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Gov. Newsom says poverty, homelessness 'poster child' of California's failures

Gov. Gavin Newsom said during a podcast interview that homelessness and poverty are the "poster child" for the state's failures on Wednesday.

California used to be the place where people went to chase dreams. Today, it’s the place where fiscal discipline goes to die. The Golden State, which is home to Hollywood glitz, Silicon Valley billionaires and the highest state taxes in America, is broke again. It's staring down another multibillion-dollar deficit that exposes just how unstable and dysfunctional its financial model has become. In short, the Golden State isn’t so golden anymore. 

For years, politicians like Democrat Gov. Gavin Newsom have insisted that California is the shining example of fiscal sensibility that America should follow. But when you peel back the layers, what you really find is a state government that can’t stop spending, can’t plan for the future and is now caught in a structural budget crisis of its own making.  

The warning signs are flashing red?

This year, California’s nonpartisan Legislative Analyst’s Office (LAO) dropped a bombshell: the state is now projected to face an $18 billion deficit in 2026–27, a shortfall $5 billion worse than what lawmakers admitted just months earlier. Even more troubling, the LAO says California is facing structural deficits of $15 to $25 billion every year through at least 2029.  

This isn’t a one-off crisis for California. It’s a multiyear budget mess that keeps getting deeper. And this is happening during strong stock-market years when capital-gains tax revenue is already at record levels. Imagine what happens when the market cools or when we hit a mild recession. 

DHS BLASTS NEWSOM OVER TAXPAYER-FUNDED HEALTHCARE FOR ILLEGALS AS CALIFORNIA AMBULANCE COSTS MAY SOAR 382%

California Gov. Gavin Newsom speaks at the 2025 New York Times DealBook Summit in New York City on Dec. 3, 2025. (Michael M. Santiago/Getty Images)

How did the state with the most millionaires end up broke??

California’s problem is simple: 

• When the money comes in, politicians spend it.
• When the money slows down, they spend even more.

Rather than tightening belts or prioritizing necessities, lawmakers have layered on new programs, expanded benefits and made long-term promises based on temporary revenue spikes. Newsom and legislative leaders have hailed these expansions as "investments," but the truth is they are obligations that don’t disappear when the economy dips. 

NEWSOM CALLS HOMELESSNESS AND POVERTY 'POSTER CHILD' OF CALIFORNIA'S FAILURES AS A STATE