California has spent its latest round of stimulus money, but more checks may be coming in 2022 – Community News
Stimulus Check

California has spent its latest round of stimulus money, but more checks may be coming in 2022

Woman checking mailbox in neighborhood with palms.

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Hoping that state stimulus packages will keep rolling in in 2022? If you’re a California resident, you might be in luck. This is why.


Most important points:

  • The latest round of state stimulus checks was issued to eligible California residents earlier this week.
  • While this audit round was the last stimulus payment for fiscal year 2021, a surplus in the state budget allows for more spending in 2022.
  • Recent comments from Governor Gavin Newsom have also made it clear that more stimulus money could be earmarked in the 2022 budget.

As the COVID-19 pandemic continues to take its toll on the nation, millions of Americans hope more federal stimulus money will arrive in mailboxes and bank accounts by 2022. At the moment, however, there are not many signs that another round of incentive money, or even additional Child Tax Credit money, is on the table. Well, at least not when it comes to federal incentive payments. More incentive money could be in store for residents of some states.

Federal stimulus money was relatively limited in 2021, so more than a dozen states stepped in to help their residents weather the economic storm caused by the pandemic. One such state, California, issued its latest round of stimulus checks to residents earlier this week — totaling more than $5.9 billion. That money was likely a big incentive for residents eligible for the incentive money, but there are currently no more payments on the roster for Californians.

However, that doesn’t mean the incentives for Golden State residents will end completely. While nothing is set in stone, there are three signs that more stimulus money could be coming to California residents in 2022. This is what those signs are.

The direct payments made to California residents in 2021 were possible because of a massive budget surplus that exceeded the state’s constitutional limit. This required the state of California to return the money from the budget surplus to taxpayers in one form or another — and the state chose to do so through stimulus checks issued to low- to middle-income earners in the state.

This kind of budget surplus is rare. In fact, it has only happened twice in the past four decades, but is expected to happen again during fiscal year 2022, which begins in July. It looks like a lot of money will also be left over, as California is projected to have a $31 billion surplus in its 2022 budget.

What that means is that the state will likely be obligated to somehow return the money from the budget surplus to California residents — and it will likely do so, at least in part, by issuing another stimulus payment. What exactly that stimulus payment will look like, however, is a mystery.

2. The governor has signaled that there is stimulus money on the table

Earlier this week, Governor Gavin Newsom presented a $286 billion budget proposal for the state of California’s 2022 fiscal year. But while the state expects the huge budget surplus mentioned above, the budget proposal did not include a new round of stimulus measures.

While that may have been disappointing for California residents, it wasn’t a sign that there will be no more stimulus money for California residents by 2022. Earlier this week, the governor made it clear that he expects to include more stimulus money in the budget. when it is reviewed in May.

“We expect in the language of the May revision, when I update the budget, that we will probably get an additional discount for taxpayers,” he said. “No new taxes in our budget.”

3. California’s 2021 stimulus program was a huge success – reaching more residents than expected

While federal lawmakers hesitated to give more stimulus money to Americans in 2021, the California government took the opposite approach. When the program first started last year, it was intended to help low-income Californians who were struggling because of the pandemic and the high cost of living in the Golden State.

But that program expanded in July to include residents earning $75,000 or less, meaning it reached more Californians than initially expected. According to the governor’s office, this expansion meant that two out of three Californians were eligible for a $12 billion share of state stimulus funds. This likely had a huge impact on the finances of Californians across a wide range of income classes.

The success of last year’s stimulus program bodes well for another stimulus program in 2022. And given the budget surplus and recent comments from Governor Newsom, it’s likely that some form of stimulus program will be on the table when the budget is revised in July.

Are other states likely to follow?

While it’s uncertain whether California or any other state will actually issue more incentive checks to residents in 2022, it is possible. Last year there were a total of 13 states handing out stimulus money to residents in one way or another, and with the new strain of COVID devastating the nation, we may see similar moves this year as well.

Of course, that’s all up in the air at the moment. Whether these or other states will offer more stimulus money to residents this year remains to be seen. Each state still faces its own set of pandemic-related issues, and as we saw in 2021, those challenges can have a major impact on how each state handles the financial incentives and other incentives they provide to residents.

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