California Expects a Record Budget Surplus of Nearly $100 Billion
SACRAMENTO — Buoyed by the pandemic prosperity of its richest taxpayers, California expects a record $97.5 billion surplus, Gov. Gavin Newsom said Friday, as he proposed a $300.6 billion state budget that also was a historic mark.
“No other state in American history has ever experienced a surplus as large as this,” Mr. Newsom said, outlining revisions to spending he first proposed in January for the 12 months starting in July.
Once again, as California heads into a gubernatorial election, the massive surplus allows Mr. Newsom to sprinkle cash across the state. Among the governor’s proposals: rebates for nearly all Californians to offset the effects of inflation, which is expected to exceed 7 percent in the state next year; retention bonuses of up to $1,500 for health care workers; expanded health care, in particular for women seeking abortions; three months of free public transit; and record per-pupil school funding. California also had a substantial surplus last year as the governor fended off a Republican-led recall.
Mr. Newsom warned, however, that state budget planners have been “deeply mindful” of the potential for an economic downturn. California’s progressive tax system is famously volatile because of its reliance on the taxation of capital gains on investment income.
