California Governor Proposes Tripling Spending on Stimulus Checks
By Christine Mai-Duc
California Gov. Gavin Newsom on Monday proposed a $100 billion
economic stimulus plan that would triple the state's direct cash
assistance program to reach an estimated two-thirds of
The announcement comes as Mr. Newsom said the state is expecting
an unprecedented $75.7 billion state budget surplus, due largely to
booming tax revenues from wealthy residents.
The budget proposal, if passed by the Legislature, would send
$600 tax rebate checks to households making up to $75,000 and an
additional $500 to families if they have children. The cost of the
new checks is about $8.1 billion.
"California's recovery is well under way, but we can't be
satisfied with simply going back to the way things were," Mr.
Newsom said in a statement.
The Democrat also announced he would be doubling the amount of
direct assistance to renters to $5.2 billion and is proposing
another $2 billion in aid to help with utility expenses.
Mr. Newsom didn't detail how he would spend the rest of the
money, but is expected to do so this week leading up to his
presentation of a revised state budget Friday.
In addition to its record-setting budget surplus, California is
getting $27 billion in additional funds as part of the federal
coronavirus aid bill signed into law in March by President
Like most of the country, California's economy is starting to
turn around from the Covid-19 pandemic-induced downturn. Mr. Newsom
shuttered large portions of the state's economy last year as it
became a coronavirus hot spot. Economists at the University of
California, Los Angeles recently have said the state's economic
recovery would start later than that of the nation overall but
ultimately be stronger.
With the state's 7-day test positivity rate at 1.1%, the lowest
since the pandemic began, California is on track to meet Mr.
Newsom's previously announced target to fully reopen the economy
June 15. Covid-19 spread has faded significantly in the past few
The new stimulus plan comes as Mr. Newsom is facing a likely
recall election later this year. Political veterans in Sacramento
have said his chances of beating back a vote to remove him depend
largely on the trajectory of the state's economy and the
John Cox, Mr. Newsom's 2018 Republican opponent who has said he
would run in a recall, accused the governor of "making one-time
payments to Californians to avoid being recalled."
Mr. Newsom didn't directly respond to questions at a press
conference Monday about any link between the proposal and the
Coupled with payments for low-income Californians announced in
February, Mr. Newsom's latest proposal would bring the state
program to $11.9 billion, a sum that would exceed state spending
last year for the University of California system.
About $8 billion of the money is prompted by a 1979 law that
requires the state to split excess revenues between schools and
taxpayer rebates if the budget surplus hits a certain threshold.
The law was last triggered in 1987, when state officials refunded
about $1.1 billion to taxpayers.
Mr. Newsom said his proposal goes "above and beyond the
Some of California's poorest residents who received the state's
Golden State Stimulus checks in an earlier round of funding
wouldn't be eligible for the $600 checks this time, but could
receive the additional $500 for families with children, said
Department of Finance spokesman H.D. Palmer.
Write to Christine Mai-Duc at firstname.lastname@example.org
(END) Dow Jones Newswires
May 10, 2021 17:43 ET (21:43 GMT)
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