California’s surplus budget, which is already predicted to be huge, could finish up becoming billions of dollars greater than expected. When Gov. Gavin Newsom announced his proposed budget for the years 2022-2023 in January, his government predicted a $45.7 billion surplus.
However, the state Legislative Analyst’s Office indicated in a February update that there’s a high chance the surplus will surpass the initial forecast by $6 billion to $23 billion, owing to revenue received from personal income, sales, and company taxes.
“Although we are midway through the financial year, much unpredictability remains, as the most critical gathering month (April) is still ahead of us,” analysts noted in a recent update, reports Ktla.com.
According to the office, the “best estimation” for the exact value is roughly $15 billion. According to the article, the state appropriations limit, commonly known as the Gann Limit, will almost certainly be a consideration for state lawmakers. This limits the amount of tax income California may spend, potentially triggering the next round of stimulus checks, as happened last year in the same scenario.
“It’s difficult to predict what the future holds in terms of the pandemic, the economy, and the budget process,” Assembly Speaker Anthony Rendon, D-Lakewood, stated. Gov. Newsom has already hinted at the possibility of another round of reimbursements for taxpayers but hasn’t specified the amount or who would be eligible.
The Original Budget
Newsom’s original budget does not include tax refunds, but he has stated that the checks will “certainly” be included in the final revision. “We intend to provide an additional refund to the taxpayers in May rewrite wording when I revise the budget,” he stated last month.
Last week, legislative leaders in California’s Assembly and Senate weighed in on the issue, pointing to the possibility of a second successive year of tax rebates if the state’s budget surplus reaches its constitutional maximum. They underline, however, that it is too early to say whether this is a possibility.
“We’ll look at it through the lens of equity for the particularly hard Californians who haven’t recovered, who are still suffering.” So reinforcement will be a part of it. Still, it’s through that lens and ensuring that we’re capable of covering those bases wisely and creating a change in actual people’s lives,” said Toni Atkins, D-San Diego, California Senate President pro Tempore.
Lawmakers pointed out that stimulus can cause inflation, which the country is now attempting to curb. But, while officials acknowledged the problem, they were more concerned about Californians’ ability to pay for basics such as rent, food, and transportation.
