Please ensure Javascript is enabled for purposes of website accessibility
Walters: More Entitlements as Economy Slows?
dan_walters
By Dan Walters, CalMatters Commentary
Published 5 years ago on
January 13, 2020

Share

Gov. Gavin Newsom is tiptoeing into a political region that predecessor Jerry Brown purposely skirted — expanding expensive services and benefits that are difficult, and perhaps impossible, to shrink if California’s economy turns sour.
They are called “entitlements” and Newsom’s own proclivities and pressure from a very liberal Legislature are slowly, but surely, expanding existing ones and adding new ones.


Dan Walters
Opinion
The $222.2 billion budget for the 2020-21 fiscal year that Newsom proposed last Friday is studded with enhanced entitlements, such as more money for early childhood education toward the goal of universal pre-school and all-day kindergarten, new appropriations to reduce the state’s largest-in-the-nation homeless population, and expanding Medi-Cal coverage to more undocumented immigrants as movement toward “a unified health care system that is universal, affordable, high-quality, and equitable for all.”
Brown was leery of adding new entitlements, openly worrying that they would deepen the impact of a recession, and warning annually that a downturn was inevitable.
However, while Brown had to deal with the fallout from the Great Recession, his eight-year reign was blessed by a steadily expanding economy that poured tens of billions of extra dollars into the state treasury, so he could bequeath a balanced budget and an expanding “rainy day” reserve to Newsom.

Newsom’s Budget Projects That the Good Times Will Continue

The state’s economy has continued to hum and Newsom is much more receptive to spending its bounty on entitlements.
“It’s often said that budgets are statements of values,” Newsom said in his budget letter to the Legislature. “In America’s most populous and productive state, our state budget is more than that. It is a blueprint for a better quality of life and brighter future for millions of individuals striving and succeeding together — in pursuit of their own version of the California Dream.”
Newsom’s budget projects that the good times will continue not only during the upcoming fiscal year but through the “forecast period” — basically the remaining three years of his first term.
But will they?
A day before the budget was unveiled, the Legislature’s budget analyst issued an updated “state fiscal health index” that raised some warning flags.
“Data provides a mixed message about the condition of the state’s economy,” the bulletin said. “Some signs point to a weakening economy, while others continue to signal growth. Overall, while not imminent, the risk of a slowdown in the coming year appears higher than it has been for some time.”

During His Budget Briefing, Newsom Cited California’s 2018 Increase

As if to underscore that warning, as Newsom was describing his new budget to reporters at the Capitol, the federal Bureau of Economic Analysis issued a report showing that California’s economic growth through the third quarter of 2019 was less than half of 2018’s 4.3%.

Even a moderate recession would, the budget says, cut state revenues by $70 billion over three years, including $40 billion in the general fund.
During his budget briefing, Newsom cited California’s 2018 increase, one of the nation’s highest. However, the BEA data reveal that 2019 was a much different story. Through the third quarter, its 2.1% economic growth rate was no better than the nation as a whole and scarcely half of No. 1 Texas’ 4% expansion.
Buried in Newsom’s budget is another indication that the economy, and the state revenue that flows from it, may be cooling off. It forecasts a slight dip in personal income tax revenues, which finance two-thirds of the general fund portion of the budget.
Even a moderate recession would, the budget says, cut state revenues by $70 billion over three years, including $40 billion in the general fund. The latter number is twice as large as the state’s “rainy day fund,” which means a downturn would force spending cuts and those new entitlements would be on the block.
CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.
[activecampaign form=31]

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Fresno County Man Killed in Head-On Collision Identified

DON'T MISS

California Allocates $56 Million to Combat Youth Homelessness

DON'T MISS

Let the Hunt for Fresno County Fruit Trail Delights Begin!

