California Governor: $98 billion surplus supports true pro-life state

California Governor:  billion surplus supports true pro-life state

SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom on Friday pledged to use the state’s record-breaking $300 billion budget, including an unprecedented nearly $100 billion surplus, to “future-proof” the state against the impact of a volatile midterm election cycle that he fears will undermine access to abortion, gun safety and privacy protections across the country.

The first-term governor of the nation’s most populous state — and a potential Democratic presidential nominee — used his budget presentation on Friday to bolster his progressive credentials while attacking his rivals in conservative states.

He has advocated large increases in spending on health care, education, childcare and the environment while pledging to spend $125 million to make abortion easier for women in California, including women from out of state.

With the U.S. Supreme Court poised to rule Roe v. Potentially tipping Wade next month, Newsom pointed to a sign showing California’s lower COVID-19 death rate compared to Republican-run states Florida, Texas and Arizona, all of which are expected to continue to increase abortion rates restrict or ban if the court overturns Roe.

Newsom instituted the country’s first nationwide coronavirus stay-home order, and many credit his aggressive actions during the pandemic with saving lives. Critics say he’s accomplished too much, compounding the economic damage.

“If you’re pro-life, how the hell is that possible?” Newsom said of the higher death rates in the three states that took a more hands-on approach during the pandemic. “Spare me your mantra of being pro-life. You don’t deserve that status.”

The sign at Newsom’s presentation referred to how California compares to “the most populous states.” Texas is #2, followed by Florida. But Arizona is No. 14. The No. 4 state is Democrat-run and strongly supports abortion law in New York, which has a higher COVID death rate than Texas and comparable to Florida.

Bryan Griffin, Deputy Press Secretary for Florida Gov. Ron DeSantis, disputed Newsom’s claim, arguing that in “a reasonably adjusted format” Florida has done as well as California with COVID, “yet has preserved the personal liberties of its citizens and don’t destroy a litany of small businesses in the process.”

California’s projected $97.5 billion budget surplus is unlike anything the state has seen before, and is being fueled by rising tax revenues. It is larger than the total operating budgets of almost all other federal states.

The incessant flow of taxpayers’ money has prompted California Republicans — who don’t have enough members in the state legislature to have much influence — to complain about high taxes hurting the quality of life.

“He has not proposed permanent tax breaks to deal with a worsening affordability crisis exacerbated by his policies,” said Republican Vince Fong, vice chair of the convention’s budget committee. “The governor may not want to acknowledge it, but California is in crisis and its budget is unsustainable.”

Newsom said the rising earnings are “a sign of how well a number of people are doing in this economy” and a reflection of the “concentration of wealth and success in the hands of a few.”

About half of California’s income tax revenue comes from the top 1% of earners, who have done well during the pandemic. This system makes the state more vulnerable than others to the ups and downs of the economy.

Capital gains — the appreciation in the value of assets like stocks and other investments from which most wealthy people make their fortunes — accounted for 9.7% of California’s personal income. That’s the second-highest level on record, behind 2000, which was just before the dot-com bubble burst and a recession began.

The Newsom administration said this could be a sign the economy will slow again, also citing uncertainties raised by the war in Ukraine, supply chain problems and the Federal Reserve’s recent action to combat runaway inflation were caused. It forecasts that investment income income will fall 22% over the next year.

Newsom’s proposal would leave the state with $37.1 billion in reserves while using almost all of its surplus on things that aren’t recurring expenses. One of his biggest proposals is returning $18.1 billion to taxpayers in the form of tax refunds and programs that provide assistance with rent, utility bills, and health insurance premiums.

With gas prices hitting a record high in March, Newsom has proposed suspending the state tax on diesel fuel, offering rebates of up to $800 for every person with registered vehicles in the state, and spending $750 million to give everyone free rides public transport permit three months.

But that proposal has gone nowhere in the state Legislature, where Democratic leaders are endorsing a narrower aid package that would target only low- to middle-income families.

Newsom insisted the two sides would agree to receive checks later that year. Republicans argue the state should instead temporarily suspend its gas tax, which is the highest in the country at 51.1 cents a gallon.

“The governor is living in election-year fantasy land if he thinks the promises of debit cards and rebates in the fall will now remedy the situation,” said Republican Senate Chairman Scott Wilk.

Newsom’s budget presentation comes as the state finds itself in a deepening drought and state energy officials are warning of possible summer power outages when air conditioning peaks.

The governor has urged people to reduce their water use by 15%, but consumption rose dramatically in March. Newsom wants to spend more money to help protect the environment, provide credit for failing drinking water systems, and promote water recycling. It includes $75 million in grants to farms and businesses affected by the drought.

Meanwhile, he’s calling for $5 billion to create a 5,000-megawatt “strategic” energy reserve to help the state avoid blackouts. One megawatt can supply 750 to 1,000 households.

Newsom’s budget document included limited details on how that reserve would be built, but he has indicated he is open to the possibility of keeping the Diablo Canyon nuclear facility online beyond its planned closure in 2025, as well as some gas-fired power plants that to be hired to retire.

The budget is subject to legislative approval and will come into effect on July 1st.

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