State Budget Surplus $100B
May 26, 2022
By David Ganezer
“The continued prosperity of California’s richest taxpayers is filling state coffers with a $97.5 billion surplus, bringing the state’s next budget to a record $300 billion, Gov. Gavin Newsom announced Friday,” writes the LA Times. “It’s California’s largest budget and biggest surplus ever.”
So. California has a massive budget surplus of nearly $100 billion. This is a good thing, of course. But it also creates a problem for the liberal Democrats who have run the State for the last 20 years: What to do with the money?
One obvious solution would be to suspend the gas tax, which adds up to about 59 cents per gallon. A gallon of gas now costs $6.09 in California, up 32 cents in two weeks.
Gov. Gavin Newsom has proposed sending $400 rebate checks to every car owner registered in California, but this proposal is blocked in the legislature by the left wing of Newsom’s own party. They believe the money would be better spent on anti-racism initiatives, on solar power and of course, on more affordable housing.
California’s unemployment rate is now 4.6%. It has been steadily declining since the pandemic began 2 years ago, when unemployment hit a covid peak of 16%.
Yet, with inflation running at 7.9% annually, many people are having trouble covering basic costs such as food and rent.
Food access activists are lobbying for free food distributions. Newsom signed a measure last week removing all barriers to anyone over 55 from free food through the EBT program, regardless of immigration status. Applications for free food are up in LA, and in other major cities in California.
Some believe the surplus should be used to subsidize tuition. On average a student pays $5000 a year for tuition at UC’s; Cal State’s are 40% less. College costs have been steadily rising for 40 years in California.
The budget surplus is due to the large number of high tech companies paying income tax in California—Apple, Google and Facebook are all headquartered here, among others.
Newsom must present a budget to the legislature by June 30th.