Politics

The Golden State? Newsom Admits that California Deficit is Now Roughly $32 Billion

Recently, a witness at one of California’s reparations hearings demanded “where’s the money?” Gov. Gavin Newsom’s announcement that the state miscalculated its deficit by $10 billion seems to answer that question. As his reparations Task Force demands as much as $1.2 million per eligible black resident, Newsom recently balked at cash payments. After years of using reparations as a political issue and insisting that such payments are a moral imperative, many are pushing back that this bill is now due. A card will just not do.

The new figure puts California’s debt at a towering $32 billion.

There are various contributors to the shortfall including a progressive tax system that makes revenues dependent on the income of wealthy taxpayers. When the stock market falls, revenues fall. There is also the mass exodus from the state of higher income citizens. Some are fed up with rising crime and taxes. It does not help when California publicly debates not just massive reparations payments but retroactive taxes for those who leave the state.

There are also now mass tech layoffs and a building recession.

Newsom expressed confidence that the state could handle the deficit and that is likely true. The state has a massive budget of $306 billion and he is looking at cuts. He has already scaled back funding for climate proposals to $48 billion, from $54 billion.

He also has a net reserve. However, just a year ago, Newsom was publicly celebrating a claimed budget surplus of $97 billion and said it was “simply without precedent.”

This year, Newsom admitted that the state would face a deficit of $22.5 billion, which he called “modest shortfall.”

Democrats are now calling for increasing taxes on large corporations and suspending a major business tax credit to raise new funds. Newsom is opposing those proposals.

The budget shortfall is massive, but so is California’s economy. The state also has a reported reserve fund, though this deficit would largely wipe out that fund of $37 billion and Newsom has vowed not to touch it.

The immediate political question is whether, after years of politicking on the issue, residents will be willing to take an IOU or non-cash “reforms” in lieu of reparation payments.

The longer term question is how to reverse the exodus of high-income citizens who are tired of rising tax and crime rates. While some in the media have pushed back by saying that the state has more people moving in than out, California and New York are losing higher earners who pay most of the taxes. Much of the difference is made up in foreign immigration.

Forbes put California as the state with the highest net loss of households followed by New York and Illinois. The Bay Area is one of the hardest hit.

I have always loved California where I spent much of my youth due to my grandparents living in Cherry Valley (near Riverside). I love the hiking and beautiful coasts. I believe that the state has the resources to pull out of this crisis, but I am increasingly concerned about the trajectory of the state.  Across the board, California has the highest taxes in areas like gasoline and other necessities. At the same time, while Democrats continue to insist that the wealthy do not “pay their fair share,” the top 5 percent of high-income taxpayers in California pay 70 percent of personal income tax revenue.

Nationally, the top one percent of taxpayers pay 42 percent of all taxes.

That is why the exodus could prove a cascading problem for California. While Newsom has run ads attacking Florida, that state is exploding in population, including many high-income households.

 

99 thoughts on “The Golden State? Newsom Admits that California Deficit is Now Roughly $32 Billion”

  1. One strategy the democrats could play would be to push the reparations legislation through, only to have it immediately tossed out by the courts as being unconstitutional. Then they could use the opportunity to bash the courts on every level from trial to appellate, to supreme claiming that the denial of the reparations is further proof that courts are evil and more far-left liberals are needed in the courts to protect America from The Man.

    Of course privately these politicians would be relieved that someone else made the reparations disaster go away, because they are too cowardly to put an end to it on their own, and too ungracious to give credit to the courts who they brought in to do the dirty work for them.

    1. That’s exactly my theory, Darren. They’ll blame the Supreme Court. They did it with student loan forgiveness, too. The Democrats are marshalling different constituencies to hate the Court by forcing the courts to shutdown unconstitutional giveaways the Democrats can’t afford anyway. When the Court becomes unpopular enough, the Democrats will impeach Thomas or whomever, and pack the Court.

      If Roberts really cares about the Court as an institution, he would be smart to find some way to let reparations stand. It’s especially unpopular. Then watch the Dems squirm. He needs to shut down this Democrat tactic by forcing the Democrats to keep their empty promises.

      1. Kicking the can to someone else is a game played when no statesmen are left. That is why, in the past decades, the courts have become so prominent.

