Budget swells to $97B surplus

Newsom updates plan to spend it but warns of possible market bust

State coffers are overflowing with an unprecedented budget surplus as Gov. Gavin Newsom on Friday unveiled a massive $300.7 billion spending package that funnels billions in cash payments to vehicle owners and hospital workers while dramatically boosting spending on education, infrastructure and wildfire resilience.

In unveiling his highly anticipated May budget revision, Newsom said the state's surplus ballooned to $97.5 billion — far higher than his $76 billion January estimate. A large chunk of this surplus is mandated toward education and other spending categories, while lawmakers have discretion over about $49.2 billion, some of which will be given back to taxpayers, Newsom said.

The bountiful budget is buoyed by a trend accelerated during the pandemic: Economic gains enjoyed by California's wealthiest residents trans