The California tax machine is running at full throttle. Gov. Newsom today unveiled his May budget revision, and the numbers are gob smacking. There wasn’t sufficient time to fully review and analyze all that is being proposed, but suffice it to say there’s plenty to go around. The $300 billion spending plan includes an incredible $97 billion surplus, bigger than the budgets of 42 states.
Gov. Newsom outlined big spending to ease the impacts of inflation, fortify climate resilience, address crime and public safety, invest in infrastructure and combat the state’s continuing housing and homelessness crisis. And he made pointed comments about how, despite piecemeal reforms to the California Environmental Quality Act, CEQA continues to be a significant barrier to creating more housing in California. The tax bonanza highlights the increasing and risky reliance of California’s progressive tax scheme and its dependence on high-income earners. We’ll have more analysis next week when we’re done pulling our jaws off the ground.