Newsom Fights Recall By Unveiling Tax Rebate Plan

With California reported a record $75.7 billion budget surplus, Governor Gavin Newsom unveiled a tax rebate plan. The governor, currently fighting for his political career, proposed a $100 billion recovery plan that includes tax rebates of up to $1,100 per household.    

RELATED: California is Moving Toward the Recall of Gavin Newsom

Golden State Stimulus

“I’m about to make an announcement that no other governor in California history has ever made and I would argue that no other governor in American history has ever made,” Newsom said.

“Today we are announcing a $75.7 billion budget surplus. This time last year we announced a $54.3 billion projected shortfall. Today we are announcing a projected $75.7 billion budget surplus. It’s a remarkable turnaround,” he added. 

In particular, Newsom proposes the expansion of the Golden State Stimulus. The plan proposes additional direct payments to middle-class families that earn up to $75,000.

Under the plan, roughly 66% of state residents that earn between $30,000 and $75,000 annually, will receive $600 direct payments. Households with dependents that earn less than $75,000 will also receive an additional $500. In addition, coverage of the additional $500 includes undocumented families residing in California. 

California Plans To Reopen By June 5

California’s COVID-19 issues are slowing down. With vaccination rates going up while hospitalizations go down, Newsom set a June 15 target date to fully reopen the state.

“California’s recovery is well underway, but we can’t be satisfied with simply going back to the way things were. We are tripling the Golden State Stimulus to get money in the hands of more middle-class Californians who have been hit hard by this pandemic.

Two in three Californians will receive a check from the state and more than $5 billion in aid will be made available to those who need help paying their rent or utility bills,” he announced. 

California’s surplus is a product of its progressive tax system. It brings in bigger revenue when the state’s highest earners’ income rises.

During the pandemic, many high earners saw sizable increases in their paychecks. John Ceffalio, a senior municipal research analyst at CreditSights, noted California weathered the pandemic better than most.

“The state is awash in cash. California came into the pandemic in good fiscal shape and it’s probably leaving it in even better fiscal shape,” he noted. 

Rental Assistance

Under Newsom’s California Comeback Plan, the state also offers a large renter assistance package. In fact, the state earmarked billions of dollars to help low-income Californians pay back 100 percent of their back rent and incoming rent for months. In addition, the plan also covers any overdue water and utility bills.

However, Newsom clarified his plan remains just that, a plan. The California State Senate and Assembly will need to pass his bill before he can sign it into law.

“I want to make one thing clear and I make it with the respect that is due. This is a proposal from the [Newsom] administration, it requires concurrence and support of the legislature and that’s why it’s humbling and very meaningful to have the two budget chairs [Assemblyman Phil Ting and State Senator Nancy Skinner] here today,” he explained. 

This Isn’t A Rebate

Meanwhile, a Republican National Committee member from California criticized  Newsom’s plan. RNC member Harmeet Dhillon said that the state should use the surplus money elsewhere.

“You can’t fix the affordability crisis in this state with a $600 check,” Dhillon told a local radio station. Dhillon accused Newsom's proposal of a recall election ploy.

“I think these one-time checks to a segment of the population here are really a function of his impending recall election and his desire to try and buy votes,” she said. 

In addition, Dhillon corrected the impression that the plan involves tax rebates. “This is not a tax refund. These are checks to a certain segment of the population, this is one-time relief for people,” she said.

“A tax refund is acknowledging that all of the taxpayers in the state are grossly overcharged. The segment of the population that pays the highest taxes in this state is not getting a tax refund.”

Watch the KTLA 5 video reporting that California Governor Gavin Newsom is proposing new $600 stimulus payments for millions of more Californians in the economic recovery plan:

 Loading ...

Do you support Governor Newsom’s Tax Rebate Plan to provide additional stimulus to Californians? Or, do you see this as a cheap election gimmick?

Let us know what you think. Share your comments in the comment section below.