Governor Gavin Newsom unveiled a sweeping $286 Billion Budget Proposal for the financial year 2022.
While the proposed budget won’t include another round of Golden State Stimulus checks, the governor left open the possibility for more tax cuts this year as the state considers what to do with its massive budget surplus — a potentially big enough to break the constitutional cap.
This is why the answer, at least for now, cannot be answered with a simple yes or no.
In the cases after the ceiling has been reached, the state must return money to the taxpayer. That’s because of Proposition 4 — also known as the “Gone limit” — a ballot measure passed by voters in 1979.
Last year marked only the second time California rose above the limit since its founding, the Associated Press reported, which in fact led to the largest state tax cut in US history.
The Golden State Stimulus program returned about $12 billion to taxpayers, with payments up to $1,100 still outstanding, Newsom said.
For this fiscal year, which begins July 1, the state’s Legislative Analyst Bureau is forecasting another budget surplus, this time of at least $31 billion.
According to the governor, California expects to exceed the “Gann limit” by $2.6 billion from the January budget. About half of the money goes to education and the rest goes back to taxpayers.
But whether they are handed out in the form of stimulus checks: there is still no yes or no answer.
“That’s an open question,” Newsom replied when asked about the prospects of such payments.
At least part of the reason is that the projected figure “…will most likely change significantly between now and May,” which is when the revised budget for the coming fiscal year is due. “So we’re waiting for more current information and data that will reflect more of what’s happening right now before we had to commit this budget to ultimately make that decision.”
And ultimately, he believes that “yes,” taxpayers will receive some form of contribution.
“What form … and to what extent in terms of total dollar amounts will be determined in May,” Newsom said.
In 2021, the governor first budget proposal included what became known as Golden State Stimulus I. An expanded version of the program that netted millions of additional residents checks was unveiled in June and eventually included in the budget 2021-2022 signed by Newsom in July.
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