Begging for a recall election, 52-year-old California Gov. Gavin Newsom showed why he’s not fit to run the state, watching the State budget deficit explode to $54.3 billion. Newsom blames the state’s whopping budget deficits on the coronvirus AKA SARs CoV-2 or Covid-19 but the real issue has to do with Newsom’s lack of common sense. It really boils down to Newsom’s lack of leadership, unable to balance the state’s corornvirus epidemic with fiscal realities of running a state. Newsom acted like he only follows medial advice when the state requires sound economic management. No one doubts that managing the coronavirus hasn’t be easy but Newsom has been warned from the beginning since he issued his “shelter in place” order March 19 about the economic calamity in California. Instead of getting the state back economically, Newsom talks about listening to “science.”

Newsom’s science advisers aren’t familiar with economics, what happens when an income-tax dependent California Treasury loses mass sums to tax revenue by closing down the state’s businesses. Instead of getting the state back to business at the earliest possible time, Newsom’s been sitting on the fence, him-hawing about opening up the economy. Newsom’s office projected a $54.3 billion budget shortfall over the next 14 months, something he hopes to get back from the federal government. When the California Legislative Analyst Office [LAO] forecasted a $31 billion deficit it was a bit of good news but still anticipating massive cuts to the California budget in priority funding, including education, health care, infrastructure and homelessness. LAO predicts that if the rebound following opening up the economy goes well, the deficit could actually be less, somewhere around $18 billion.

Newsom had about $21 billion in California’s Rainy Day Fund, something 82-year-old former Gov. Jerry Brown worked hard to get in his eight years in office. Brown surely warned Newsom about playing with fire, keeping Californians sheltered in place, unable to work. No, Newsom relied on his “science” advisers, urging him to resist 73-year-old President Donald Trump three-phase plan to reopen state economies. Newsom set his own arbitrary criteria, going at a much slower pace to reopen the economy. Now Newsom faces real urgency to reopen the state’s businesses. LAO’s projections are built on a robust return to work for California’s 39.53 million residents, with Los Angeles County reporting Depression-era 30% unemployment. “There’s an unusually high level or uncertainty at this time,” said Legislative Analyst Gabriel Peteck, uncertain about when Newsom would reopen the state.

Newsom gave no clue how his Office of Finance estimated the $54.3 billion budget deficit, considerably higher that the LAO at $20 to $30 billion. “The uncertainty is across multiple dimensions, more than the typical recession in the sense that we’ve have uncertainty about the course of the virus itself,” said Petek. Newsom’s finance spokesperson H.D. Palmer said Newsom’s estimate included billions in new spending, something that clearly can’t happen now. “The budget gap that we pun forward is based on an altogether traditional definition of the size of the budget problems used by Democrat and Republican governors alike,” Palmer said. Both Newsom and the LAO estimate about $39 billion and $41 billion in lowered tax revenue, where the difference in the size of budget gaps lies in new programs projected by the governor. When the governor accounts for less additional spending, the differences between the governor’s office and LAO are closed.

LAO’s offices projected that the state would no longer put $2.4 billion a year into a Rainy Day fund, until state revenues recover after most Californians return to work. “Revenues are slightly lower than our L-shaped recession scenario; caseload-driven costs are higher by billions of dollars; all of the Governor’s budget discretionary proposals are part of baseline costs; the Governor’s budget proposed level of spending for Prop. 98 remains roughly unchanged,” Palmer said. Prop. 98 sets minimum levels of K-12 and community college funding, something that would be reduced by the LAO by $13.3 billion in fiscal 2020 and $18.6 billion in 2021. Newsom hopes when Congress weighs revenue shortfalls in California, they’ll keep the governor’s current funding levels. Whatever the problems with the state’s budget, Newsom can’t blame it on Covid-19, more than how he manages things.

Newsom must stop dithering on reopening California’s economy at the earliest possible time, including hair salons or nail parlors, something he blames for the state’s first outbreak of coronavirus. Newsom can issue state warnings to seniors and vulnerable populations to continue social distancing. But he can’t continue the lockdown without more catastrophic damage to the state’s economy. If New York Gov. Andrew Cuomo learned anything recently, there’s only so much “state at home” orders can do to stop infections and hospital admissions. Newsom must live with the undeniable reality that SARS CoV-2 will be with the state for some time, even after vaccine or better treatments come online. Opening up the economy now, while late, ensures that Newsom can stop the hemorrhaging before the unemployment situation plunges the state into another protracted Great Depression.