California Gov. Gavin Newsom has proposed a $100 billion stimulus plan to triple the state’s direct cash assistance program and reach around two-thirds of the state’s residents, Wall Street Journal (WSJ) reported Monday (May 10).
If passed, this proposal would send $600 tax rebate checks to households making up to $75,000. Another $500 will go to those with children.
The cost of these checks comes out to around $8.1 billion, WSJ reported.
“California’s recovery is well … [underway], but we can’t be satisfied with simply going back to the way things were,” Mr. Newsom said in a statement, WSJ reported.
Newsom also announced that direct assistance for renters would be doubled to $5.2 billion. There is also another $2 billion proposed to help with utility expenses.
In terms of the remainder of the money, Newsom didn’t detail how he’d spend it — though WSJ reported that he is likely to do so later in the week. There will be a revised presentation of the state budget on Friday.
The new stimulus plan comes as Newsom is facing the likely probability of a recall election later in the year, which Sacramento political veterans say could go either way depending on how the trajectory of the pandemic goes until then.
Like much of the rest of the U.S., California has been recovering from the economic downturn from the pandemic. Newsom’s strategy involved large-scale lockdowns of the state as it became a hotspot for the virus. Economists from the University of California, Los Angeles, predicted that while the state’s recovery might start later, it would ultimately come back stronger.
The stimulus checks sent out nationwide in December and then again in March both had the effect of bolstering the economy, with PYMNTS reporting that the last round of them lifted March retail sales by 9.8 percent. The cash injection made for the biggest leap since the 18 percent spike 10 months previous.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More