California Bets That Progressive Policies Will Reinforce Economic Growth

California governor Gavin Newsom plans to invest a budget windfall in a progressive agenda. Photo: Rich Pedroncelli/AP

Republicans tend to think of the current levels of economic growth as a testament to their faith in what corporate job creators can do if given lower taxes and few regulations, and if liberated from such pesky worries as climate change or inequality. But the same sunny prospects shine on places with very different ways of looking at the foundations of economic life and the proper way to invest the fruits of growth.

We’re seeing that right now in Donald Trump’s least favorite state, the alien-coddling, tree-hugging, regulation-loving hellhole of California. Actually, the economy is doing well enough in the Golden State that its government entered 2019 with an estimated $21 billion budget surplus. Newly elected Governor Gavin Newsom prepared his first budget based on that figure, but since the surplus has actually increased since then, he has now released a revised budget to enhance an already impressive agenda of progressive expenditures, as described by the Sacramento Bee:

The updated proposal unveiled Thursday builds on the $209 billion budget the governor laid out in January. It keeps in place spending to expand health coverage for undocumented immigrants and $1.75 billion to spur housing construction …

His revised proposal adds $130 million for child care  mostly from taxes raised on legal marijuana sales  and doubles a proposed tax credit for families with children under 6 from $500 to $1,000. It also would eliminate sales taxes on diapers and tampons.

Newsom’s budget adds an extra $150 million in grants for communities to build programs that help the homeless, setting aside a total of $650 million for those efforts. It has extra money that would help the homeless through college programs, workforce grants and mental health resources. All together, the budget has $1 billion for homeless programs.

That investment in addressing homelessness would double last year’s level of spending.

Newsom is also proposing to expand tuition-free higher education at the state’s network of community colleges from one to two years, and a comprehensive overhaul of California’s perpetually crisis-ridden water supply and distribution system. But he’s also socking back some money into debt retirement and a rainy-day fund.

Legislators being legislators, Newsom won’t get everything he’s asking for, and will have to accept initiatives and spending priorities that are not his own. But because Democrats enjoy supermajorities in both the California Senate and Assembly, Republicans cannot do much to block whatever Newsom and his fellow Democrats work out. And, in fact, he may be more concerned about protecting his left flank, particularly given strong interest in the legislature and among party activists for an aggressive push to begin building a single-payer health-care system.

In his spare time, of course, Newsom will join Attorney General Xavier Becerra in waging a plethora of legal fights against the Trump administration, mostly focusing on environmental protection.

Generally speaking, California is showing that economic growth and progressive policy initiatives are not mutually exclusive. In time, it may help reestablish the once-taken-for-granted case that they are mutually reinforcing.

California Bets Progressivism Will Reinforce Economic Growth