The Brief

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In 2019, first-year Gov. Gavin Newsom inherited a state flush with cash. With a $21.4 billion budget surplus to play with, an ambitious Newsom invested billions in affordable housing, child care and healthcare expansion while paying down the state’s debt and shoring up reserves.

The next governor won’t be that lucky.

When Newsom unveils his last spending plan as governor Friday, he will do so with the specter of a projected $18 billion deficit — the result of the state’s fast-growing spending, federal funding losses and heightened economic uncertainties under President Donald Trump’s administration.

The deficit could balloon to $35 billion annually in the next few years if state leaders don’t pursue long-term solutions, namely making sustainable revenue increases or cutting spending, according to the Legislative Analyst’s Office, the nonpartisan fiscal adviser to lawmakers.

But neither will be appealing options to Newsom and legislative leaders this year.

They have repeatedly resisted increasing taxes on average Californians and high-income earners alike — a politically dicey pitch to make in a state with high tax rates and increasing revenue. Spending cuts are equally painful to swallow, especially for Democrats running for re-election in November who have fought to expand services, such as Medi-Cal, that may now be rolled back.

For Newsom, a lame-duck governor with presidential aspirations, there is even less incentive to address the state’s long-term budget health through major policy changes, political strategists say.

“It’s not an uncommon occurrence in California for a departing governor to leave a note on the new governor’s desk that they’ve got a budget deficit,” said longtime Democratic consultant Garry South.

But how Newsom tackles the structural deficit will almost certainly have implications for his expected presidential bid. State Republicans, such as Assemblymember David Tangipa of Fresno, are already blaming the budget problem on Newsom’s mismanagement. “A Newsom presidency would be a fiscal and governance disaster of historic proportions,” Tangipa wrote in a December op-ed.

It’s the fourth consecutive year in Newsom’s tenure that the state is projecting a deficit even as revenue grows. In the past, state Democratic leaders resorted to temporary fixes such as internal borrowing, deferring payments, one-time cuts and drawing from California’s rainy day fund to avoid cutting into the social safety net.

But that cushion is deflating: The state’s reserve stands at $14 billion, half its peak balance, after two years of withdrawals. State leaders have borrowed more than $20 billion from other state funds, debts that will come due in later years. Continuing to rely on those options would leave the state “undeniably less prepared” for an economic downturn, the LAO warned.

“Eventually you are going to run out of Band-aids,” said Steve Maviglio, a Democratic strategist who worked for then-Gov. Gray Davis during a massive budget deficit. Newsom "has used every trick in the book, and after a certain point, there’s nothing left.”

More healthcare cuts to come?

Newsom has not indicated whether he’ll consider cuts to Medi-Cal, the state’s primary health insurance program for low-income residents. But as the state’s most expensive program, it is an attractive target. More than half of the $200 billion program’s funding comes from the federal government.

Last year, as Newsom and legislators scrambled to close a $12 billion budget gap, they froze new Medi-Cal enrollment for undocumented immigrants, charged immigrant enrollees a $30 monthly premium and delayed cutting certain benefits. The cost of Medi-Cal has been rising faster than expected, forcing the state Legislature to allocate $6.2 billion midyear to prevent a shortfall.

The decision was contentious, with some healthcare advocates and Democratic lawmakers slamming their leaders for creating a “two-tiered healthcare system” that deemed immigrants less worthy of quality coverage.

“That was an incredibly disappointing backslide,” said Amanda McAllister-Wallner, executive director of Health Access California, which advocates for universal healthcare.

This year, Trump’s budget reduced the federal government’s share of funding to Medi-Cal, requiring the state to pay more to provide the same benefits. California is projected to spend at least $1.3 billion more to implement that change, a figure that could reach $5 billion by fiscal year 2029-30, the LAO estimated.

The Martin Luther King Community Hospital in Los Angeles.

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Pablo Unzueta

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CalMatters

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Assemblymember Mia Bonta, an Oakland Democrat who chairs the Assembly Health Committee, said solving the state’s budget crunch shouldn’t come at the expense of health care.

“California needs its state and federal leaders to look for more innovative solutions to fill the gaps, make healthcare affordable, and keep our families healthy,” she said in a statement that did not offer specific alternatives.

Any cuts to Medi-Cal could bring political consequences for Democrats who often pride themselves on expanding social services. Rolling back Medi-Cal could hurt Newsom’s legacy, too, since it was under him that the state began offering Medi-Cal to immigrants.

“Democrats are the party of expanding healthcare,” Maviglio said. “To slash it goes against everything they stand for.”

