Cuts will widen inequality fueled by recession & COVID-19, especially in communities of color


Sacramento, CA (October 6, 2020) — After President Donald Trump walked away from negotiations today for federal stimulus and relief from COVID-19 and after spending months raising the urgent economic, racial, and social justice needs that require state leaders to secure new revenue, SEIU California reiterated to state leaders the need to mitigate billions in trigger cuts coming to the state budget later this month by taxing California’s wealthiest residents. 

“All summer we warned California leaders that Donald Trump and Mitch McConnell were never serious about delivering the billions in relief needed to reopen schools safely, get PPE to frontline workers, and invest in tracking and tracing needed to get Californians back to work,” said Tia Orr, Director of Government Relations for SEIU California. “Waiting on Washington has delayed our recovery and brought more suffering to our state by wasting valuable time to help families living on the edge and enduring the inequities of systemic racism in healthcare, our economy, education, and more. Now is the time for courage in the State Capitol to prevent this crisis from becoming a catastrophe.”

“Expecting Trump to deliver dollars needed for a just recovery is like expecting him to wear a mask. It’s simply foolish because he is not interested in helping other people,” said Orr. “California leaders must finally get serious and take the reins of our own recovery. Taxing billionaires is the most obvious and overdue path to spur a just, equitable, and inclusive recovery. The wealth of California’s billionaires has exploded during COVID-19. Without the courage to tax the ultra wealthy, California’s leaders are choosing to make school children, college students, working people, and people seeking justice in our courts pay the price – the vast majority of whom are people of color.” 

Without federal relief anticipated in the state budget passed by the Legislature and signed by Governor Newsom in June, child care providers have already shouldered a significant pay cut that threatens 40,000 small businesses, the vast majority operated by women of color.  The following “triggers” will occur October 15: 

  • $6.6 billion in payment delays, or “deferrals,” to K-14 education ($5.8 billion for K-12 schools and $791.1 million for community colleges)
  • $1.9 billion in cuts to state employee compensation.
  • $498.1 cut to California State University.
  • $471.6 cut from University of California.
  • $250 million will not be restored to counties for operating range of programs, including health-related and safety net services.
  • $150 million cut from courts 
  • $88.4 million from the Golden State Teacher Grant Program at the Student Aid Commission
  • $46.4 million from child support administration
  • $45 million from moderate-income housing production
  • $1.9 million from Hastings College of Law.

During the last legislative session, SEIU CA and the Commit to Equity coalition supported two tax bills targeting the wealthiest Californians in order to invest in California’s recovery from COVID-19, recession and unemployment, and the legacy of racism before these crises become catastrophes. 

  • AB 1253 would impact nearly 70,000 households by raising income taxes from 13.3% to 14.3% for income above $1 million, from 13.3% to 16.3% for income above $2 million, from 13.3% to 16.8% for income above $5 million.
  • AB 2088 would impact nearly 30,000 households by applying a 0.4% tax on net worth of at least $30 million in net assets, excluding real estate. 

Both bills were introduced in the context of growing inequality. During the first months of the COVID-19 pandemic, the 154 billionaires who live in California got over $175 billion richer, and 11 more became billionaires.