Should California Spend $321.9 Billion Next Year?

The California budget should be on our radar screen especially since we have to fund it with our taxes. Governor Newsom has released his budget for the upcoming fiscal year with $321.9 billion of total spending. This constitutes budget growth of over $100 billion since 2019-20 at the beginning of his term. If the budget is not passed by June 15, legislators suffer loss of income until one is adopted. 

While Newsom blames President Trump for his budget woes, he fails to accept any responsibility for the excessive spending and costly government programs. He seems to overlook the continuing erosion of businesses and entrepreneurs leaving California that has lowered state revenue. The one big mistake he does acknowledge is the excessive MediCal spending on illegal aliens causing an estimated $9 billion shortfall.

The Governor claims that California is number one in the nation for innovation, manufacturing output, agricultural output, Fortune 500 companies, and start-up businesses. California produces 18% of the world’s research and development and the state’s total output amounts to $4.1 trillion per year. If this business climate is so productive, why are businesses leaving the Golden State?

We can be proud that California is a superpower not only in the United States, but globally. We are touted as the 4th largest world economy. Our natural resource abundance, optimal weather and well located trade ports provide unique advantages to support economic diversity. But the competitive edge that fosters technology, biotech, defense and entertainment companies is at risk. The high cost of living and business expense to accommodate overly zealous government regulations has caused a steady exodus of employers, entrepreneurs and families from our state.

The Governor is blaming President Trump for California’s woes while failing to acknowledge that the democrat supermajority legislature and their actions cause runaway spending that is creating a bankrupt state. California is once again grappling with a budget deficit estimated at $12 billion with an anticipated $16 billion decline in revenue for the next two fiscal years.  

Governor Newsom’s budget adjustment tactics include a $5 billion freeze on MediCal expansion.  Newsom favored universal health care regardless of immigration status as part of his progressive agenda but giving 1.6 million illegal aliens healthcare at government expense has proven too costly. What did he expect when he opened the doors of our hospitals for free healthcare for illegal aliens? 

Governor Newson fails to recognize that overregulation is a substantial obstacle for entrepreneurs. He supported constraints on Independent Contractors forcing legislation (AB5) to reign in government control. Raising the minimum hourly wage to $20 for fast food workers has forced layoffs at franchises often owned by entrepreneurs. His progressive agenda has had deleterious results that demand solutions.

Governor Newsom says he is trying to deal with the long-needed revision of the California Environmental Quality Act (CEQA). It is a well-known fact that CEQA affects housing costs and fuels sky-high housing costs. NIMBY activists, environmental organizations, labor unions and other influential groups block even modest changes to CEQA. It has been used extensively to block new development driving up costs. All the while, the growing demand for affordable housing exceeds supply that stimulates homelessness. Do we really need 42 bills to “streamline” the process to resolve our housing affordability crisis?

Newsom’s sudden embrace to reform CEQA smacks of political expedience. His solution is to heap more debt on taxpayers by passing a bond to address the issues of housing affordability, and mix in fixing our crumbling infrastructure. That should appeal to everyone but shouldn’t our $321.9 budget be more than adequate to cover these real needs? 

Currying favor with potential voters, Governor Newson has announced $60 billion in rebates related to utility use. It will be based on a “California Climate Credit”. This is money to help offset costs we are already paying and does nothing to adjust utility rates based on our excessive climate policies. We see it every time we open our utility bills. Californians pay some of the highest utility rates in the nation resulting from government policies and layers of regulations, climate mandates and the war on natural gas.

California has the highest number of homeless individuals in the nation, around 187,000 as of 2024, a record high for the state. Remember, voters passed a $6.8 billion bond for behavioral health facilities and services. With some of this money we are building 214 new facilities to provide more beds for those needing behavioral health treatment. 

Even though 16,000 homeless camps have been cleared, it is minimal progress for such a huge problem. Government has stepped up with numerous taxpayer-funded programs to provide housing and develop new permanent and interim housing. One of the problems is the excessive cost per unit. We should assess the effectiveness of yet another runaway government program and impose measurable outcomes for the billions of dollars in continued homelessness spending.

California presently spends $24,300 per public school student. The new budget increases the amount to $25,176 per public school student. This budget is for fewer students without emphasis on educational outcomes. Last year less than half of California students met state reading standards and only 35.5% met state math standards.

To assist with our children’s education we established 2,484 new community schools in California at the cost of $4.6 billion. These are schools that include health care, mental health services, and family services. School days were enhanced with before and after school care, summer school, and the universal implementation of public Transitional Kindergarten. When will schools understand that their mission is to teach kids to read, write, and do math and not provide healthcare? Government is more involved than ever in raising our kids. We should ask, is this good for them?

Taking a careful look at what is envisioned for the new budget, we should ask is it really necessary to spend so much money for such questionable objectives?