As California mulls whether to possibly send another round of stimulus checks to deal with a massive projected budget surplus, one state lawmaker on Wednesday made the case for more tax rebates.
In a video released online, Republican State Sen. Brian Jones used grains of rice to break down the projected budget surplus which, as of January, was estimated at $45.7 billion.
“If each grain of rice is $100,000, that means California’s $45 billion surplus is taxes over-collected by this much,” Jones explained as he shifted the large pile of rice around with his hand.
So what to do with all that money?
According to the state senator, the amount is enough to send every Californian a tax rebate of $1,125, or $4,500 for a family of four.
More stimulus checks are a possibility because the surplus is likely to exceed California’s constitutional limit as set by the voter-approved Proposition 4, or what’s more commonly known as the “Gann Limit“. That essentially restricts the amount of tax revenue the state can spend while giving lawmakers options on what to do with the leftover funds — including giving it back to taxpayers in the form of a rebate.
The state has only hit the Gann Limit twice since Prop 4’s passage back in 1979, including last year.
In unveiling his sweeping $286 billion budget proposal for the 2022 fiscal year last month, Gov. Gavin Newsom noted that his office projected a surplus of around $2.6 billion over the constitutional limit.
Jones, for one, supports sending rebates, or as they were known as last year, Golden State Stimulus payments.
“If it’s 2,500, if it’s 1,500, any amount that we can convince the state, the governor, the Democrats in the Legislature to send back, I think is a benefit to every Californian and every California family,” said Jones, whose 38th district encompasses much of inland San Diego County.
Although Newsom’s initial proposal didn’t actually include such payments, he indicated afterward that the checks “likely” will be added in the final revision.
“We expect in the May revise language when I update the budget that we are likely to have an additional rebate to the taxpayers,” he said.
It’s still unclear how much taxpayers could receive if the Golden State Stimulus program is revived for 2022. In the second, expanded GSS program, eligible Californians got $600, plus an additional $500 if they had one or more qualifying dependent.
State Legislative Analyst Gabe Patek thinks lawmakers shouldn’t wait so long to determine what to do with the budget surplus, however.
“Our office thinks it’s a very good idea for the Legislature to develop a plan before that,” Patek said.
Waiting another three months to decide how to spend the extra funds would give Newsom and the California Legislature just weeks to negotiate ahead of the June 15 budget deadline, he explained. The state’s fiscal year begins July 1.
It’s also likely the budget surplus could be even higher than the current estimate, according to Patek.
“Since the time of the governor’s budget proposal even, we know revenues have exceeded the governor’s estimate, and they’ve exceeded last year’s budget act. All signs point to higher revenue than what the governor is estimating,” he said.