DON'T MISS

Fresno Police Arrest Suspect in Southwest Shooting Through Valley Crime Stoppers’ Tip

DON'T MISS

18 Injured in Knife Attack in Hamburg, Report Says

DON'T MISS

White House National Security Council Hit by More Firings, Sources Say

DON'T MISS

All Six People Aboard Plane That Crashed in San Diego Confirmed Dead

DON'T MISS

Explore the Wild Side of Route 66 With These Natural Wonders

DON'T MISS

Billy Joel Cancels Touring After Being Diagnosed With a Brain Disorder

DON'T MISS

Justice Department Reaches Deal to Allow Boeing to Avoid Prosecution Over 737 Max Crashes

UP NEXT

Test Your Memorial Day Knowledge With This Quiz

UP NEXT

Gavin Newsom’s Off-the-Mark Budget Numbers Undermine His Credibility Again

UP NEXT

The Trump-Supporting Christians Accusing Jews of Antisemitism

UP NEXT

Congress Debates Two Issues With Big CA Implications: EVs, Taxes

UP NEXT

Newsom’s Budget Cuts Anger Allies and Leave the State’s Chronic Deficit Unresolved

UP NEXT

The Tragedy of Joe Biden

UP NEXT

The Day Grok Lost Its Mind

UP NEXT

Democratic Candidates for CA Governor Shy Away From State’s Anti-Oil Crusade

UP NEXT

Trump Navigates Iran Nuclear Talks. Should US Insist on Zero Enrichment?

UP NEXT

Fresno, Wake Up. We’re Numb to Our DUI Problem

Fresno Police Arrest Suspect in Southwest Shooting Through Valley Crime Stoppers’ Tip

13 hours ago

18 Injured in Knife Attack in Hamburg, Report Says

13 hours ago

White House National Security Council Hit by More Firings, Sources Say

13 hours ago

All Six People Aboard Plane That Crashed in San Diego Confirmed Dead

14 hours ago

Explore the Wild Side of Route 66 With These Natural Wonders

15 hours ago

Billy Joel Cancels Touring After Being Diagnosed With a Brain Disorder

15 hours ago

Justice Department Reaches Deal to Allow Boeing to Avoid Prosecution Over 737 Max Crashes

15 hours ago

Fresno County Wildland Fire Burns One Acre Before Being Contained

16 hours ago

Clovis Church’s ‘Giving Truck’ Offers Free Coffee With a Twist

17 hours ago

Should Fresno Make It Easier to Convert Office Buildings Into Housing?

17 hours ago

Fresno County Man Killed in Head-On Collision Identified

A 20-year-old Raisin City man was killed early Thursday morning in a head-on collision north of Huntsman Avenue, according to the California...

12 hours ago

fresno
12 hours ago

Fresno County Man Killed in Head-On Collision Identified

12 hours ago

California Allocates $56 Million to Combat Youth Homelessness

12 hours ago

Let the Hunt for Fresno County Fruit Trail Delights Begin!

A Valley Crimes Stoppers tip and surveillance footage led Fresno police to arrest Andy Ramos on Thursday, May 22, 2025, who confessed to a May 11 shooting that left a man hospitalized in stable condition. (Fresno PD)
13 hours ago

Fresno Police Arrest Suspect in Southwest Shooting Through Valley Crime Stoppers’ Tip

Police officers and forensic experts work at Hamburg's main train station, after several people were injured in a knife attack, in Hamburg, Germany, May 23, 2025. REUTERS/Fabian Bimmer
13 hours ago

18 Injured in Knife Attack in Hamburg, Report Says

A view of the White House in Washington, U.S., July 20, 2024. REUTERS/Kevin Mohatt/File Photo
13 hours ago

White House National Security Council Hit by More Firings, Sources Say

Emergency personnel work at the crash scene on a street, after a small civilian aircraft went down in a military neighborhood in San Diego, California, U.S. May 22, 2025. REUTERS/Mike Blake
14 hours ago

All Six People Aboard Plane That Crashed in San Diego Confirmed Dead

15 hours ago

Explore the Wild Side of Route 66 With These Natural Wonders

Help continue the work that gets you the news that matters most.

Search

Send this to a friend