The massive budget surplus is largely due to taxes paid by rich Californians who generally did well during the pandemic, and marks a major turnaround after officials past year said they feared a deficit of more than $50 billion.
All households making up to $75,000 with at least one child, including immigrants who file taxes, would get an extra $500 payment. The proposal also includes $5.2 billion to pay back rent and $2 billion for overdue utility bills for people who fell behind during the pandemic.
Newsom, a first-term Democrat facing a recall election over his handling of the coronavirus pandemic, directed the state's water board to consider modifying requirements for reservoir releases and take other conservation measures. That law, passed by voters as part of a tax revolt that swept the state, calls for a taxpayer rebate if per capita spending, adjusted to account for growth, exceeds a certain level for two consecutive years. The state estimates it will be $16 billion over that threshold.
State Sen. Scott Wilk used the hashtag #RecallRebate in a tweet calling out the governor's plan.
"The hots are getting a lot hotter in this state, the dries are getting a lot drier", Newsom said.
Of California's almost 40 million people, around 30% now live under a drought emergency that Newsom said is likely to expand. The proposal would cover eligible taxpayers, regardless of immigration status, who did not get a $600 state stimulus check under an earlier program that targeted more than four million low-income Californians. "And of course, he's anxious about his own neck", Cox said at a campaign event in Los Angeles.
Former San Diego Mayor, and Republican candidate, Kevin Faulconer put out a statement right after the announcement, arguing, "Californians need permanent, real tax relief, not just one-time stimulus checks".
While many states, including California, initially were predicting that the pandemic would be catastrophic for budgets, many of those projections have become less dire in recent months. Still, experts emphasized that many states - particularly those that rely heavily on tourism and sales tax revenue, like Hawaii and Nevada - have struggled financially.