Newsom Eats More Cake in First State of the State

A few weeks back, in writing about Gov. Newsom’s first budget proposal – I noted that the Governor was demonstrating how one could have his cake and eat it, too, in his spending plan for the state.

As I watched the Governor’s first State of the State address yesterday, it’s clear that he has extended this philosophy to the rest of state government.

For example, Newsom said he was against former Gov. Brown’s controversial “twin tunnels” plan – or “twice pipes” as my former boss Connie Conway called it, channeling Cheech and Chong.  In the next breath, he said he favored a slimmed down “one tunnel” approach.

On California’s housing crisis, the Governor noted that the Legislature has granted CEQA exemptions to build new sports stadiums, then asked why we couldn’t grant the same exemption to streamline new housing construction.  I pictured PRI’s Kerry Jackson giving him a standing ovation, as this is something that he has suggested many times.

Kerry quickly stopped cheering as the Governor next lamented that many renters are still struggling following the defeat of the Proposition 10 initiative.  He asked lawmakers for ideas to update the law to encourage “rent stability”, which he vowed to sign into law.  Really, this is an exercise inviting the liberal supermajority to enact new rent control regulations.

As Kerry has noted in the past, rent control is the worst thing you could do to solve the state’s housing crisis.  The answer is to unleash the power of the free market to encourage as much new housing construction as possible.

High-speed rail is still another example.  Newsom joined critics of the long-beleaguered plan in calling out the project’s lack of leadership and questionable spending, and pledged to scale back the project overall (though there was much debate and clarification on Twitter about what he actually meant).

But he then doubled down on the current Central Valley portion of the “Little Engine That Could,” calling it wrong and offensive to criticize what he believes is an important economic development and environmental improvement project for the region.  He even called critics wasteful, charging that if the project were abandoned, California would have spent billions with nothing to show for it.

This is just throwing good money after bad.  As Kerry Jackson has written, unless there is a major project revamp, we’ll have very little to show for it other than Central Valley pork.  If pork is the real reason for the project, surely there are more efficient ways to stimulate Valley economic development.  After all, will a train from Madera to Bakersfield really be an economic catalyst when it won’t connect passengers with the rest of the state?

Later, Newsom admitted the real reason he wants to press forward – he doesn’t want to send $3.5 billion in federal dollars back to the Trump Administration.

As PRI’s Wayne Winegarden has explored in the “Beyond the New Normal” series, there are opportunity costs when government wastes tax dollars on high-speed rail.  When spending exceeds the optimum level for economic growth, money is taken away from private sector employers and individual taxpayers that could be better spent in their hands boosting the private sector economy.

To be sure, Newsom is an effective orator who should be applauded for even discussing these thorny issues.  But in a speech practically devoid of free-market proposals, it would have been refreshing to see him chart a principled-driven course on one of these tough issues and stick to it – rather than taking the easy way out of having his cake and eating it too.

Tim Anaya is the Pacific Research Institute’s communications director.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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