Los Angeles fires and Trump make Newsom’s proposed California budget meaningless | Opinion
Gov. Gavin Newsom did not seem particularly interested in his constitutionally-required state budget proposal this year. He planned to be on the other side of the country on Friday until the horrific Los Angeles fires kept him home.
With the financial devastation sure to change the state government’s fiscal situation, Newsom is submitting a dead-on-arrival budget proposal. A half-hearted attempt, to begin with, a placeholder produced only to meet a constitutionally imposed deadline, Newsom’s budget has been eclipsed by a series of tragic infernos that, when more is known, will raise fundamental questions for the governor and legislators.
Will Newsom and legislative Democrats leave it to the public to pay for rebuilding LA through property insurance increases that will ultimately hit homeowners and renters alike? Or will Newsom and the party in power tap state and federal dollars to help ease the burden?
The governor’s proposed budget offers few clues because it assumes rosy financial conditions and spends most of what is available.
Last year, anticipating another year of sub-par tax collections that are disproportionately based on the gyrations of the stock market, Newsom and legislators planned on spending $7.1 million in reserves from the state’s so-called “Rainy Day fund” this coming fiscal year should tax revenues remain depressed. Yet thanks largely to a hotter-than-predicted stock market, revenues actually went up by more than $16 billion. However, that did not stop the administration from sticking with plans to diginto reserves to avoid tougher decisions in the preliminary budget.
In some respects, this was bound to be a near meaningless document. It essentially assumes that incoming president Donald Trump will be a fiscal clone of the outgoing Joe Biden and change no federal spending that could negatively impact California. Newsom’s budget essentially pretends that Trump does not exist rather than to guess what he may do to health care, immigration, or disaster relief that could impact the state.
Cutting much fat out of the budget simply did not happen. Instead, Newsom slashed vacancies throughout the state’s vast bureaucracy. That and other trims reduced costs by an estimated $3.5 billion. That’s basically 1% of the overall state spending plan. Legislative Republicans are justifiably howling at the nominal belt-tightening and the continued tapping of reserves.
Ironically, Newsom traveled to Kern County last week to showcase the unfinished high-speed rail project that could run between Bakersfield and Merced. “To the cynics that are filled with cynicism, that stand on the sidelines and don’t engage, we’re here making this thing work,” Newsom said. Despite what he said, Newsom’s budget did not include any increase in the funding necessary to finish the work needed to run the train service between Bakersfield and Merced. Absent an unscheduled allocation of money from Biden before he leaves office on January 20, Newsom’s DOA budget essentially defers a day of reckoning on whether to provide billions more money or build tracks for no trains.
Trump’s next moves are impossible to predict. And as much as want to know in January what the coming year’s budget will look like, or how much water will eventually fill reservoirs, it’s simply too early to know.
California has been shaken to its core, however, by hurricane-force winds burning entire neighborhoods. The bill for the destruction has yet to come due.
This story was originally published January 14, 2025 at 5:00 AM with the headline "Los Angeles fires and Trump make Newsom’s proposed California budget meaningless | Opinion."