How Will Gov. Newsom Spend Expected $31 Billion Surplus?

(My Epoch Times article)

California’s government is accelerating toward Gov. Gavin Newsom’s early January release of his budget proposal for fiscal year 2022–23, which begins on July 1. Newsom announced in October there would be an “historic budget surplus.” In a November 17 report, “The 2022–23 Budget: California’s Fiscal Outlook,” Legislative Analyst Gabe Petek projected a $31 billion surplus.

That would be on top of the $47 billion surplus from the previous year, as Petek calculated in a separate report on Oct. 27, “Overview of the Spending Plan (Final Version).”

The state really is rolling in the money, largely because of the immense profits of Silicon Valley and $27 billion from the federal government’s American Rescue Plan (ARP) Act Fiscal Relief Funds. As Petek wrote in his November report, “The 2021–22 budget allocated the entirety of these funds to a variety of purposes, including about $9.2 billion to offset existing General Fund costs.”

What to do? Unfortunately, most of the proposals are short-term thinking, from one-time tax rebates to spending on liberal Democrats’ wish list. But the history of California’s tax system shows that it always swings from “highs” like this, with the money flowing in like a flood through the Santa Ana River, and “lows” in which the money dries up, the riverbed is parched and the $40 billion deficits roll in, prompting tax increases.

THE REST HERE:

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