Newsom unveiled a revised budget plan of just over $300 billion for the next fiscal year, the highest in state history and fueled by surging tax revenues. The state has collected $55 billion more in taxes than officials expected in January, leaving it with an estimated $97.5 billion surplus.
That means Newsom, a Democrat, has tens of billions of dollars more to spend on new and existing initiatives as he seeks re-election in the fall. He plans additional spending to tackle the ongoing drought, to help more women get abortions in California and to offset rising costs of food, gas and other goods due to inflation.
He'll have to reach agreement with the Democratic-led legislature on all of his proposals. They have until the end of June to finalize the budget, which takes effect July 1.
Newsom said one of his top budget priorities is providing Californians relief from inflation.
"People are feeling deep stress, deep anxiety," he said.
He's proposed giving $400 checks to registered car owners in the state, with up to two checks per person. That would cost the state about $11.5 billion, he said. Though the money would only go to car owners, Newsom said it should be considered "inflation refund and relief."
"For you, it could be a rebate to address the issue of groceries, it could be a rebate to address the other cost burdens that are placed on you," he said.
Democratic lawmakers, though, have a different idea on how to provide relief. They want to give $200 checks only to those below a certain income level.
Republicans, meanwhile, say rather than a check Newsom should suspend the state's highest-in-the nation gas tax for one year. They've also asked him to increase a tax credit for renters and offer new tax credits to students.
"Senate Republicans believe there is a better way to invest in the state," said Sen. Rosilicie Ochoa Bogh of Yucaipa.