On Friday, California Democrat Governor Gavin Newsom pushed back on accusations that the Golden State is becoming unfriendly for business and that is why so many companies are moving out. Newsom deflected the criticism by pointing to "all the new billionaires" created by initial public offerings and said that its richest people are "doing pretty damn well."
Newsom’s comments came as in response to questions about high profile residents moving out of California including Elon Musk, the head of Tesla, and Larry Ellison, the chief executive officer of Oracle. Musk recently moved to Texas, though Tesla remains in California, and Ellison moved his family company to Hawaii.
The Governor's tone deaf comments came as he was outlining his proposed $227 billion dollar budget for the upcoming year which included a $15 billion surplus despite the economic crisis caused by his own coronavirus restrictions and lockdowns. California’s budget relies heavily on personal income tax, with the highest taxed tier paying the majority of the tax bill. The top tier still managed to grow their wealth during the shutdown, while Newsom’s mandates hit the lowest income levels the hardest from job losses.
In response to criticism about the closures and the harm to the middle and lower class, Newsom said, "The state is still this remarkable, remarkable, home to more dreamers and doers than any other part of the globe."
Newsom laid out a spending plan which he claimed would "create a climate where entrepreneurs and job creators can thrive," but acknowledged there are "areas of stress" the state must address.
"We’ve got a lot of work to do to help small, medium-sized businesses, but the folks at the top, doing pretty damn well," he said. "But I don’t begrudge that success. I admire and respect it. But at the same time, we have to be mindful of a competitive landscape. And I am acknowledging that, and I’m committed as governor to be more aggressive in the future to make a case anew for this great state."
Newsom is fighting not just Republican criticism, but from elements of his own party as well. DoorDash joined Lyft and Uber in spending more than $100 million to defeat a November ballot measure Proposition 22 that would have required them to treat their drivers as employees entitled to certain wages and benefits rather than independent contractors.
After the bill became law, delivery drivers at Albertsons, the country's second-largest grocery chain, which includes Vons, Pavilions and other subsidiaries, are expected to be laid off at the end of January.
Assemblywoman Lorena Gonzalez, who is an ally of labor unions in the state tweeted "The Governor is proud of Door Dash. I am proud of the hard working delivery drivers that made the company successful despite being underpaid."
According to NBC Los Angeles, a coalition of labor unions, environmental groups and others last year pressed Newsom to increase taxes on the wealthy, but Newsom said those taxes are “not part of the conversation.”
"The same health and economic crises that leveled working families and small businesses led to skyrocketing wealth among the mega-rich," the group said in a statement about Newsom’s budget proposal.