Will Gavin New­som stick to his prom­ise of fis­cal pru­dence?

The Mercury News Weekend - - OPINION -

Did Gavin New­som mean what he said? Let’s hope so.

“We will live within our means,” the gov­er­nor- elect told the Sacra­mento Bee ear­lier this week. “We’re not go­ing to de­vi­ate from be­ing fis­cally pru­dent.”

New­som made the com­ments af­ter the newly swornin, Demo­cratic- con­trolled Leg­is­la­ture met just long enough for law­mak­ers to in­tro­duce a flurry of costly bills:

Ex­pand­ing Medi- Cal el­i­gi­bil­ity to adults liv­ing il­le­gally in the state. K-12 school fund­ing in­creases. More money for the state’s preschool pro­gram. Mak­ing the se­cond year of com­mu­nity col­lege free. Bring­ing back re­de­vel­op­ment agen­cies, which re­quire the state to back­fill lo­cal gov­ern­ments for lost tax rev­enues.

The list of more than 100 bills in­tro­duced Mon­day, the first day of the leg­isla­tive ses­sion, would re­quire more than $40 bil­lion in new state spend­ing, ac­cord­ing to the Bee.

Some of the ideas make good pol­icy sense. Some are ridicu­lous. What’s clear is that the state doesn’t have the money for most of them. So, let’s hope New­som meant it when he said that “all of this will be whit­tled down” to keep the state on a fis­cally pru­dent track.

Un­less some­one, specif­i­cally New­som, in­jects some san­ity into this de­bate, we have the mak­ings of a per­fect fi­nan­cial storm:

First, Democrats, fresh off their stun­ningly suc­cess­ful elec­tion, have a su­per­ma­jor­ity in the Leg­is­la­ture and are ea­ger to ex­pand gov­ern­ment spend­ing for pro­grams they have long sought.

Se­cond, Gov. Jerry Brown, who has for eight years pro­vided a check on the freespend­ing in­cli­na­tions of the leg­isla­tive ma­jor­ity, is about to leave the Capi­tol.

Third, state Leg­isla­tive An­a­lyst Mac Tay­lor last month re­leased a fore­cast of a $14.5 bil­lion re­serve fund by the end of the 2019-20 fis­cal year and a $14.8 bil­lion bud­get sur­plus.

“The bud­get is in re­mark­ably good shape,” Tay­lor wrote. It was an un­for­tu­nate char­ac­ter­i­za­tion that has led many to claim that the state is flush with cash.

Noth­ing could be fur­ther from the truth. The re­serve fund would be wiped out in a mat­ter of months if the state hit a long over­due eco­nomic down­turn.

And the sur­plus in the an­nual state bud­get only ex­ists be­cause, as we pre­vi­ously noted, the state has strung out pay­ments on its stag­ger­ing, $257 bil­lion debt for pub­lic em­ploy­ees’ pen­sions and re­tiree health cov­er­age. If the state re­spon­si­bly ad­dressed that, the in­stall­ment pay­ments would swal­low up the sur­plus.

The state’s best, and per­haps only, hope of main­tain­ing fis­cal san­ity rests with New­som — the same per­son who cam­paigned with big vi­sions that carry big price tags.

Which is why his prom­ise this week that the state will main­tain a fis­cally pru­dent path was wel­come news. Next month, when he re­leases his pro­posed bud­get for the 201920 fis­cal year, we’ll find out if he means it — and what he means when he says it.


“We will live within our means,” Gov.-elect Gavin New­som said this week. “We’re not go­ing to de­vi­ate from be­ing fis­cally pru­dent.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.