When Gavin Newsom became governor of California in early 2019, general fund expenditures were $147 billion. Six years later, they are budgeted to hit $238 billion, an increase of 62 percent. That compares to an increase in total personal income in California over that period of 33 percent. Since Cal ifornia’s population stayed about the same since 2019, at 39.6 million, per capita general fund spending also increased by 62 percent, from $3,700 per person in 2019 to $6,000 in 2025. According to the National Association of State Budget Officers (NASBO), that $6,000 figure compares to per capita general fund spending during the 2025–2026 fiscal year of $1,500 in Texas, $1,884 in Florida, $4,000 in Illinois, $3,700 in Pennsylvania, and $5,600 in Massachusetts. The average for all 50 states is $3,600, about 40 percent lower than California’s per capita spending. The governor and the veto-proof supermajority in the legislature would likely argue that all that spending provides Californians with top-flight public services. Such a belief, however, flies in the face of the U.S. News ranking of California’s K-12 public education as 36th in the nation. That is despite the fact that, when considering state general fund spending, K-12 per-student spending in California is $11,300, which is 54 percent higher than the U.S. average of $7,319. Homelessness in California since 2019 has increased by 30,000 to an estimated 187,000. Even with Newsom’s earmarking of $24 billion between 2019 and 2024 for the homelessness problem, California has the highest number of unsheltered individuals, with over two-thirds of its homeless population living on the streets. Yet, the governor has continued to avoid being held accountable for the funds spent and has vetoed two bipartisan bills (AB 2903 and AB 2570) designed to evaluate the effectiveness of state-funded homelessness programs and conduct annual reviews of homelessness funding grants. The acid test of whether California is getting bang for its taxpayers’ buck is the fact that former Californians have voted with their feet in droves. The state’s Department of Finance recently reported that net domestic migration—people moving into California minus those moving out—totaled 1.6 million people during the Newsom years between 2019 and 2025. The state’s total population remained about the same over that period only because the loss resulting from people moving out was offset by increases in foreign immigration and the natural increase (births minus deaths) in population. But now, with foreign immigration falling off and the aging of baby boomers, California’s population in future years is expected to decline. California’s profligacy in state funding during the Newsom era has been made possible by its high tax rates, as evidenced by its 48th overall ranking in the 2025 Tax Foundation’s State Tax Competitiveness Index. Its individual income tax ranks even higher at 49th, driven largely by its marginal income tax rate of 13.3 percent and corporate tax rate of 8.8 percent. Since Newsom became governor, personal and corporation income taxes increased from $117 billion during the 2019–2020 fiscal year to $186 billion in 2025–2026, an increase of 59 percent. It is not a coincidence that this closely matches the 62 percent increase in state expenditures during that same period. Unfortunately, this tax-and-spending-driven policy has dangerous long-run consequences. Gavin Newsom appears to be ignoring those consequences as he puts the finishing touches on California’s 2026–2027 state budget, his last as governor. That budget includes revenues of $227 billion and expenditures of $248 billion, resulting in a budgeted deficit of $21 billion. To meet the state’s constitutional requirement for a balanced budget, the $21 billion deficit would draw down California’s rainy-day reserves from $36 billion at the beginning of the 2026–2027 fiscal year to $19 billion by its end. Ironically, these reserves are being reduced by half during a year when the governor is forecasting continued economic and financial market strength—a forecast of sunshine, not rain. Related Articles Immigrants reduce America’s deficit. Congress should take notice. Doug McIntyre: The view from ground zero on the immigration divide Derek Tran: Congress cannot be a bystander to another forever war New high-speed rail business plan offers a partial dose of honesty California’s taxpayer-backed pension systems invest in Bitcoin and crypto It gets even worse. The governor’s final budget leaves California with a structural deficit that will plague the state in future years. Commenting on California’s budgetary outlook, the Legislative Analyst’s Office (LAO) concluded in its Overview of the 2026–2027 Governor’s Budget that “deficits have persisted even as the state’s economy and revenues have grown, underscoring that the problem is structural rather than cyclical. Taken together, these trends raise serious concerns about the state’s fiscal sustainability.” While the 2026–2027 budget deficit is $21 billion, the LAO estimates the deficit in the 2027–2028 budget to be even higher at $35 billion. Although the state’s Department of Finance forecasts a lower deficit of $25 billion, a shortfall in that range will wipe out the remaining $19 billion in rainy-day reserves. Without those reserves, the state’s constitution will not allow Sacramento to budget a deficit in 2028–2029. Presumably, Gavin Newsom won’t have to worry about that since he’ll be long gone from the governorship, focusing on other things, like running for president. James L. Doti is president emeritus and professor of economics at Chapman University. Raymond Sfeir is director of the A. Gary Anderson Center for Economic Research at Chapman. Fadel Lawandy is CAIA director of C. Larry Hoag Center for Real Estate and Finance at Chapman. ...read more read less