What’s Next for the State Budget?

We are less than two weeks before the California legislature needs to pass a budget in order for the members to continue receiving their paychecks.  This Wednesday, leaders announced an operating budget of more than $300 billion with $8 billion in taxpayer rebates.  However, the legislative version of the budget does not include the Governor’s vision of how to spend the state’s surplus.  

As Calpeek has shared in recent weeks, one sticking point continues to be what taxpayers get when it comes to that $8 billion.  The legislature is pushing to give $200 checks to California taxpayers and their dependents with incomes up to $125,000 per year for single people and $250,000 for couples.  Meanwhile, Governor Newsom wants to give up to $800 to people who own cars ($400 per vehicle with a two-car limit per person).  For those without cars, Newsom wants to spend $750 million to pay for free rides on public transit for three months.  In addition to the $8 billion in rebates, lawmakers are proposing $1.3 billion in small business and non-profit aid to help cover the costs of the new law requiring workers receive up to two weeks of paid sick leave.  Both the Governor’s plan and the Legislature’s plan account for fallout from the expected overturn of Roe v. Wade and strict Republican laws regarding abortion in nearby states.  The Governor is proposing $40 million to pay for abortions for women who can’t afford them, while lawmakers want to spend $20 million to pay for items such as travel, lodging, and child care for women in other states who would need to come to California for an abortion, if federal protections are overturned.  

Regardless of what the legislature is proposing, their budget is a placeholder since the Governor has final veto power.  All of which will require a month of back and forth until a final budget agreement is reached.

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