California's legislative leaders on Wednesday said they want to return nearly $10 billion of the state's record-setting budget to taxpayers, setting up a month of intense negotiations with Gov. Gavin Newsom over how to best help a weary public battered by soaring inflation.
Leaders of the state Senate and Assembly announced an operating budget of more than $300 billion. It includes $8 billion in rebates for most taxpayers, $1.3 billion in aid for small businesses and nonprofits and $400 million to expand assistance for Californians with little to no income.
But the agreement does not include Democratic Gov. Gavin Newsom, who has the power to veto anything he doesn't like. Legislative leaders are moving ahead anyway because of a state law that says lawmakers don't get paid if they don't pass a budget by June 15. They pledged to keep negotiating with Newsom to reach an agreement by July 1, the start of the state's fiscal year.
That means the proposal lawmakers announced Wednesday is more of a placeholder budget since it likely won't be the final version that becomes law. Still, the Legislature's plan brings into sharper focus their priorities and how they contrast with the Newsom administration.
The biggest difference is how to help taxpayers keep up with rising gas prices, which hit an all-time high of $6.19 per gallon on Wednesday. The Legislature wants to send $200 checks to taxpayers and their dependents with incomes of up to $125,000 per year for single people and $250,000 per year for couples. A family of five that meets the income requirements would get $1,000.
Newsom's plan would send up to $800 checks to people who own cars — $400 per vehicle with a limit of two cars per person. For people who don't own cars, Newsom wants to spend $750 million to pay for free rides on public transit for three months.
Lawmakers don't like Newsom's plan because they say it would only benefit car owners, leaving out those who can't afford vehicles. Newsom doesn't like the Legislature's plan because it's less money and he says it would take too long to send out the checks. Both sides have said they are confident they will reach a deal.
“I'd like to be on the higher end. They have a different number,” Newsom said last month during his budget presentation. “We'll come down and meet together."
For business owners, lawmakers want to give them $870 million to offset their increasing unemployment insurance taxes. They also want to give small-business owners and nonprofit organizations $250 million in grants to cover the costs of a new law requiring employers to give workers up to two weeks of paid sick leave.
“With this budget, we are spreading our state's wealth to hard-working Californians and small businesses like never before," Senate President Pro Tempore Toni Atkins said. “We look forward to continuing the conversation with Governor Newsom and his office.”
One of the biggest mysteries of the proposal is how lawmakers would spend $21 billion to combat climate change. The plan commits to spending that amount, but says the details are “subject to negotiations.”
The Legislature's plan has few major policy disagreements with the Newsom administration, but plenty of differences on the details. Newsom has proposed spending $40 million to pay for abortions for women who can't afford them. Lawmakers want to spend $20 million to pay for things like travel, lodging and child care for women in other states who would need to come to California for an abortion should the U.S. Supreme Court overturn federal abortion protections.
“The Senate and Assembly did not start by asking, ‘What things do we want?’ We started by asking ourselves, ‘What beliefs do we cherish?’” Assembly Speaker Anthony Rendon said. “We share a firm belief that our state is strongest when it cares for the weakest among us.”
