California collected loads of tax revenue from high earners, which is bringing the state to an unexpected $75.7 billion state budget surplus. On top of the surplus, California state government is getting $26 billion from President Joe Biden’s American Rescue Plan Act – a federal coronavirus aid bill signed into law in March.
Yes, the Golden State is getting rich from federal taxpayers across the country. Consider this:
When U.S. House Democrats, led by House Speaker Nancy Pelosi, changed the state bailout allocation from population to unemployment rate in the Rescue Plan, California picked up an additional $6.6 billion. Big losers were states like Georgia (-$1.5 million) and West Virginia (-$900 million) – their federal tax dollars were sent to California (and New York, plus $6 billion!).
So, what is California Gov. Gavin Newsom going to do with the largess? Dole out $8.1 billion to residents in the form of “stimulus checks.”
The state legislature would need to approve the budget measure, which would give $600 rebate checks to households making up to $75,000 and another $500 to families with children.
Newsom, currently facing a recall election, is receiving criticism for his spending spree. John Cox, a 2018 Republican gubernatorial candidate and current candidate in the recall election, accused the governor of “making one-time payments to Californians to avoid being recalled,” as reported by The Wall Street Journal.
California localities received another $16 billion in congressional “bail out” money – in addition to the $26 billion to the state government.
California’s sunny playgrounds receiving big bailouts including Manhattan Beach ($6.6 million), Newport Beach ($9 million), Palm Springs ($11 million), Palo Alto ($12 million), Brentwood ($12.1 million), Napa ($15 million), San Jose ($22 million), Santa Barbara ($22 million), Santa Monica ($29 million), Huntington Beach ($31 million), and even Berkeley ($68 million).