Millions of Californians will see “inflation relief” payments ranging from $200 to $350 per person in the coming months under a budget deal struck by Gov. Gavin Newsom and top state Democrats.
Individuals earning less than $75,000 per year will receive $350 as part of tax refunds in the $17 billion agreement while couples making less than $150,000 who file jointly are eligible for $700.
Families in those categories with a dependent can qualify for another $350, meaning some families could see up to $1,050.
California tax filers are expected to see payments through direct deposit or debit cards by October.
“California’s budget addresses the state’s most pressing needs, and prioritizes getting dollars back into the pockets of millions of Californians who are grappling with global inflation and rising prices of everything from gas to groceries,” said Mr. Newsom, Senate President pro tempore Toni G. Atkins and Assembly Speaker Anthony Rendon after landing the deal late Sunday.
Californians and people across the nation are reeling from the high cost of gas and everyday goods, as supply chains shake off the pandemic doldrums and Russia’s invasion of Ukraine hinders global commerce in other ways, especially in the energy markets.
Critics say President Biden and Democratic allies fueled inflation with relief payments in early 2021, overheating the economy as supply struggled to keep up with demand.
At the same time, state and national Democrats say the government has a role to play in alleviating the sting of high prices.
Mr. Biden is pushing a social spending package that would extend supersized Obamacare subsidies and let Medicare negotiate down the cost of certain prescription drugs. He says any savings on health services will alleviate the pressure on households’ pocketbooks.
He also proposed suspending the federal gas tax for 90 days to ease prices at the pump, though the GOP panned it as a gimmick and even fellow Democrats gave it a cool reception.
In Sacramento, the California budget agreement would suspend a state sales tax on diesel while spending more on green technologies.
“California is doubling down in our response to the climate crisis — securing additional power-generating capacity for the summer, accelerating our clean energy future, expanding our ability to prepare for and respond to severe wildfires, extreme heat and the continuing drought conditions that lie ahead,” Mr. Newsom and the Democratic leaders said.
California leaders said the budget also includes a $47 billion infrastructure and transportation package, billions for universal preschool and education programs, and health care spending that will put California on track to become the first state offering universal coverage.
They also said the deal will provide a contrast to states that are rushing to ban abortion after the Supreme Court decided to overturn Roe v. Wade.
“In the wake of Friday’s stunning Supreme Court decision, the state is reaffirming its commitment to defending reproductive rights, providing more than $200 million in additional funding for reproductive health care services,” the top Democrats said.