Gavin Newsom was inaugurated as California’s 40th governor last Monday, taking over a general-fund budget that is flush with cash and a state government that is in remarkably good shape—at least superficially—from a fiscal perspective. For all his flaws, outgoing Gov. Jerry Brown left Newsom with a $15 billion surplus and a rainy day fund that is nearly full. As an added plus, the economy that is humming along even though an erratic stock market points to storm clouds on the horizon.
The big question is whether Newsom will heed Brown’s advice and govern as if there’s always a recession around the corner—or ignore the former governor’s warnings about Democratic lawmakers who always say “yes” to any “harebrained” spending scheme. Unfortunately, based on Newsom’s inaugural words, initial budget and many of his early high-level administrative appointments, the safe money is on the latter. Newsom wants to spend big.
One need not read between the lines in Newsom’s introductory words. He spelled it out clearly. Newsom pointed to Brown’s inaugural address, which quoted from the Sermon on the Mount. There was the foolish man who built a house on sand and the wise man who built it on rock. “For eight years, California has built a foundation of rock,” Newsom said. “Our job now is not to rest on that foundation. It is to build our house upon it.”
But that financial foundation might be built less on rock and more on sand, writes Steven Greenhut.
from Hit & Run http://bit.ly/2FMN1hT
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