Gov. Newsom Brags on His ‘Economic Blueprint’ While CA Businesses Get Hit with Higher Payroll Taxes

California Governor Gavin Newsom is on a listening tour of the state’s red counties, where he does all of the talking and gaslighting, and the people who voted for Trump have to listen.

Newsom said Thursday:

More jobs. More businesses. Higher wages. Faster. We’re launching our new Jobs First plan — small businesses and working people deserve better wages and more opportunities, especially in rural communities.

“Early next year, California is releasing the California Jobs First Economic Blueprint, a first-of-its-kind, bottom-up strategy to create good-paying jobs. From agriculture to clean energy & everything in between, we’re fostering sustainable growth & expansion across the state.”

Gaslighting much? “More jobs” have really only occurred in state government.

What California needs is a blue print for lower state individual and corporate income taxes, lower gas taxes and affordable electricity. But I digress.

What California needs is an honest governor. Newsom’s administration was so grossly negligent during his lockdown of the state, the EDD, the state’s unemployment agency, allowed tens of billions of taxpayer dollars to be lost to fraud.

The estimate on how much the EDD lost is anywhere between $31 billion and $40 billion sent to to illegitimate claimants, state and federal prisoners, international fraud rings, all of whom simply walked right into the department’s completely unprotected system, the Globe reported in 2023.

The House Committee on Oversight and Accountability investigated the California EDD after the Trump administration provided the EDD with over $1.8 billion to cover the department’s additional administrative costs caused by the pandemic.

That money must be paid back. The EDD started to re-pay the $1.8 billion after Gov. Newsom and the state legislature colluded to foist the re-payment of the federal debt onto the backs of California businesses.

Enter California Chef Andrew Gruel, who posted this horrifying message on X Thursday:

We just ran payroll. The payroll taxes were 2K higher than calculated. We called the payroll company. They explained (in summary) that California has a budget shortfall, and the federal government wants money back that it lent California for UI that it “lost.” They are making up for it by having business owners pay it. Keep in mind that it was around 10% of our total payroll. When people say, “Why isn’t California business-friendly?” remember this.

This is a textbook example of California’s wicked, mean, cruel and nasty business climate.

California has four state payroll taxes:

• Unemployment Insurance (UI) and Employment Training Tax (ETT) are paid by the employer (the EDD calls these “contributions” as if they are voluntary).
• State Disability Insurance (SDI) and Personal Income Tax (PIT) are withheld from employees’ wages.

Remember when Gov. Gavin Newsom declared that his budget had a $97.5 billion budget surplus? What happened to that?

“Newsom’s Department of Finance, based on one short-term spike in income taxes, projected that revenues from the state’s three largest sources would remain above $200 billion a year indefinitely,” Dan Walters reported. “Newsom then declared that the budget had a $97.5 billion surplus, although that number never appeared in any documents.”

California is reliant on personal and corporate income taxes for more than 75% of the state’s general fund revenues.

But Newsom’s finance department botched the tax revenues projection, which was due to a massive increase in federal aid during Newsom’s pandemic lockdowns, escalating Californians’ personal incomes to more than $3 trillion in 2021, and dropping by about $7 billion in 2022, Walters explained.

“Two years later, buried in its fine print, the deficit-ridden 2024-25 budget acknowledged that sales taxes and personal and corporate income tax revenues would fall well short of the $200 billion a year projection, estimating a $165.1 billion shortfall over four years,” Walters said.

The Legislative Analyst’s Office reports that California’s spending is much too high:

“…the state faces double‑digit operating deficits in the years to come. By historical standards, spending growth in this year’s outlook is high. Our estimate of annual, total spending growth across the forecast period—from 2025‑26 to 2028‑29—is 5.8 percent compared to an average of 3.5 percent in other recent outlooks. Meanwhile, revenue growth over the outlook window is just above 4 percent—lower than its historical average largely due to policy choices that end during the forecast window. Taken together, we view it as unlikely that revenue growth will be fast enough to catch up to ongoing spending.

So instead of paying down debt when California had higher revenues, Newsom and Democrats went on a spending spree of longterm social welfare programs, which the state now cannot afford. Therefore, businesses will be paying off the debt – debt which could have been avoided had Newsom and his appointees taken their jobs seriously.

As the Globe reported:

Overseeing the EDD during the pandemic was California Labor and Workforce Development Agency Secretary Julie Su, who confirmed that, in 2020, fraudsters stole at least $31 billion in unemployment benefits from California, the Globe reported. And 800,000 unemployment claims were paid late, along with 12.7 million delayed eligibility determinations.

But what led to the total $31 billion in fraudulent claims was when then-Secretary Julie Su made the decision to suspend most EDD eligibility requirements, according to the California State Audit. It was only federal oversight which caught this and notified the EDD that they could not suspend eligibility requirements.

Now Gov. Gavin Newsom is forcing California business owners like Chef Andrew Gruel with additional payroll tax to pay back the billions in fraudulent unemployment debt he and Julie Su allowed.

Doesn’t this feel a lot like taxation without representation?