Amid Recall Threat, CA Gov. Newsom Unveils ‘Largest State Tax Rebate In American History’

As a recall election to determine his fate seems inevitable, California Democratic Governor Gavin Newsom on Monday unveiled what his office described as the “largest state tax rebate in American history.”

The Los Angeles Times reports, “The proposal to deliver $8 billion in new cash payments to millions of Californians is part of a $100-billion economic stimulus plan made possible in part by a budget that has swelled with a significant windfall of tax revenues, a surplus the governor put at $75.7 billion.” According to the outlet, “Newsom also proposed $5 billion to double rental assistance to get 100% of back rent paid for those who have fallen behind, along with as much as $2 billion in direct payments to pay down utility bills that are overdue.”

“California’s recovery is well underway, but we can’t be satisfied with simply going back to the way things were,” said Newsom. “We are tripling the Golden State Stimulus to get money in the hands of more middle-class Californians who have been hit hard by this pandemic.”

NEW: CA is delivering immediate relief to renters through the largest renter assistance package in the COUNTRY:

$5.2 billion for renters to cover their back-rent AND their rent for several months into the future.

And $2 billion to help pay overdue water and utility bills. 👏

— Gavin Newsom (@GavinNewsom) May 10, 2021

Newsom’s California Comeback Plan still requires approval from the Legislature. It would provide a second round of direct $600 stimulus checks to low-income and middle-class households that make up to $75,000 a year, including undocumented families. He estimates two-thirds of Californians would benefit from the payments. Qualified households with dependents would be eligible for an additional $500, along with an extra $500 in direct payments to undocumented families.

The Sacramento Bee reported, “Undocumented immigrant families, who were left out of most federal pandemic aid, will be eligible for $1,000 family checks, double what other California families will receive, to make up for the lack of federal support, Finance Director Keely Bosler said.”

The California secretary of state’s office recently announced that organizers of the campaign to recall Newsom had turned in a sufficient number of signatures for ballot placement this fall, but an election date has not been set. Politico reporter Jeremy B. White noted that the “checks will precede recall ballots in the mailboxes of many many voters.”

I think the millions of Californians who signed petitions to qualify a recall election of @GavinNewsom can take some credit for the Governor coming up with a plan to send even more direct cash payments to even more (voting) Californians.

— Jon Fleischman (@FlashReport) May 10, 2021

More details from the L.A. Times:

State officials said the cash payments were triggered in part by a 1979 voter-approved state constitutional amendment that requires tax rebates when revenues exceed a cap on government spending. That appropriations limit, loosened by subsequent ballot measures, has been significantly higher than state spending levels for the better part of the past four decades — allowing lawmakers to exclude billions of dollars in spending from the final calculation.

This year, awash in cash from a tax windfall and facing a historic slowdown in population growth used to determine the maximum spending allowed, the Newsom administration projects $16 billion in excess revenue. By law, half of that must go to public schools and the other half to taxpayer rebates — in this case, targeted toward middle-class adults and families.

The budget windfall was created by factors including $26 billion in federal aid and a roaring stock market.

Sen. Mitt Romney, a Republican representing Utah, reacted to news of California’s budget surplus on social media.

This is one more reason why borrowing and sending tens of billions to California was a crying shame—and why every Republican in Congress opposed it. https://t.co/Tzoo3WXejW

— Senator Mitt Romney (@SenatorRomney) May 10, 2021

“This is one more reason why borrowing and sending tens of billions to California was a crying shame—and why every Republican in Congress opposed it,” Romney tweeted on Monday.

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