The California Franchise Tax Board updated their website on Wednesday in preparation for California’s largest stimulus program in history, the Golden State Stimulus II, to begin disbursement next week.
Golden State Stimulus II was first proposed in May when Governor Gavin Newsom unveiled a $100 billion dollar spending program. Spurred largely by a $76 billion surplus (which the California Legislative Analyst’s Office has only calculated at $38 billion) and around $25 billion in federal coronavirus aid, the California Comeback Plan was signed into law in July, with the $12 billion Golden State Stimulus being one of the largest programs in the plan.
Recall supporters, as well as many others, were quickly up in arms about the plan once approved, largely due to check mailings and direct deposits of the Stimulus being scheduled for early September: less than two weeks before the recall election on September 14th. Lawmakers such as Assemblyman Kevin Kiley (R-Rocklin) even pointed out on Twitter just how suspicious that these were being given out at ‘opportune’ times.
Experts noted that Newsom’s bucked the trend of past stimulus payments by not being near a crisis or promised tax cut.
“Economic stimulus payments are a relatively new thing,” explained Cassandra Hall, an economist who has studied past stimulus payments and their effects on the economy. “The first one came out early in George W. Bush’s presidency in 2001 with checks worth between $300 and $600 being sent out. The U.S. wasn’t running on a deficit and Bush ran on tax cuts, so the stimulus was part of it. The country was also dealing with the dot com bust at the time still as well as brewing financial scandals like Enron, so it made sense to help boost it up. They became all the more important when later in the year September 11th happened and the economy went down a bit.”
“Bush had to sign another one in early 2008 to combat the Great Recession, with, again, several hundred dollars going out to each American adult depending on different factors. And then there were all of the ones we’ve had in the last few years from the federal government because of COVID-19.
“Now, this far into 2021, many states have certain types of stimulus programs. Some for teachers, others for those who were on unemployment. But California has by far the largest program, with along with the first Stimulus they gave out, covers nearly all the taxpayers in the state, only excluding certain people, most notably top tax bracket level Californians. The second stimulus alone covers over two-thirds of state taxpayers.
“But this stimulus was only given because of a surplus and no real reason. You can try and say economy, but California’s is already rebounding. You can try and say COVID-19, but lockdowns and such are no longer in place. It is sure nice to have, but there is no apparent reason for it.”
This has only helped further the belief that the Stimulus being sent out so close to election day is helping give Newsom a last boost in votes to help stave off the recall.
“Newsom was doing well when the stimulus checks were signed off on, ” added former lobbyist Harry Schultz to the Globe. “Now…not so much. What was then considered insurance, having checks and payments going out so close to the election, it’s now considered more essential for him. He needs that goodwill, and he’s not finding any with the droughts, wildfires, and dozens of other things on his plate. The Franchise Tax Board is really building up now. Those payments are going out soon.”
Golden State Stimulus II payments will begin to go out next week.
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