Gov. Jerry Brown will propose offering a $380 million tax credit for the working poor as part of his revised budget Thursday.
Information provided by the Brown administration says the tax credit would help as many as 2 million people who earn up to $13,870 a year for a family of four.
Brown has been under pressure from fellow Democrats and social welfare groups to spend some of the surplus revenue pouring into state coffers this year as California rebounds from the recession.
Education will get most of the $3 billion in unexpected extra income, but there's fierce competition for the rest of it.
California is flush in cash. State Controller Betty Yee reported a surge in personal income tax receipts in April, giving California a $1.8 billion cushion in just that month alone. And with two months left in the fiscal year, the state's General Fund revenues are $3.4 billion ahead of projections.
"Most of those new revenues are going to go to schools," said H.D. Palmer, a spokesman for the Department of Finance.