        If the scenario you describe happened, why must Roberts do something? There is no rule forcing the Supreme Court to take a case.

        1. Alan, maybe Roberts won’t have to, but if the lower courts shoot down reparations, the Democrats will still blame the entire Judiciary. Then the Supremes might have to review the case to force the Democrats to pay up or shut up. That was my thinking.

          1. Diogenes, you have a good point. Unfortunately, no matter what, the Supreme Court is now in the headlights of the left. They nearly assassinated one of the justices, and the DOJ did little to protect them. We are dealing with a left that will use Marxist Revolutionary tactics to ensure they get their way. Those that lean left are too afraid of voicing a less violent approach, and many on the right don’t care enough.

            The solution is a solid Trump victory with a strong Republican win in Congress of those who believe in freedom. We need such a victory to filter down to the lowest office to suffocate those radical leftists that even terrorize their own.

  2. This is classic political doublespeak. Perhaps this is a reverse President Obama: “I was Against the Authorization for War Before I Was for It.”

  3. At Year End, 4,127 U.S. Banks Held $7.7 Trillion in Uninsured Deposits; JPMorgan Chase, BofA, Wells Fargo and Citi Accounted for 43 Percent of That
    https://wallstreetonparade.com/2023/05/at-year-end-4127-u-s-banks-held-7-7-trillion-in-uninsured-deposits-jpmorgan-chase-bofa-wells-fargo-and-citi-accounted-for-43-percent-of-that/

    President Biden announces nominations for key positions at Federal Reserve
    https://cointelegraph.com/news/president-biden-announces-nominations-for-key-positions-at-federal-reserve

  4. C’mon Turley,

    Now you know what Newsom was willing to say he was pro-reparations.

    He knew that there’s no way they could afford to do it.
    So its a hollow promise.

    -G

  5. CA is not the Golden State anymore. I live here. Over 1 million have left due to taxes and unaffordability of basic needs. Currently. 30 companies of all sizes leave a week. There is no middle class left. The rolling blackouts, the crime, the homeless, the regulations and lack of employment that pays a livable wage have all contributed to it.

    1. La Duca – I don’t live there, so I’d be interested in your reaction to the analysis in the video below. It’s about how unusual California’s problems are, and concludes it’s America’s America, in terms of viewing itself as characterized by exceptionalism within an exceptional nation. What do you think?

      1. I disagree with the conclusion that the primary cause of homelessness is the high cost of housing. While that does contribute, the vast majority of people living on the street is drug addiction and mental illness, which are intertwined.

  6. ……and the pale faced fools and knaves into whose pockets the state’s hands will dip in order to fund this brain dead enterprise will vote for him and support his party, like lemmings, running to the cliff, or the children of Hamlin, following the Pied Piper out of town.

  7. I believe that Biden is running again because he needs the political juice to try to keep the lid on the investigations of himself and his family. The ironic thing is that since he is tanking in the polls and in his own mental capacity the left and the deep state needs to get rid of him and therefore they will use his crime family as a wedge to force him out of office. It is typical Biden, he gets everything wrong and you can now include this in his resume” of bad decisions.

    1. Biden does not need to run to protect himself and his familiy.
      He is president – he can and will pardon himself and his family.

      If he loses in nov 2024 – he will do that in December 2024.
      If he wins he will do it in Jan 2025.

      It is happening regardless.

        2. Also FARA is federal law – there is no state analog.
          The money laundering claim is based on the FARA violation – there is no valid state money laundering claim without a different state law being broken.

          The influence pedaling and lobbying are all federal.

          There might be a state tax claim against Hunter, The Gun charge is purely federal, The trafficing and drug charges against Hunter might be fileable as state charges.

          But again – this is all Hunter and you have to find a prosecutor with jurisdiction.

          I believe much of the damning content on the laptop is while Hunter was residing in the Swedish house in DC.
          So again Federal charges. not state.

          There is pretty much ZERO chance that the bidens are getting prosecuted.

          Impeached – maybe. Lose and election – probably. Join Nixon in ignomy possibly.
          But not proseuted.

  8. NOT TO WORRY!

    IF JOKE BIDEN CAN DO IT, ANYONE CAN, RIGHT?

