California Budget

California Gov. Gavin Newsom leaves a news conference after unveiling his proposed $286 billion 2022-2023 state budget during a news conference in Sacramento, Calif., Monday, Jan. 10, 2022.

(The Center Square) – With California anticipated to exceed its appropriations limit in the upcoming budget year, Gov. Gavin Newsom hinted on Monday that California taxpayers would likely see some form of rebate.

On Monday, Newsom unveiled his $286 billion budget proposal, including a projected $45.7 billion surplus. With this surplus, the state is anticipated to exceed the State Appropriations Limit, also known as the Gann Limit – a 1979 voter initiative that caps state and local government spending at 1978-1979 levels adjusted for inflation.

If the state exceeds the Gann Limit, state lawmakers must allocate the money very specifically – increase spending on education and allocate money back to the taxpayers. Lawmakers also have the ability to spend money on projects excluded from the limit, including infrastructure.

When faced with a nearly $80 billion surplus last year, Gov. Newsom allocated about $12 billion in tax rebates to California taxpayers through the Golden State Stimulus program. Millions of Californians below certain income levels received $1,100 payments, some of which are still being delivered.

Newsom said Monday that the state is expecting to exceed the Gann Limit by about $2.6 billion but noted that this number could “substantially change” in the coming months. Of that $2.6 billion, roughly half will go to education, while the remaining half will go back to the taxpayers, Newsom said.

“There likely will be substantial contributions back to the taxpayers,” Newsom said during a press conference Monday.

While the governor did not specifically address what form the rebates would come in this time around, he said he would work with the legislature and have a better idea of the total amount allocated back to taxpayers when the budget is updated in May.

Within Newsom’s budget proposal unveiled Monday, the governor outlined several new investments, including $22 billion to fight the climate crisis, $2.7 billion to bolster the state’s COVID-19 response and $2 billion to address homelessness on top of last year’s $12 billion package.

The proposal will now go before the state Legislature, and the governor will unveil a revised budget in May.

Staff Reporter

Madison Hirneisen is a staff reporter covering California for The Center Square. Madison has experience covering both local and national news and is a graduate of Liberty University. She currently resides in Southern California.