For eight years Gov. Jerry Brown showed his lieutenant governor, Gavin Newsom, how to balance a California budget every year, but Newsom didn’t listen. Now Newson’s May Revision for his budget for fiscal year 2025-26, which begins on July 1, starts with a $12 billion “budget problem,” Sacramento parlance for a deficit.
Newsom is blaming President Trump’s tariffs for tanking state revenues by $16 billion. Then he ought to credit Trump’s coming tax cuts with boosting the overall economy, including state revenues. If the tax cuts include restoring the full SALT (state and local tax) deduction, billionaires will return and their state taxes will goose the budget.
Brown also faced turmoil, including the 2008-10 Great Recession, which included real estate prices crashing up to 70% inland and 33% on the coast. Then followed the first two years of Trump’s first term, which included new tariffs.
The real problem is Newsom is spending far more than Brown did based on per capita income. The data are in Newsom’s initial, longer, Jan. 10 budget proposal. The key is the percentage of personal income going to support the state general fund, listed on Schedule 6, Appendix 12. The number is crucial because each Californian can only work so many hours to support the state government.
While perusing the data two decades ago for a column in this paper, I noticed whenever that figure rose above 6.2%, the state went into deficit. Big spending cuts then were enacted by necessity. Unfortunately tax increases also were imposed.
During Brown’s eight years in the governor’s chair, the percentage of personal income going to the general fund averaged 5.4%, well below the 6.2% threshold. His highest was 5.8% in 2014-15. “I don’t like to spend money,” Brown once said. “But that’s not because I’m conservative – it’s just because I’m cheap.”
Newsom started out well, 5.6% in 2019-20 and 5.9% in 2020-21. Then in 2021-22, with all the federal COVID money flowing in, the ratio soared to 7.2%. It stayed at 6.5% or higher the next three years. And for 2025-26, it’s projected to be 6.5%. Average for seven years: 6.4%. No wonder there’s a budget problem.
Another figure from Schedule 6 also tells the story: the number of state employees per 1,000 Californians. Under Brown, it averaged 9.3. In Newsom’s first year, 2019-20, it was just 9.6. Soon it soared to 10.9 in 2022-23 and 2023-24; then to 11.1 in 2024-25 and for the 2025-26 projection. The 11.1 number is 19% higher than Brown’s 9.3 average.
And budget expert David Crane wrote this on X of the May Revision, “Newsom proposes spending $45 billion on 255,000 state positions, or $177k per position, 18% more than the current year.” And $177,000 is almost double the state’s $95,521 median income.
Call me cynical, but the union bosses, all those new government workers and all the old ones with huge raises on March 2028 are going to remember who goosed their pay. That’s the date of the California presidential primary that could feature Newsom vs. another Golden Stater, Kamala Harris.
Related Articles
Newsom still doesn’t have the guts or ideas to get vagrants off our streets Jon Coupal: The lamest excuse for perpetuating the high-speed rail project Was Trump’s meeting with Canadian PM Carney a turning point or a head fake? A reasonable, incremental approach to student loan reform ‘Unleashing’ police means more abuses of everyone’s rights We’ll see. It’s a long way to the Oval Office. Nobody knows today what the issues will be in 2028, or how the Gavin Newsom Show will play in Peoria. Every move he makes is calculated to run for that higher office. But you can be too calculating.Without Silicon Valley, whose artificial intelligence boom is its latest wizardry, the state economy would be in deep depression. Last December the ADP management company released a study showing one in 48 Valley workers makes $500,000 or more a year. That almost doubled the next highest, Austin, Tex. From the Valley the taxes just roll in.
After this budget cycle ends in a month, Newsom will have one more budget before he leaves office. If he gets through it reasonably unscathed, as seems likely, California budgets will be low on the radar of issues voters care about anywhere, including here.
And despite his frugality, Jerry Brown failed in three presidential attempts. Perhaps Newsom’s way is better – for him, anyway.
John Seiler is on the SCNG Editorial Board
Read More Details
Finally We wish PressBee provided you with enough information of ( Newsom should’ve paid more attention when Brown was governor )
Also on site :