    All you communists (liberals, progressives, socialists, democrats, RINOs, AINOs) out there, restrain your TDS.

    MOOCHHELL OBAMA – 2024!

    Moochhell did not run in 2020. Everyone knew that Real President Donald J. Trump was on his way to a landslide reelection victory. Sane candidates would wait for 2024. Biden ran because no one else was obtuse enough to attempt anything so crazy. Enter the Chinese Communist Party. “China Flu, 2019” was released to take full effect six months prior to the reelection of Real President Donald J. Trump. “China Flu, 2019” did exactly what it was designed and deployed to do. As an insurance policy, the MSM and SM hid the truth of the Biden Crime Family to seal the victory for “China Flu, 2019” and the Chinese Communist Party. The truth of the Biden Crime Family is being released by the global communist Deep Deep State “Swamp” to force Joe out of the 2024 race. Bill Clinton appeared at the convention in 1988. Obama gave the keynote in 2004. Moochhell gave the “keynote” at the 2020 convention.

  9. The Reparations recommendation reminds us that Bernie Bros revel in their role as Useful Idiot to Trumpers. I mean, what a gift to rightwing media with an election year coming up!

    It illustrates, perhaps, that ‘without’ the Bernie Bros, Trumpers might be just the far-right faction of a party controlled by the Koch Network of corporate donors. In that scenario, Glenn Youngkin would be the man to beat in ’24.

    1. “Anonymous” is still doing the “Koch” thing. If you mention Soros they call you a Jew hater, but the Koch guys are fair game in the strange world of Doublestandarstan.

  10. California is in a catch 22: as the economy becomes increasingly unequal, the voter demand to increase taxes on the wealthy does too. As taxes increase, more companies and wealthy individuals leave, taking with them much-needed tax revenue. The cycle repeats. Running on a promise to cut taxes or spending is political suicide. Candidates promising to spend and tax more win. California is now the most business-unfriendly state in the nation, and it has the highest tax rate for high-income earners. The top 0.5% of earners pay 40% of the state’s tax revenue. They are thus incentivized to move to another state.

    California and the rise of its once-mighty economy came down to successive booms, from the gold rush to Silicon Valley, with agriculture in the Central Valley, ports for international trade, university-level education, the entertainment industry, oil discoveries, and major military investment in between, especially in aerospace. Today’s tech boom, however, has led to higher income inequality. As the state has pivoted to account for this, it has destroyed the very thing that sustains it: its ability to foster innovation and attract talent from all over the world – coupled with homeowners waging campaigns for lower-density housing that has pushed prices up dramatically and has thereby pushed many children into overcrowded schools. The California dream of working hard and being rewarded has seriously eroded. The above is summarized from the following:

    1. OMFKansas writes, “coupled with homeowners waging campaigns for lower-density housing that has pushed prices up dramatically and has thereby pushed many children into overcrowded schools.”

      What California homeowner’s want is to protect the single-family dwellings that make for nice, safe neighborhoods. Among the myriad of factors driving up housing prices are cheap money, foreign investment, inflationary compensation in the tech industry, scarcity (market bottom up… four rent-paying illegals per bedroom), and the declining quality of life in even the nicest high-density housing (into which gov’t injects ruinous Section 9 incivility).

      For decades the city of Oakland, a beautifully-situated collection of single-family homes, has produced record levels of both violent crime and academic failure. Billions have been poured into its schools in the mistaken belief that stupidity, of the type that celebrates single motherhood and parasitical behavior, can be tolerated without consequence. Confronted with repeated failure, the government’s solution was not to alter housing density, it was to move the happily unemployed into small towns in the outlying area, where they stacked them into high-density structures, closed their eyes tight, and hoped the felonious behavior and academic failure would not follow. Well, it did, bringing big city violence to the small towns of Antioch and Pittsburg.

      Homeowners (as well as those who would be) are not the problem; they have been made out to be the bad guys by progressives who believe the prosperity and contentment of cherished neighborhoods and suburbs is the product of the rich soil and fresh air, as opposed to the quality of the residents (and those working and saving to join them). The idea that poor quality seeds can yield a high quality crop just by planting them next to good seeds might excite an alchemist or a leftist sociologist, but not anyone even vaguely experienced with nature’s true ways.

