California Governor to Update Budget Proposal With New Money | California News

By Adam Beam, Associated Press

Sacramento, Calif. (AP) — California Gov. Gavin Newsom will likely announce another record-breaking budget surplus on Friday, giving him and state lawmakers lots of money to spend in a year the governor is expected to cruise to reelection for a second term.

The surplus in California’s general fund could be as high as $68 billion, up from the initial $29.6 billion surplus Newsom announced in January.

“Our revenues are up significantly above January,” said Keely Martin Bosler, director of the California Department of Finance.

Newsom has already said how he wants to spend most of the state’s money this year. In January, the governor revealed a $286.4 billion budget proposal that would pay the health care expenses of all low-income immigrants living in the country illegally while also cutting taxes by about $5.5 billion for businesses — cuts Newsom has since signed into law.

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But that budget proposal was based on the administration’s best guess of how much money California would have. Now that most people have paid their taxes, state officials know they will have a lot more money than they thought. Friday, Newsom will update his budget proposal to include that new money.

The governor has already announced how he plans to spend some of the new money. He wants to spend an extra $322 million on the drought and another $125 million to make it easier for women to get an abortion in California.

But there are still lots of questions about how the state will spend its surplus. For one thing, Newsom and legislative leaders cannot agree on how to give money back to taxpayers to help offset higher gas prices.

Newsom wants to give $400 checks to people who own cars, regardless of their income. Democrats in the state Legislature want to give $200 checks to everyone who earns below a certain income level. The two sides are still negotiating.

Newsom wants to expand the state’s Medicaid program to cover health expenses for all low-income adults, regardless of their immigration status. But Newsom’s plan would not start until January 2024. Some advocates and Democratic lawmakers have asked him to do that sooner.

At least one of Newsom’s January budget proposals won’t happen. With gas prices soaring, the governor had wanted to halt an inflationary increase in the state gas tax this summer. But Democrats who control the state Legislature did not agree to do that, and now it’s too late.

Republicans have urged Newsom to suspend all of the state’s gas tax for one year. They’ve also asked him to increase a tax credit for renters and offer new tax credits to students.

“Senate Republicans believe there is a better way to invest in the state,” Sen. Rosicice Ochoa Bogh, a Republican from Yucaipa, said.

But Republicans have just nine of 40 seats in the state Senate, preventing them from mustering enough votes to pass their priorities.

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