Millions of poor and middle-class 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 an eye-popping $75 billion budget surplus.
Individuals and households making between $30,000 and $75,000 a year would get a $600 payment. All 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.
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.
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 drive up 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.
It comes as he faces a likely recall election later this year, and his Republican rivals quickly criticized the effort.
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.
Subscribe to our YouTube channel: bit.ly/2TwO8Gm
Bloomberg Quicktake brings you live global news and original shows spanning business, technology, politics and culture. Make sense of the stories changing your business and your world.
To watch complete coverage on Bloomberg Quicktake 24/7, visit bloomberg.com/qt/live, or watch on Apple TV, Roku, Samsung Smart TV, Fire TV and Android TV on the Bloomberg app.
Have a story to tell? Fill out this survey for a chance to have it featured on Bloomberg Quicktake: cor.us/surveys/27AF30
Connect with us on…
YouTube: youtube.com/user/Bloomberg
Breaking News on YouTube: youtube.com/c/BloombergQuickTakeNews
Twitter: twitter.com/quicktake
Facebook: facebook.com/quicktake
Instagram: instagram.com/quicktake
- California Governor Pitches $100 Billion Recovery Plan Following Massive Surplus ( Download)
- Governor Newsom submits $100 billion California Comeback Plan to the Legislature ( Download)
- Gov. Newsom Proposes Improving Infrastructure And Social Programs With $100 Billion Surplus Money ( Download)
- Largest State Budget Surplus In California At Almost $100 Billion ( Download)
- Raw Video: Gov. Newsom Announces Budget Surplus, New Stimulus Payments ( Download)
- Governor Newsom Unveils his Economic Recovery Package ( Download)
- California Comeback Plan announced by Governor Gavin Newsom with $75 B surplus, federal support ( Download)
- California has a staggering $75.7B budget surplus ( Download)
- Gov. Newsom unveils CA recovery plan, budget proposal to lawmakers | ABC7 ( Download)
- Gov. Newsom Expected To Announce $100 Billion Budget ( Download)
- Governor Newsom's $100 Billion California Comeback Plan - May 14, 2021 ( Download)
- California governor proposes $12B to house state’s homeless ( Download)
- Newsom proposing new $600 stimulus payments for millions more Californians in economic recovery plan ( Download)
- State lawmakers return to capitol on Monday ( Download)
- Jen Psaki Responds To California's Plan To Give $600 Stimulus Payments, $75 Billion Surplus ( Download)
