Newsom can spend $19 million on a sugar-coated economy

from Dan WaltersCalMatters

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California hasn’t had a truly balanced state budget in four or maybe five years and the current one continues to overspend its revenue.

However, Gov. Gavin Newsom wants to spent $19 million on a marketing campaign to describe California as having a vibrant economy, to counter “myths driven by misinformation and political rhetoric.”

“California and its business climate have been falsely and maliciously maligned for years, and the state has a right to tell the true story — California is a great place to live, work, invest and visit,” Newsom spokeswoman Tara Gallegos told the Los Angeles Times. “Setting the record straight will benefit every business, worker and resident of this state.”

Recruiting for the campaign quoted a passage from Newsom’s State of the State speech: “California has never been about perfection. It’s about persistence. The courage of our convictions and the power to embody them. That’s the California way.”

It appears to be a $19 million donation from California taxpayers to Newsom’s upcoming presidential campaign. The state has been the target of constant criticism on social media and the internet, some of it far-fetched but, unfortunately, much of it deserved, such as the seemingly intractable homelessness crisis. Being from California would be one of the hurdles Newsom faces if he runs for president.

The marketing campaign will try to make a positive impact on California’s economy and business climate, echoing Newsom usually answers when interviewers ask on corporate migrations and population loss to other countries. He cites that California has the globe 4^th the largest economy if it were a nation.

The hard fact, however, is that California’s economy isn’t doing so well these days, and it can’t be dismissed, as Newsom often does, as something concocted by political enemies.

Take, for example, a report that the Legislature’s budget analyst, Gabe Petek, released last fall, describing California’s economy as “sluggish.”

“California’s economy has been in a prolonged slowdown for the better part of two years, characterized by a soft labor market and weak consumer spending,” Petek said, adding, “Outside of government and health care, the state has not added jobs in a year and a half. Likewise, the number of Californians who are unemployed is 25 percent higher than during the strong labor markets of 2019 and 2022.” d. Consumer spending (measured by inflation-adjusted retail sales and taxable sales) continues to decline in 2024.”

This week, the California Center for Jobs and the Economy, an offshoot of the California Business Roundtable, issued a report that reflects and builds on what Petek said four months ago.

“California’s economy in 2025 presents a troubling paradox,” the detailed report states. “Although the country continues to rank among the world’s largest economies, the underlying data reveal an economy that no longer provides broad-based growth, opportunity or stability.”

“Instead of growing,” the report continued, “California’s economy is increasingly defined by stagnant job creation, an erosion of its private sector base, and growing structural challenges related to affordability and competitiveness. Many of the state’s major strengths — particularly in technology — mask deeper weaknesses in the broader economy. The data show an economy that has largely stagnated since the pandemic recovery, with employment barely rebounding to pre-2020 levels, private sector job losses are accelerating and consumer activity is weakening in real terms.”

Newsom clearly wants to bury these sobering facts, but that undermines his duty — as governor for another nine months — to be honest with Californians and not just create taxpayer-funded propaganda.

He will have plenty of time to spin fables after he leaves office and begins the presidential campaign.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.