Gov. Gavin Newsom’s lavish California budget proposal demonstrates what money can’t buy

Few states have illustrated the limits of government spending as convincingly and consistently as California.

Gov. Gavin Newsom this week embarked on what is threatening to become an annual exercise in sorting out how to spend a mountain of state money, and California has nothing if not money. The projected surplus for the next fiscal year runs to 11 figures for the second straight year thanks to a progressive income tax and the prosperity of the state’s wealthiest residents, who are flourishing despite the nation’s highest poverty rate and lagging employment.

But in the absence of bolder policies, the targets of Newsom’s spending continue to prove impervious to lavish investment.

Newsom’s proposed budget, which is preliminary pending spring revisions and negotiations with the Legislature, would add $2 billion in spending to the current year’s $12 billion to house homeless Californians, a population that swelled past 160,000 before most of the state’s jurisdictions stopped counting two years ago. The proposal also includes $2 billion in grants and tax credits to encourage housing construction and help close the housing deficit, which is at the root of the state’s disproportionate homelessness.

They’re worthy uses of the projected $45.7 billion surplus, but the state and many of its local governments have spent liberally on housing subsidies and homelessness aid for years without making a dent. That’s largely because of the state’s failure to tackle barriers to housing and shelter construction in its urban centers through zoning reform and a right to housing. When pressed to explain why the latest spending should be expected to yield discernible results, the governor uselessly deflected responsibility, twice declaring, “I’m not the mayor of California.”

Newsom also proposed dedicating $2.7 billion to boost vaccination, testing and staffing to respond to the coronavirus pandemic, including $1.4 billion he is asking the Legislature to authorize in the short term. Some of that is expected to fund testing and other efforts in schools and prisons, which have grappled with outbreaks amid the resurgence of the virus.

It’s another sensible spending priority that raises more questions about the administration’s inaction on other fronts. Newsom has waged a legal battle against vaccine mandates for prison guards and issued a porous school vaccination requirement that doesn’t take effect for months and allows exemptions for almost any reason. As with the housing and homelessness crisis, the governor is spending money treating the symptoms rather than using his power to prevent the illness.

Newsom’s budget also includes an impressive $22 billion in funding to address climate change and its consequences, including wildfires and drought, through electric vehicle and infrastructure subsidies, high-speed rail, forest management and more. But the governor acknowledged that his administration has “work to do” after the California Public Utilities Commission’s recent move to cut credits for rooftop solar generation. He has also hesitated to impose mandatory water conservation despite extreme drought conditions and settled for limiting new rather than existing fossil fuel extraction.

To his credit, as in prior years, the governor is aiming the state’s surfeit of revenues at some of its most urgent problems. And yet without action to match spending, the problems will persist.