Ron Adar/SOPA Images/Sipa USA via AP Images
New York Gov. Kathy Hochul speaks during a Martin Luther King Jr. Day event in Harlem, New York City, January 17, 2022.
The mood is dour for congressional Democrats, and rightfully so. All of their policy ambitions look to be going nowhere. The only meaningful date on the 2022 calendar so far is Election Day, when they expect to lose the House and possibly the Senate. Many if not all of the big-money projects have likely fallen out of the year’s budget. A gridlocked Congress, a bumbling Democratic majority, a viciously partisan judicial system have made federal governance, particularly on the legislative side, all but impossible.
That couldn’t be further from the feeling in big blue statehouses, where budgets are now, also, being negotiated. Despite the certain doom augured by coronavirus, which was supposed to wreak havoc on state tax revenues, wiping out property values and/or creating a migrational outflow to lower-tax states, there’s actually been a budgetary windfall for states like New York and California. Despite some population decline, economic fortunes in those states have been boosted by the very conditions that were supposed to be their undoing, aided by the $350 billion in federal money allocated by the American Rescue Plan Act, which may end up being the first, last, and only major accomplishment of the Biden years.
This means that the big, ambitious projects side of governing has effectively fallen to state-level Democrats, especially those in populous states without meaningful Republican obstruction. From here out, statehouse work in Sacramento, Albany, and elsewhere is the party’s best bet to accomplish what might otherwise be expected from Democrats in Washington, D.C. They’re going to have to do Joe Biden’s job for him.
That means that governors like Kathy Hochul in New York and Gavin Newsom in California are going to have to aim high, higher than they otherwise might.
Hochul just announced a budget proposal for the forthcoming year, and The New York Times rightfully identified the state as “awash in money.” The state’s record $216 billion outline surprised even close watchers with its magnitude, buoyed by increased tax collection from the rich and $23 billion in ARPA relief over the next four years. Hochul referred to the forthcoming budget as a “once-in-a-generation opportunity,” and she’s not incorrect.
Despite the certain doom augured by coronavirus, there’s actually been a budgetary windfall for states like New York and California.
Some of the budget proposal is pretty good: $32.8 billion over five years for transit projects, as well as $25 billion for the construction and maintenance of 100,000 housing units over five years. Substantial money has been allocated for nursing homes. There’s significantly increased spending on Medicaid and public higher education, sorely needed after disgraced Gov. Andrew Cuomo’s fervent opposition to both. Other components are less, shall we say, ambitious: $2.2 billion in property tax rebates for homeowners.
The state’s windfall is also one for Hochul personally, who, unlike many Democratic governors, hasn’t had to survive years of austerity and cutbacks or a recall election. She just waltzed right into the biggest budget in state history, giving her a shot at legacy-making investments just months into the job.
What she spends that money on will be crucial, though, and many of these early proposals are one-offs or top-ups, not transformative, permanent policies. Even something like fixing the tens of billions of dollars of funding backlog for public housing, something Build Back Better was supposed to do before it died in the Senate, should be high on the list as New York state is forced to take responsibility for what was once expected to be a federal contribution.
The budget surplus is even larger in California, where there are expectations of more than $45 billion of available cash on offer over the next 18 months. Some officials are predicting that money will be redirected to taxpayers directly, under an outmoded state law known as the “Gann limit” that requires such a course of action when spending exceeds certain levels. In 2021, the state cut $600 checks for residents who made less than $75,000 in income, which happened to go out just before Gov. Newsom’s recall election.
Newsom survived that recall breezily, but it’s not clear that his ambition survived with him. Despite stimulus checks seeming to have a particular political potency at that moment, there wasn’t any real indication that they’d swung the electorate in any meaningful way. And as one-off payments, it’s not clear either that they had much real lasting impact.
Now, ruling with a mandate, no risk of recall, and another massive budget, Newsom will get a chance to put in place something lasting that even national Democrats can point to. He just unveiled a $286.4 billion budget proposal, almost 10 percent larger than last year’s record plan.
The Los Angeles-to-San Francisco bullet train project that Newsom disavowed after coming into office would be one such example, though, for obvious reasons, it seems safe to rule that out. In 2019, Newsom said such a project “would cost too much and take too long.” Just a handful of days ago, however, he pledged $4.2 billion to high-speed rail.
Newsom also vowed to have the state begin to manufacture generic insulin, a groundbreaking proposal based on a law passed in 2020. This would dramatically reduce cost burdens for the state’s diabetics and could serve as a national model for state-sponsored production.
The most obvious other contender is California’s single-payer bill, which is setting up to be a massive fight. Newsom ran on single-payer, but now that it’s getting close to actual passage, he seems to be losing conviction. Already, activists are gearing up for a showdown.
As Laurel Rosenhall wrote in the Los Angeles Times, Newsom’s recently unveiled budget has a focus on health care, but notably omits the single-payer system that he ran on. Instead, there’s a lot of reliance on the most dreaded watchword of health care reform, “affordability.” While the single-payer bill working its way through the legislature would get rid of existing private and public insurance plans and cover all state residents with a new program called CalCare, Newsom’s proposal focuses on the creation of a new Office of Health Care Affordability and an expansion of Medi-Cal, the state Medicaid program, for noncitizens.
Despite that record dollar figure, Newsom’s budget is arguably the least ambitious of the four he’s introduced as governor. His 2019 budget expanded paid family leave by two weeks. His 2020 budget notched substantial criminal justice reforms. His 2021 plan inaugurated the state’s preschool proposal.
Now, Newsom has a chance for a true breakthrough, and despite the procedural hurdles enshrined in the state’s constitution by unwise voter initiatives, it’s incumbent upon him and the state’s Democratic trifecta to realize it.
While the United States has seemed troublingly unable to build new institutions or administrative capacity in recent years, it’s state Democrats who have the opportunity now to buck that trend. It may be hard to believe, but whole university systems have been built by willing state regimes, like Democrat Pat Brown’s 1960 creation of the tuition-free University of California system. That, indeed, seems like something that might “cost too much and take too long,” but it’s exactly the sort of thing Democrats should be pursuing.
When Joe Biden ran for president, he pledged his election would prove that Congress could work for everyday Americans. A year in, it’s proven that it emphatically cannot. It’s not just Californians or New Yorkers who are counting on their Democratic governors to aspire to ambitious, lasting civic projects; it’s national Democrats and the president himself.
