A year after creating it as a major new tool to fight poverty, Gov. Jerry Brown and California lawmakers are scaling back expectations on a tax credit for the working poor after claims for 2015 totaled less than half the money set aside for the program.
The budget package negotiated by Brown and the Democrat-controlled Legislature expects $255 million in lost income from tax returns that include claims with the state’s version of the earned-income tax credit, according to the Legislative Analyst’s Office. That is down a third from the $380 million budgeted for the current year and what Brown proposed in January for 2016-17.
Department of Finance spokesman H.D. Palmer emphasized that no one will be denied a credit if they qualify for the program, adding that the state continues to reach out to thousands of taxpayers who may qualify for the credit but have not claimed it.
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