California’s budget surplus has more than doubled since January to a staggering $68 billion, Senate Democrats said Thursday, prompting a raft of new spending proposals from lawmakers that include returning $8 billion to taxpayers in a move that highlights a disagreement with Gov. Gavin Newsom.
While the pandemic had prompted warnings of multibillion-dollar budget deficits in most states, those fears were unfulfilled as tax revenues across the country rose despite coronavirus-related business closures that caused millions of people they lost their jobs.
This whiplash in income was most pronounced in California, the nation’s most populous state that is home to Silicon Valley and many billionaires. Newsom warned that the state would run a $54 billion shortfall in 2020 after issuing the first statewide stay-at-home order in the entire country. Instead, incomes rose sharply as wealthy people, who pay much higher taxes in California, got richer during the pandemic.
Last year, California’s budget included a $47 billion surplus, which was a record at the time. Thursday’s new estimate, based on preliminary numbers from the nonpartisan Legislative Analyst’s Office, confirms that California is on track to surpass that number this year.
The $68 billion surplus in California’s general fund would be more than double the $29 billion figure Newsom announced in January. Additionally, California is projected to have a $37 billion surplus that must be spent on education, an increase from the $16.1 billion Newsom announced in January. Newsom’s administration will update his budget proposal by May 15.
On Thursday, Democrats, who hold the majority of seats in the state legislature, announced how they would spend that money. His plan confirms most of what Newsom announced in Januarywith some new proposals.
One of the biggest additions is a plan to send $200 checks to each taxpayer making less than $125,000 a year, or $250,000 a year for couples filing jointly. The plan would also guarantee $200 checks for each dependent, meaning a family of five would receive $1,000.
That proposal puts Democrats at odds with Newsom, who wants to send checks as big as $800 to people who own cars in California to help offset record gasoline prices. Newsom says his plan will cost about $9 billion.
Both Newsom and Democratic lawmakers have said they want to get this money to taxpayers as quickly as possible. But so far, they have been unable to agree on how to do it. In general, Democratic lawmakers say they don’t like Newsom’s plan because the money would only go to people who own cars. Newsom’s plan also includes $750 million to give people free rides on public transportation for three months.
“We are ready to act as soon as the Governor joins us in supporting a plan that provides greater relief to California families,” said the two top leaders of the Legislature, Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon in an earlier joint statement. this week.
California’s gas tax increases slightly each year due to inflation. The tax is scheduled to increase about 3 cents a gallon on July 1. Newsom had proposed a bill that would stop that increase this year, which must be passed before Sunday to give him enough time to take effect. But Democratic leaders in the state legislature never called it up for a vote.
Meanwhile, Republicans want to temporarily suspend the state gas tax, which at 51.1 cents a gallon is the second highest in the country. On Thursday, a small group of Republican and Democratic lawmakers unveiled a plan that would suspend the entire gas tax for a year, while mandating that the savings go to drivers instead of oil companies. But legislative leaders have already said they won’t do that, a sign the proposal likely won’t have the support to pass.
Beyond aid to individuals, the Senate Democrats’ proposal would also provide billions of dollars in aid to small businesses. Businesses pay a tax that pays people’s unemployment benefits when they lose their job. But so many people lost their jobs during the pandemic that the fund ran out of money. California had to borrow money from the federal government, which companies must pay back.
Senate Democrats want to give rebates to businesses with 250 or fewer employees, which would offset some of those taxes. In addition, Democrats want to give about $500 million in grants to businesses with 150 or fewer employees to help pay for a new law requiring them to give workers up to two weeks of paid sick leave because of the coronavirus.
The plan would not only spend money. It would also put more money into the state’s savings accounts, bringing the state’s reserves to a total of $43.1 billion, the most ever.
Atkins, the Senate president pro tempore, said the plan is “doubling down on our priorities” by “reinvesting California’s wealth in those who need it most, especially struggling families and small businesses.”
The plan would spend another $3 billion to combat homelessness, or $1 billion more than Newsom proposed in January. Senate Republicans have called for a $10 billion “Mental Health Infrastructure Fund” to help pay for care for the state’s homeless population, which includes many people with mental illness. But Republicans only control nine of the 40 Senate seats, meaning they can’t pass their budget priorities on their own.
“We have ignored the mental health and substance abuse treatment needs of too many Californians for too long, primarily because we have failed to invest in the facilities and workforce necessary to provide the needed help,” Republican Sen. Patricia Bates said last week. anus. week.
The Senate Democrats’ proposal represents only one side of the budget negotiations. Any budget proposal must also be approved by the Newsom-Democrat controlled state Assembly.
Reference-ktla.com