SACRAMENTO, Calif. (NewsNation Now) — Millions of Californians would get tax rebates of up to $1,100 under a proposal unveiled Monday by Democratic Gov. Gavin Newsom, as part of a broader pandemic recovery plan made possible by a $75 billion budget surplus.
Newsom’s proposal comes amid a likely recall election later this year, and Republicans quickly criticized his efforts. Kevin Faulconer, a Republican candidate, said a one-time infusion of cash wouldn’t solve California’s problems.
“Californians need permanent, real tax relief, not just one-time stimulus checks,” Faulconer, the former San Diego mayor, said in a statement.
Democratic Assemblyman Phil Ting, the chamber’s budget chair, said the state has the ability to help the neediest people because of how well wealthier Californians did during the pandemic. The state’s budget relies heavily on personal income tax from high earners.
“That budget surplus is going right back to the most vulnerable Californians, the ones who need help the most,” he said.
Here’s what you need to know about the payments:
Who gets a payment?
Taxpayers making between $30,000 and $75,000 a year will get a $600 payment. Households making up to $75,000 with at least one child, including immigrants in the country illegally who file taxes, would get an extra $500 payment.
“California’s recovery is well underway, but we can’t be satisfied with simply going back to the way things were,” said Gov. Newsom. “We are tripling the Golden State Stimulus to get money in the hands of more middle-class Californians who have been hit hard by this pandemic. Two in three Californians will receive a check from the state and more than $5 billion in aid will be made available to those who need help paying their rent or utility bills.”
The massive budget surplus is largely due to taxes paid by rich Californians who generally did well during the pandemic, and marks a major turnaround after officials last year said they feared a deficit of more than $50 billion.
What else do I get?
Additionally, the state would also offer the largest renter assistance package of any state in the U.S., with billions of dollars to help low-income Californians pay back 100% of their back-rent, rent for the months to come, and overdue water and utility bills.
It comes as Newsom continues to aim for a statewide June 15 reopening.
Why do I get more money?
The massive budget surplus is largely due to taxes paid by rich Californians who generally did well during the pandemic and marks a major turnaround after officials last year said they feared a deficit of more than $50 billion.
“We believe people are better suited than we are to make determinations for themselves on how best to use these dollars,” Newsom said during an event in Oakland to announce the plan.
The payments will total an estimated $8.1 billion, said H.D. Palmer, a spokesman for the state Department of Finance. The proposal also includes $5.2 billion to pay back rent and $2 billion for overdue utility bills for people who fell behind during the pandemic.
A law passed by voters in the 1970s requires the state to give some money back to taxpayers if the surplus hits a certain limit. The state estimates it will be $16 billion over that threshold. Newsom does not have to act immediately, but is choosing to do tax rebates now, Palmer said.
They are part of what Newsom is calling a $100 billion plan to boost the state’s economic recovery. He’ll be rolling out details of the plan all week ahead of releasing his revised state budget. The chairs of the state Senate and Assembly budget committees joined Newsom, indicating their support for a proposal that will go before overwhelmingly Democratic Legislature.
2nd round of payments
It’s the second round of cash payments given by the state in response to the pandemic. Earlier this year, people making less than $30,000 got a $600 payment. Immigrants making up to $75,000 who file taxes, including those also living in the country illegally, also got the check. State officials chose a higher eligibility limit for those people because they didn’t get federal stimulus checks.
All combined, the state would spend $11.9 billion on direct cash payments.
The Associated Press and NewsNation affiliate KRON contributed to this report.