ARTICLE
On September 21, 1987, Governor George Deukmejian signed legislation giving Californians a $1.1 billion tax rebate, the first refund ever granted under a state spending limit approved overwhelmingly by voters in 1979 (The Gann Initiative). Between November 1 and Christmas of 1987, 13 million people who filed state income tax returns for 1986 received checks ranging from $32 to $118 for individuals and $64 to $236 for couples. The rebate plan was passed by the Legislature on the final day of this year’s session. I received a check for $32. At the time, I was a staff aide to a US Congressman. The discussion around the office was humorous — with the number one question being, “What are you going to do with your refund?” Answers were serious and funny. One staffer said, “I can pay my PG&E bill this month”; another staffer said, “I’m going to buy lottery tickets and win the jackpot.” A not-so-fun matter happened in the following years: California (and the nation) went into a mild economic downturn in the late 1980s into the early 1990s — where the state was near insolvency. In 1993, the state issued vouchers instead of paychecks to state workers. California state employees would have to hope their bank and other vendors would honor the voucher as real dollars. I had just signed mortgage papers on a home purchase so you can imagine how challenging it was to tell my bank — “It is ok, California will be good on this voucher.” A prayer and a promise. Here we are thirty-five years later, and Governor Gavin Newsom and California Democrats have reached a budget deal for gas tax relief amid soaring prices at the pump. “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,” Governor Newsom, Senate President Pro Tem Toni G. Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) said in a joint statement. Their new budget deal calls for a $9.5 billion tax refund to Californians. The deal still must be voted on in the state Assembly and Senate. So where do you fit into this refund plan? The plan would provide refunds on a sliding scale based on three income levels: > An individual who earns up to $75,000 a year would receive a $350 refund, which would double to $700 for joint filers earning as much as $150,000. Households would receive an additional $350 payment if they claimed any dependents, for a maximum refund of $1,050. > At the next income level, single filers who earn up to $125,000 would get $250 refunds. Households that file jointly and earn up to $250,000 would receive $500. Children or any other dependents would qualify taxpayers for an additional $250 payment, making families in the income bracket eligible for as much as $750 total. > Individuals who earn up to $250,000 would receive $200, and joint filers with income of as much as $500,000 would receive $400. Households with dependents would receive an extra $200, making this income bracket eligible for a maximum of $600. So just like in 1987, we are asking the same question: What are you going to do with your refund? Don’t hold your breath in responding because the discord between the Democrats in Sacramento and the release of these refunds won’t hit your pocketbook until October or later. Last Sunday night, the Legislative Leaders and the Governor emerged with a deal and other budget issues that included two “budget bill juniors” to modify the initial placeholder version and more than two dozen “trailer bills” to implement the budget’s provisions but also containing an unknown number of policy decrees, some of which had little or nothing to do with the budget. It is not unusual for the Governor and the Legislature to find consensus on the overall budget bill, but then move small legislative pieces of the bill (trailer bills) back to the full legislature for final consideration. The details of those trailer bills will be important to those interested stakeholders and the general public on the final outcome of where our tax dollars will be spent. State law requires that the bills must be in print for the minimum three days before the legislation can be acted upon. The Democratic-led Legislature will pass and Governor Newsom will sign the final budget just in time for the new fiscal year to begin on July 1.
On September 21, 1987, Governor George Deukmejian signed legislation giving Californians a $1.1 billion tax rebate, the first refund ever granted under a state spending limit approved overwhelmingly by voters in 1979 (The Gann Initiative).
Between November 1 and Christmas of 1987, 13 million people who filed state income tax returns for 1986 received checks ranging from $32 to $118 for individuals and $64 to $236 for couples. The rebate plan was passed by the Legislature on the final day of this year’s session.
I received a check for $32. At the time, I was a staff aide to a US Congressman. The discussion around the office was humorous — with the number one question being, “What are you going to do with your refund?” Answers were serious and funny. One staffer said, “I can pay my PG&E bill this month”; another staffer said, “I’m going to buy lottery tickets and win the jackpot.”
A not-so-fun matter happened in the following years: California (and the nation) went into a mild economic downturn in the late 1980s into the early 1990s — where the state was near insolvency. In 1993, the state issued vouchers instead of paychecks to state workers. California state employees would have to hope their bank and other vendors would honor the voucher as real dollars. I had just signed mortgage papers on a home purchase so you can imagine how challenging it was to tell my bank — “It is ok, California will be good on this voucher.” A prayer and a promise.
Here we are thirty-five years later, and Governor Gavin Newsom and California Democrats have reached a budget deal for gas tax relief amid soaring prices at the pump. “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,” Governor Newsom, Senate President Pro Tem Toni G. Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) said in a joint statement. Their new budget deal calls for a $9.5 billion tax refund to Californians. The deal still must be voted on in the state Assembly and Senate.
So where do you fit into this refund plan?
The plan would provide refunds on a sliding scale based on three income levels:
So just like in 1987, we are asking the same question: What are you going to do with your refund? Don’t hold your breath in responding because the discord between the Democrats in Sacramento and the release of these refunds won’t hit your pocketbook until October or later.
Last Sunday night, the Legislative Leaders and the Governor emerged with a deal and other budget issues that included two “budget bill juniors” to modify the initial placeholder version and more than two dozen “trailer bills” to implement the budget’s provisions but also containing an unknown number of policy decrees, some of which had little or nothing to do with the budget. It is not unusual for the Governor and the Legislature to find consensus on the overall budget bill, but then move small legislative pieces of the bill (trailer bills) back to the full legislature for final consideration. The details of those trailer bills will be important to those interested stakeholders and the general public on the final outcome of where our tax dollars will be spent.
State law requires that the bills must be in print for the minimum three days before the legislation can be acted upon. The Democratic-led Legislature will pass and Governor Newsom will sign the final budget just in time for the new fiscal year to begin on July 1.