We may never run out of signs that Gov. Gavin Newsom (D-CA) is an utterly incompetent executive who belongs nowhere near power. The latest is that he has not repaid a federal pandemic unemployment loan, effectively creating a new California tax on jobs.
During the 2020 pandemic, the Trump administration provided loans to states to help address unemployment as businesses were shut down. California received a loan of $20 billion and, more than five years later, has not paid it back. In fact, California is one of only two states that have not repaid their loans. And California failed to do this despite the Biden administration giving all states the ability to repay loans with federal stimulus money.
TEXAS CONTINUES TO EAT GAVIN NEWSOM’S LUNCH
This means the cost is now passed on to California employers. Every employer in California will be required to pay an additional $42 per employee in payroll taxes to help the state pay back the loan. That will increase by $21 every year until the loan is paid back (which is not projected to happen until the 2030s). It does not matter if the employee is part-time or full-time. It does not matter if the employer is a big business or a small, family-run store. Everyone will be taxed for each person they employ.
That means, in effect, Newsom and California Democrats have allowed a new tax on employing people to take effect while having the highest unemployment rate of any state in the country. California, with onerous regulations and taxes, already makes job growth difficult; in 2024, 96.5% of new jobs created were government jobs. This will only make it even more difficult, all because Newsom and California Democrats want to recklessly spend money without making sure everything is paid for.
NEWSOM ACTS LIKE A KING WHEN IT COMES TO THE DEATH PENALTY
California’s latest budget deficit estimate for the upcoming fiscal year has increased by another $5 billion, to $18 billion. It is estimated to grow to $35 billion the following year. Newsom and California Democrats continue to tax residents into the dirt and still can’t manage the state’s finances, resorting to kicking the can down the road and hoping they can be term-limited out of office in time for this to be a problem for the Democrats who replace them in the governor’s mansion and the state legislature.
No one in American politics has more unearned arrogance than Newsom right now. He continues to lecture everyone about how things can be run while he has failed California in every area of governance. This is the latest example, but it won’t be the last, given that Newsom is more focused on fluffing his ego and running for president than he is on running the largest state in the country.