When Governor Gavin Newsom unveiled his creative May Revision to the state budget last month, he not only ignored fiscal discipline and reality but issued a bureaucratic veto of the people’s will. Senate and Assembly Democrats followed his lead, bloating the budget even further. Instead of meeting the moment, Sacramento is once again dodging responsibility and deflecting blame, all while California families are asked to shoulder the consequences of the Legislature’s mismanagement of their taxpayer dollars.
Let’s be clear: California is facing a $12 billion budget deficit this year. But rather than engage in real fiscal discipline or rank order the needs of our communities, this budget leans on gimmicks — draining our Rainy Day Fund, borrowing billions from special funds, and relying on tax hikes that disproportionately harm small businesses and middle-class families. News flash: this budget is balanced in name only.
We’ve seen the results of this approach before: a cycle of unsustainable spending, vanishing reserves and policies that push more tax-paying Californians out of the state. While Sacramento insiders protect entrenched interests, everyday Californians are struggling — whether it’s the small business owner drowning in red tape (fix: regulatory reform!) or the family waiting months to access basic healthcare services (fix: Medi-Cal reform!). Let’s be clear: a one-party state that passes policies and budgets with no resistance produces deficits, failed programs and misguided and mismanaged public infrastructure. (fix: fiscal discipline!) Common sense fixes elude the Legislature.
Take Proposition 36, for example. Voters overwhelmingly supported (nearly 70 percent) this measure last November to crack down on repeat drug and theft crimes and to expand treatment options for convicted criminals struggling with addiction. The clear message from the voters was this: we want crime laws that work; and accountability and compassionate pathways to recovery. The governor’s budget included zero funding to implement Proposition 36, and the Legislature’s budget falls at least $200 million short of the $400 million needed. It’s not just insufficient — it’s a slap in the face to the people of California and the counties and cities who need the funds to implement the new law.
Then there’s Proposition 35, also passed by voters last November. It was meant to protect access to critical health services by permanently increasing Medi-Cal reimbursement rates for doctors, clinics and mental health providers. But instead of honoring the voters’ will, the budget uses $1.6 billion to backfill underfunded base Medi-Cal rates, not the increased rates that Proposition 35 guaranteed. Californians didn’t vote to paper over structural problems — they voted to fix them. Sacramento is choosing to ignore voters, hoping no one will notice.
Adding insult to injury, the state instead continues to shovel millions of dollars toward health care programs for undocumented immigrants — including at least $12 billion in the Legislature’s budget — while underfunding services Californians are paying for and counting on. Perhaps not coincidentally, the $12 billion budget deficit roughly equates to the $12 billion budgeted to provide Medi-Cal services for undocumented immigrants.
Meanwhile, the Legislature is pushing a massive $750 million tax credit to keep Hollywood happy — a deal I voted for only because I believe in incentivizing job creation. But it’s hard to explain to a local plumber, hardware store owner, or restaurant manager why they are still drowning in regulations and taxes while billion-dollar studios get sweetheart deals. Relief for one industry should not come at the exclusion of every other struggling California business.
The Legislature’s own budget proposal (negotiated by the Assembly and Senate to respond to the governor’s budget) spends $5.5 billion more than the governor’s already bloated deficit plan, driving projected deficits as high as $25 billion in 2026 and 2027 and beyond. That’s not governance; that’s fiscal irresponsibility. Instead of structural reform, we’re building a “Wall of Debt,” borrowing another $6.5 billion from special funds reserved for other uses and depleting our cash reserves. The state will soon owe more than $10 billion to more than 50 internal funds — an unsustainable gamble that threatens the economic security of every Californian. California also still owes the federal government for its $20 billion loan to pay unemployment benefits during COVID. That loan will be repaid by tax increases on employers! There is a limit on non-stop borrowing (with no repayment plan) and we have reached it.
The governor likes to talk about California as a model for the nation as the fourth largest economy in the world. But a model of what? We are dealing with runaway spending, fiscal mismanagement, broken promises and a long list of spending on unsustainable programs and projects that don’t always work. Homelessness, public safety, affordable housing, wildfire mitigation, the highest in the nation gas prices caused by excessive regulations– not one of these problems has been adequately addressed. We are choosing to “kick the can down the road” which is Sacramento’s budget strategy every year. Are Californians better off than they were five years ago? We deserve a government that honors taxpayers, manages your money with responsible discipline and restores confidence in public services.
The budget may be a statement of priorities, but it’s also a reflection of values. This budget makes it painfully clear: Sacramento’s tax and spend values are increasingly out of step with the people it was elected to serve.
It’s time to make California fiscally sound again.
Diane Dixon represents California’s 72nd Assembly District.
