On Election Night 2022, California governor Gavin Newsom slammed the door on persistent rumors that he intended to run for president in 2024, after spending much of the year not-so-subtly positioning himself for a national run if President Biden did not seek another term. (For example, it’s not normal for the governor of California to challenge the governor of Florida to a debate, or to run ads in Florida denouncing that governor.) Our Will Swaim found the governor’s sudden lack of interest so abrupt and at odds with Newsom’s previous behavior, that he doubted Newsom really was ruling out the idea completely.
Then again, in light of California’s budget situation being much more dire than the public believed for much of the year, maybe Newsom’s sudden lack of ambition reflected a realization that his record was more vulnerable to attack than he previously believed.
Six months ago, Newsom and California Democrats boasted that the state enjoyed a budget surplus “simply without precedent.” The governor envisioned a progressive spending spree: $18.1 billion to provide financial relief for Californians buffeted by inflation and $37 billion for infrastructure investments, including $5.6 billion for education facility upgrades, and an extra $2.3 billion for the ongoing fight against Covid-19.
But that budget surplus proved an illusion. Inflation forced the state to spend more than projected, and the tumbling markets meant that capital gains tax revenues were much lower than expected. Suddenly, instead of that joyous and unprecedented surplus, the state government is facing a $22.5 billion budget deficit. And while predicting the course of the California economy has proven tricky, the state budget office now projects deficits for the next three years after that.
Now instead of presiding over a booming economy and an expansion of government services, Newsom is forced to make cuts, with less money for zero-emission vehicle credits and infrastructure programs, and a clawback of $2 billion from local rail projects and $350 million from housing programs. The state’s environmentalists are already trashing Newsom’s proposed budget.
“Given how far behind we are, we have to sustain our commitment to climate action every year. This proposed budget doesn’t do that,” California Environmental Voters declared in a released statement yesterday. “To further delay these investments will compound the climate crisis and the cost of inaction will be far worse.”
If Newsom had been gearing up for a presidential bid next year, this year’s budget fight, likely to end with a plethora of disappointments for progressives, would have offered a lot of fodder for attack ads against the California governor. And in a general election, it would have been one more example of Newsom overpromising and underdelivering, as Swaim laid out:
His high-speed rail system? Stalled in the Central Valley. Record spending on schools? Newsom’s obeisance to teachers’ unions has cratered California student-test scores. Homelessness? High and rising despite billions of dollars of new spending. California has the nation’s highest cost of living, highest marginal income-tax rate, and highest gasoline prices. And now, just one year after he boldly pointed to a $100 billion budget surplus as a symbol of his economic-management skills, Newsom’s own state finance department is raising alarms that the surplus has vanished.
Hey, you know which states are enjoying big budget surpluses right now? Texas, Georgia, and Florida.