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Millions of Californians will receive $200 discount checks under a plan by state senators who say they expect the state’s additional spending power to reach $68 billion.
Senate leaders revealed their plan and economic estimates Thursday, predicting California’s budget surplus to be more than double what Gov. Gavin Newsom estimated in his January budget proposal.
At the time, Newsom predicted a surplus of about $29 billion in the state’s general fund when he presented that Spending plan For the 2022-23 fiscal year.
Both Newsom and lawmakers have suggested using the surplus money to provide relief for soaring gas prices, but they haven’t agreed on the specifics of which residents should benefit and how.
The Senate plan unveiled Thursday would send checks for $200 to individuals with incomes less than $125,000 or families with less than $250,000. It will also provide additional money for people in state programs for food aid and supplemental income for low-income residents.
The state is rife with unexpected cash because tax returns from the state’s high-income earners have continued to come in stronger than analysts expected. California taxes its wealthiest residents and businesses, which means that their financial success in the past two years has led to solid revenue for the state.
Lawmakers and Newsom find themselves with so much extra money that they risk hitting spending limits in state law. To comply with government spending rules, Senate leaders said Thursday they want to spend a large portion of the surplus money on infrastructure projects.
Despite their rosy forecasts for next year, legislative leaders estimate that particularly strong tax collection will fade in the coming years, making future surpluses less likely.
Lawmakers’ new estimates come in anticipation of Newsom’s revised budget plan, which he will unveil next month. In his initial spending plan from January, Newsom called for more spending on fighting COVID-19, building more infrastructureexpanding state-funded health care to undocumented immigrants of all ages, and other priorities.
In that plan, Newsom estimated that the total surplus, including in the state’s general fund and in other areas of the budget, would be about $45.7 billion. For the current fiscal year, which ends in July, Newsom’s budget team estimated a surplus of $80 billion.
Last year, Newsom and lawmakers used a portion of the surplus to send $600 stimulus checks to millions of Californians. This year, it is unclear whether residents will see similar screenings and what form they will take.
Newsom proposed a different scheme to send money to Californians for higher gas prices, He called on the state to send $400 per vehicle to drivers, a maximum of $800 per family. Some state lawmakers have rejected that plan, saying instead that the state should prioritize giving money to its low-income residents.
Newsom and lawmakers must agree on a budget framework by mid-June, though they may continue to hash out the details for months after the fiscal year begins on July 1, as they have done in recent years.
Dustin Gardiner contributed to this report.
Sophia Polag is a writer for the San Francisco Chronicle. email: sophia.bollag@sfchronicle.com Twitter: Tweet embed
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