Governor Newsom Proposes $18.1 Billion Inflation Relief Package

Package includes direct payments to help address costs of rising inflation and past-due water and utility bills, free public transit, money for health care workers, middle-class health care subsidies, and waiving child care fees for families 

SACRAMENTO – As people throughout the country face increasing costs due to global inflation, Governor Gavin Newsom today announced an $18.1 billion inflation relief package to get money into the pockets of Californians.

“We enacted the most comprehensive economic stimulus program in the nation last year, getting billions in immediate relief to millions of Californians. But many folks are still struggling, especially with high costs due to inflation, so we’re leveraging this historic surplus to get money back into the pockets of Californians,” said Governor Newsom. “This inflation relief package will help offset the higher costs that Californians are facing right now and provide support to those still recovering from the pandemic.”

Governor Newsom’s inflation relief package includes:

• $11.5 Billion for Tax Refunds to Help Address Inflation. As the entire country faces increasing costs due to inflation, Governor Newsom proposed getting $400 checks to every eligible registered vehicle owner, capped at two checks per individual.
• $2.7 Billion for Emergency Rental Assistance. Governor Newsom is proposing significant state funds for qualified low-income tenants who requested rental assistance before March 31, helping these Californians get the support they need.
• $1.4 Billion to Help Californians Pay Past-Due Utility Bills. As Californians continue to face difficulties in paying for utility bills, this investment expands upon last year’s utility relief program to continue this vital support – $1.2 billion for electricity bills and $200 million for water bills.
• $933 Million for Hospital and Nursing Home Staff. Providing up to $1,500 to hospital and skilled nursing facility workers who have been delivering care to the most acute patients during the COVID-19 pandemic and saved thousands of lives.
• $750 Million for Free Public Transit. Governor Newsom is proposing incentive grants to provide three months of free public transportation for communities throughout the state.
• $304 Million to Make Health Coverage More Affordable for Middle-Class Families. This extends health insurance premium assistance under Covered California for families of four earning up to $166,500 annually, upwards of 700,000 Californians.
• $439 Million to Pause the Diesel Sales Tax. Bringing relief to the commercial sector and drivers, Governor Newsom is proposing a 12-month pause in the sales tax rate for diesel fuel that would provide upwards of $439 million in relief.
• $157 Million to Waive Child Care Fees for Low-Income Families. Making state-subsidized preschool and child care more affordable, benefitting 40,000 low-income California families with savings of up to $595 per month.

 Additionally, California’s minimum wage is projected to increase to $15.50 per hour for all workers on January 1, 2023. The accelerated increase is required by a provision in the state’s existing minimum wage law when inflation exceeds 7 percent. The COVID-19 pandemic has resulted in persistent supply chain disruptions and labor market frictions have driven inflation to its highest rate in 40 years. These conditions have further been exacerbated by Russia’s war in Ukraine.

The wage increase will benefit millions of California households that are struggling to keep pace with the highest rate of inflation in decades. For years, the state minimum wage has increased steadily while inflation numbers remained modest.

This inflation relief package builds off of Governor Newsom’s nation-leading stimulus package last year, which helped accelerate California’s economic recovery and support those hit hardest by the pandemic, including:

• Golden State Stimulus checks for 2 out of every 3 Californians. The Governor created the biggest state tax rebate in American history, expanding direct payments to middle-class families, with $9 billion in stimulus payments delivered directly to middle-class Californians and families.
• Largest statewide renter and utility assistance program in the country. Governor Newsom put forth a plan to distribute $5.4 billion to help low-income renters and landlords, as well as $2 billion for past-due utility bills like water and electricity.
• Largest small businesses relief program in the nation. The Governor invested $4 billion in direct grants to California’s small businesses – on top of $6.2 billion in tax relief – putting more money directly into the pockets of hundreds of thousands of small business owners and helping them re-hire workers displaced by the pandemic.

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