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Sunday, May 29, 2022

Cash flows into California amid unprecedented $97.5 billion surplus, says Newsom

Government coffers are overflowing with an unprecedented budget surplus as Governor Gavin Newsom on Friday unveiled a massive $300.7 billion spending package that funnels cash payments to vehicle owners and hospital workers, while the dramatic significantly increases spending on education, infrastructure and wildfire resilience.

During his much-anticipated May budget revision, Newsom said the state’s surplus rose to $97.5 billion — far higher than his January estimate of $76 billion. A large portion of this surplus is mandated for education and other spending categories, while lawmakers have about $49.2 billion in discretion, some of which will be given back to taxpayers, Newsom said.

The budget is buoyed by a trend that accelerated during the pandemic: The economic gains enjoyed by California’s wealthiest residents translated into unusually high tax revenue for the Golden State. In the 2021 tax year, residents will report a staggering $291 billion in investment gains, according to the revised budget estimate.

“This is without precedent,” Newsom said during the two-hour press conference. “Never in American history has any other state experienced such a large surplus.”

But despite the rosy outlook, Newsom argued that California needed to prepare itself for a stock market bust by investing $23.3 billion at a one-time expense and using up the vast majority of the surplus. He compared the state’s current budget situation with the bubble before the dot-com crash and said the recent stock market crash is a cause for concern.

“You remember 1999-2000, what happened?” Newsom as he pointed to the high share of capital gains revenue fueling the state’s generosity. “We’re looking deeply into this.”

The largest single spending category is a record-breaking $128 billion for public schools, from transitional kindergarten classes all the way to college. The $9 billion bump from Newsom’s January figure is $22,850 in vaccine-12 funding per student, the highest in the state’s history.

The investment is a win for public schools as teachers seek relief amid declining enrollment numbers and rising absenteeism in some areas.

State Superintendent Tony Thurmond said the money “meets the most important needs” of students and schools two years after the pandemic.

California’s budget boom is so large that the governor must contend with a 1979 spending limit, which requires Sacramento to split some of the surplus between taxpayer exemptions and spending on select categories, including education and infrastructure. Newsom said his budget avoids moving money to exempt spending categories, including a $400 “gas relief” payment to Californians who own a vehicle, totaling $11.5 billion in cash. Back.

The revised budget is Newsom’s latest salvo as he talks with Democratic leadership in the Senate on how to spend surpluses and channel funds back to those grappling with rising consumer goods prices. State lawmakers have until June 15 to pass the budget.

In a brief statement, Speaker of the Assembly Anthony Rendon said the leadership would “work closely to present Governor Gavin Newsom with a budget he could be proud to sign by the constitutional deadline.”

Under Newsom’s plan, billions more people will go to infrastructure projects, build tiny homes to address the homelessness crisis, and expand state health insurance to undocumented immigrants.

Ray Bramson, chief operating officer of Santa Clara County nonprofit Destination:Home, said he is “really pleased” to see continued investment in housing and homeless services.

“We are seeing more and more homes for people, both temporary and permanent, coming online much faster than before,” he said. But he cautioned that while smaller homes and other temporary options are part of the solution, the state cannot lose sight of the long-term goal – more sustainable housing.

Amid concerns over the future of Roe v. Wade, $125 million in budget to strengthen abortion access, $12 million to help California’s indigenous tribes locate missing people, and 13 years on a sprawling former farm in the state $5 million to set up the first new state park. in Stanislas County.

Since Democrats have a majority in the legislature, most of Newsom’s plans are expected to become law, although there are divisions. Newsom plans to send the money back to Californians as part of an $18.1 billion “inflation relief fund.”

The centerpiece is a controversial gas price relief proposal that only gives money to those who have vehicles. Democratic leadership in the legislature wants to target the $200 check to people at certain income levels, with an additional $200 for each dependent, but Newsom said it would mean delays in getting the money into the taxpayer’s hands.

Environmentalists also argue that the plan flies in the face of California’s goal of removing gas-consuming vehicles from the road.

“Honestly, I’m confused about why they’re sticking with this idea,” said Chris Hone, research director at the California Budget and Policy Center, an organization advocating for low-income residents. “It basically means that a lot of people who could really use some cash aid right now would be left out of it.”

Newsom is seeking to funnel $2.7 billion in rental aid to an estimated 300,000 families, risk pay of up to $1,500 for each hospital worker, and fund three months of free public transportation as part of a financial relief package. Is.

The governor is also targeting drought and wildfires, with an increase from the previously proposed $22.5 billion to $9.5 billion.

This includes a massive $5.2 billion push to avoid blackouts in the coming years. It would create a “Strategic Electricity Reliability Reserve” that would spend money to open old power plants, expand state incentives for new power plants and battery storage projects, and bring more temporary diesel and natural gas generators online. Another $1.6 billion in new drought funding is proposed to reduce water consumption, but Newsom did not fund the construction of new reservoirs this year.

Asked if he can guarantee there won’t be a blackout this summer, Newsom said, “We’re going to do everything in our power to make sure that doesn’t happen.”

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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