Governor Gavin Newsom announces largest state budget surplus in American history

California's massive budget surplus has Governor Gavin Newsom demanding a huge spending spree in his updated 2022 Budget Plan. It includes billions more in education spending and cash payments to every Californian who owns a vehicle.

Newsom announced what he says is the largest state budget surplus in American history — but Democrats can't agree on how to get the money back in the hands of state residents.

"It hurts — I have to work extra hard," said Cecilia Aragon, who works four — sometimes five jobs to stay afloat amid rising gas prices. "I'm literally PA'ing when I'm a tailor. I'm doing extra things just to make my money and pay rent."

As folks struggle in Southern California — the state is raking in tax revenue — thanks to the richest Californians who managed to get even richer during the pandemic. 

"Projected operating surplus for the state of California in May revision — just shy of 100 billion dollars. Simply without precedent no other state in American history has ever experienced a surplus as large as this," said Newsom.

Newsom now wants to move forward with giving some of that money back to Californians. 

The record breaking surplus is $97.5 Billion. Newsom's plan would give $400 dollar checks to vehicle owners — two vehicles max — but other state Democratic leaders want to send $200 checks — based on income — not vehicle ownership.

"It's great but I don't know that it's enough. It's great that they're even thinking about us — but it's still not really enough," said Aragon.

State Republicans also say the current Democratic plans are not enough.

"I'm getting calls into my office every day from people who can't pay their electric bill — who have to travel for work, who can't afford the gas in California," said GOP State Senator Brian Dahle, who is running for governor. "We pay two dollars a gallon higher than other states. ... We need to give them back their money."

Newsom was asked Friday during the budget announcement about whether the state should rethink how its taxing people. The governor pointed out a bulk of this surplus comes from the richest of the rich.

"Concentration of wealth and success at the hands of a few that are enjoying abundance in historic and unprecedented ways," said Newsom. 

The massive windfall gives state leaders many options. Loyola Marymount University Professor of Political Science Fernando Guerra says even after rebates are paid out — there's a lot more money to be distributed.

"What are you going to do with this money? I think they need to focus on one-time issues. Like focusing on homelessness. Helping out police departments, and while the CA budget is fantastic. This might not transfer to cities and counties. For really they have municipal services and I would strongly suggest that they transfer some of this money back to the locals," said Guerra.

State democratic leaders released a statement that negotiations with the governor are ongoing but there is no timeline as to when a deal will be reached.