Newsom and Davis Have a Lot More in Common Than You Might Imagine
The images of mass power outages across the state during our recent run of extreme temperatures evoked images in many Californians of the last time the state faced mass power blackouts.
The year was 2001, when then-Governor Gray Davis bungled the state’s controversial electricity restructuring plan and allowed the state’s power market to be manipulated while power plants were idled and utilities faced bankruptcy. This was the first time Californians heard the phrase, “Flex Your Power”.
I couldn’t help but think of comparisons between Davis and our current embattled Governor, Gavin Newsom. While Newsom is certainly more photogenic and a better orator than Davis, there are quite a lot of similarities between the two as Governor.
Both Newsom and Davis inherited rosy state budgets with large surpluses amid an era of economic prosperity and roaring tax revenues being generated for the state.
Almost overnight, each experienced a severe economic downturn that turned surpluses into massive deficits in the blink of an eye. Davis’ budget problems were compounded by his spending one-time money in the 1999-00 budget to fund massive, permanent spending increases. Once the dot com bubble burst, California was left with a massive budget hole for Davis to close.
Newsom’s 2020-21 budget path was eased somewhat by the presence of a multi-billion rainy day fund that was a Republican idea under the leadership of then-Assembly Republican Leader Connie Conway. But the budget was largely predicated upon “trigger cuts” that rely upon revenue coming from Washington. If Congress and the Trump Administration don’t agree to a massive Washington bailout for states – which grows more likely by the day – Newsom will either have to engineer a massive tax hike or allow massive spending cuts to popular programs to go forward to balance the budget.
In dealing with the Legislature, Gray Davis once infamously said that it was the job of the Legislature “to implement my vision.” Naturally, lawmakers – who are also ambitious politicians – did not take kindly to Davis’ remarks and any era of cooperation between the two quickly dissipated.
Gavin Newsom, while known for namechecking lawmakers and their legislative priorities in his budget press conferences, acted without a legislature in session for much of the early months of the COVID-19 crisis. Now that they are back, lawmakers – including many Democrats – are growing increasingly frustrated with his governing by executive order and refusing to be forthcoming with details about the administration’s coronavirus spending. Two Republican legislators even took Newsom to court over the propriety of some of his executive orders.
At a recent hearing, Senator Maria Elena Durazo bluntly asked the Department of Finance, “Why did you not feel it was important to provide the Legislature with more information, and more often?”
Davis and Newsom also often operated in secret. During the height of the power crisis in 2001, the Davis administration entered into long-term power contracts to ensure the state had an adequate power supply in the coming months. But the administration refused to release the details of the contracts, so taxpayers and the media were in the dark on how much the state was spending. As I’ve written previously on Right by the Bay, I worked on Public Records Act requests seeking the release of the contract details, which after a court battle, were released. Only then did we learn that the administration had committed the state to $43 billion in taxpayer dollars for the power contracts.
During the height of the coronavirus crisis, with shortages of personal protective equipment running high, Newsom also entered into a secret, $1.2 billion no-bid contract with the Chinese firm BYD for masks for the state of California. Immediately, media questions were raised about the activities of the firm, and whether the masks met N95 standards. Initially, the administration refused to divulge the contract details to the Legislature or news media. Only in the face of significant public outrage did Newsom immediately reverse course and released the contracts.
Gray Davis might have been the ideal Governor for California during times of peace and prosperity. His leadership style may have been perfect for the small issues that were at the top of the agenda, but woefully inadequate for a major crisis. The jury is still out on how Newsom will fare in his efforts to steer California through the next few years of choppy waters.
Ultimately, voters recalled Davis largely because of the power mess he oversaw as Governor. It remains to be seen what fate Newsom will face at the hands of the voters.
Tim Anaya is the Pacific Research Institute’s senior director of communications and the Sacramento office.