Walters: How Newsom’s presidential ambitions complicate his last budget as governor

As Gavin Newsom moves ever-closer to declaring his presidential candidacy, everything he does in his last year as governor is rightfully being viewed through that political prism.

Newsom knows that being portrayed as a left-leaning cultural warrior from deeply blue California — a factor in sinking Kamala Harris’s White House bid — is potentially fatal.

Thus, Newsom’s final state budget takes on a new political meaning, and makes the always-difficult process of weighing competing interests within the state even trickier than usual.

We saw that syndrome affect Jerry Brown, the last California governor to harbor serious presidential ambitions. In 1978, he opposed Proposition 13, the iconic tax cut ballot measure, but after its passage championed both a large state tax reduction and a spending limit ballot measure to realign himself with the tax cut movement.

Brown then tried to ride the anti-tax, spending-limit movement into the White House two years later — but failed miserably.

Back to Newsom.

His initial budget proposal, released last week, basically adopts the current spending plan, with a few tweaks that continue his ideological drift to the right. In hopes of producing a balanced budget, at least on paper, Newsom is cutting back on spending for social welfare and health care services and college scholarships.

Those steps alone are drawing criticism from many advocacy groups, but resistance is also heightened by his apparent unwillingness to fill in gaps caused by President Donald Trump’s cutbacks in federal support.

The reaction from left-leaning advocates was summarized well in a critique by Chris Hoene, executive director of the California Budget and Policy Center, an umbrella group of organizations that lobby for public services, especially those for the poor.

“California’s state budget is a reflection of our shared values and our responsibility to care for one another,” Hoene said in a statement. “Unfortunately, the governor’s 2026-27 spending plan balances the budget by dodging the harsh realities of the Republican megabill, H.R. 1, and maintains state cuts to vital public supports, like Medi-Cal, enacted as part of the current-year budget.

“Governor Newsom’s reluctance to propose meaningful revenue solutions to help blunt the harm of federal cuts undermines his posture to counter the Trump administration.”

Some budget critics want new taxes to both cover the state’s deficits and offset federal reductions. To fill those gaps, any new levies would need to generate somewhere around $30 billion a year.

“That means taking on corporations and billionaires, raising revenue instead of slashing budgets, and building a stronger California every step of the way,” the Legislature’s Progressive Caucus said in response to Newsom’s budget proposal.

Both of Newsom’s predecessors, Brown and Arnold Schwarzenegger, supported new taxes to close multibillion-dollar shortfalls. However, Newsom has repeatedly rejected any broad tax increases to close deficits.

Unions and other left-leaning groups are sponsoring two potential ballot measures to raise taxes. One would continue and expand a temporary tax hike on high-income Californians that Brown sponsored after returning to the governorship in 2011. The other proposal would levy a 5% tax on wealth of the state’s billionaires.

Newsom has promised that when he revises the budget in May, just a few weeks before it must be enacted, he will both balance it for the next fiscal year and attack the huge deficits that will linger after his governorship ends. The chances of doing that without new taxes of some kind are — to put it mildly — almost nil.

If Newsom continues to reduce spending on services for the poor and resist new taxes, his lame-duck status could draw unaccustomed resistance in the Legislature. Likewise, his presidential hopes might face opposition from progressive groups both in California and states that are important to a 2028 campaign.

As both governor and likely presidential candidate, Newsom is snared in a political trap of his own making.

Dan Walters is a CalMatters columnist.