Newsom Budget: The Good, The Bad and The Ugly

The governor’s budget is a tale of the good, the bad and the ugly. We won’t see a real state budget until it emerges from the smoke-filled backroom following the May revise, but that didn’t stop Gov. Gavin Newsom from gleefully announcing to reporters how he would like to spend the windfall of other people’s money in a 400-page “summary” presented last week.

Here’s the good, the bad and the ugly of his proposal.

The Good.

The governor’s budget puts more money into the reserve accounts, accelerates the paydown of state retirement liabilities, eliminates some budgetary debt, and allocates 86 percent of the discretionary surplus to one-time spending rather than ongoing liabilities that has so often happened in past years.

That’s good because the good times won’t go on forever. While the budget projects healthy returns for the next couple of years, it notes that “[s]tructural (non-pandemic) downside risks to the forecast remain, including the challenges of an aging population, declining migration flows, lower fertility rates, higher housing and living costs, increasing inequality, and stock market volatility.”

That’s important because the top 1% of California taxpayers pay more than 50% of the state’s income tax revenues. The state is currently riding high on the wealthy’s stock market gains, but as the Federal Reserve starts raising interest rates, the party could be coming to an end, and soon.

The Bad.

The bad is that an already bloated bureaucracy is getting even more bloated. Under the requirements of Proposition 98, increases in spending for public schools and community colleges will be dramatic and, as has been much talked about in these pages recently, California’s public schools aren’t hurting for cash as it is.

According to the federal government’s National Center for Education Statistics, in inflation-adjusted constant dollars, per-pupil spending in California for public elementary and secondary schools in 2017-18, the most recent year for which statistics are available, was $13,129, the highest ever.

Under the governor’s budget, schools would see more than $20,000 per student, putting California in the top five of states in education spending – with little to show for it.

Even worse is the fact that there is little in the budget to address waste, fraud and abuse generally, not just in education. There is nothing to prevent another fiasco like we saw with the $20 billion in fraudulent claims paid by the Employment Development Department; still no accountability with the bullet train project and, in fact, the boondoggle is getting billions more.

Click here to read the full article at OC Register

Comments

  1. If you are realistic about Slick Newsom, you will see every budget mover has been to ignore reality and support Radical Democrat Party centralized control of society, including control of money.

    When the smoke clears?

    Never fear there will be more legislation based upon hard core Socialist Central Planning that has always destroyed societies where it was put in place. Unfortunately it will take a minimum of 2 decades before the destruction sinks in these bullies. They will then try to solidify their control of offices and jobs to protect the theft the RDP creates.

    Have no fear San Fran Nan, Slick Newsom, Weny Weiner, and the rest are creating bunkers to protect themselves from prosecution and social ostracism.

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