Speaking on CNN’s “State of the Union” on Sunday, California Governor Gavin Newsom complained that the federal government might not bail out his state, saying, “It is incumbent upon the federal government to help support these states through this difficult time.”
“State of the Union” host Jake Tapper pointed out that Caifornia was running a $54 billion budget deficit, then said that White House adviser Kevin Hassett told Tapper, “President Trump has signaled that, while he doesn’t want to bail out the states, he’s willing to help cover some of the unexpected COVID expenses.” Tapper continued, “So, the position of the White House seems to be that any money for states would be premature. What’s your response, sir?”
Newsom answered, “Well, it’s not charity. I mean, a year ago, Jake, we were running a $21.5 billion surplus. And here we are at $54.3 billion budget deficit that is directly COVID- induced. We have been managing our budget effectively, efficiently, paying down our long-term pension obligations.”
Despite Newsom’s effulgent proclamations of his supposed budget austerity being the cause of the state’s prior surplus, the California Policy Center noted in January 2019, the reason California was running a budget surplus was largely due to hiking taxes on taxpayers:
To illustrate just how unusually swollen California’s current state tax revenues have gotten, compare state tax collections in FYE 6/30/2017 (our most recent available data) to seven years earlier, in 2010. Back in 2010, California was in the grip of the great recession. Total state tax revenue was $94 billion, and $44 billion of that was from personal income taxes. Skip to FYE 6/30/2017, and total state tax revenue was $148 billion, and $86 billion was from personal income taxes. This means that 80 percent of the increase in state tax revenue over the seven years through 6/30/2017 was represented by the increase in collections from individual taxpayers, which doubled.
Newsom continued, “We’re not looking for handouts. It’s social responsibility, at a time when states not just California, large and small, all across this country, cities and counties, large and small, all across this country are facing unprecedented budgetary stress. It is incumbent upon the federal government to help support these states through this difficult time.”
After Tapper noted Senate Majority Leader Mitch McConnell had suggested that a bill requesting the federal government send money to states was dead on arrival, Newsom threatened, “These same folks that say it’s dead on arrival, I hope they will consider this. The next time they want to salute and celebrate our heroes, our first responders, our police officers and firefighters, consider the fact that they are the first ones that will be laid off by cities and counties.”
Newsom pronounced, “In a few weeks, over 100,000 Americans will have lost their lives. These are Depression era unemployment numbers, and we have to own up to that. So, I’m not looking to score cheap political points, but I do want to make this point, Jake. We have an obligation, a moral, an ethical obligation to American citizens all across this country to help support cities, states and counties.”
Tapper quoted Stanford Professor Joe Nation, a former Democratic state lawmaker, pointing out that California has over trillion dollars in pension debt. He asked Newsom, “How much of the crisis you’re in right now is due to preexisting financial obligations?”
Newsom protested, “None,” then blamed the coronavirus, saying, “That $54.3 billion is a direct result of COVID-19.”
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