McAllister-Wallner acknowledged she isn’t optimistic about the budget outlook. But she said she hopes the state finds new revenue through taxing corporations instead of making cuts to vulnerable populations.

If “we are addressing this through cuts only, and cuts to the most vulnerable, that’s … not the leadership that we are looking for,” she said.

State leaders could also walk back some of last year’s funding commitments in other areas. While state lawmakers negotiated $500 million for homelessness to counties and delayed it until next year, it is not guaranteed. Newsom, who has blamed the state’s homelessness problem on local governments, could withhold the money.

Newsom also promised last year he’d reach a deal with Bay Area transit advocates over state funding. But last month, in light of the budget shortfall, Newsom urged advocates to dip into previously allocated dollars to save the regional transit network, instead of a $750 million loan the advocates had requested.

Taxing the rich a nonstarter for Newsom

It’ll be hard to muster the political will in Sacramento to raise taxes.

Former Assembly Speaker Anthony Rendon, a Los Angeles Democrat running for state superintendent of public instruction, said he’s long supported higher taxes on industries that have “skated away from taxation for a long time.”

But even the most progressive Democrats in California have had little appetite to raise taxes, he said, because many represent affluent areas such as Silicon Valley where their wealthy donors live.

Even when the state faced a projected $56 billion deficit over two years in 2023, Rendon said Democrats were “shrugging” at the problem and pointing to the state’s reserves as a solution, which he said reflected a culture of reliance on the rainy day fund.

This year, Newsom has already spoken out against a proposed labor-backed wealth tax ballot measure, consistent with his past opposition to similar proposals.

The ballot measure, titled “The 2026 Billionaire Tax Act” and filed with the state attorney general’s office in October, seeks to tack a one-time 5% tax on those with a net worth of at least $1 billion and use the money to fund the state’s healthcare and education programs. The effort is led by the SEIU-UHW, a powerful labor union representing healthcare workers, and St. John’s Community Health, one of the largest nonprofit healthcare providers in Los Angeles County.

State. Sen. Roger Niello, a Roseville Republican and vice chair of the Senate Budget Committee, applauded Newsom’s opposition to the proposed tax increase.

“To have a situation where we have developed an increasing deficit in the face of an economy that is not in recession, and revenues are increasing, it would seem to be silly to solve that by further increasing revenue,” he said.

While taxing the rich is a popular Democratic talking point, backing a proposal like that could mean alienating the wealthy donors Newsom will likely rely on for his presidential run.

There would also be no political gain for Newsom in his last year to stabilize the state’s progressive tax structure, which heavily relies on high-income earners, despite him promising to do so when he took office.

“He’s going to make more enemies doing it than he would not doing it,” Maviglio said.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

A new trail across the beloved natural area of Elephant Hill in Northeast Los Angeles is officially opening this weekend.

The route is years in the making, and it's a big milestone in the decades-long conservation efforts to preserve this local jewel in the community of El Sereno.

The hiking trail connects one side of Elephant Hill to the other — from the corner of Pullman Street and Harriman Avenue all the way across to Lathrop Street.

It's 0.75 miles in total, but packs a punch.

"It's a pretty straight shot, but because of the terrain — the trail is kind of twisty and curvy. There's switchbacks — and great views," Elva Yañez, board president of the nonprofit Save Elephant Hill, said.

People have always been able to access the 110-acre green space, but Yañez said the new trail provides a safe and easy way to navigate the steep hillsides.

The El Sereno nonprofit has been working for two decades to preserve the land. Illegal dumping and off-roading have damaged the open space over the years. And the majority of the 110 acres are privately owned by an estimated 200 individual owners.

Mountains Recreation and Conservation Authority (MRCA) joined the efforts in 2018, spurred by a $700,000 grant from Los Angeles County Regional Park and Open Space District, in part, to build the trail. The local agency received some $2 million in grants from the Santa Monica Mountains Conservancy to add to the 10 acres of Elephant Hill it manages and conserves. This year, MCRA acquired an additional 12 parcels — or about 2.4 acres.

And the spiffy new footpath — with trail signage, information kiosks and landscape boulders — is not just a long-sought-for victory but a beginning in a sense.

"We know that it means a lot to the community," Sarah Kevorkian, who oversees the trail project for MRCA, said. "We're wrapping up the trail, but it really feels like the beginning of all that is to come."

A hint of that vision already exists — for hikers traversing the new route, courtesy of Test Plot, the L.A.-based nonprofit that works to revitalize depleted lands.

"They're able to see at the end of the trail, at the 'test plot' — exactly what a restored Elephant Hill would look like," Yañez said.

