Gov. Gavin Newsom on Monday unveiled a sweeping $286 billion budget proposal for the 2022 budget year.
While the budget as proposed does not include another round of Golden State Stimulus checks, the governor left open the possibility for more tax rebates this year as the state figures out what to do with its massive budget surplus — one potentially large enough to exceed California’s constitutional limit.
Here’s why the answer, at least for now, can’t be answered with a simple yes or no.
In the instances after the ceiling is reached, the state must return money to taxpayers. That’s because of Proposition 4 — also known as the “Gann limit” —a ballot measure approved by voters in 1979.
Last year was just the second time California soared above the limit since it was established, the Associated Press reported, and that effectively triggered the largest state tax rebate in U.S. history.
The Golden State Stimulus program gave back about $12 billion to taxpayers, with payments of up to $1,100 still being issued, Newsom said.
For this budget year, which begins July 1, the state’s Legislative Analyst Office is once more projecting a budget surplus, this time to the tune of at least $31 billion.
As of the January budget, California expects to exceed the “Gann limit” by $2.6 billion, according to the governor. Approximately half of the money will go toward education, and the rest back to taxpayers.
But whether they will be distributed in the form of stimulus checks: there’s no yes or no answer just yet.
“That’s an open-ended question,” Newsom responded when asked about the prospects of such payments.
At least part of the reason is that the projected figure “will … most likely substantially change between now and May,” which is when the revised budget for the upcoming fiscal year is due. “So we are awaiting more contemporary information and data, more reflected of what is currently happening before we had to put this budget to bed to ultimately make that determination.”
And ultimately, he believes that “yes,” taxpayers will receive some form of contribution.
“What form … and to what degree in terms of total amounts of dollars will be determined more closely in May,” Newsom said.
In 2021, the governor’s initial budget proposal included what became known as Golden State Stimulus I. An expanded version of the program that brought checks to millions of more residents was unveiled in June and ultimately included in the 2021-2022 budget signed by Newsom in July.