budget

Newsom, the Legislature, and $20 Billion for Doubtful High-speed Rail

Wendell Cox — Mon, 15 Sep 2025 12:04:26 -0400

It is reported that California governor Gavin Newsom and the state legislature have agreed to provide $20 billion in funding ($1 billion annually) from the state’s cap and trade program. The California High Speed Rail Authority indicates that the total cost of the Gilroy to Palmdale segment would be $87 billion and would be completed by 2038.

There is still a considerable funding gap for the Gilroy to Merced (or Madera) segment. This portion of the route includes expensive tunneling through Pacheco Pass. Then there is the Bakersfield to Palmdale segment over Tehachapi Pass which is probably even more challenging.

If the present plan works out (and no one would be more surprised at that than me), a passenger getting on the train in San Francisco might wait up to three hours for the last part of the trip to Los Angeles. Of course, CHSRA could substitute bus connection service for anything they don’t finish, like the Amtrak San Joaquin’s do already on the Bakersfield to Los Angeles segment.

CHSRA indicated that this agreement “resolves all identified funding gaps for the Early Operating Segment (Merced to Palmdale).” I doubt it. The scaled back project could take many more years and many billions more.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a Senior Fellow with Unleash Prosperity in Washington and the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985), which was a predecessor agency to the Los Angeles County Metropolitan Transportation Authority (Metro). Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Gavin Newsom Meets Reality with California’s Budget Deficit

Joel Kotkin — Tue, 16 May 2023 11:42:47 -0400

Gavin Newsom, the would–be president many Democrats hope might be an alternative to the current dodderer–in–chief, has landed himself in hot water. Once an enthusiastic backer of just about every progressive cause, the California Governor must now cope with a budget deficit that has already ballooned to $32 billion. This will no doubt limit his ability to spread largesse to the party’s loyal constituencies.

Perhaps nowhere is this more evident than in the coming battle over reparations for African Americans. Newsom approved a reparations task force in the midst of the frenzy which followed the murder of George Floyd, but he now faces a bill that could top $800 billion. Newsom has already hinted that the reparations discussion is about “more than cash payments”, but in reality cash — estimated as at least $125,000 per individual but sometimes much higher — is what this is all about.

Read the rest of this piece at UnHerd.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

California’s Budget Deficit Spells Trouble

Joel Kotkin — Thu, 23 Feb 2023 11:38:13 -0500

Just a year ago California Governor Gavin Newsom could, and did, brag about the state’s estimated $100 billion surplus. Flush with cash, the preening presidential hopeful was able to hand out thousands of dollars of goodies to households while financing an elaborate multi-billion dollar climate change agenda.

Now the state faces a budget deficit of at least $25 billion, which could grow to $35 to $50 billion if there’s a deep recession. Part of the problem lies with the end of federal Covid spending, but more to blame is the utter dependence of the state on tech billionaire taxpayers and high property prices. These are the top 1% of earners, who pay roughly half of the state’s income taxes.

Read the rest of this piece at UnHerd.

The Myth of the Sustainable Public Budget

Wendell Cox — Tue, 16 Nov 2010 10:57:35 -0500

Nobel Laureate economist Paul Krugman caused a stir on ABC's This Week, expressing the following view to Christina Amanpour on the recommendations by the leadership of the US Debt Reduction Commission:

"Some years down the pike, we're going to get the real solution, which is going to be a combination of death panels and sales taxes. It's going to be that we're actually going to take Medicare under control, and we're going to have to get some additional revenue, probably from a VAT."

He later clarified his statement to be less provocative, noting that health care costs had to be better controlled and that there is a need for "several percent" more revenue, which might "most plausibly" come from a value added tax.

He went on to say that "And if we do those two things, we’re most of the way toward a sustainable budget." That is a very tall order. Any serious examination of government costs makes it clear that there is no such thing as a sustainable budget. The unit costs of government services routinely rise, frankly because in government competitive influences are largely absent. When government encounters financial difficulty, it looks for ways to cut services and raise taxes --- that is, ways to reduce customer service or to charge more for what it does. Regrettably, in government, the answer to every question seems to be "more money."

On the other hand, when companies in competitive markets run into fiscal difficulties, their survival requires that they find ways to attract customers and look for ways to lower their prices without cutting service.

Sustainability and government budgets are more often than not an oxymoron, except perhaps for the special interests who live off them (whether of the Right or the Left).