As I commented previously, the political figure secretly most disappointed that the GOP red wave didn’t occur in the mid-term is Gavin Newsom. If a red wave had taken out Michigan’s Wretched Witmer, Minnesota’s Tim Walz, Colorado’s Jared Polis, or New York’s Kathy Hochul, Newsom could point to his landslide re-election in California as evidence that he’s the strongest person to run for president in 2024 in place of the decrepit Joe Biden, not to mention Kamala Harris, who Newsom privately despises by all accounts. But with Biden getting a new lease on life, and some early buzz about Witmer and Polis as a possible candidates, Newsom has lost ground as a presumptive front-runner.
That’s only the beginning of his problems just now. A year ago, California enjoyed a near $100 billion budget surplus—a combination of lavish federal COVID aid and the continuing prosperity of high tech. This has all changed virtually overnight. Suddenly California is looking at a $25 billion budget deficit (likely to double or triple by next spring if past experience is any guide), the result of the stock market swoon and a suddenly struggling tech sector. California is extraordinarily dependent on high income earners—and capital gains tax revenue from IPOs and stock options—for its income tax revenue. Every time the stock market slumps and the capital gains and stock option machine stumbles, California’s fiscal picture darkens quickly. It happened in 2001-2003, again in 2009, and again just now.
Today the Wall Street Journal reports that Gov. Newsom is threatening to withhold $1 billion in funds for California cities, most of them run by Democrats, for the purpose of reducing homelessness. The story reports that Newsom is unhappy that the cities requesting the funds have submitted plans that would reduce homelessness in their jurisdictions by . . . 2 percent. Even Newsom can see that $1 billion for a mere 2 percent reduction in homelessness is unserious. From the article:
Many mayors were also rankled when Mr. Newsom told the Los Angeles Times he froze the homelessness funds because local leaders needed to “deliver damn results,” adding that he would be willing to play “mayor of California” if they didn’t.
How to tell Newsom is running for president without saying he’s running for president? Statements like this.
But the story buried the lede in some respects. This:
The number of homeless people in California has grown roughly 15% since 2019, even as Mr. Newsom oversaw the largest increase in funding for homeless programs in the state’s history. California has dedicated some $15 billion toward the issue since the start of the pandemic.
Simple question: with money like this, who thinks any local government in California actually wants to reduce homelessness? If spending $15 billion increases homelessness by 15 percent, imagine how much more homelessness we could have if we only spend $30 billion? Unfortunately, California doesn’t have it to spend just now.
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