Excerpted from the Willow Glen Times
By Jim Beall, Jr.
May, 2009

If there's an overlooked federal tax law that can help cash-strapped Californians, we ought to bring it to people’s attention.

And if a federal regulation unfairly penalizes Californians during these tough times, we ought to change that regulation.

During this legislative session, I'm tackling two of these significant problems to put more cash and benefits in the pockets of people who deserve it.

In February, I introduced Assembly Bill 325, known as the "Earned Income Tax Credit: Working Families Economic Stimulus Act." The bill was written to ensure more eligible low- to moderate-income households file for an Earned Income Tax Credit on their federal income tax return.

This tax credit provides more than $43 billion in refunds to working households nationwide every year. For the 2009 tax year, the maximum credit is $5,028 for a family with two or more children; $3,043 for a family with one child; $457 for a tax filer with no children.

Who is eligible? Generally, they are families who are citizens with an earned income and adjusted gross income:

• Less than $40,295 -- $43,415 if married and filing jointly – with two or more children.
• Less than $35,463 -- $38,583, married filing jointly – with one child.
• Less than $13,400 -- $16,560, married filing jointly – with no children.

According to the Internal Revenue Service, the tax credit does not affect certain welfare benefits. In many cases, EITC refunds are not used to determine eligibility for Medicaid, Supplemental Security Income, food stamps, low-income housing or most Temporary Assistance for Needy Families payments.

But only 30 percent of eligible workers apply for this tax credit. Too many families are passing up this valuable tax credit simply because they don't know about it.

AB 325 addresses this problem by requiring the state Department of Community Services and Development and members of the Volunteer Income Tax Assistance to expand their operations to get working families to apply for this federal tax credit.

But there is a second and separate case that underscores how the lack of accurate information costs Californians, especially seniors: the calculation of the Federal Poverty Line.

The Federal Poverty Line is a yardstick that is commonly used to determine eligibility for key programs such as Medi-Care, Medi-Cal, and Food Stamps. The Federal Poverty Line, however, is based on a nearly 50-year-old methodology that is based on the costs of a subsistence food diet. It fails to take into account California's higher cost of living.

A report by UCLA's Center for Health Policy Research and the Oakland-based Insight Center for Community Economic Development found the minimal annual income for California seniors to cover basic living expenses is $21,001, not the Federal Poverty Line's estimation of $10,400. This means nearly 40 percent of our seniors are eliminated right off the bat from applying for programs that can stretch their dollars, and in these terrible economic times that hurts.

Assembly 324 and Assembly Joint Resolution 6, which I both introduced, aim to end this disparity.

AB 324 – the Elder Economic Dignity Act of 2009 – requires local organizations, such as the California Area Agencies of Aging, that plan programs to use the Elder Economic Security Standard Index, a new and effective tool to measure the real costs for older adults to meet their basic needs.

The index is tailored to specific geographical localities, making it even more valuable for seniors who are contemplating moving from one California region to another. The bill calls for the California Department of Aging to update the index annually using the Consumer Price Index.

AJR 6 encourages the Congress and President Obama to modernize Federal Poverty Guidelines to reflect the actual costs to survive in each state and every county.

This deep recession has cost the jobs or lowered the salaries of millions of Californians and derailed the retirement plans for tens of thousands of seniors. They did nothing wrong except believe that working hard work would ensure them a fair deal: a roof over their head and food on the table. I believe that social compact must be preserved and I hope these bills facilitate it.

Jim Beall, Jr. represents the Assembly District 24 which encompasses Campbell, Saratoga, and includes portions of San Jose, Santa Clara, and Los Gatos.