Newsom’s campaign gave reporters about one hour to look through the tax returns on Monday, and reporters could not take photographs. The 2019 law requiring candidates to release their returns says the secretary of state must post redacted versions of the returns online for the public to see. Candidates must submit their returns at least 98 days prior to a primary.

In a recall election, there is no primary and Newsom is technically not a candidate. The secretary of state’s office did not respond to questions Monday about how it planned to apply the law to a recall.

An election date has not yet been set. If the recall moves forward as expected, voters will be asked two questions: Should Newsom be removed from office, and if so, who should replace him? He cannot be a candidate listed on the second question.

Most of his Republican rivals’ campaigns immediately answered questions about when they would release returns.

Anthony Ramirez, a spokesman for businessman John Cox, said the campaign has been reviewing the requirements under the new law. Cox ran against Newsom in 2018 and only released partial returns.

Celebrity Caitlyn Jenner’s campaign said the campaign will comply with any requirements for the election.

Former San Diego Mayor Kevin Faulconer’s spokesman John Burke said he would “fulfill every legal requirement for his candidacy.”

Former Congressman Doug Ose said he would release his returns, according to the Los Angeles Times.

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SACRAMENTO, Calif. (AP) — Aided by an astonishing nearly $76 billion budget surplus, California Gov. Gavin Newsom on Monday proposed tax rebates of up to $1,100 for millions of households and more than $7 billion to help people affected by the pandemic cover rent and utilities.

It was Newsom’s first in a weeklong roll out of pandemic recovery proposals totaling $100 billion, which could boost his political fortunes as he faces a likely recall election later this year. His opponents accused him of pandering and said the state would be better served by broader tax reforms.

“Direct stimulus checks going into people’s pockets and direct relief — that’s meaningful,” Newsom said from a community organization in a disadvantaged Oakland neighborhood.

Under his plan, roughly 11 million low- and middle-income Californians would see direct, one-time payments. Taxpayers making between $30,000 and $75,000 a year would get a $600 payment. Households making up to $75,000 with at least one child would get an extra $500 payment. It builds on an earlier payments to the lowest-income Californians and immigrants who pay taxes but did not get federal stimulus payments, including those living in the country illegally.

The projected $75.7 billion budget surplus is largely due to taxes paid by rich Californians who generally did well during the pandemic, and marks a major turnaround after officials last year said they feared a deficit of more than $50 billion. Officials from the state Department of Finance said multiple rounds of federal coronavirus bills boosted the state’s budget by putting money back into the economy. The stock market also did well, helping California’s tax collections. The state relies heavily on income taxes from the wealthiest people.

The state will also get $27 billion from the latest federal coronavirus spending plan, the U.S. Treasury Department announced Monday.

Under Newsom’s plan, the direct payments would total an estimated $8.1 billion, said H.D. Palmer, a finance spokesman. The proposal also includes $5.2 billion to help with back rent and future payments and $2 billion for overdue utility bills for people who fell behind during the pandemic, though Newsom’s office provided few details.

A law passed by voters in the 1970s requires the state to give some money back to taxpayers if the surplus hits a certain limit. The state estimates it will be $16 billion over that threshold. Newsom does not have to act immediately, but is choosing to do tax rebates now, Palmer said.

“We believe people are better suited than we are to make determinations for themselves on how best to use these dollars,” Newsom said.

Oakland Mayor Libby Schaaf, who joined Newsom, urged immigrants to take advantage of free assistance to file their taxes and become eligible for the payments.

The budget surplus puts Newsom in a prime political position, said Eric Schickler, a political science professor at the University of California, Berkeley. It’s a better position when “you’re able to give out surplus to millions of voters than in a mode of cutting the budget, raising taxes, asking for sacrifice,” he said.

Newsom must introduce his revised state budget by the end of the week. The chairs of the state Senate and Assembly budget committees joined Newsom, indicating their support for a proposal that will go before overwhelmingly Democratic Legislature.

Jon Coupal, president of the fiscally conservative Howard Jarvis Taxpayers Association, said he did not think Newsom’s plan complied with the state law that limits how much the government can spend. But he didn’t argue with the idea of giving money back to people.

“If he is giving money back to taxpayers, back to citizens, that is a positive thing. Who he is giving it to, we could argue about that,” he said.

Meanwhile, Newsom’s Republican rivals in the recall election quickly criticized the effort, saying long-term tax reform is needed instead. Kevin Faulconer, the former mayor of San Diego, plans to roll out a tax cut proposal later this week.

“One time payments for just one year isn’t enough, not nearly enough,” Faulconer said. “We need permanent, lasting tax relief for middle-class families.”

Businessman John Cox, who campaigned alongside a bear last week for attention, accused Newsom of engaging in a publicity stunt.

“The governor’s got a lot of money to hand out. And of course, he’s worried about his own neck,” Cox said at a campaign event in Los Angeles.

Mindy Romero, director of the Center for Inclusive Democracy at the University of Southern California, said the cash payments could give Newsom a temporary boost but are unlikely to make or break his political future. Instead, his fate will likely depend on a collection of things like the pandemic, drought, wildfires and other issues that could be on voters’ minds.

Combined with the earlier payment, the state would spend $11.9 billion on direct cash payments.

Democratic Assemblyman Phil Ting, the chamber’s budget chair, summed up the plan as one that helps those most battered by the pandemic.

“That budget surplus is going right back to the most vulnerable Californians, the ones who need help the most,” he said.

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