Gov. Gavin Newsom is leveraging the state’s $54.3 billion budget deficit. Give us what we want, he demands, or public safety programs will be cut.
At the same time, he wants $20 million to enforce Assembly Bill 5, maybe the most damaging piece of legislation that ever became law in California.
Appearing on CNN, Newsom said that if California doesn’t receive federal aid, “our heroes and first responders, our police officers and firefighters” will be the first to be “laid off by cities and counties.”
“The true heroes of this pandemic, our health care workers and nurses, those county health systems have been ravaged, their budgets have been devastated and depleted,” he said.
“They’re the first ones to be laid off.”
So we’re supposed to accept, says FrontPage Magazine’s Daniel Greenfield, that these “are the most expendable employees in California.”
“Not all the social justice and diversity personnel,” he continues. Nor “the vast useless corps of educational administrators.”
Further burdening California are 340,000 current and retired public employees enjoying yearly incomes of $100,000 or more. Total cost: $45 billion a year. One public school superintendent is taking down nearly $450,000 a year while at least three are making more than $350,000. Ten retired educators have pensions exceeding $300,000. Two retirees and two employees from the Los Angeles County Sanitation Districts also have annual incomes of more than $300,000.
The federal aid Newsom is looking for would be allocated by the HEROES Act, a $3 trillion financial aid package for state and local governments approved by nine votes in the Democrat-dominated U.S. House. The Republican Senate won’t be as accommodating.
HEROES is a “political payoff” to House Speaker Pelosi’s constituents, Wyoming GOP Sen. John Barrasso said from the chamber floor, a “far-left fantasy,” and a rescue for “underwater blue state pension plans” that “will never become law.”
Because Sacramento is constitutionally bound to balance the budget, it’s obvious Newsom is counting on Washington. His revised budget would spend less than his January proposal, but the squeeze isn’t enough to close the $54 billion deficit. That gap will be bridged only with federal help.
While Newsom has decided California is a nation-state, it can’t print money like Washington does. So, the governor, who believes Congress and the president have a “moral and ethical obligation” to bail out states, is expecting to be saved by an outside source. He does not want an additional $14 billion in budget cuts to be automatically triggered if it doesn’t.
Officials are blaming the budget troubles on the pandemic, but City Journal’s Steven Malanga says “that’s clearly not true.” California’s creaky revenue system goes bust when the economy does, nevertheless it’s perpetually on a “spending spree,” which includes shelling out taxpayers’ dollars “to fix problems that the state’s own bad policies have worsened.” Though a $7 billion surplus was forecast for the current fiscal year before the pandemic, it’s foolish to think that more deficits aren’t coming.
“Even in a moderate downturn,” says Malanga, citing a Public Policy Institute of California study, there would be “revenue shortfalls averaging more than $22 billion a year for the next four years.”
Despite the budget straits, Newsom is still determined to spend $20 million to enforce AB5, the same amount he had set aside in his original budget proposal.
Money is fungible, and the funds could be better applied elsewhere. But even if the state sent those millions to local governments, they’d do little to stop first responder layoffs. The Los Angeles Fire Department alone collected more than $190 million in just overtime pay in fiscal 2018-2019.
But it’s still a misapplication of public funds and revealing of Sacramento’s mindset. Community needs can be used to negotiate the ransom terms of political extortion during a budget crisis, yet the provisions of a particularly destructive law, AB5, can not only not be temporarily suspended, they must be dutifully observed under the watch of the bureaucracy.
If only Newsom would use his executive authority to suspend the law at least until the economic storm has passed, the income earned by the independent contractors and freelancers whose work arrangements have been outlawed by AB5 would generate needed tax revenues, and they wouldn’t need unemployment or public assistance programs.
There’s no excuse for the governor to both block Californians from earning income and intentionally forgo a source of tax revenue, and to make it all worse by telling Washington to send money or public safety will be compromised.