$3.707 trillion
As Gavin Newsom gets set to enact the eighth and final budget of his tenure as governor, I am beginning a review of all of his spending since he took office in January, 2019. His first seven budgets spent $3.168 trillion, including federal funds. His final budget proposes to spend $539.1 billion, for a total of $3.707 trillion of spending over Newsom’s eight years. Three categories dominate spending: state-financed health care (Medi-Cal), state-run K-12 schools, and employee compensation and benefits. This post will be about spending on employee compensation and benefits.
First, imagine you are a shareholder of a company where the CEO negotiates with organizations representing employees paid entirely with shareholder funds. Would you want that CEO receiving millions of dollars in gifts from those very organizations? Certainly not. Yet, that is precisely the conflict of interest suffered by California taxpayers. Their governor holds ultimate authority over collective bargaining agreements that dictate employee compensation and benefits paid by taxpayers, and unions representing employees can provide gifts to that governor.
All 10 unions representing employees whose compensation and benefits are determined by the governor have donated millions to political committees controlled by Newsom, as have unions whose members are enrolled in retirement benefit systems that receive funding from the state budget. Newsom has deployed those donations towards a variety of objectives, including boosting his national profile as he gets set to run for president.
Newsom’s final budget proposes annual spending on salaries and benefits of $51.2 billion. That’s 47% greater than the $34.8 billion of spending on salaries and benefits in Jerry Brown’s final budget. Net of inflation of 27% – 30% since Brown’s last budget, that translates into an extra $5.9 billion per year of inflation-adjusted spending on salaries and benefits. Newsom also favored employees by making supplemental pension contributions, tapping into taxpayer reserves to avoid cutting compensation, and exempting employees from prefunding retiree healthcare.
Clearly that’s a great return for the public sector unions that donated to Newsom. What’s not clear is what, if anything, taxpayers received in return. I have scoured the web and made inquiries of Gemini and Claude but I cannot find measures of employee productivity in California’s government. Perhaps the reader or the Newsom Administration can supply that information.
Prioritizing public sector unions is not unique to Newsom and he will not be the last governor to take donations from employees. That conflict will persist until a governor and legislature repeal laws from 1968, 1975, 1977, and 2023 that transformed California’s public employees into powerful political forces. Until then, Californians should elect leaders who refuse to sacrifice the interests of taxpayers to further their own interests.
