News

It’s election season. Citizens looking for questions to ask of candidates or state officials might consider the following two.

Lieutenant Governor Eleni Kounalakis and every other candidate for governor in 2026 should be paying very close attention to the Multiyear Forecast in Governor Newsom’s Proposed Budget.

Next week my students will start reading through Governor Newsom’s proposed state budget for the next fiscal year, which was released today. Before they do, I’ll be sending them a 2019 column from the LA Times entitled, “The one-day, $1-billion California budget gimmick that has lasted for almost a decade,” which is about a budgetary maneuver employed in 2009.

Last month, I wrote about the unique opportunity Governor Newsom has with his next budget to “reinvent government” as he called for in his 2014 book, Citizenville. Next week we will learn if he plans to do so.

Last week the Orange County Register published a lengthy article about California’s skyrocketing spending and budget deficit that included some comments from the Department of Finance and Legislative Analyst’s Office that might lead readers to conclude incorrectly that the governor and legislators don’t have authority over much spending. Some of the comments are non-controversial but some incorrectly imply a lack of authority over statutory spending, some are imprecise about funding sources, and some are striking in their omissions.

In 2013, then-Lieutenant-Governor Gavin Newsom published a book entitled “Citizenville” in which he argued for a government that kept pace with changes elsewhere in society. Asserting that “we must inject a more innovative, entrepreneurial mind-set into government,” Mr. Newsom wrote that “we simply cannot have a government that relies on bureaucracy and maintaining the status quo.” I hoped his vision would be realized. But a decade later, half of which Mr. Newsom has presided over as governor, California’s bureaucracy is bigger than ever, residents would be hard-pressed to point to a single innovation, and the status quo is still the status quo.

General Fund Expenditures Per Capita have climbed 63.9% since Governor Newsom took office, growing at more than twice the annual rate at which those expenditures grew under Governor Brown (10.4% vs. 4.7%):

Last Wednesday, the Commerce Department reported U.S. GDP grew at a 5.2% clip in the third quarter. The next day, Governor Newsom told a debate audience that the economy is “booming.” But Friday, California’s Legislative Analyst’s Office said that state tax revenues are falling far short of forecasts. When combined with General Fund spending that has grown more than 50 percent over the last five years, the drop in revenues portends another large budget deficit for California.

When launching GFC in 2011 it was my hope that we would see meaningful pension reform by 2020, but we have failed to achieve that objective and the negative consequences for public services and taxpayers have been enormous. As evidence, just look at the four-fold explosion in annual pension spending by the Los Angeles Unified School District this year compared to ten years ago:

Last week I reported that Governor Newsom falsely told an interviewer that the state was unable to reopen schools during COVID because the state constitution requires local control of schools, which isn’t true. After my email, some local school officials contacted me to report that Mr. Newsom’s statement actually contained two fictions.