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State budget surplus raises prospect of a new round of stimulus checks | News

Do you remember the golden state stimulus check? Well, in the near future, more may land in your bank account.

California-again-is flooded with money and is likely to have a $ 31 billion budget surplus next year, according to a report Wednesday from an independent legislative analyst office. Also, because the state is banned from spending more taxes per Californian than in 1978, there are several options for handling most of the cash plunge after inflation adjustments. Tax refund issuance. Pour it into schools and community colleges. Or assign it for a specific purpose, such as infrastructure.

Congressman Khan has a competing idea of ​​whether to give checks to individual taxpayers, invest in long-term investments, and how to spend money. Meanwhile, Governor Gavin Newsom has his own ideas.

Newsam plans to “significantly increase one-off investment in infrastructure” in a budget proposal sent to state legislators in January while touring the untreated ports of Los Angeles and Long Beach on Wednesday. Said. He also suggested that another round (or two) of stimulus checks could be underway.

“We will build an approach this year as well as how we built that historic surplus last year,” said the governor.

Newsom and state legislators have agreed on a record $ 262.6 billion spending plan for the fiscal year beginning July 1. This includes $ 12 billion in stimulus and unprecedented investment in education, homelessness and the environment. On Wednesday, Newsom announced the first 18 projects funded by a $ 6 billion broadband package.

Much of the extra income comes from temporary sources, which helps explain why many California schools are still facing yawning budget deficits. However, legislative analyst firms predict that California can afford to increase annual expenses by $ 3 billion to $ 8 billion throughout fiscal year 2025-26. This is expected to be incompatible with the Republican Party.

Bakersfield Republican Vince Fong, vice chairman of the Parliamentary Budget Committee, said in a statement last week that a surplus does not mean that the state’s economy is doing well. He suggested making a long-term investment.

“State leaders need to prioritize surplus income to build a healthy economy and keep Californians and businesses in the state and invest in critical issues that affect all Californians. there is. .

But state senator Melissa Hurtado, D-Sanger, said Wednesday residents need money now, especially as prices are rising in grocery stores. “It’s always good to give back to the hard-working people in California,” she said, saying that doing so would benefit everyone as the state’s economy is showing signs of recovery.

“I think people are … ready to spend money,” Hurtado said. “They are ready to move forward and I think additional stimulus funds will help with that.”

According to the legislative analyst office, a whopping 26% of residents are functionally unemployed, and despite the state’s highest poverty rate in the country considering living costs, California is the main swimmer for money. There are several reasons. This includes massive capital gains for California’s wealthiest residents of the pandemic, recording personal consumption when residents use state and federal stimulus checks.

California companies reported record $ 217 billion in taxable sales in the second quarter of 2021, according to figures released Tuesday by the Department of State’s Tax Department.

David Anderson, co-owner of Moneywise Wealth Management at Bakersfield, said in a text Wednesday that not everyone in the state really needs a stimulus check. From his point of view as a financial adviser, there is a simple test to find out who does and who does not.

“If they hand out a check to the right people, there isn’t much advice on what to do with it. They will spend it on their urgent needs,” Anderson said. “If people need advice on what to do with money, they probably don’t need a stimulus check.”

Californian John Cox contributed to this report.

State budget surplus raises prospect of a new round of stimulus checks | News Source link State budget surplus raises prospect of a new round of stimulus checks | News

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