California Democrats See Targeted Tax Relief From Budget Surplus

California’s Senate Democrats plan to use part of a multibillion-dollar surplus to expand the earned income tax credit, child tax credit, and tax relief for small businesses in next year’s budget.

With an expected surplus of about $31 billion for the fiscal year that starts July 1, 2022, senators aren’t ruling out broad tax rebates to Californians along with targeted tax relief. Rebates might be necessary to stay under a constitutional appropriation limit set in the 1970s.

• The tax priorities are part of a preview for the 2022 budget debate offered Wednesday by Senate President Pro ...