California

Are Gavin Newsom's $600 Checks a Redistributive Vote-Buying Scheme or Welcome Return of Stolen Goods?

California's embattled governor wants to spend $8 billion of the state's surprise budget surplus on individual payments to state residents.

|

Flush with a surprise budget surplus and facing an impending recall election, California Gov. Gavin Newsom is engaging in a little populist politicking by proposing to send checks straight to state residents.

Those checks will come as part of the Democrat's $100 billion "California Comeback Plan," made possible by a staggering $75.7 billion in excess state revenues and an additional $25 billion in federal coronavirus aid. (The proposal will still have to be approved by the state legislature.)

The details of how all that money will be spent "will be trickled out by Newsom's team, hoping for a crescendo of budget news to build throughout the week and culminate with the unveiling of the governor's revised state spending plan" on Friday, reports the Los Angeles Times.

The governor was nevertheless eager to telegraph the checks when he announced the state's huge budget surplus on Monday.

"We are tripling the Golden State Stimulus to get money in the hands of more middle-class Californians who have been hit hard by this pandemic," said Newsom in a Monday press release. "Two in three Californians will receive a check from the state."

Earlier this year, California sent $600 checks to low-income Californians earning up to $30,000, low- and middle-income undocumented workers, the disabled, and families already receiving state CalWORKS benefits. (Low-income undocumented workers qualified for an additional $600 to make up for their exclusion from federal relief payments.)

This second round of checks is more broad-based. It will give all Californians earning up to $75,000 a $600 stimulus payment. Families with children will get an additional $500.

Perhaps as intended, the checks are forcing Newsom's Republican opponents—including contenders in the upcoming recall election—to perform some awkward political contortions as they try to criticize the governor without coming out against free money.

"One-time payments for just one year isn't enough, not nearly enough," former San Diego mayor and current gubernatorial contender Kevin Faulconer said to the Associated Press. "We need permanent, lasting tax relief for middle-class families." Businessman and bear enthusiast John Cox, who is also running in the recall election, dismissed the checks as vote buying at a campaign event.

Ironically, these checks are likely mandated by a decades-old ballot initiative passed by anti-tax activists trying to limit government largesse. That initiative, 1979's Proposition 4, uses a complicated formula that incorporates population growth and inflation to cap the allowable amount of government spending.

When revenues exceed that cap—the"Gann limit," named for Proposition 4 champion Paul Gann—the extra money has to be returned to taxpayers. Subsequent amendments to the law require half of excess revenues to be given to public schools.

The limit has only been triggered once before, in 1987, when $1.1 billion was given back to taxpayers.

It takes two years to calculate precisely how much of a budget surplus has to be returned to taxpayers. But Newsom is wasting no time in getting this money out the door. His staff is insisting that the checks satisfy the Gann Limit's requirements.

The estimated amount of money that the state has to surrender under Proposition 4 is $16 billion, half of which will fund this second round of stimulus checks. The other $8 billion will go to education.

So what's a libertarian to make of these stimulus checks?

One could argue that this is just the state returning money it took from taxpayers. The trouble with this argument is that the reason California has Gann Limit–triggering surplus revenues to begin with is its steeply progressive system of taxation.

State revenues depend heavily on income taxes levied on high earners, and on state capital gains taxes. The highly paid professionals and the owners of capital who pay those taxes have done quite well for themselves during the pandemic, with much of their good fortune filling the state's overflowing coffers. Newsom's stimulus checks therefore take a surplus funded largely by high-income earners and redistribute it to low- and middle-income Californians.

To be sure, putting money in individuals' pockets to spend as they see fit still seems a better use of excess government revenues than lavishing it on state bureaucracies. The governor himself has made that point. "We believe people are better suited than we are to make determinations for themselves on how best to use these dollars," he said while announcing the plan, striking a rare libertarian note.

And if it helps him beat the recall too, I'm sure he won't mind.

NEXT: Biden’s $1.9 Trillion ‘Rescue Plan’ Isn’t Saving the Economy. It’s Holding It Back.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. “Two in three Californians will receive a check from the state.”

    Anything to get the recall off the front page

      1. Making money online more than 15$ just by doing simple work from home. I have received $18376 last month. Its an easy and simple job to do and its earnings SADASW are much better than regular office job and even a little child can do this and earns money. Everybody must try this job by just use the info
        on this page…..VISIT HERE

    1. Considering the cost of living in the places where 70-80% of the state’s population lives, 2/3 of the state making under $75k/year would mean probably half the state is realistically living in poverty.

