Newsom Picks Pontificating Over Governing

SACRAMENTO — Am I wrong to notice that Gavin Newsom doesn’t seem particularly interested in the nuts-and-bolts of governing the nation’s most-populous state but instead prefers gallivanting around the country and globe giving lectures about “transformative” political ideas? Political travel laced with gauzy rhetoric isn’t unusual for an ambitious governor, but it is fairly atypical to do so much of it — especially when major crises dominate the news cycle at home.

In March, Newsom toured the Mexican border and urged “spineless Republicans in Congress to do their job” and pass a comprehensive immigration proposal. In January, he visited South Carolina and touted Joe Biden’s reelection bid. Last year, the governor formed the Campaign for Democracy and then toured the American South, where he warned about “authoritarian leaders” in America who are “hell-bent on gaining power and keeping it by whatever means necessary.”

This month — as the state faced a budget deficit estimated at between $45 billion and $73 billion — Newsom and his wife traveled to Italy to visit the American Academy in Rome. As the academy’s publication noted, the Newsoms took a tour, lunched with the community, and even had an audience with Pope Francis. The first couple also toured the Rome Sustainable Food Project’s garden, where they “learned about the kitchen’s work promoting farm-to-table, seasonal eating, and slow food.”

It sounds like a delightful trip by any standard. A nonprofit foundation paid the bill for the travels and for Newsom’s other two international junkets: to El Salvador in 2019 and to Israel and China last year. Newsom’s Central American jaunt was designed to find the root causes of migration to the United States. He stopped in Israel to weigh in about the conflict with Hamas — and then headed to China to participate in climate-related talks.

This is standard for rising-star politicians from both parties. Few have anything genuinely interesting to say, but it’s part of the process. At least taxpayers were spared the expense. The problem is that Newsom doesn’t seem to have mastery over the day-to-day stuff. Gov. Jerry Brown took overseas trips to Europe and Asia, mostly to speak about climate change. But we never got the sense that Rome — or, at least, Sacramento — was burning while he was gone.

Before he left, Newsom did in fact release his May budget revise — the updated budget that reflects that latest revenue numbers. If I were advising him, I would have suggested spending the month hunkered down in his government office, meeting with lawmakers and financial gurus rather than taking selfies with international students and learning about artisanal delicacies. The governor takes a reasonable stab at the deficit in his proposal, but there’s a lot more work to do before the June budget deadline.

Until now, Newsom has been content to employ budget gimmicks (delays in payments, shifting funds around, accounting tricks, fantastical projections) to delay having to seriously deal with the state’s plummeting tax revenues. He and the Legislature apparently figured the economy would come roaring back and the matter largely solve itself, but instead the budget hole keeps getting deeper.

The size of the deficit is even more spectacular when one realizes that just two years ago California enjoyed a budget surplus of $97.5 billion. Newsom and his Democratic allies were almost giddy, as they got to spend most of the money on their liberal social-service and healthcare priorities. Former Gov. Brown had always warned lawmakers to sock more money away and avoid spending surpluses on permanent programs, but Newsom took a somewhat different tack.

The state’s boom-and-bust budget cycle is the result of its progressive, capital-gains-based income taxes, which make the state budget unusually dependent on the ups and downs of the stock market and the success of California-based technology companies. It’s always entertaining when left-wing lawmakers spend their days blasting the evils of private enterprise and business greed, then secretly hope for those same companies’ success to bail out their spending plans.

At least now, after knowing what was coming, Newsom did indeed finally, belatedly, grudgingly, and insufficiently propose some actual budget cuts. As the Associated Press explains, “So far, Newsom has not gutted some of his splashiest policy advancements, including free kindergarten for all 4-year-olds and free health insurance for all low-income adults regardless of their immigration status. But … Newsom is willing to chip away at some of those promises to balance the budget.”

The governor cut state operations by 8 percent, mainly by eliminating 10,000 vacant state jobs. He has indeed chipped away at spending, although he’s left alone most of California’s massive spending on climate-change programs. Left-wing groups are angry, but that’s a good sign. Also good, Newsom has publicly vowed not to raise taxes, which are among the highest in the nation. “I feel strongly that we have to live within our means,” he said.

But as veteran columnist Dan Walters observes (based on data from the California Taxpayers Association), “However, the fine print of Newsom’s budget contains several indirect tax increases on businesses — mostly by reducing offsets of taxable income — that over the next few years would raise as much as $18 billion.” That is typical Newsom. He often says the responsible thing but leaves out a few details in the fine print.

It’s important to keep that in mind as the governor wrestles with another crisis — in the state’s property insurance market. As I’ve reported for The American Spectator, major insurers have stopped writing new policies and are even pulling out of California. We’ve seen this pullback for a year, although the handwriting has been on the wall for much longer. The basic problem: California’s voter-approved system of insurance regulation subjects insurers to a drawn-out process to approve rate hikes. If they can’t adjust rates to reflect their risk, they exit the market.

Also this month, Newsom said he will introduce a budget trailer bill that would speed up the timeframe for considering such rate requests — and he even chided the slow pace of the insurance commissioner’s proposed plan. We’ll await the details, but it’s encouraging news even if inexplicably belated. As the Orange County Register’s editorial board asks: “Newsom is on the right track here, but why did it take so long?”

Good question. The obvious answer is that maybe rolling up his sleeves to, say, tweak mind-numbing insurance regulations or slash spending isn’t as much fun as meeting with the pope or traveling the country pontificating about democracy and climate change.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

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