The impending budget surplus in California does create a new — better — argument against general federal support for states: Many don’t need it, because they are doing pretty well on their own.
That’s probably true even when you factor in the additional spending burden all states, including California, are facing because of covid-19, but for which they already received targeted federal assistance from previous relief bills — much of it still unspent.
Biden’s $350 billion request seems high; public-sector layoffs are a concern, but many so far have resulted from school closings rather than budget cuts per se and should end as schools reopen. Government support for the economy generally, through small-business loans and unemployment insurance, has indirectly but significantly helped the states by maintaining the capacity of workers and firms to earn — and pay taxes. The Fed’s zero-interest policy has goosed the stock market, which helped, too.