California governor proposes tax rebate as virus relief

Gov. Gavin Newsom addresses the crowd during a press conference held at Unity Council career center in the Fruitvale neighborhood of Oakland on Monday, May 10, 2021. Provided / Associated Press

SACRAMENTO, Calif. — Millions of poor and middle-class Californians would get tax rebates of up to $1,100 under a proposal unveiled Monday by Democratic Gov. Gavin Newsom, as part of a broader pandemic recovery plan made possible by an eye-popping $75 billion budget surplus.

Taxpayers making between $30,000 and $75,000 a year would get a $600 payment. Households making up to $75,000 with at least one child, including immigrants in the country illegally who file taxes, would get an extra $500 payment.

“We believe people are better suited than we are to make determinations for themselves on how best to use these dollars,” Newsom said during an event in Oakland to announce the plan.

The massive budget surplus is largely due to taxes paid by rich Californians who generally did well during the pandemic, and marks a major turnaround after officials last year said they feared a deficit of more than $50 billion.

The payments will total an estimated $8.1 billion, said H.D. Palmer, a spokesman for the state Department of Finance. The proposal also includes $5.2 billion to pay back rent and $2 billion for overdue utility bills for people who fell behind during the pandemic.

A law passed by voters in the 1970s requires the state to give some money back to taxpayers if the surplus hits a certain limit. The state estimates it will be $16 billion over that threshold. Newsom does not have to act immediately, but is choosing to do tax rebates now, Palmer said.

They are part of what Newsom is calling a $100 billion plan to boost the state’s economic recovery. He’ll be rolling out details of the plan all week ahead of releasing his revised state budget. The chairs of the state Senate and Assembly budget committees joined Newsom, indicating their support for a proposal that will go before overwhelmingly Democratic Legislature.

It comes as he faces a likely recall election later this year, and his Republican rivals quickly criticized the effort. Businessman John Cox, who campaigned alongside a bear last week for attention, accused Newsom of engaging in a publicity stunt.

“The governor’s got a lot of money to hand out. And of course, he’s worried about his own neck,” Cox said at a campaign event in Los Angeles.

He and Kevin Faulconer, another Republican candidate, both said a one-time infusion of cash wouldn’t solve California’s problems.

“Californians need permanent, real tax relief, not just one-time stimulus checks,” Faulconer, the former San Diego mayor, said in a statement.

It’s the second round of cash payments given by the state in response to the pandemic. Earlier this year, people making less than $30,000 got a $600 payment. Immigrants making up to $75,000 who file taxes, including those also living in the country illegally, also got the check. State officials chose a higher eligibility limit for those people because they didn’t get federal stimulus checks.

All combined, the state would spend $11.9 billion on direct cash payments.

Democratic Assemblyman Phil Ting, the chamber’s budget chair, said the state has the ability to help the neediest people because of how well wealthier Californians did during the pandemic. The state’s budget relies heavily on personal income tax from high earners.

“That budget surplus is going right back to the most vulnerable Californians, the ones who need help the most,” he said.

California expands drought emergency to large swath of state

In this April 21 file photo, California Gov. Gavin Newsom holds a news conference in the parched basin of Lake Mendocino in Ukiah, where he announced he would proclaim a drought emergency for Mendocino and Sonoma counties. (Kent Porter/The Press Democrat via AP, File)

 

SACRAMENTO, Calif. — Gov. Gavin Newsom on Monday expanded a drought emergency declaration to a large swath of the nation’s most populated state amid “acute water supply shortages” in northern and central parts of California.

The declaration now covers 41 of 58 counties, covering 30% of California’s nearly 40 million people. The U.S. Drought Monitor shows most of the state and the American West is in extensive drought just a few years after California emerged from a punishing multiyear dry spell.

Officials fear an extraordinarily dry spring presages a wildfire season like last year, when flames burned a record 6,562 square miles (16,996 square kilometers).

The expansion comes as Newsom prepares to propose more spending on both short- and long-term responses to dry conditions. He was set to release details during a visit to Merced County, in the agricultural Central Valley south of Sacramento.

The Democratic governor last month had declared an emergency in just two counties north of San Francisco — Mendocino and Sonoma.

The expanded declaration includes the counties in the Klamath River, Sacramento-San Joaquin Delta and Tulare Lake watersheds across much of the northern and central parts of the state.

The Sierra Nevada snowpack, which provides about a third of the state’s water, was at just 59% of average on April 1, when it is normally at its peak.

This year is unique because of extraordinarily warm temperatures in April and early May, the Newsom administration said. That led to quick melting of the Sierra Nevada snowpack in the waterways that feed the Sacramento River, which in turn supplies much of the state’s summer water supply.

The problem was worse because much of the snow seeped into the ground instead of flowing into rivers and reservoirs, the administration said.

The warmer temperatures also caused water users to draw more water more quickly than even in other drought years, the administration said, leaving the reservoirs extremely low for farmers, fish and wildlife that depend on them.

That all reduced the state’s water supplies by as much as what would supply up to one million households for a year, officials said.

“It’s time for Californians to pull together once again to save water,” California Natural Resources Agency Secretary Wade Crowfoot said in a statement.

He urged residents to limit their use, whether by limiting outdoor watering, checking for leaks, or taking shorter showers and turning off the water when washing dishes or brushing teeth.

Newsom’s declaration directs the State Water Board to consider changing the rules for reservoir releases and water diversions to keep more water upstream later this year to maintain more water supply, improve water quality and protect cold water pools for salmon and steelhead.

The declaration also allows more flexibility in regulations and contracting to respond to the drought, while speeding voluntary transfers of water between owners.

Newsom said he also wants lawmakers to spend more in the next fiscal year to both respond to the drought and build the state’s long-term water supply.

The governor is spending the week previewing highlights of the revised budget he will present to state lawmakers Friday for the fiscal year that begins July 1.

Earlier Monday in the San Francisco Bay Area, Newsom proposed tax rebates of up to $1,100 for millions of lower- and middle-income Californians, one leg of a pandemic recovery plan made possible by an eye-popping $75 billion budget surplus.

The barnstorming comes as Newsom faces a fall recall election driven in large part by frustration over his handling of the pandemic, though he noted that he also previewed his budget proposals in the past when he wasn’t facing a recall.

The governor’s fellow Democrats, who control the Legislature, have until June 15 to pass a spending plan.