While Newsom does not support the bill’s spending plan, lawmakers sent the bill to his office anyway because the California Constitution requires them to approve a budget by Wednesday, otherwise they will not be paid. Unlike most states, California lawmakers are full-time and are paid $ 119,702 a year.
Newsom and legislative leaders will continue negotiations to reach a spending plan that everyone can agree on before the start of the financial year on July 1st.
The Democrat-controlled legislature wants to spend more money than Newsom on education and housing. The legislators’ plan would cover college tuition for 150,000 more students than Newsom.
And lawmakers want to borrow about $ 1 billion a year and use it to help some 8,000 first-time buyers buy a home for 20 percent of the price. The plan could potentially reduce mortgage payments by about $ 1,000 a month in a state where the average home price hit a record high of $ 849,080 in March.
“This is the budget you are running for,” Sacramento Democrat Kevin McCarty told lawmakers Monday, urging lawmakers to vote in favor of the bill.
Lawmakers say they can afford to do these things because California’s revenue has skyrocketed during the pandemic as the rich have become richer and pay higher tax rates than other states. This year, California’s surplus – money left over when the state fulfills its existing commitments – exceeds $ 97 billion.
But Newsom does not like the bill because it says it will spend too much of the state surplus – money that is only available for one year – on things that should have more than a year of funding, especially for schools and community colleges. The bill’s bill will spend $ 2.4 billion more on current spending than Newsom’s plan, a gap that will increase to $ 5.6 billion by 2026.
While California has a lot of money today, the Newsom administration fears that the economy is showing signs of stress as stock prices fall and inflation continues to rise due to supply chain disruptions and the Russian invasion of Ukraine.
“Given the financial storms on the horizon, a final budget needs to be financially accountable,” said Anthony York, Newsom’s senior communications consultant. “The governor remains opposed to the huge ongoing spending and wants a budget that pays more than the state’s long-term debt and puts more money into government reserves.”
Lawmakers disagree. They say the extra money they want to spend is small, accounting for less than 1% of total spending. In addition, lawmakers noted Monday that their plan includes “record reserves” – about $ 700 million more than Newsom proposed – “to protect California in the face of future economic slowdowns.”
This type of disagreement is common in California, where governors typically see their role in preventing the progressive legislature from spending too much money.
But Newsom’s plan has its problems. It will leave the state with about $ 25 billion in excess of a constitutional spending cap over the next two years, a situation that the non-partisan Bureau of Legislative Analysts says could push the state over a “fiscal cliff” that could force budget cuts. even if government revenues continue to rise.
Newsom’s management has downplayed these concerns, noting that their plan will spend 95% of the budget surplus on one-off expenses – money that could be withdrawn in an emergency.
One thing Newsom and lawmakers can agree on is that they want to return a portion of the budget surplus to taxpayers to help them pay for record gas prices. But they can not agree on who should get the money and how much to get.
Newsom wants to send checks of up to $ 800 to anyone with a state-registered car. The legislature wants to send $ 200 checks to people with taxable income below a certain level – $ 125,000 for singles and $ 250,000 for couples.
Newsom’s plan would cost $ 11.5 billion and taxpayers could receive the checks a little faster because the money would come in a debit card. The bill would cost $ 8 billion, but it would not benefit the rich.
“We need to support those middle-class and lower-income families and households who are really struggling with these costs versus those with incomes that would not be such a big deal,” said State Sen. Nancy Skinner. Democratic by Berkeley and chairman of the Senate Budget and Fiscal Review Committee.
Republicans do not like either plan. Instead, they are in favor of suspending the state gas tax, which at 51.1 cents per gallon is the second highest in the country.
“There is nothing in the current proposal that would offer immediate relief to Californians,” said Vince Fong, a Bakersfield Republican and vice-chairman of the convention’s Budget Committee. in Sacramento and get back pennies temporarily. That’s not a relief. “
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California gas rebates: Deal remains elusive even as Legislature approves $300 billion preliminary budget Source link California gas rebates: Deal remains elusive even as Legislature approves $300 billion preliminary budget