Newsom skips budget speech as California faces looming $22B deficit

Sometimes the easiest way to deliver bad news is to simply have someone else do it.

That’s the tack Gov. Gavin Newsom took Friday as he reportedly flouted tradition by skipping his annual budget presentation — last year he was dealing with the Los Angeles wildfires — and left the unenviable task to his finance director.

Joe Stephenshaw, who was appointed by Newsom to take over the state’s Department of Finance in 2022, detailed a nearly $349 billion state budget that has grown by nearly $30 billion since last year and has an estimated $3 billion shortfall. That disquieting number could grow to $22 billion the following fiscal year. 

“Our projections show a manageable shortfall in the coming year, driven in part by continued strength in key revenue sources,” Stephenshaw said, his voice occasionally cracking as he attempted to lay out a brighter vision of what could be dark days to come.

Newsom’s budget has the hallmarks of a betting man, as the governor appears to be relying on a surging stock market fueled by the AI tech boom.

Stephenshaw noted that a key difference in how Newsom was able to avoid falling on the sword of an $18 billion budget deficit in his final year in office — a number tabbed last month by the state’s Legislative Analyst’s Office — is because the governor’s office does not take into account warning signs about a stock market downturn, which could lead to a recession.

Izzy Gardon, a spokesperson for the governor’s office, issued a statement to The Post defending Newsom’s absence while ignoring a question about where he was instead.

“The Governor previewed the budget yesterday in his State of the State [speech]. Consistent with exactly how we handled the budget last January, the Director of Finance presented the full budget AGAIN this year. January just starts the conversation — the Governor sees the May Revision as his final, fully informed budget proposal, which he will present himself,” Gardon said.

Newsom’s startling revenue projections — roughly $42.3 billion higher than previously anticipated over the next few years and fiorst detailed in his final “State of the State” speech — is being taken with a heavy dose of skepticism. 

Longtime political columnist Dan Walters dutifully noted that Newsom is the same governor who touted a nearly $100 billion surplus in 2022 before his finance department quietly revised its numbers to show the governor’s office had overstated income by $165 billion over four years.

No major cuts were suggested in Newsom’s budget, while he is throwing more than $700 million into the state’s two higher education systems.

“Today’s budget announcement is like proposing to build a house on quicksand,” George Andrews, a spokesperson for the state Assembly’s Republican Caucus, said in a statement. “It is exposed, built on volatile revenue, proposes delayed payments to retirees, and takes a gamble that Californians will pay for later.”

Democrats in the Legislature seem to be taking a cautious approach in embracing Newsom’s budget, as a paltry $23 billion in reserves could leave many holding the bag after the governor leaves office at the end of this year.

Senate Pro Tem Monique Limón reportedly told reporters a day prior to Friday’s budget release that California won’t be able to backstop federal cuts to health care and food assistance programs, which could make Newsom’s steadfast resistance to a wealth tax on billionaires an even more difficult path to navigate. 

Speaker Robert Rivas and Assemblymember Jesse Gabriel, who chairs the lower chamber’s budget committee, expressed similar caution while laying blame for shortfalls at the feet of President Trump.

“With Trump targeting our state, we must defend vulnerable communities and protect essential programs that help families put food on the table and see a doctor,” Rivas and Gabriel said in a joint statement.  “Today’s roaring tax revenues may not last, so this moment also should be used to strengthen schools and accelerate much-needed housing construction.”

Of course, this is just the beginning of what will be a grueling negotiation process. The governor will issue a revised budget in May and legislators will have until a mid-June deadline to hash out the details. Only then will god and the devil finally be revealed.