California

Newsom seeks minor tax relief as Calif. surplus hits eye-popping $97bil surplus

California’s state budget will break $300 billion this year, a startling rebound from a COVID-19-induced deficit in 2020 and a significant jump beyond pre-pandemic levels.

State lawmakers and Gov. Gavin Newsom will have a $97.5 billion surplus to allocate this year, though half of it must be earmarked for education and other purposes. It’s the second year in a row California is facing a substantial surplus driven largely by income tax revenue from the state’s wealthy earners.

In 2019, the budget clocked in at $213 billion.

Newsom wants to use part of the surplus to send rebates to California drivers and $1,500 bonuses to hospital and nursing home employees as part of his proposed $300.6 billion budget plan. It includes $227.4 billion in general fund spending and $73.2 billion from bonds and special funds.

The governor’s administration unveiled the rebate proposals ahead of his revised budget presentation Friday morning. It also includes billions in additional aid for rental assistance and utility bills for Californians affected by the pandemic.

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Staff reports from The San Joaquin Valley Sun staff.