Stimulus Check News: California Is Going All in on More Checks (Good Idea?)

Stimulus Check News: California Is Going All in on More Checks (Good Idea?)

While the stimulus checks nationwide are coming to an end, one state, California, has recently begun to send out its own payments to all qualifying state residents.

Over the past two weeks, substantial media attention has been paid to the Biden administration’s newest quasi-stimulus program: a series of six payments to low- and middle-income American families, running from July until December,

Most (although not all) of the March 2021 stimulus checks have now been sent out and spent. The IRS announced on Wednesday that an additional 2.2 million payments, including so-called “plus-ups”, had been sent out over the previous weeks. It has been estimated that 90 percent of qualifying Americans have received their stimulus payments by now, and roughly $400 billion of the $450 billion set aside for the payments has been sent out.

However, while the stimulus checks nationwide are coming to an end, one state, California, has recently begun to send out its own payments to all qualifying state residents. The state budget is closely tied to gains and losses in the stock market, and the stock market’s success during the pandemic left the state with a multibillion-dollar surplus. California Gov. Gavin Newsom has estimated the surplus at $75 billion; other groups have lowered the estimate to $40 billion, depending on how it is measured. 

Last week, California Gov. Gavin Newsom agreed to a budget deal with the state legislature. The most consequential part of the deal for many Californians is the section concerning the stimulus payment; all Californians making between $30,000 and $75,000 per year, regardless of immigration status, will receive an extra $600 payment. Parents of dependents under the age of 18 will receive an additional $500 per child.

The checks are slated to be sent out in September, according to the Sacramento Bee. An earlier round of equivalent checks targeted Californians making $30,000 per year or less; they will not receive a second payment.

Newsom has trumpeted the projected benefits of the stimulus measure, citing early estimates of its positive impact. The governor has not mentioned publicly that the stimulus payment is legally required by a quirk in California state law, which states that a budget surplus above a certain limit must be returned to the state’s residents.

In addition to the stimulus payment, California’s new budget includes funding to a number of other discretionary issues. The state government in Sacramento has also created a $5.2 billion fund to assist struggling low-income renters and landlords; the fund is intended to cover back rent accrued during the pandemic, as well as future rent. An additional $2 billion has been provided for similar relief for unpaid utility bills. $4 billion has been set aside for small business grants.

Trevor Filseth is a current and foreign affairs writer for The National Interest. He lives in California.