        1. It certainly passes California’s “is it dumb enough?” litmus test, so buckle up (or, if a lawyer, start salivating). Expect a big kerfuffle among democrats, though, as the local scoundrels butter their quid pro quo bread with donations from grateful developers.

  11. “Rishi Sunak refuses to apologise for UK slave trade or to pledge reparations”

    “PM says ‘trying to unpick our history is not the right way forward’ in response to Labour’s Bell Ribeiro-Addy.

    “Rishi Sunak has refused to apologise for the UK’s role in the slave trade or to commit to paying reparations.”

    – The Guardian

    1. The Pakistani import in the UK refuses to pay some historical figures’, some one else’s, “debt.”

      How much will the Mexican, Arabian, Caribbean, Central American, Asian and African imports in Crazyfornia pay for some one else’s debt?

    1. california-to-build-temporary-gas-plants-to-avoid-blackouts

      Go Green, then dream… counting birds, bats, whales, etc., humans, too, left in their woke (sic).

  13. Isn’t the answer to just raise taxes … I mean REALLY, do I have to think of everything around here? 😉

  15. Imagine you were the parent of a breathtakingly beautiful daughter and a handsome, charming son. Being a complete idiot, you raised your daughter to believe, due the power of her beauty, she was destined to an endless supply of desirable suitors no matter how spoiled or ugly her behavior. In guiding your son, you irresponsibly bolstered his prodigious conceit by downplaying his every blunder and fawning over his every idea. The mistakes you made in the home were magnified by a depraved local culture and an influential but childish media.

    After enjoying many good years of adulthood, daughter San Francisco has discovered that even natural beauty has its limits, rudeness is not always excusable, suitors are not always plentiful or desirable. This big dose of reality has caused her to feel abandoned, clueless, and desperate for someone (perhaps a sugar daddy) to do what may be impossible: save her from herself.

    As for your son, Gavin, it might be said that among no-talents his lucky run has been the greatest since Chance the Gardener’s. His political rise, engineered by a local media excited to have its own boy-toy, was effected by boldly attacking straw man issues, grabbing headlines with stunts (disrespectful of laws/agencies), and being aggressively shielded from accountability or consequence. But now, with reality arriving in the form of unforgiving arithmetic and dollar signs, the emptiness of Gavin’s head is at risk of becoming as obvious as that of Kamala’s (another Bay Area product). Perhaps, if Doddering Di could be manipulated into resigning, Gavin could finagle himself into filling the vacant seat with his vacant head. After all, what better place for the accountability-intolerant and dumb than Congress?

    What a shame. Had San Francisco been raised to honor her natural beauty by being equally beautiful within, her existence would today be enchanting admirers and attracting riches from every corner of the world. And had young Gavin been made to confront his very apparent weaknesses, he could today be among the most popular of game show hosts, or perhaps celebrity hairdressers.

    1. What you see is what is presented for public consumption by the CCP.

      Two “democrats” and no opponents run for office, every office, in CC.

  16. At over $103 billion annually California’s welfare system is by far the largest in the nation and over twice that of the next two highest states (New York and Texas) combined. Population size is a factor, but not one that is as great as the failure of the system to lead people to become self sufficient rather than leave them to remain dependent. Unabated welfare dependency in California has met its match with those who pay the bills. The downward trend in population that has been occurring is clear indication that Atlas is shrugging off California.

  17. The Democrats are realists. They see the black vote slipping away so they double down on free stuff. Their fear is palpable. They see that black people are coming around to the truth that Democratic policies have failed them for the last forty years and their shaking in their boots. It’s obvious that they are willing to take your money to stop the slide if you let them. There have been many reparations programs put in place. You can rest assured that with the Democrats your penance will never come to an end. Payment for your sins must continue. Forgive me Pope Newsom for I have sinned. Don’t forget to leave your alms in the plate says Pope Newsom. Oh, that part about being forgiven for your sins, forget about that cause it ain’t never gonna happen.

      1. Independent Bob, you have it correct. They see their power over the people of color slipping away and they are feverish to stop it. There is no doubt that Trump like any man has his faults but he exposes them for who they are and they detest him for taking the vale away. If it wasn’t for Trump the Department of Misinformation would be fully in place and the FBI and the CIA would have a free rein in censoring what you can see and hear. They hate Trump because just when they thought the had us all of us under control he exposed their nest to the sunlight. You can hear the hissing.

