Governor Gavin Newsom Unveils $18.1 Billion ‘Inflation Relief’ Package Proposal

Governor Gavin Newsom unveiled a $18.1 billion inflation relief package proposal on Thursday, building off previous plans and proposals from prior months and giving a preview of what the Governor’s May budget proposal revision due to be released on Friday may include.

According to the details of Governor Newsom’s inflation relief package, over half, $11.5 billion, will go towards tax refunds and direct relief through checks. Mirroring the cost of gas relief proposal he made in March, all registered vehicle owners in the state would get $400 checks similar to the $600 Golden State Stimulus checks released last year, albeit with a more narrowed focus on who would be receiving them. The $400 stimulus checks would be capped at only two checks per individual, covering Californians who own both personal and work cars, but avoiding giving money to those with a large number of cars.

Qualified low income tenants who requested rental assistance before March 31st would also be eligible to receive a small part of the $2.7 billion emergency rental assistance plan Newsom has as part of the package. This part would be only allowed for rent relief. Another part of the package would have $1,4 billion towards helping pay past due utility bills. $1.2 billion of that would specifically go towards electricity bills, with $200 million for water bills.

To help offset the checks going directly to car owners, Newsom borrowed heavily from his March gas relief proposal again and set aside $750 million that would give three months of free public transportation for everyone in the state. Truck drivers and those in the commercial sector, also likely to miss out on the $400 checks, would see $439 million go towards pausing the diesel sales tax for 12 months.

Other parts of the inflation relief package proposal are to benefit low-income families and those in healthcare. These include $933 million going towards giving checks worth up to $1,500 for providing care in hospitals and skilled nursing facilities for giving care during the COVID-19 pandemic, $304 million going to families covered under Covered California for cheaper health insurance premiums for around 700,000 Californians, and $157 million to give free or reduced cost child care and pre-school for around 40,000 low-income California families.

In addition to the $18.1 billion package, the state’s minimum wage is set to be increased to $15.50 per hour beginning on January 1, 2023 due to a provision in the minimum wage law giving increases when inflation goes above 7%.

Governor touts package proposal

Governor Newsom touted his package proposal and the minimum wage increase on Thursday, noting that every Californian stands to benefit in at least one way.

“We enacted the most comprehensive economic stimulus program in the nation last year, getting billions in immediate relief to millions of Californians,” said Newsom in a press release on Thursday. “But many folks are still struggling, especially with high costs due to inflation, so we’re leveraging this historic surplus to get money back into the pockets of Californians. This inflation relief package will help offset the higher costs that Californians are facing right now and provide support to those still recovering from the pandemic.”

However, critics noted than much of the package proposal has gone around solutions by other Democrats and Republicans that were struck down out of hand.

“Right now Newsom’s proposal skirts around many of the proposals Republicans wanted, either through their requests made on Wednesday or through rejected bills made earlier this year. Specifically around the gas tax,” added Adam Mendoza, a Los Angeles-based pollster who is currently focusing on public opinion on next years budget, to the Globe on Thursday. “There’s some good spending ideas in there, but there’s also some questionable ones. But the main thing here is that Newsom is trying to get the credit for all of this. He’s taken pieces of Republican proposal, Democrat proposals, and proposals made by different state agencies into a package under his banner.”

“It’s not because he’s worried about the Governor’s race this year. He is going to win that unless something goes terribly wrong for him. He’s worried about the state; let’s be fair there, any Governor would be, but also he’s still repairing his reputation following the recall last year and breaking his own mandates several times. He’s looking at running for higher offices later this decade, or possibly being appointed to one, so he wants to be known as the Governor he helped make decisions during times of crisis and prepared it for the coming carbon-free future. It’s all that plus his legacy. We just now have to see what the rest of the Legislature thinks. There’s a $68 billion surplus after all.”

Newsom’s May budget revision is due to come out on Friday.