San Diego Union-Tribune (Sunday)
CALIFORNIA’S BUDGET SURPLUS
Gov. Newsom intends to give stimulus checks of $600 to people earning less than $75,000. Our panel weighs in.
ECONOMISTS NO
After California implemented some of the nation’s toughest Covid-related restrictions and last reopenings, distributing $600 to households will not accomplish much. The state is not operating with budget surpluses when massive long-term liabilities compound. As long as California makes minimum debt payments and dubious projections of future revenue returns, annual spending levels will not cover projected unfunded state employee pension liabilities, as well as deferred highway infrastructure maintenance.
YES
Deciding how to spend the tax revenue windfall is best left up to California residents. The proposed distribution of stimulus checks helps accomplish this. Moreover, the state has an obligation to rebate a portion of the excess tax collections to taxpayers. Renters who lost their jobs because of the pandemic have benefited from eviction moratoriums. However, many will be unable to pay back rent obligations accumulated during the pandemic without assistance.
YES
While the state economy is coming back, there are still many people in difficult circumstances, especially those with low incomes. They were the ones who were more likely to lose their jobs, have more issues with child care due to schools being online, and are facing a huge backlog of unpaid rent. The extra money and the rent relief will help them a lot and the money will get into the economy faster than if it had gone to high income people.
NO
A budget surplus is partially indicative of excess taxing. But we need to guard against stunts that seem to be precipitated by this silly recall movement and strive to work out more thoughtful ways to receive and spend money. Why not dub this the “Robinhood Tax Giveaway”? I would like to see clarity on a long-term, budgetbalancing plan that reduces taxes, yet ensures that there is a continued focus on educational reform, infrastructure spending, water improvements and fire protection, among other things.
EXECUTIVES NO
Though popular with the voters (and there is a recall election looming) the money would be better spent on other issues. The governor does need to follow the law and refund excess funds but, combined with the excessive federal grants being offered this is more money on top of other money. I would support child care, any kind of job training or internship program or even infrastructure funding. The economy is accelerating at a fast pace and will grow even faster if people would go back to work rather than be encouraged to stay home with more grants.
YES
It is difficult post-pandemic to criticize the governor’s “roaring back” plan. Beyond providing low-income and middle-class families economic relief, it addresses immediate environmental, infrastructure and social program needs. While all good, the governor’s proposal falls short on utilizing the surplus as a catalyst to address longer-term problems facing the state. The housing crisis and related cost-of-living issues stifling middle-class growth are looming problems. Resources need to be directed toward sustainable fixes.
NO
California is legally forced to return some of the estimated $76 billion dollar surplus money back to taxpayers. Recently that amount was questioned, as it includes reserves and constitutionally required spending. According to the Legislative Analyst’s Office (LAO), the surplus amount is expected to be around $38 billion. The spin of the surplus amount and the timing of stimulus payments to Californians by the governor looks to be politically motivated.
YES
Direct payments to those most likely to need (and immediately spend) the money on necessities are widely considered to be a great way to boost the economy. The next logical step would be to make these payments automatic based on economic indicators. As for the rest of the surplus, I would like to see California invest more in our future: early education, after school programs, vocational training and weatherproofing.