With state revenues at an all-time high, Gavin Newsom on Monday proposed a budget that would cut taxes while also promising to pay the health care expenses of all of the state’s low-income adults who are living in the country illegally.


It will cost state taxpayers about $2.2 billion per year to cover the cost of health care for the state’s low-income illegals. Meanwhile, Newsom’s tax cuts would reduce revenue by more than $6.5 billion.


But the numbers still balance because California has a projected $45.7 billion surplus, driven by incredible growth in tax collections during the pandemic. California taxes the wealthy more than people with lower incomes to the point that, in 2019, the top 1% of earners paid nearly 45% of all the state’s income tax collections.


That top 1% has only gotten richer during the pandemic. While California has the highest unemployment rate in the country, it is on pace to collect at least $25 billion in capital gains taxes in 2021, the most ever.


“We have the capacity to invest in our growth engines, invest in the future, as well as make sure that we prepare for the uncertainties that the future presents.” Newsom said, touting his plan to put $34.6 billion in reserves.


California taxpayers already pay the health care costs for illegals 26 and younger and plans to cover people 50 and older this May. Newsom’s proposal would cover everyone else starting in January 2024.

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