By Aman Jain. Originally published at ValueWalk.
California, so far, has sent two rounds of stimulus checks under its Golden State Stimulus program. Millions of residents in the state could get one more stimulus check from California if a new plan from state senators is approved. Under the new plan, eligible residents could get $200 stimulus checks from the state’s record estimated budget surplus.
More Stimulus Checks From California: Who Will Get Them?
Last week, Senate leaders introduced a plan to send stimulus checks, estimating California’s budget surplus to be more than double what was estimated by Gov. Gavin Newsom in his January budget proposal. California’s budget surplus is now estimated to be as high as $68 billion, which is at the high end of a projection from the nonpartisan Legislative Analyst’s Office.
Newsom, previously, estimated a budget surplus of $29 billion for the 2022-23 fiscal year. Newsom also proposed using the budget surplus to offer relief to residents from the rising gas prices. The Governor shared no specific details on the plan. However, the Senate plan has come out with details on stimulus checks from California.
As per the Senate plan, individuals making less than $125,000 (less than $250,000 for families) would get a stimulus check of $200. Further, the plan would also contribute additional money toward the state’s food aid and supplemental income programs for low-income residents.
California’s estimated budget surplus can be attributed to more than expected tax revenue from the state’s highest earners. California imposes heavy taxes on its wealthiest residents and businesses.
With a record budget surplus, state lawmakers also run the risk of hitting spending limits. Thus, to adhere to the state spending rules, Senate leaders plan to spend a significant portion of the surplus money on infrastructure projects. Several experts, however, believe that the state’s robust tax collections will lose steam going forward, making surpluses less likely.
Advocates Calling For $2,000 Stimulus Checks
Though state senators plan on giving $200 stimulus checks from California, a coalition of anti-poverty organizations is calling on lawmakers to give a $2,000 one-time payment per child to families with income of up to $30,000 a year.
Assembly member Miguel Santiago, a Los Angeles Democrat, has sponsored this bill of a $2,000 one-time payment. The bill aims to partly compensate for the expanded federal Child Tax Credit, which expired last year.
Columbia University researchers claim that the expanded child tax credit helped in reducing child poverty by over 26%, especially among Black and Latino families. Further, the Center on Budget and Policy Priorities (CBPP) found that almost 90% of the families spent the child tax credit on basic items, including food, clothing or rent.
Those in favor of the one-time payment of $2,000 argue that the end of the expanded child tax credit program puts the risk of millions of kids falling back into poverty. A recent study from CBPP claims that 1.7 million California children are now at risk of falling back into poverty.
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