California’s state budget, already poised to be flush with higher-than-expected tax revenues, will receive an additional cash infusion of $26 billion under the COVID-19 relief bill that President Biden is expected to sign this week, sparking demands for a wide array of new efforts to help those hit hardest by the pandemic.
The bill that received final congressional approval by the House on Wednesday offers significant relief to state and local governments across the nation, with California getting a total of $42 billion earmarked for state government, counties, and cities.
While local governments would almost evenly split $16 billion of that amount — and a sizeable share will go to large urban centers like Los Angeles — the biggest portion will be spent using decisions made during the annual state budget negotiations between Gov. Gavin Newsom and the Legislature.
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“It gives us a lot of options,” said Assemblyman Phil Ting (D-San Francisco), chairman of the Assembly’s budget committee. “And we know that there are lean years that are coming.”
State budget officials said Wednesday they were still reviewing the budget rules governing how the $26 billion can be spent but noted the bill makes clear states aren’t allowed to use the money to pay for new tax cuts or to delay already planned tax increases.
Beyond that, the early view is that California officials budget will have wide discretion over how to use the cash — the amount is equal to more than 11% of all state spending in the budget proposal Newsom sent to lawmakers in January.
Beyond that, the early view is that California officials will have wide discretion over how to use the cash — the amount is equal to more than 11% of all state spending in the budget proposal Newsom sent to lawmakers in January.