The California Budget and Newsom’s Presidential Ambitions

California Gov. Gavin Newsom speaks during a press conference in Sacramento on Feb. 1, 2023. Justin Sullivan/Getty Images

Commentary

As I have been writing in The Epoch Times, everything Gov. Gavin Newsom does now advances his ambition to move into the White House—probably as early as Jan. 20, 2025. So watch how he handles negotiations with the California Legislature over the budget for fiscal year 2023-24, which begins on July 1.

Unlike last year, when he and the Democratic supermajority enjoyed a nearly $100 billion surplus, this year the deficit is at least $31.5 billion. But there are ways to finesse that. In longtime Sacramento parlance, they’re called “gimmicks”—accounting tricks to shift spending around, especially into the future, to reduce current spending or advance revenues.

It used to be a budget impasse could last weeks, even months. In 2008, as the Great Recession dug in, Gov. Arnold Schwarzenegger signed a budget 85 days late. But he was a Republican, likely the last of that party to hold the post in a long time. Gov. Jerry Brown avoided such delays by being not only a Democrat, but the most experienced governor the state ever had due to his having been governor in the 1970s, and with a father who was governor in the 1960s. He knew how to push all the right political buttons in the process.

A key element is Proposition 25, passed by voters in 2010. It dropped the threshold for passing a budget in each house of the Legislature from two-thirds to a majority vote, except for tax increases. That has effectively cut Republicans out of the budget process, even when they have risen above one-third of the seated legislators, which currently they have not.

In return, the voters were promised prompt passage, by the June 15 deadline, of budgets not only on time, but meeting the constitutional requirement of being balanced—or the legislators’ pay would be withheld if there was any delay. In 2011, Controller John Chiang actually docked legislators’ pay for their tardiness, branding the budget “miscalculated, miscounted or unfinished”—an apt description of every budget I’ve written about for 36 years!

But then Sacramento Superior Court Judge David Brown threw it out as “an unwarranted intrusion into the Legislature’s budget deliberations.” His final ruling came in April 2012. That actually makes sense. In our system of divided government—legislative, executive, and judicial—you can’t have the legislature’s salaries determined by the executive branch, in this case the controller.

Legislators were still worried about constituents becoming even more cynical over new budget delays. So, ever creative, the legislators realized they could just pass what some call “sham” budgets, balanced and on time, at least as presented, to be adjusted later with “trailer bills.”

Newsom’s Ambitions

That’s where we stand now. On June 15 the Legislature sure as tootin’ passed a “balanced” budget. Now legislative leaders are negotiating with Newsom. But keep this in mind: Everybody knows there’s a good chance he’ll be in the White House, doling out many thousands of patronage jobs, from cabinet secretaries to sub-department heads. And he will reward his California friends more than any others with the dream jobs all political operatives lust after. So they will play along to get along—all the way to D.C.

The Bee reported Friday; note the tax-shift gimmick:

“Assembly Budget Chair Phil Ting (D-San Francisco), on Thursday said lawmakers and the administration are ’very close' to an agreement, which he expects will come together in the matter of days.

“During floor discussions, Republicans raised concerns about $42 billion in anticipated tax receipts that have been delayed until October. California residents in areas affected by severe winter storms received a tax-filing extension, which means leaders are not certain exactly how much revenue they will get this fall.”

Sticky issues also include what to do about the $31.5 billion deficit and transportation funding. But at this point, those are just details. In a Newsom Presidency, could Ting become the Director of the Office of Management and Budget? Certainly possible.

For their part, the super-minority Republicans objected that the budget isn’t anywhere near being balanced. Said Assembly Minority Leader James Gallagher (R-Chico):

“While regular folks have to make hard choices to deal with California’s affordability crisis and weak job market, Capitol Democrats are relying on gimmicks and borrowing to continue spending like there’s no tomorrow. Californians deserve a real budget that controls spending, helps the economy and makes our state a better place to live. This spending plan isn’t it.”

True enough. But the aim of the budget is to get Newsom through this cycle unscathed before the 2024 presidential primaries. If he ends up having to wait until 2028 to run, then no sweat. But if Biden drops out for whatever reason—something I covered in April in the Epoch Times—then Newsom is tanned, rested, ready, and with a balanced budget.

Newsom is scoring 20 cents to be the Democratic nominee on the PredictIt site, which takes bets on political and other events, second and rising to Biden’s 72 cents.

That’s why Newsom is eager to get the budget wrangling over with. He wants go back to Florida to campaign against Gov. Ron DeSantis, currently running second to Donald Trump as a potential GOP nominee for president. At this point, for Newsom, California politics is just an afterthought.

John Seiler’s email: [email protected]

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.