With just two weeks until Election Day, California Democratic Lt. Gov. Gavin Newsom is sharply ahead in the polls to become the governor of the nation’s most populous state. He also has almost 10 times more cash on hand than John Cox, a Republican challenger who is struggling to get his message across to voters.
California continues to be an economic powerhouse for the U.S. economy. The Golden State’s year-over-year job growth has outpaced the national rate since March 2012. Yet the winner of the governor’s race will confront serious challenges given nearly 1 in 5 Californians live in poverty and may want to fix state’s unreliable tax revenue structure.
A USC Dornsife/Los Angeles Times poll released Wednesday found longtime front runner Newsom has a commanding 23-point lead over Cox, a San Diego real estate investor endorsed by President Donald Trump. Newsom, an ex-mayor of San Francisco, led 54 percent to Cox’s 31 percent among likely voters.Fifteen percent were undecided.
“Absent some massive implosion on the part of the Newsom campaign, it is really hard to imagine a scenario where Cox could make up such a gap of more than 20 percent,” said Tom Hogen-Esch, professor of political science at California State University-Northridge. “The Republican Party is now the third-largest group of voters in California, behind Democrats and independents — most of whom are leaning left.”
Still, Trump on Friday may have provided a boost of sorts to Cox and other Republican candidates by announcing water relief for farmers in the state’s Central Valley, a fertile agricultural region where drought conditions have returned. Among other things, the presidential order is designed to streamline the approval of new water projects and bring more water to farmers.
The federal government oversees the Central Valley Project, an irrigation system that supplies water to the San Joaquin Valley as well as to various other areas of the state.
Californians’ opinions of Trump, who lost California by 4.2 million votes to Democrat Hillary Clinton in 2016, have some bearing on how they will vote. According to the USC/Times poll, Cox has the backing of 87 percent of likely voters who approve of Trump and Newsom has the backing of 77 percent of voters who disapprove of the president.
“Cox’s primary message was that Trump was for him, and that helped him in the primary,” said Robert Schrum, director of the USC Dornsife’s Center for the Political Future and a former Democratic political operative. “I don’t think he’s ever found a post-primary message.”
A KFI-NBC statewide poll released last week shows Newsom with a nearly 8-point lead, 51 percent to Cox’s 43 percent. Roughly 6 percent are still undecided in the poll, which has a margin of error of about 5 percentage points. The nonpartisan Real Clear Politics website says Newsom’s average in polls from mid-September through mid-October was 52 percent to Cox’s 36 percent.
Newsom’s campaign has framed Cox as too out of touch to be governor, including on abortion, the environment, gun control and immigration. The Republican candidate wants to scrap the sanctuary state law policies passed by the Democratic-controlled legislature that are designed to protect undocumented immigrants.
At the same time, Cox’s past support for a federal amendment to ban same-sex marriage and equating gay rights to allowing polygamy and bestiality has been brought up during the campaign. Cox said during a debate earlier this month that he’s “evolved on those issues.”
As mayor of San Francisco, Newsom directed the local clerk’s office to issue marriage licenses to same-sex couples in 2004. He did so just weeks into his first term of mayor.
Cox has sought to connect with voters by leading the fight to repeal California’s gas tax increase. He claims Newsom will raise income taxes and property taxes. The Republican candidate also has tried to tap into anger about the state’s Department of Motor Vehicles, which has been plagued by long lines and other problems, including improperly allowing noncitizens and others not eligible to register as voters
One area Newsom and Cox agree is a priority is the state’s affordable housing shortage, although Cox believes not enough emphasis has been placed on addressing costs. The lack of affordable housing in the state has exacerbated homelessness.
California has about 12 percent of the U.S. population but accounts for about 25 percent of the nation’s homeless population.
Cox has blames the homeless problem on the lack of affordable housing in the state as well as substance abuse. He also has been critical of how Newsom dealt with the homeless issue when in San Francisco by focusing on slashing welfare payments to the city’s homeless and instead favoring housing and other social services.
“He didn’t solve the homeless problem here at all, and it’s gotten worse,” Cox said earlier this month during a debate on Bay Area’s KQED radio.
Newsom has accused Cox of lacking specific strategies and plans to deal with issues such as homelessness and housing.
Regardless, time is running short for Cox to close the gap. The Nov. 6 election is in 15 days, and Newsom has about $16.2 million in cash on hand while Cox has about $1.7 million for the final push, according campaign finance reports through Sept. 22.
The next governor will fill a job held by Democratic Gov. Jerry Brown, who leaves office in January and was ineligible to run again because of term limits. Brown returned to office in 2011 with the state facing a $27 billion deficit and is leaving with the largest surplus in more than a decade.
“While Brown was always sort of what people described as ‘the adult in the room’ in terms of spending, I think Newsom is going to be a lot more aggressive on the spending side of things and taxing side of things,” said Steve Maviglio, a Sacramento-based Democratic strategic and onetime spokesman for former California Gov. Gray Davis. “I think the centerpiece of all that is going to be how he handles the single-payer health care.”
As mayor of San Francisco, Newsom signed into law a universal health care program for the city that covered everyone, including noncitizens. He wants to see a single-payer health care system in California, which is opposed by hospital and doctor groups. A legislative analysis last year estimated a single-payer system in the state would cost $400 billion annually.
Cox wants to limit government involvement in health care and believes Californians should buy from private insurers who compete in a marketplace for business.
In the end, Maviglio said the choices the next governor makes will be dictated in large part by what happens to the economy.
“A lot of people come into office with great plans, only to see the economy tank,” Maviglio said. “And we’re so dependent on the high-tech industry and upper income owners in terms of our taxes that this, too, can play a giant role in a governor’s agenda.”
Economists see no signs of a recession for California but the current economic expansion is three years longer than the historical average since World War II. California has added more than 3 million jobs during the current expansion.
California is the world’s fifth largest economy and accounts for 14.1 percent of the overall United States’ GDP, but its volatile tax structure makes it sensitive to business cycle fluctuations and puts the state at financial risk. It also can make it tougher for the state to accurately forecast tax revenues.
“Revenue volatility is one of California’s biggest problems,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association, a Sacramento-based nonpartisan group. “If there’s a severe recession, the state’s rainy day fund is not going to last very long.”
That’s because California’s top 1 percent of personal income tax earners — or nearly 164,000 tax returns — generate almost half of the personal income taxes in the state. A good chunk of the income from the wealthy comes from capital gains and stock options, meaning that even small changes in the financial markets can cause big swings either way in terms of the state’s collected revenues.
Personal income taxes in the last fiscal year accounted for nearly 68 percent of all state general fund revenues.
The state’s nonpartisan Legislative Analyst’s Office said earlier this year “a moderate recession, like the dot-com bust, could lead to a $40 billion budget problem. A more mild recession might result in a $20 billion budget problem.”
“You’ve got to deal with the volatility of the income tax to avoid the thing that happened in 2008 and 2009 when the state was on the verge of insolvency because tax revenues collapsed,” said USC’s Schrum.
At this point, though, there doesn’t appear to be any significant movement on reducing the state’s revenue volatility. Some state lawmakers have proposed expanding the sales tax to services, although critics argue it would unfairly impact small businesses and cause jobs to leave the state.