Here's a preview:

The Venice Boardwalk after sunset has generally been a no-go zone for tourists and locals alike, as the beachside bars and restaurants close on the early side and safety is often an issue. Now, a group of artists is out to bring some vibrancy to the creative neighborhood with a series of new installations that will include live evening performances – and even a “Venice Opera House.”

“Let's play with light and let's play with sound and give people a reason to come to the Boardwalk after sundown,” said artist and entrepreneur Stefan Ashkenazy, who is curating the project and owns the buildings housing them. “I mean, let's just be open 24 hours a day.”

The concept doesn’t have an official name yet, but he’s been calling it “See World.”

Artist James Ostrer's space looks out from a bed through the fence to the ocean at Venice Beach.

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Laura Hertzfeld

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William Attaway, a longtime Venice artist, created a gallery space filled with various paintings and sculptures.

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Laura Hertzfeld

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The pair of modern buildings on the Venice Boardwalk at Thornton Ave. – with their big balconies, floor-to-ceiling glass windows, and seven open garage-style retail spaces – have sat mostly empty since Snapchat vacated their beachside offices in 2019. Ashkenazy recently bought the building and recruited artists to fill those front-facing spaces with creative work until a full-time tenant comes in.

Over the past several weeks the installations have been created in real-time, in public.

All of the projects are loosely along the theme of “home,” with each artist claiming a “room” in the two buildings that stretch across a full block on the Boardwalk. Several local Venice artists are featured, including William Attaway, whose intricate mosaic work is recognizable on the Venice public restrooms along the beach. Attaway’s space features a floating larger-than-life-sized statue and various works in a mini-gallery. In the next room is Robin Murez’s pieces, featuring carved wooden seats from her beloved neighborhood Venice Flying Carousel.

Ashkenazy is no stranger to wild (and wildly successful) art ideas. He’s the owner of the Petit Ermitage hotel in West Hollywood, a longtime haven for visiting artists, and the founder of the decade-old Bombay Beach Biennale, where artists install all kinds of work in an annual event near the Salton Sea. Many of the artists from that community are featured at the Venice project.

A "Venice Opera House" will host pop-up music events throughout the summer.

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Laura Hertfeldz

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LAist

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New York-based artist Greg Haberny's paintings on the wall of his Venice space.

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Laura Hertzfeld

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LAist

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New York-based artist Greg Haberny and London-based artist James Ostrer have brought some of their work in the Bombay Beach Biennale to the Venice project. Their windows on the Boardwalk both speak to a child-like sense of wonder and creativity.

“I think it's just kind of exploring and playing a little bit, to have the freedom to be able to do that,” Haberny says of his imagined child’s bedroom space, which includes a fort made out of puffy cheese balls. “It's a big space, too.
It's beautiful.”

Ostrer is experimenting with a performance art idea where he sits in bed amongst a room full of his own artwork, which he describes as “happy art with an edge.” Looking out at the ocean from the bed, he’s invited passersby to sit and have chats with him about his work or anything else they want to talk about.

“It’s a very intimate space, so you have a different kind of conversation,” he said. “I use art to channel human creativity, and [talk about] dark things.”

While there are open fences that block off the spaces, they aren’t sealed up at night. Both Ashkenazy and the team of artists seemed open to the idea that anything could happen and that the installations are a conversation with the public – and with that comes some risk.

Greg Haberny (right) works with his assistants on an installation featuring kid-inspired graffiti art and a "cheesy puff" fort.

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Laura Hertzfeld

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“I don't really know if I [would] say worried, but I guess it's just the cost of doing business,” Haberny said. “I don't really make things to get damaged or broken, sure. But I have done [things like] burned all my paintings and then made paint out of ash.”

While he’s felt safe – and even slept overnight in the installation – Ostrer has been collaborating with a local female artist who performs in a pig mask in front of his installation some nights. Watching her perform, he said, has taught him about the vulnerability of women in public spaces like the Boardwalk. “I've started to, on a very fractional level, have seen how scary that is. Because I've sat in the bed behind her performing at the front here… the way in which men are approaching her and shrieking at her … it's shocking.”

Ashkenazy says he will keep the artists in the space, potentially rotating new ones in, until a fulltime tenant takes over.

“This is an experiment … and after acquiring the building, the intention wasn't, ‘let's open a bunch of public art spaces,’ he said. “It is kind of …what the building wanted and listening to what the Boardwalk needed. Let's play, let's have the artists that we love and appreciate have a space to play and engage and give the locals and the visitors to the Boardwalk something to experience.”

A coalition of residents from across the San Gabriel Valley are mobilizing over a battery storage project and possibly more industrial development in the City of Industry they say could pollute communities next door.