      If the Governor’s office had the power to really make a difference in the face of the “progressive” supermajority in the legislature, the recall proponents could maybe make some hay politically out of the fact that leftist governance has driven the cost of living to a point where $75k/year can’t really be considered a “middle class” income in most of the state.

      Also, getting $1100 isn’t about to change the outlook for anyone trying to raise a kid (or more than one) on that income level in L.A. or S.F. other than maybe allowing them to get current on their utility bills for the next 2 months or so.

    2. “Two in three Californians will receive a check from the state.”

      And 1/3 of those paid into it.

    3. Considering that the income threshold is lower than what qualifies for HUD subsidized housing for a family of 2 in L.A. County, the fact that 2/3 of the taxpayers in the state are in that category should be grounds for recalling the entire state legislature along with Newsom.

  2. Yes he is buying votes and nothing more. Its the same reason he is opening up on June 15th, if not for the recall we would be shut down till 2022

  3. It worked in the Georgia Run-off election.

  4. Just like a like a rich kid buying his friends. But, this rich kid is using someone else’s money.

  5. He’s also planning to drop the mask mandate on June 15th. Seems like the recall effort is paying off, even if he stays in office.

    1. Not so fast:
      “California ending mask mandate June 15? Newsom softens earlier remarks”
      https://www.sfchronicle.com/health/article/California-likely-to-end-most-mask-requirements-16170984.php

    2. The period for people to withdraw signatures from the recall petitions runs through June 8th. I have a hard time believing it’s a coincidence that Newsom’s magical reopening date just happens to be a week after that; however I would believe that the date might have also been chosen because it’s just past the end of the “official” school year in most public schools so re-opening then doesn’t raise questions about why schools remain closed when everything else has been deemed safe.

  6. Or California could, you know, prop up their state employee pension fund.

    1. The rest of us are going to be on the hook to pay for that, so why would they?

  7. “We believe people are better suited than we are to make determinations for themselves on how best to use these dollars,” he said while announcing the plan, striking a rare libertarian note.

    Someone left the irony on.

    1. I don’t believe for a second Newsom believes that. He’s a good little progressive and a totalitarian. But it’s still good he has to say it. You get enough of these assholes saying libertarian things, maybe people will start to wake up.

  8. Look at this guy, would you have voted for this rat? California deserves him.

    1. I didn’t vote for him. I got him anyway.

      This used to be a heavy Republican state, the home of Nixon and Reagan. Also used to be a conservative state, the home of a tax warriors and Paul Gann and Prop 13. But the state Republican Party went full on kulturwar and ended up pissing off too many people, and are now basically just a party for old white people. They are coming back slowly, but it takes time to recover from their 80s and 90s reputation. For every McClintock there’s ten McCarthy clones dragging the party down.

      The party, like all parties, is a coalition party. And every ten years some coalition tries to take over. In 2000 era it was the religious right, then after that the Ron Paulers. Both failed, but the Trumistas were next and they succeeded. And they tossed out the Tea Party fiscal conservatives. Tax cuts were still good, but the ideas that debt and spending needed to be cut as well were openly mocked. Eventually some other coalition will assume control. But right now they are diametrically opposed to the cultural majority in California who a socially liberal but fiscally conservative government. Not libertarian though. More like old school moderates.

      1. “But the state Republican Party went full on kulturwar and ended up pissing off too many people, and are now basically just a party for old white people.”

        You don’t live here do you? This is absolutely positively not the reasons the Republicans lost the state. They lost the state the same reason that every other blue state turned blue: Liberal urbanites grew to outnumber the conservatives in the rest of the state.

        The State Republicans have not put up a “Kulture Warrior” in years. Oh, was Schwarzenegger some sort of religious right? Fiorina?

        You are crazy.

        1. While the state GOP hasn’t gotten into social issues in a long time, the national brand hurts the state GOP. If you renamed the state parties, I think the races would be a lot more interesting. There are a lot of people here who like more roads, less spending, and charter schools, who stubbornly refuse to vote Republican at the state level.

          1. While we might have an argument to be had here, that is not what Brandybuck asserted. They specifically said “But the state Republican Party went full on kulturwar”- emphasis on “state”. And that is flat out wrong.

          2. “…who stubbornly refuse to vote Republican at the state level.”

            And we had the same at the national level in November. Unfortunately, we got what they deserve.

