California to Issue More Stimulus Checks as Newsom Signs $100-Billion Recovery Plan

Mandatory Credit: Photo by Jay L Clendenin/Los Angeles Times/Shutterstock (12084348i)As part of California's full reopening, marking the end of pandemic-era restrictions like masks, social distancing and most capacity restrictions, Gov.
Jay L Clendenin/Los Angeles Times/Shutterstock / Jay L Clendenin/Los Angeles Times/Shutterstock

State leaders in California have approved a $100-billion plan to further the economic recovery in California that includes new stimulus checks for residents, rent relief and grants to businesses.

See: Child Tax Credit Payment Schedule Is Out Now – Here’s When You’ll Get Your Money
Find: Almost 3 Million Signatures on Petition for 4th Round of Stimulus Checks

First proposed back in May, California Gov. Gavin Newsom signed the legislation July 12 that reflects the majority of the state’s 2021-2022 state budget agreement. The budget is part of Newsom’s “California Comeback Plan” aimed to aid the state’s economic recovery from the coronavirus pandemic.

According to Newsom’s office, the plan provides immediate cash relief to middle-class families and businesses hit hardest by the pandemic, “creating the biggest state tax rebate in American history and the largest small business relief package in the nation.”

Newsom claimed that the plan will be partially funded through a “surge in state revenue” in addition to federal recovery funds and a resurgent economy. California is a state with progressive income tax, meaning that tax rates increase the further up the income scale you go. These rates rise and fall more dramatically than other taxes. Capital gains, in particular, can drive much of the change in these tax rates.

Make Your Money Work for You

Cal Matters, a website dedicated to explaining how California’s state capitol works, claims that the economic recovery from the pandemic saw higher earners getting back to work much more quickly than low-income workers and that taxing wealthier workers at a higher rate has given the state the resources to pay for the benefits that Newsom is now transferring through next year’s budget.

This has been realized through what Newsom claimed as a $75.7 billion surplus which will help to pay for one of the most ambitious state economic stimulus plans in history. Newsom added that “the budget is built on a strong fiscal foundation that includes over $25 billion in reserves, pays off educational deferrals and continues to pay down long-term retirement debts.”

The plan will see two out of every three Californians receive a “Golden State Stimulus check” in the form of the biggest state tax rebate in American history. Newsom’s office claims that nearly two-thirds of residents now qualify for a stimulus check of $600 and qualified families with children will receive an additional $500.

See: Stimulus Package Update Offers Free Health Insurance Through the End of the Year
Find: The IRS ‘Get My Payment’ Tool for Stimulus Payments — What It Is and How To Use It

Make Your Money Work for You

The plan also includes $5.2 billion to help low-income renters and landlords, covering 100% of back-rent and all prospective rent for several months into the future. Newsom also stated that $2 billion will be allocated for past-due water and utility bills and more money for tenant legal assistance.

For small businesses, the plan will also provide an additional $1.5 billion in direct grants for California’s small businesses including $120 million towards a grant program to incentivize businesses to relocate to the state.

More From GOBankingRates

Last updated: July 25, 2021

About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.