A California budget surplus, already expected to be massive, could end up being billions of dollars more than the original estimates.
When Gov. Gavin Newsom unveiled his budget proposal for 2022-2023 back in January, his administration predicted a $ 45.7 billion profit.
But in a February update, the state legislative analysts’ office said there is a very good chance that profits could exceed the initial estimate of $ 6 billion to $ 23 billion, thanks to money raised from personal income, sales and corporation taxes.
In it update released last weekwrote analysts, “Even though we are halfway through the fiscal year, there is still a lot of uncertainty as the most important collection month (April) is still ahead of us.”
The office’s “best guess” at the actual amount is about $ 15 billion.
The report also noted that state legislators are likely to have to reckon with the state grant limit, also known as the Gann limit. It limits the amount of tax revenue California can spend, and can trigger another round of stimulus checks, as was the case when that particular scenario unfolded last year.
“It’s hard to say what the future holds in terms of the pandemic, in terms of the economy, and it’s early in the budget process,” said Assembly President Anthony Rendon, D-Lakewood.
Governor Newsom has previously signaled the likelihood of another round of rebates to taxpayers, but has not provided details on potential amounts and eligibility. Last year, there were two rounds of direct payments, dubbed Golden State Stimulus I and Golden State Stimulus II.
Newsom’s proposed budget did not include tax rebates, but he has indicated that the final revision will “likely” include the controls.
“In the May review, when I update the budget, we expect that we will probably have an extra rebate for taxpayers,” he said last month.
Legislators in the state House and Senate weighed in on the matter last week, noting the potential for the second year in a row with tax rebates if California’s budget surplus hits its constitutional limit again. But they stress that it is too early to say whether it is a possibility,
“We’re going to look at this in the lens through equity for the hard-working Californians who have not come back who are still suffering. So the stimulus is part of it, but it will be through that lens and try to ensure that we is able to cover these bases thoughtfully and to make a difference in real people’s lives, “said California Senate President Pro Tempore Toni Atkins, D.-San Diego.
Legislators noted that the stimulus may be a driving force for inflation, something the nation is currently struggling with how to control. But while acknowledging the problem, executives expressed more concern that Californians could pay for necessities like rent, food and transportation.
“I’m certainly worried about inflation, but at the same time I know there are everyday problems with bread and butter that Californians suffer from on a daily basis,” Rendon said.
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