  18. The promise of reparations smacks of russian disinformation. Just ask the 51.

    1. Ah, yes, the 51!

      The Secretary of State Antony Blinken-led 51.

      The “Big Lie.”

      The global communist American Deep Deep State “Swamp” – Eisenhower’s military industrial complex with an exponent.
      ________________________________________________________________________________________________

      “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

      – President Dwight D. Eisenhower, Farewell Address, January 17, 1961

  19. Lets talk UNIONS.
    Unions are dispersed across all State of California Bargaining Units (21 of Them).
    https://www.calhr.ca.gov/state-hr-professionals/Pages/bargaining-contracts.aspx

    The Unions are as functional as They were back in the Days of Detroit, Good for Taking Dues ($) and keeping Bad Actors employed and in charge. In exchange the Unions insure the Politicians (Democrats) an Office Seat in the Legislature.

    None of these People can balance a Checkbook, what do you expect them to do with the State’s Checkbook(e.g.: It’s Overdrawn 32-Billion).

    Oh but should you ask Them, They are the First to tell you: Nothing Happened On My Watch.
    Many State Workers will Tell you and the rest Know:
    “It was broken before I got here, and it will be Broken after I’m gone.”
    Got to make my 2.5%-@55 Calpers target, and get Out of the State (Oregon, Arizona, Nevada, East)

    Are you ready for this? “Keep your pantyhose on”
    https://transparentcalifornia.com/pensions/calpers/

    Been There, Done That. Cal State Employment looks nice, but it is rigged and is rack with; cronyism nepotism favoritism and corruption as it can be, smack in the face of the Equal Employment Opportunity Act as Amended.

    Newsom will run away, once again.

    1. Unions are criminal enterprises.

      Unions have one bargaining chip: Violence to oppose replacement workers.

      No organization may be blackmailed into hiring “qualified” people who refuse to do the job as directed.

      Let the AWOL workers eat cake and hire the best people available on the labor market.

      People are free to be businessmen or employees.

      Signing union contracts must be illegal.

  20. California has had its share of stupid, but this latest craze is beyond what I’m not sure, but beyond. This latest winter saw record snow fall in the Sierra’s, some of it must have landed in Sacramento and infected numerous brains into thinking of notions of grandeur, built upon the belief that ‘Money Really Does Grow on Trees’!

    1. “It’s the [one man, one vote democrazy], stupid.”

      – James Carville
      _____________

      “It’s [communism], stupid!”

      – James Carville
      _____________

      “According to data available from the Federal Reserve’s Board Survey of Consumer Finances, the median savings balance…of Americans under 35 is just $3,240, while that jumps to $6,400 for those ages 55-64.”

      – MarketWatch
      ____________

      Multiple millions of people with absolutely nothing, no “skin in the game,” people who are not vested or otherwise competent, vote to steal your money for their personal use.

      Ben Franklin gave you a restricted-vote republic.

      You couldn’t keep it.

      You can’t take it back.

      You lack the “resolve” to do what is necessary.

      Start here: Restrict the vote, severely.
      ______________________________

      “the people are nothing but a great beast…

      I have learned to hold popular opinion of no value.”

      – Alexander Hamilton
      _________________

      “The true reason (says Blackstone) of requiring any qualification, with regard to property in voters, is to exclude such persons, as are in so mean a situation, that they are esteemed to have no will of their own.”

      “If it were probable that every man would give his vote freely, and without influence of any kind, then, upon the true theory and genuine principles of liberty, every member of the community, however poor, should have a vote… But since that can hardly be expected, in persons of indigent fortunes, or such as are under the immediate dominion of others, all popular states have been obliged to establish certain qualifications, whereby, some who are suspected to have no will of their own, are excluded from voting; in order to set other individuals, whose wills may be supposed independent, more thoroughly upon a level with each other.”

      – Alexander Hamilton, The Farmer Refuted, 1775
      _______________________________________

      “[We gave you] a republic, if you can keep it.”

      – Ben Franklin, 1787

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