Gavin Newsom is almost certain to become California’s next governor and is promising a vast array of new services. But with Californians’ taxes already among nation’s highest. how would he pay for them?
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Barring some calamitous meltdown on his part, Lt. Gov. Gavin Newsom will become the next governor of California.
Newsom all but locked up the governorship last week when fellow Democrat Antonio Villaraigosa failed to place second in the top-two primary election, allowing Newsom to face a token Republican foe, San Diego businessman John Cox.
On election night, Newsom reiterated the left-of-center agenda he would pursue as governor, to wit:
“Guaranteed health care for all. A ‘Marshall Plan’ for affordable housing. A master plan for aging with dignity. A middle-class workforce strategy. A cradle-to-college promise for the next generation. An all-hands approach to ending child poverty.”
Promising to be “audacious” and “bold,” Newsom declared, “No family should ever lack a roof over their heads. No child should ever be raised below the poverty line. No patient should ever be denied access to basic health care. And no Californian should ever have to choose between the three.”
By happenstance, just two days later, outgoing Gov. Jerry Brown and legislative leaders announced agreement on Brown’s 16th and final state budget, which will take effect on July 1.
The Legislature’s dominant Democrats wanted a budget that would more or less mirror the Newsom agenda and would spend billions more dollars on a wide variety of social services.
Brown, however, stayed true to the fiscal caution he had long espoused, one that limits long-term commitments to expensive new entitlements and socks away more money in reserves to cushion the inevitable economic downturn.
In the final negotiations, he gave a little here and there to grease the squeakiest wheels. He agreed to increase spending on homelessness, for example, but it would be only a third of the $1.5 billion that the state’s mayors had been seeking. And he deflected demands for permanent new spending with some one-time appropriations.
“After detailed discussions, California is on the verge of having another on-time, balanced budget,” said Brown said in announcing the agreement. “From a $27 billion deficit in 2011, the state now enjoys a healthy surplus and a solid rainy day fund.”
The stark contrast between Brown’s fiscal approach and Newsom’s campaign promises is obvious.
Even assuming that California avoids a long-overdue economic downturn, where would Newsom get the immense sums of money that he’d need to deliver his agenda?
Just providing “guaranteed health care for all” would cost at least $100 billion more in taxes on someone, according to analyses of a single-payer measure that passed the Senate before stalling in the Assembly. And that assumes that the federal government, which now pays half of Californians’ $400 billion a year tab for health care, would shift that money into a new state program.
The other items on Newsom’s agenda, such as a “cradle-to-college promise,” would cost untold billions more.
Californians already have one of the nation’s highest state and local tax burdens as a percentage of their personal incomes, coughing up more than $300 billion a year. We have the nation’s highest income and sales tax bites and despite Proposition 13’s limits, hefty property taxes.
We may not be at the breaking point, but paying for Newsom’s promises, especially “guaranteed health care for all,” could increase the burden by 50 percent.
So is he serious, or just blowing election year smoke? And if it’s the former, he should be willing to say who will pay and how much.