California Gov. Gavin Newsom has made no secret that he intends to play a big role in the resistance to President-elect Donald Trump, but fiscal hawks in his state are warning that expensive strategies and brash plans could do more harm than good.
Newsom, who is widely expected to throw his hat into the 2028 presidential race, is one of three Democratic leaders in state capitals that have already started to push back on potential Republican policies on everything from abortion to the environment.
Newsom called a legislative special session starting next month to “safeguard California values and fundamental rights in the face of an incoming Trump administration.”
On Monday, Newsom said California would provide rebates to eligible residents who buy electric vehicles if Trump ends the $7,500 federal E.V. tax credit.
“We will intervene if the Trump administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California,” Newsom said in a statement. “We’re not turning back on a clean transportation future — we’re going to make it more affordable for people to drive vehicles that don’t pollute.”
Trump is expected to try to block California’s authority to set auto emissions limits that are stricter than federal standards.
The fight between Trump and Newsom is shaping up to be an epic one, as it was during Trump’s first term when California sued his administration more than 120 times. Trump has called Newsom “one of the worst governors in the country” and nicknamed him “New-scum.” Newsom’s ex-wife, Kimberly Guilfoyle, is engaged to Donald Trump Jr.
Trump staffers have made it known they want to disrupt the Democratic Party’s stranglehold over California politics. Newsom hopes to stop them but there’s real concern the state might lack the funds to do it.
While the California legislature’s nonpartisan fiscal adviser projects California’s budget is “roughly balanced,” the office has warned that spending growth is expected to plunge the state into a deficit. That means any big changes, like the ones Newsom has indicated he plans to make, could cripple California.
In its annual fiscal outlook, issued to prepare lawmakers for the budget process, the Legislative Analyst’s Office estimated that California will face a $2 billion deficit in 2025. This gap could be made up with minor tweaks to programs already in place. However, Legislative Analyst Gabriel Petek repeatedly warned in the report that it means there is no room in the budget for new programs or initiatives.
“The revenues are up, but the outlook ahead on that is a little more precarious,” Petek told reporters. “There’s really no capacity for new commitments, because we do estimate there to be these pretty significant operating deficits in the subsequent years.”
That could create problems for Newsom as he tries to mount a very public campaign against the incoming Trump administration. Newsom has also pushed for creating a backup disaster relief fund in case Trump denies California federal aid for fires, floods, and other emergencies.
“You could have multiple disasters stacking up … and you’re going to have serious cash flow issues, even a state as large as California, even with budget reserves that are significant,” the Democratic governor told Politico. “You have massive fires that cost billions and billions of dollars just for the debris removal, let alone the recovery.”
Newsom has also floated doubling the state’s film and television production tax credit to $750 million annually from its current $330 million annual allocation. While this is not in response to Trump, it would push the state into an even more dicey fiscal situation.
Senate President Pro Tempore Mike McGuire (D-CA), told CalMatters that his caucus “will review the multiple proposals that are being advanced” by the governor. He didn’t say whether he was on board with creating new programs or expanding existing ones next year.
“We need to be incredibly strategic on any new potential spending, and we need to err on the side of caution as we move forward into the budget negotiations,” he said.
Newsom’s office insists he has a plan to keep California’s $300 billion budget on track, though they have been tight-lipped on specifics given his newest priority seems to be keeping the Trump administration at bay.
Newsom must publicly share his budget plans by Jan. 10. Lawmakers have to send the governor their own list of priorities and programs they want to protect by June 15.
Like Newsom, Illinois Gov. JB Pritzker said he would ask his state’s legislators to address potential threats from a second Trump term.
“You come for my people; you come through me,” Pritzker said.
Illinois is dealing with a deficit that is projected to top $3 billion.
In Washington, Bob Ferguson, the Democratic attorney general and gov.-elect, said his legal team had been preparing for months in anticipation of a second Trump term, including a line-by-line review of the Project 2025 plans.
“I hope to God, I pray that things we are talking about don’t come to pass,” Ferguson said.
Like California and Illinois, Washington is staring down the barrel of a multi-billion dollar deficit.
Outgoing Gov. Jay Inslee (D-WA) will write a proposed 2025-27 budget that he will release in mid-December. The spending plan is expected to be a template for lawmakers and Ferguson when they write budgets in the 2025 session.
CLICK HERE FOR MORE FROM THE WASHINGTON EXAMINER
Democratic budget writers in the state have already started openly saying they are looking for additional streams of money.
“I am sure we’ll be looking at revenue options as well because $10 billion is quite a sizable gap to fill,” said Sen. June Robinson (D-WA), chairwoman of the Senate Ways and Means Committee.
