Newsom: California’s budget surplus hits record $97.5 billion

California is entering its next budget year with a record surplus of nearly $100 billion, Gov. Gavin Newsom said Friday.

Newsom unveiled a revised budget plan for the next fiscal year that is just over $300 billion, the highest in state history and driven by a surge in tax revenue. The state’s tax revenue was $55 billion more than officials expected in January, with an estimated surplus of $97.5 billion.

That means Newsom, a Democrat, has tens of billions of dollars left to spend on new and existing initiatives as he seeks re-election in the fall. He plans to increase spending to combat the ongoing drought, help more women in California have abortions and offset rising costs of food, gas and other goods due to inflation.

He must reach a deal with the Democratic-led Legislature on all of his proposals. They have until the end of June to finalize the budget, which goes into effect on July 1.

Newsom said one of his top budget priorities is to free Californians from inflationary pressures.

“People are stressed and anxious,” he said.

He proposed issuing checks for $400 to registered car owners in the state, up to two checks each. That would cost the state about $11.5 billion, he said. While the money will only go to car owners, Newsom said it should be seen as an “inflation refund and relief”.

“For you, it could be a rebate for groceries, or it could be a rebate for other cost burdens placed on you,” he said.

Democratic lawmakers, however, have different ideas about how to provide relief. They only want to give $200 checks to people below a certain income level.

Meanwhile, Republicans say Newsom should suspend the state’s top national gas tax for a year instead of a check. They also asked him to increase the tax credit for renters and a new tax credit for students.

“Senate Republicans believe there are better ways to invest in the state,” said Sen. Rosilicie Ochoa Bogh of Yucaipa.

US News.

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