A protest is scheduled today in neighboring Rowland Heights, targeting a 400-megawatt battery energy storage facility sited on about 9 acres that was approved by the City of Industry leaders in January.

Such Battery Energy Storage Systems, or BESS, are used to keep the power grid stable, especially as output from renewable energy sources like solar and wind fluctuate. But fires involving lithium batteries at some sites have heightened environmental and public health fears.

Because of the City of Industry’s unusual, sprawling shape stretching along the 60 Freeway, it borders on more than a dozen communities, meaning what happens there can have far-reaching impact.

“Pollution does not end right at the border,” said Andrew Yip, an organizer with No Data Centers SGV Coalition. “Pollution travels.”

Some local activists with the Puente Hills Community Preservation Association have challenged the approval of the battery facility under the California Environmental Quality Act.

Beyond environmental concerns, locals have also been frustrated with how decisions are made by officials in the City of Industry, a municipality that’s almost entirely zoned for industrial use and has less than 300 residents.

Organizers say they’ve struggled to get direct responses from city officials whom they say have replaced regular meetings with special meetings, which under state law require less advance notice.

A city spokesperson has not responded to requests for comment.

The so-called Marici Energy Storage System Facility would be run by Aypa Power. The fact that the battery storage developer is owned by the private equity giant Blackstone, a major investor in AI and data centers, has only fueled concerns that a battery storage facility would lay the groundwork for data center development.

A request for comment from Aypa was not returned.

Today’s protest is taking place at Peter F. Schabarum Regional Park in Rowland Heights across the street from the Puente Hills Mall, a largely vacant “dead” mall, which activists fear could be redeveloped into a data center and bring higher utility costs and greater air and noise pollution.

Yip pointed out that industrial developments make a lot of money for the City of Industry.

“But none of these surrounding communities receive any of those benefits,” Yip said. “Yet we have to put up with all the harmful effects and impacts from this city that does all this development without really reaching out.”

It’s about the size of a park bench and made of steel and wood. The bench’s arm rests are formed by the letters “L” and “A” in a design that’s unmistakable to any sports fan. But the welder-artist who created it says it’s not a Dodgers bench.

“This is about civic pride, L.A. pride. I made a design statement saying that it has nothing affiliated with the Dodgers,” said Steve Campos.

Campos grew up near Dodger Stadium, raised by parents who were die-hard Dodgers fans. So much, that they named him after Steve Garvey but that legacy doesn’t keep him from confronting how the Dodgers benefitted from the mass displacement of working-class people from Chavez Ravine after World War Two. That’s why he calls it an L.A. Bench, and not a Dodgers Bench.

The logo may be synonymous with the city's beloved baseball team, but the design of the interlocking letters was used by the L.A. Angels minor league baseball team before the Dodgers moved to L.A. in 1958.

“The monogram was here before the Dodgers,” Campos said.

A second-generation welder

Welding is the Campos family business. His father created gates and security bars for windows and doors for L.A. clients. That was the foundation for the work Campos has done for two decades since graduating from Lincoln High School, L.A. Trade Tech College, and enrolling in a summer program at Art Center in Pasadena.

The inspiration for the L.A. Bench came last year while he was playing around in his shop creating versions of the L.A. logo. A friend he hangs with at Echo Park Lake asked Campos to make him a piece of furniture.

“I was trying to figure out what my friend Curly wanted. He liked Dodgers and drinking and getting into fights, so I was like, 'Let me make something with the LA monogram,'” he said.

Welder-artist Steve Campos created whimsical steel sculptures with the LA logo.

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It didn’t design itself. He said he had to lengthen the legs on the “A” and lean the back of the “L” in order to make the bench functional. In the process, he’s made a piece of furniture with a ubiquitous logo that he’s embedded with his own L.A. pride, as well as city history past and present.

LA civic pride travels to Japan

Campos vacationed in Japan the last week of April and took advantage of the trip to reach out to people who may be interested in the L.A. Bench. He was caught off guard by people’s reaction when he showed them pictures of it.

“They look at it and they go, 'Oh, Ohtani bench,'” he said.

For them, it’s still a bench embedded with pride, he said, but centered around Dodgers star Shohei Ohtani, an icon in his native Japan.

Campos has made four L.A. benches and is selling them fully assembled, he said, for $2,500 each — taking into account his labor and how costly the raw materials have become. For now, he’s offering the metal parts as a package for $500, which requires the buyer to purchase the wood for the seat and the back — an easy process, he said.

While he has no plans to mass produce the L.A. Bench, he does have one goal in mind that shows how hard it is for him to separate L.A. civic pride and the Dodgers.

“I would love to get a couple of them installed at Dodger Stadium,” he said.