Cautious Paddling on the First Budget

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

In looking at Governor Gavin Newsom’s first budget and the reaction to it, it appears that former Gov. Jerry Brown’s famous canoe has not been retired. There was a little paddling on the left (more money for education, homelessness, and health issues) and paddling on the right (boosting the rainy day fund and one-time funds to pay down debt and pension obligations).

One-time payments won’t fix the debt and pension problems but it’s a start.

Newsom received qualified praise from both left-leaning groups and business associations. Although there were some rebukes such as the Howard Jarvis Taxpayers Association’s red flag over a proposed water tax and surcharge on 911 services.

Generally, the response was cautious across the board. Not a surprise since the real budget action will unfold later, especially after the budget is revised in May when April tax collection is considered.

The governor acknowledged that the economy could be slowing and California did not want to be put in a position to suffer a big drop in the budget dollars if the slowdown is major. On the other hand, the budget proposal calls for an $8 billion increase over last year, which could mean an even bigger drop in revenue if hard economic times hit.

More will be revealed as the legislature examines the budget and attempts to add spending of its own. Yes, theoretically there could be reductions in some budget categories, but given the makeup of the legislature and promises made to different pro-spending constituencies, that is unlikely to happen. How the governor will react to more spending demands despite promises he made on the campaign trail will frame his governorship, which is still a partial blank slate.

While Newsom may be trying out the Brown canoe, he also checked in with another former governor. At the USC Schwarzenegger Institute conference on gerrymandering yesterday I asked former Governor Arnold Schwarzenegger if he gave any advice to the incoming governor.

Schwarzenegger said he and Newsom did talk but he preferred not to reveal any details. However, Schwarzenegger said Newsom had an open mind on issues and there was conversation about the importance of a rainy day fund and how to deal with the pension issue.

Two items Newsom highlighted to a degree in his first budget.

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