Taxes, program cuts and Newsom's legacy on the line in budget negotiations

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SACRAMENTO — One of Gavin Newsom’s top goals as he winds down his final year as California governor is to leave the state with a balanced budget.After years of the state spending more money than it brings in, it’s Newsom’s last opportunity to fix a chronic deficit or dump the problem on the next governor.How far he goes to solve the state’s structural spending imbalance will define his legacy as a steward of trillions in taxpayer dollars.As a potential candidate for president in 2028, he could also have a political incentive to do as little as possible.“Any cuts you make are going to cause people to scream,” said Darry Sragow, a veteran Democratic strategist.

“Any increases in taxes are going to cause people to scream and in terms of what’s best for a presidential run, it would be nice if people weren’t screaming.”As California’s 40th governor, Newsom expanded publicly funded healthcare to income-eligible undocumented immigrants, increased state-subsidized child-care slots and provided free meals for schoolchildren among a wishlist of progressive wins since he took office in 2019.His achievements have helped struggling Californians live in an increasingly unaffordable state and given him bona fides to tout to voters if he launches a bid for the White House.

But the state could never afford to pay for existing services and the new programs that Newsom and Democratic lawmakers enacted, according to an analysis of ongoing state spending since before the pandemic released by the Legislative Analyst’s Office last week.Spending from the state’s principal operating fund has grown about $100 billion since Newsom’s first full fiscal year in office in 2019-20, mostly due to the growing cost of existing programs that he inherited.

State spending has outpaced California’s strong revenue growth by about 10%, creating a perennial budget shortfall — a stru...