Gavin Newsom: California Has So Much Cash It Could Return Some to Taxpayers

LOS ANGELES, CA - NOVEMBER 06: Democratic gubernatorial candidate Gavin Newsom speaks during election night event on November 6, 2018 in Los Angeles, California. Newsom defeated Republican Gubernatorial candidate John Cox. (Photo by Kevork Djansezian/Getty Images)
Kevork Djansezian/Getty Images

The State of California has so much cash, thanks to a revenue surplus, that it may be required to return some to taxpayers, according to a new budget proposal from Gov. Gavin Newsom for 2021.

On Friday, Newsom presented his budget, a staggering $227.2 billion plan that he said was a “fiscal blueprint that provides funding for immediate COVID-19 response and relief efforts where Californians need it most while making investments for an equitable, inclusive and broad-based economic recovery.”

In addition to proposing new spending on COVID-19, climate change, and other typical Democratic priorities, Newsom noted that the state has a $15 billion surplus, despite the economic devastation of the coronavirus pandemic.

As the Sacramento Bee noted, there may be so much surplus on a per capita basis that some money, by law, may have to be refunded:

The state is on pace to hit a spending cap voters adopted in 1979 when state politics were dominated by a taxpayer revolt, Gov. Gavin Newsom said Friday as he unveiled his $227 billion 2021-22 spending plan.

The cap, known as the Gann limit in honor of taxpayer watchdog Paul Gann, aims to restrict per capita government spending to 1978-79 levels. Voters passed it just after they adopted Proposition 13, the landmark law that restricts California property tax increases.

If the state exceeds the Gann limit, the government must send rebates to taxpayers.

The Bee notes that the state has not sent money back to taxpayers since 1986, when it returned $1.1 billion. The projected refund in 2021 would be more modest, in the range of $50 million. A similar situation arose in 2017, but then-Gov. Jerry Brown exploited loopholes to structure the state budget so that the money would not have to be returned.

California’s tax revenues did well in 2020 because the state’s tax system is heavily dependent on a relatively small number of wealthy individuals. Wall Street ended the year at record highs, driven largely by the success of Silicon Valley tech firms,

Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). His newest e-book is How Not to Be a Sh!thole Country: Lessons from South Africa. His recent book, RED NOVEMBER, tells the story of the 2020 Democratic presidential primary from a conservative perspective. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.

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