        2. you had devin nunes. Not to mention that the split became big people in cities and suburbs all over the country are turning their back on the crazy republicans.
          If democrats had a spine they would fix the flaws in the elctoral college by simply admitting puerto rico and DC as states and passing legislation to change the size of the house. Because if the electoral college was closer to the breakdown between states you would have democrats running the country since the year 2000. Yet democrats just dont have the stomach to go nuclear.

          I think they should. Once republicans are faced with being the minority they will begin more outreach and take out crazies in the party. Having two parties trying to compete for votes makes democracy better. The current system makes it so that Marjorie taylor green is the face of your party.

    2. The same way the people of Portland voted for and elected Wheeler. They got what they deserved.

    3. when one panders to the unions, overpays and greases all the state and local employees (who oddly also have a union. WHY?) , and welcomes all to the welfare rolls it is not hard to get those votes. spend a few decades dumbing down the lumps with increasingly bad schools and it gets even easier. that oily duechebag is now buying our votes with our own money…don’t call him anything but a clever conniver

  9. Yes it’s vote buying. It’s also better than spending the money on some stupid shit.

    1. No it isn’t.

      Stop normalizing cash give aways under the guise that the money is going to be spend otherwise. Because guess what? The other money is also going to be still spent.

      This is why you aren’t a libertarian but a socialist. Just because you want the individual to choose where they spend their government allowance doesn’t deny the fact they are using a government allowance.

      This is pitiful.

      1. So you think if there’s a surplus, it’s not better for the state to get it out of their hands as efficiently as possible, i.e. as cash for nothing, than to buy goods and services for government to use? It’s unconscionable for government to hold onto cash it doesn’t need, and it’s a good thing there’s this law that makes them get rid of it.

        1. This is not a refund of a surplus. It is taking money that was largely taken from the rich, and paying it solely to the poor. It is plain old Wealth Redistribution.

          1. if it was a refund it would be going back to the folks that got it extracted from them. one good way to do that might be a cut in gas tax or sales taxes. but NOOOOO…that would highlight the fact that we get hosed daily

    2. That the money went through various channels first does not mean it’s my money. This is still money the government took from other people. The law says it has to be handed back, but the correct thing to do is to accompany that with an apology and a concrete tax and spending cut.

    3. Spending money on Cali in any form is stupid shit, fatty.

      1. But this is not spending, this is giving it away.

    4. I suppose we should all just be thankful that he didn’t decide to just plow it all into the HSR boondoggle.

    5. I really hoped they would pay back some of their state debt. If they had used half of the money to do that california would have some of the best balance sheets.

  10. When revenues exceed that cap—the”Gann limit,” named for Proposition 4 champion Paul Gann—the extra money has to be returned to taxpayers.
    That’s nice.

    Subsequent amendments to the law require half of excess revenues to be given to public schools.
    *sigh*

    1. Parasite grows itself, declares itself a symbiont benefitting the host, and that the host should feel like shit for thinking it should be a touch smaller, or, hell, just stop growing.

  11. I’m seeing a lot of Bear commercials, but I’ve yet to see one blasting the governor’s picture dining indoors at the French Laundry. The pandemic will be essentially over by the time the recall rolls around, but the hypocrisy still needs to be displayed.

    California Dems won’t vote for a Republican, but they might vote to oust this turkey to make room for a different Democrat.

  12. How much of that surplus is Federal stimulus?

    1. Far less than the $1Trillion that Newsom was claiming the state couldn’t survive without a year ago.

    2. EXACTLY!!!

  13. That the recall petition attracted so many to sign has made gruesome Newsom more afraid than ever. Is not to worry Komrade, you have plenty of Bolsheviks in Sacramento who will support you.Do not fear Komrade Newsom, they will vote against the recall and further they will pass a bill outlawing any further attempts. Furthermore those who signed the petition will be arrested for insurrection. The names will be passed on to the FBI.
    Of course it doesn’t hurt to have nasty Nancy as a relative either.

    1. Moan Abe brother.

  14. “Are Gavin Newsom’s $600 Checks a Redistributive Vote-Buying Scheme…”
    Yes.

  15. I’ll take the money. But I signed recall and will still support it; even if I have to vote for the one with an identity crisis Jenner. Still better the Newsomlini

  16. We have been told that the mere appearance of inappropriate actions by a politician is enough. Governor Gavin Newsom at the very least appears to be buying votes regardless that this is in reality an attempt to actually buy votes.

    Voters in California should be irate that Governor Gavin Newsom holds the citizens of California to such a low regard. To me even if I were friendly to some of his politics would find his attempts to bribe the electorate so distasteful and even possibly criminal.

Please to post comments

Comments are closed.