No. 1 priority for Gov.-elect Gavin Newsom

The election of Gavin Newsom as the state’s next governor marks a new era in California politics. Gov. Jerry Brown’s prudent management of the state’s limited financial resources will be a thing of the past.

If Newsom’s time as San Francisco’s mayor is any indication, he is more likely than Brown to think and talk big.

But he won’t be able to act big without significant changes in state priorities and funding. For starters, he should dump the costly high-speed rail and Delta twin-tunnels boondoggles that Brown unwisely viewed as his legacy projects. That would stamp Newsom as a common-sense governor who understands financial realities.

Then Newsom should get to the state’s biggest challenge: tax reform.

We know, we know. It isn’t sexy. It won’t garner the sort of headlines his “like-it-or-not” edict on same-sex marriage generated 14 years ago. But fixing California’s convoluted tax system would give Newsom his only real chance to pursue and deliver on the promises he repeatedly pushed during the campaign.

Consider that wish list: universal health care, universal preschool, universal prenatal care, free community college tuition for two years, more funding for higher education, cradle-to-career education, building hundreds of thousands of housing units by 2025 to ease the homeless and housing crisis. And that’s just for starters.

The projected costs simply don’t pencil out without a complete financial overhaul. Especially so during the inevitable, and now overdue, economic downturn. Brown has been warning that a moderate recession would blow a $60 billion hole in California’s budget.

The state’s tax structure is overly reliant on revenues from income taxes, making the state flush with money during strong economic times and short on funding during downturns. California’s additional dependence on its high sales tax only worsens the problem. How bad is the current tax structure? Nearly three decades ago, personal income tax accounted for 35 percent of the state’s general fund revenues. In more recent years, it’s closer to double that amount.

Now is the time for serious action on tax reform: A ballot box battle royale on Proposition 13 is looming in 2020 with a proposed measure to tax business and industrial properties based on regular assessments of their value. The prospect should motivate the business community to negotiate an alternative approach that would bring more stability to the state.

Newsom had it right during his campaign that “we need to have a grownup conversation” on tax reform and that “everything would be on the table,” including Prop. 13, the infamous 1978 property tax-cutting initiative.

Major tax reform should be his No. 1 priority. It’s the only way the state can both secure its financial future and seriously address other issues plaguing the Golden State.