It’s no secret that California Gov. Gavin Newsom wants to be president. He’s had his eye on the White House since he was first elected governor in 2018, and after easily surviving a recall election and winning a smashing victory in his 2022 re-election contest, it was assumed that Newsom would be a candidate for the Democratic nomination if Joe Biden faltered.
But reality, as it is wont to do, intruded. Newsom mismanaged the state’s finances so badly that California is now facing a staggering $32 billion deficit from a total budget of $302 billion. Since California is required to pass a balanced budget every year, finding 10% of the budget will be no easy task.
“The fact that the Governor continues to overspend creating structural deficits in future years is fiscally irresponsible,” said Assemblymember Vince Fong, a Republican from Bakersfield who is vice chair of the Assembly Budget Committee.
Tell us something we don’t know. Newsom has been playing fast and loose with the budget for years in order to finance his climate schemes and his most beloved project, the high-speed rail boondoggle that’s already going to cost $128 billion by 2030.
When in doubt, do the liberal government two-step.
“This was not an easy budget, but I hope you see we will try to do our best to hold the line and take care of the most vulnerable and most needy, but still maintain prudence,” Newsom said.
The two goals are mutually exclusive. But don’t tell Newsom that.
So now, Newsom has to find a way to put $32 billion into a budget hole. Will he cut $32 billion from his $302 billion budget? Heavens to Betsy no!
Newsom, a Democrat in his second term, proposed no major tax increases for individuals or spending cuts across the state’s most important programs, including those impacting public education, health care and homelessness. His plan would cut spending by about $10.6 billion — about $1 billion more than what he proposed in January — while covering the rest of the deficit through a combination of borrowing and delaying some spending while shifting other expenses to different sources.
In other words, smoke and mirrors and moving a few zeroes around hoping no one notices.
California has a progressive tax system that relies on rich people, meaning it gets about half its revenues from just 1% of the population. When the economy is good, rich people pay more in taxes and revenues can soar quickly. When the economy is bad, they pay less and revenues can drop just as fast.
That’s why Newsom said it is common for future budgets to be unbalanced, especially during lean years. He also said Democrats, who control state government, have learned to use the volatile tax system to their advantage. Newsom’s plan would leave California with $37.2 billion in various savings accounts, money that he said could be used to balance future budgets.
“A progressive tax system allows us to stack away billions and billions of dollars for exactly this moment,” Newsom said.
Does anyone else think that sounds an awful lot like a $37.2 billion political slush fund? Democrats would never do that, would they?
Whatever plans Newsom might have had for a White House run have collided with the reality of his own mismanagement. If the Democrats wanted an alternative to California Democrat Kamala Harris to run for president, it won’t be Newsom. While Newsom gets moderately high ratings for his performance, more than 70% of Californians oppose a 2024 presidential run for their governor, which is usually a sign that a candidate should quit while they’re ahead.
The Berkeley poll was taken before the extent of the budget deficit was known. It’s a good bet that Newsom’s approval numbers have declined, making any run for the presidency even more problematic.
