Good Morning.
On Monday, Governor Gavin Newsom gave his answer to a question that has trickled away since the reports began, showing the state’s pandemic-ridden coffers weren’t that empty after all: How was California going to use its unexpected budget surplus?
“The biggest year-over-year tax break in any state in American history,” said the Oakland governor, flanked by local leaders and state lawmakers. “Direct stimulus checks go into people’s pockets.”
That would be $ 600 checks for roughly two-thirds of California’s taxpayers, as Shawn Hubler, Conor Dougherty, and I reported.
You are part of the governor’s plan for a budget slump that was not only unexpected but major. Like in $ 75.7 billion.
The governor also announced plans to pay 100 percent of the rent back owed by some low-income tenants hit by the pandemic, and to spend $ 2 billion to help residents pay overdue utility bills.
As the week progresses, Newsom will uncover more big swings in its annual budget revision, including asking lawmakers to approve $ 12 billion in new spending on homelessness over a two-year period – which is by far the biggest problem who was ever committed to the problem – and billions in expanded childcare grants and in fighting drought and forest fires.
We’ll be exploring these plans in more detail soon. For now, however, here’s what you should know about the proposals announced on Monday:
Who is Eligible for the Additional Golden State Stimulus Checks?
The rebate plan would send out government stimulus checks of at least $ 600 to approximately 11 million middle-class taxpayers with adjusted gross income of less than $ 75,000 and $ 500 to those with dependent children. The income threshold and benefit would be cut in half for married couples filing their tax returns separately.
The proposal would cover eligible taxpayers regardless of immigration status who did not receive a $ 600 state stimulus check under a previous program targeting more than four million low-income Californians.
If I am eligible for a check, when will I get it?
The money would be a tax break so make sure you file your taxes.
Why does the state have so much money right now?
Unlike property or sales tax, California is heavily dependent on income tax. The vast majority of the state’s income tax revenue comes from the wealthiest residents of California. (Almost half of the state income tax comes from the top 1 percent of state earners.)
Wealthy Californians, by and large, didn’t stop making money during the pandemic. You have benefited from a rapid stock market and an IPO boom. And they were able to work from home for the most part while lower-income Californians picked groceries, filled grocery shelves, and delivered packages sent by more Californians working in huge warehouses.
Will this actually hurt the state’s pandemic recovery?
Chris Hoene, executive director of the California Budget and Policy Center, a Sacramento think tank promoting measures designed to help low- and middle-income households, said the governor’s proposed help – combined with state stimulus payments, rent support and unemployment insurance – will make a significant difference not just to individual Californians but to the state’s economy as a whole.
While the surplus, he said, was built as the state’s affluent residents made money during the pandemic, “the rest of California is not doing as badly as was thought from the state and federal aid provided.”
Hoene said helping tenants pay back rent at the end of the state’s eviction moratorium would keep many Californians from losing their homes and avoid a crisis that would further destabilize already precarious families and exacerbate the state’s homeless crisis.
But, as was often the case during the pandemic, the state needs to work with local governments and community organizations to actually get rent relief for people who need it most.
What does that mean politically for Newsom?
Raphael Sonenshein, the executive director of the Pat Brown Institute of Public Affairs at California State University in Los Angeles, told me that Newsom was benefiting from a big nationwide shift in the Democratic Party: a new hug, spending lots of money on things that people Money want to be spent on.
“Editions are very popular,” he said.
Sonenshein said the Democratic Party had made frugality something of a selling point for decades. But President Biden’s ambitious, New Deal-inspired plans to help the nation recover from the pandemic effectively grounded Newsom’s sweeping proposals at the state level.
“The stimulus payments are more popular than the Biden government,” said Sonenshein. That revelation is likely to get Newsom both ways as it faces a recall.
While the fact that the state is flushed with cash certainly helps the governor, the question remains whether receiving an additional $ 600 will convince proponents to call the governor back to change their minds.
“I think it’s awfully difficult these days to convince people of anything,” said Sonenshein. “The real audience is more like Democrats and Independents who now have a stronger reason to stick with the governor and the governor’s party.”
For more:
Here’s what you should know today
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NBC will stop broadcasting the Golden Globes after the Los Angeles Times reported a number of ethical and financial inadequacies and found the organization had no black members.
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California seized a record number of guns under a law that allows courts to prevent local residents from obtaining guns if family members or police offers believe they could harm themselves or others, the Los Angeles Times reports.
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A man in Irvine who received more than $ 5 million in payment protection program loans bought luxury cars instead.
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ICM Partners, a top Hollywood talent agency, has been accused of creating a hostile work environment for women and people of color, reports the Los Angeles Times.
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What do you get when you combine Snoop Dogg, Ice Cube, E-40 and Too Short? Mount Westmore, a rap super group that formed in the pandemic and has already recorded 50 songs.
California Today goes live at 6:30 am Pacific time on weekdays. Tell us what you’d like to see: [email protected]. Have you been forwarded this email? Sign up for California Today here and read every issue online here.
Jill Cowan grew up in Orange County, studied at UC Berkeley, and reported across the state, including the Bay Area, Bakersfield, and Los Angeles – but she always wants to see more. Follow here or on Twitter.
California Today is published by Julie Bloom, who grew up in Los Angeles and studied at UC Berkeley.