A pleasant burden
It’s good to be king, or in this case governor. Gavin Newsom will take office with a super majority of fellow Democrats in the Legislature, a clean-sweep party lineup in state offices, and a $15 billion surplus.
This last nugget may be the most noteworthy. Newsom won office with a shopping list of costly promises that includes expanded health care, 3 million new housing units and early childhood education. All popular and all expensive. Following through is now a lot easier except it runs into another Newsom promise: to be as thrifty as outgoing Gov. Jerry Brown.
The surplus is a stunner, so big the state Legislative Analyst’s Office couldn’t come up with an historical parallel and fell back on a one-word description: “extraordinary.” The wave of money is flowing off a booming economy and rides on top of a rainy day fund totaling another $14.5 billion.
There are plenty of problems that could use the money, to be sure. Wildfire costs will eat up $1 billion or more. California has the highest poverty rate in the nation with one in five residents living below the low-income line. Water sharing and high-speed rail plans remain costly, divisive and inconclusive. State pension obligations continue to run far ahead of projected revenues though the picture has improved because of reforms, higher deductions and investment performance.
Nudging Newsom ahead of his January due date is the new game. Senate President Pro Tem Toni Atkins, a San Diego Democrat, said a new budget will need “strong new investments,” code for new spending to ease the state’s ills. Other lawmakers are saying much the same, hoping that the growing surplus and new governor will break with Brown’s skinflint views.
Newsom’s job will be to craft a budget that blends California’s good fortune with its serious needs. Fresh in mind should be Brown’s frequent reminders that the flush times won’t last. The state’s volatile tax-gathering system could dry to a trickle if the economy sours. Newsom may want to add another promise to his wish list: an updated revenue code that can weather an up-and-down economy and reflects a business world that’s grown from manufacturing to include untaxed services. Times are good, governor-elect, and you have a rare chance to make a change without serious financial pressure. California can set an example by fixing its finances for the future.