During Governor Gavin Newsom’s $300.7 billion 2022-2023 revised state budget proposal announcement on Friday, he proceeded to astound Californians by also stating that the state budget surplus was now $97.5 billion.
The figure towers over last years $38 billion surplus and is more than the total 2020 pending for 47 states, with only Texas and New York spending more than $97.5 billion. California’s tax system, which has caused many to leave the state in recent years due to markedly higher taxes on wealthier citizens and businesses. Typically higher income taxes have been a main contributor, with Capital Gains taxes bring in $291 billion alone into California in 2021. In total, state officials have found that $55 billion more was collected compared to estimates in January.
With so much coming in, Newsom has proposed that over 90% of the surplus should go to one-time only spending items. While some things Newsom proposes has the backing of both parties, such as paying $3.5 billion in bonds early and paying for projects with funds instead of selling debt to cover them, most of his proposed spending has already led fiery debates. Money going to make California a safe-haven for abortion ahead of a Roe v. Wade reversal has clear divisions in Sacramento, while inflation relief, something that will likely become more important through the year, only amounted to $18.1 billion of one time spending. And, out of that, $11.5 billion would go towards $400 checks for car owners in the state.
“People are feeling deep stress, deep anxiety,” said Governor Newsom on Friday of the worsening inflation. “I’m deeply mindful of prospects of a slowdown. The surplus is simply without precedent. Offsetting costs for residents is wise and noble, and it’s something I think that should be celebrated and not criticized.”
“Backed by a robust surplus and grounded in our unshakable values, we’re paving the California Way forward to prosperity and progress for all. With historic investments, we’re doubling down on our formula for success and making sure no one is left behind – supporting working families and businesses, tackling climate change, expanding health care access, making our communities safer, and more,” added the Governor in a statement. “While gridlock persists in Congress and right-wing fanatics turn statehouses across the country into laboratories of hate and oppression, here in California, we’re putting in the work to grow our economy and implement real, inclusive policy change to create a brighter future for all.”
However, the announcement of such a large surplus brought waves of criticism on Friday, with many prominent lawmakers being outraged and demanding the Governor instead spend it on things that are more pressing on Californians, such as suspending the gas tax or drastically improving water infrastructure. Here’s what some opposing lawmakers and groups said on Friday:
Senate Republican Leader Scott Wilk (R-Santa Clarita): “The governor is living in an election-year Fantasyland if he believes promises of debit cards and rebates in the Fall will provide relief NOW.
“Even the non-partisan Legislative Analyst’s Office agrees with Republicans that suspending the gas tax would be the quickest way to give families immediate relief from soaring gas prices. The governor and Democratic leaders should take a page out of the Republican playbook and suspend the gas tax immediately.”
Republican National Committee Spokesperson Hallie Balch: “California’s $97.5 billion surplus is a slap in the face to hardworking taxpayers. California Democrats have refused to offer any kind of immediate relief on some of the highest taxes in the nation, as well as the continuously rising cost of gasoline, and now Governor Newsom is bragging about how much extra money the state has taken off the backs of hardworking Californians. Maybe it’s time for Democrats to stop stealing money from average citizens at every opportunity.”
Senate President Pro Tem Toni Atkins (D-San Diego): “Some of Newsom’s proposals are encouraging. Others, as happens every year, will require more discussion and negotiation.”
Senator Jim Nielson (R-Red Bluff): “It’s nice we have extra revenue, but we have to be careful with how we spend it. We absolutely should not create new, future funding obligations. Budget priorities need to be focused on water infrastructure, wildfire prevention, homelessness and public safety.
“The current historic drought emphasizes the need to quickly finish Sites Reservoir and vital water conveyance projects. Funding forest management is critical to preventing more catastrophic wildfires. Moving the seriously mentally ill away from dangerous homeless encampments and towards effective treatment is essential. And we dare not forget to support funding to strengthen local law enforcement.”
Governor Newsom will need to reach an agreement on spending by June 30th for it to take effect on July 1st. Should they not come to an agreement by then, pay for legislators will be forgone in the next year.