California to enter budget year with record surplus

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California to enter budget year with record surplus

California will be entering the next budget year with a record surplus of more than $100 billion, according to Gov. Gavin Newsom said Friday.

Newsom unveiled a revised budget plan of just over $300 billion for the next fiscal year, the highest in state history and fueled by surging tax revenues. The state collected $55 billion more taxes than expected in January, leaving it with an estimated $97.5 billion surplus.

Newsom, who is a Democrat, has tens of billions of dollars more to spend on new and existing initiatives as he seeks re-election in the fall. He plans to spend more to deal with the ongoing drought, help more women get abortions in California and offset rising costs of food, gas, and other goods due to inflation.

He'll have to reach an agreement with the Democratic-led legislature on all of his proposals. They have until June 31 to finalize the budget, which takes effect July 1.

One of his priorities is to provide Californians relief from inflation, according to Newsom.

People are feeling deep stress, deep anxiety, he said.

He proposed giving $400 checks to registered car owners in the state, with up to two checks per person. He said that it would cost the state about $11.5 billion. Although the money would only go to car owners, Newsom said it should be considered an inflation refund and relief. It could be a rebate to address the issue of groceries, and it could be a rebate to address the other cost burdens that are placed on you, he said.

Democratic lawmakers have a different idea on how to provide relief. They want to give $200 checks only to those below a certain income level.

The Republicans say that Newsom should suspend the state's highest-in-the- nation gas tax for a year rather than a check. They have asked him to increase a tax credit for renters and to give new tax credits to students.

Senate Republicans believe there is a better way to invest in the state, said Sen. Rosilicie Ochoa Bogh of Yucaipa.