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About this blog: I am a native of Alameda County, grew up in Pleasanton and currently live in the house I grew up in that is more than 100 years old. I spent 39 years in the daily newspaper business and wrote a column for more than 25 years in add...  (More)

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Sacramento debates how to spend record surplus--no talk of reducing taxes

Uploaded: May 24, 2022
Gov. Gavin Newsom and the Legislature are debating how to divvy up the abundance of tax receipts that the capitol is awash in.
The governor released his May budget revise last week with his proposal to spend $300.7 billion. What was projected in January as a $76 billion surplus has soared to $97.5 billion as wealthy taxpayers have flourished during the pandemic. The wealthy, the top 0.5 percent of earners, provide Sacramento with about 40% of its taxes. In good times, that results in record revenues as long as they continue to live here. When the economy sours revenues can rapidly contract. That’s the financial mess that former Gov. Jerry Brown dealt with in 2012 before the economy recovered and it became a question of how to spend the money instead of what to cut.
Inflation is running at more than 8% year-over-year thanks to slow reaction from the Federal Reserve to its low interest rates policy and the Democrat spending spree after President Joe Biden took office. Remember that they called inflation “transitory.” Couple inflation with gasoline prices hitting $6.50/gallon in California thanks to Biden’s anti-fossil fuel policies, California’s unique blend and surging demand worldwide exacerbated by the Russian invasion of Ukraine, people are looking for help. Newsom and the legislative leaders have yet to agree on how to bring some relief to California residents. One of the silly Newsom notions is to send checks to owner of every car registered in California, including electric ones. Given that the income of most electric car owners is far above average, they don’t need the money and are not buying gasoline.
It's people who need to drive who are paying the price at the pump. Some reports already have shown people are reconsidering summer road trip plans based on the cost of gas that shows no signs of dropping in the short term.
Proposition 98, passed by voters during tough times back in the late 1980s, requires that about 40% of the budget go schools and community colleges so their budgets will continue to grow on a per student basis. Enrollment in public schools has dropped every year since 2013-14 and fell by 270,000 students statewide over the last two years of the pandemic. Enrollment is under 6 million for the first time in decades. With about half of the surplus devoted to education totaling $128.3 billion, that will provide $22,850 per student, an all-time record. So school districts will do just fine—the question is how effectively the money will be spent. Public education is a disaster for poor Black and Brown children.
The same can be asked across the budget categories. The governor is proposing some one-time expenditures as well as growing the rainy day fund by a healthy amount.
All of this will make for an interesting May and early June as the Legislature must put a budget on Newsom’s desk by June 15 or its pay gets docked. Since that provision was passed by voters, the budget has never been late. Stay tuned to see how the dollars are doled out.
Democracy.
What is it worth to you?

Comments

Posted by Lahommed, a resident of Dublin,
on May 24, 2022 at 9:54 am

Lahommed is a registered user.

Our federal Govt and state govt are inept, corrupt and dishonorable. America has no leadership currently and hasn't since President Trump left office. America deserves to feel the pain for allowing a low life like Joe Biden to sit in the white house. there are consequences for poor choices at the ballot box under suspicious circumstances as we witnessed in 2020.


Posted by MichaelB, a resident of Pleasanton Meadows,
on May 25, 2022 at 6:58 am

MichaelB is a registered user.

There is actually a "debate" with one party rule in the state? With whom?

Taxes will never be reduced. If anything, expect Democrats to propose additional tax increases (higher state income tax, wealth tax, etc.) for so called "income equality" purposes. When government is seen as the "solution" for everyone/everything, the only "fiscally responsible" thing to do is to tax/spend more.


Posted by Dena, a resident of Ruby Hill,
on May 25, 2022 at 2:47 pm

Dena is a registered user.

Whine Whine Whine

California is a HUGE state with a lot of expenses. The surplus can be put to good use fixing local roads, giving opportunities to those less fortunate, helping with the housing situation etc etc etc ....

Where are your ideas? Run for office if you want to change something. But no, you'd rather just whine, complain, point fingers... worship a man that tried to overthrow our democracy
(portion removed)


Posted by Joe V, a resident of Birdland,
on May 26, 2022 at 10:22 am

Joe V is a registered user.

Some of the surplus will be needed to protect a women's right to choose.
Once again a minority of voters implementing their will on others.
On the subject of a minority of voters getting their agendas passed, it has been extremely sad to walk by the local elementary school these last couple of days. An 18 year old was able to buy an assault weapon without even having a drivers license! No need for a background check, or a waiting period? Would have been a good idea to check who this kid was and why he needed it! This tragic event could have been avoided.
The conservative news jumped on the claim that schools needed armed guards, before they learned that the kid engaged in fire with one, to no avail. Just like the same scenario that happened in Buffalo recently. They also mocked the fence that surrounds the school, how they could jump over it, without understanding that the fence was installed to keep the little ones in the school grounds. This is what some people are listening to in the news.
By the way Lahommed, you can travel to Texas this weekend to hear your boy give a speech at the NRA convention!


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