As Gov. Gavin Newsom (D-CA) faces backlash over California’s budget deficit, he’s also coming under fire for failing to deliver for the middle class.
In 2022, lawmakers touted the $9.5 billion Middle-Class Tax Refund as a one-time payment to provide relief to Californians struggling to recover from the pandemic.
Instead of receiving praise for his efforts, Newsom’s post-pandemic refund was attacked by critics as poorly executed. They said the state’s payment plan, which offered recipients an option to sign up for direct deposit into their bank accounts, wasn’t a refund but merely came from the Golden State’s one-time budget surplus. Critics also say 624,000 Californians with low to moderate incomes have yet to activate their free cash. Money Network, the state’s contractor, continues to hold hundreds of millions in unspent funds.
At the time of the cash giveaway in 2022, California was anticipating a $100 billion surplus. Two years later, California faces a $45 billion budget deficit. Now, Newsom faces criticism for his proposal to make $15.2 billion in budget cuts, including reducing water storage and reducing the state’s prison population by 4,600.
Newsom also faced backlash for allegedly being tone-deaf after recently posting on X celebrating the state’s wealth of Fortune 500 companies.
“For the first time in 10 years, CA is officially home to the most Fortune 500 companies. More than Texas. More than Florida,” Newsome wrote. “57 incredible and booming companies, right here in the Golden State.”
Critics slammed the post, highlighting California’s growing economic disparity while claiming that, when adjusted for population size, the state should proportionately have 68 Fortune 500 companies to qualify as the nation’s leading home of big business.
California is home to one of the highest income gaps in the nation. A poll conducted by the Public Policy Institute of California examined the ramifications of the economic crisis.
“About one in four lower-income residents say that the lack of well-paying jobs in their region is making them seriously consider moving out of the state,” the PPIC’s report read.
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Hundreds of thousands have already left California. According to the PPIC, 433,000 people left California between July 2020 and July 2023.
As economic prospects for the middle class have declined, California’s homeless population has skyrocketed. More than a third of America’s entire homeless population is found in California, where homelessness rose 53% from 2013 to 2023.
