Never mind Kansas. What’s the matter with my home state of California?
Or, more in keeping with the spirit of the place, given that nearly 40 percent of the state’s population is Latino: Que pasa con California?
On Monday, Gov. Gavin Newsom took a whack at proposing the annual state budget—all $286 billion of it—and out of the piñata flew a tasty treat: a plan to expand Medi-Cal, the state’s health care program for the economically disadvantaged, so it pays the health-care expenses of all of the state’s low-income adults, including those who are undocumented.
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To be honest, California was already pretty far down that road. Currently, undocumented immigrants through the age of 26 are eligible for Medi-Cal. And due to a change already in the works, after May 1, that eligibility will extend to the undocumented who are 50 and older.
Newsom’s proposal would fill the age gap and provide coverage, under Medi-Cal, for undocumented adults between the ages of 26 and 49. Coverage would begin on Jan. 1, 2024. And the change would, going forward, cost the state $2.7 billion annually. Just launching the program in the 2023-24 fiscal year will cost an estimated $819.3 million.
You might think that—however well-intentioned—this is a social experiment that California simply can’t afford at the moment. Especially given that the other surprise in Newsom’s budget was a set of tax cuts that would reduce the state’s annual revenue by more than $6.5 billion.
Part of living in California is coping with the inescapable feeling that the state is strapped, underwater and living beyond its means.
Which would make sense given that this is exactly how many Californians feel every month, as they sit at the kitchen table and try to finagle their household finances and stretch each dollar.
Given that sinking feeling of economic calamity, the idea of providing more health-care coverage to people who are not in this country legally will be tough to swallow for many folks in the Golden State.
I totally get that. There is something about what Newsom is proposing that also really sticks in my craw.
I say that as a proud Mexican American whose family owes everything to the fact that, 100 years ago, my Mexican grandfather left the state of Chihuahua as a boy during the Mexican Revolution and crossed with his family—legally—into the United States.
I say it even though I recognize that many of the Californians who would be aided by Newsom’s proposal are people like my grandfather, the hard-working poor who don’t like to take handouts and never think of themselves as entitled to anything. These are the folks who put off getting that cough looked at, and won’t go to the doctor for check-ups—until they’re checked into the emergency room. And by then, it’s often too late.
And I say it even though California has got the money to pay for the adjustment. In fact, despite how strapped many of its residents feel, the state probably has enough cash on hand to pay for what Newsom proposes 10 times over.
It turns out that the nation’s most populous state is not on the way to the poor house. In fact, the state is fat and flush with cash. It has a projected $45.7 billion surplus that was fueled by an incredible spike in tax collections from the filthy rich during the pandemic.
Most states tax the wealthy at a higher level than the working class. But no state does a better job of soaking the rich than California, where it just so happens a lot of the rich still choose to live. In 2019, the top 1 percent of earners paid nearly 45 percent of all the state’s income tax collections.
Many California companies made a killing during the pandemic. Consider the San Francisco-based food delivery behemoth Uber Eats, which generated $4.8 billion in revenue in 2020. Or its competitor across town, Door Dash, which took in $2.8 billion.
Also, California is on track to collect at least $25 billion in capital gains taxes in 2021, the biggest take ever. A “capital gain” is income that comes from selling a valuable asset—like a rental property or blue-chip stock— and it often helps the wealthy become even wealthier.
All of this helps explain how California—home to 39.2 million people, representing more than 10 percent of the U.S. population—became the big dog economically. They don’t call it the Golden State for nothing.
In Texas, where I lived for five years, they like to say that everything is bigger. But, next to California, Texas is all hat and no cattle.
In 2021, Texas’ GDP was $2 trillion, representing 8.8 percent of the national GDP. California’s GDP was $3.35 trillion, or 14.6 percent of the national total.
The California economy is so large that, if the state were a country, it would boast the 5th largest economy in the world, making it more productive than India and the United Kingdom.
So yeah, we can definitely afford to pay for what Newsom is proposing— and then some. Money is not the issue.
The issue—and what I find most taxing about all this—is that California is the land of confusion. My home state is full of idiosyncrasies, contradictions and riddles that provide more questions than answers.
Are we broke, or loaded? Will our destiny be defined by drought, or dot coms? Are we the leader of the pack, producing trends that spread to other places? Or a cautionary tale, a flashing red light, a fate to avoid?
At the heart of the debate over whether to provide health care coverage to the undocumented—many of whom among are much ballyhooed “essential workers” we’re told pulled us through the pandemic—is yet another question. And it’s a tough one:
Which are Californians more willing to tolerate: a concern that we’re normalizing unlawful activity by making life too cozy and comfortable for law breakers, or the hypocrisy of continuing to live off the sweat of a population of undocumented workers that we like to pretend doesn’t exist even though we wouldn’t last a week without them?
I can’t stomach the hypocrisy.
There are more than 2 million undocumented immigrants in the state, according to the Public Policy Institute of California. But the actual figure could be double that.
Never forget that, in California—as in the United States, at large—the number one employer of illegal immigrants is the American household.
If my fellow Californians are enjoying their quality of life, good for them. But good manners dictates that they ought to take a minute and say “gracias” to the hardworking undocumented people who—in a thousand different ways every day—help make that life possible.
Picking up the tab for the health-care costs of these essential workers won’t square the account. But it’s a decent down payment.
