Newsom selling ‘efficiency’

“We’re all taxpayers. We all want to make sure our money is being well invested, not wasted. We want more efficiency,” Newsom told reporters during a stop at the Stanislaus State campus in Turlock.

“Our D.O.G.E. is spelled O.D.I.” he said, referring to the Office of Data and Innovation he created in 2019 to improve public services through technology.

The concept isn’t entirely unfamiliar for Newsom, who has been interested in reinventing government since he served in San Francisco City Hall — and even once wrote a book about it. But his approach as governor has been nearly antithetical to D.O.G.E., which under the leadership of entrepreneurs Elon Musk and Vivek Ramaswamy aims to trim trillions of dollars of what they consider waste from the federal budget by cutting programs and dismantling entire agencies.

Instead, in his six years in the governor’s office, Newsom has steadily guided California’s government to expand its mission and scope: launching flashy initiatives, creating new departments and offering more services to more people, even during periods of deficit. The number of employees per capita — a measurement of the size of state government compared to the population it serves — has reached its highest level in more than five decades of tracking by the state Finance Department.

Even Newsom’s own office has more than doubled in size. At the end of 2024, the governor’s office employed 381 people, according to payroll data provided by the State Controller’s Office, compared to 150 at the end of 2018, before Newsom was sworn in.

It’s another reflection of how Newsom’s governing philosophy contrasts sharply with President-elect Donald Trump and his allies, who treat government as a burden and an obstacle to their ideological goals.

“Gov. Newsom believes there are a lot more societal problems that government should be in the middle of,” Keely Bosler, who served as finance director during his first term, told CalMatters.

Marybel Batjer, who was Newsom’s first government operations secretary and launched the Office of Data and Innovation, said he has expanded state government not because he is an “old dog Democrat who thinks government is good,” but because he wants to help people. She said D.O.G.E. should aim to make government more effective, rather than simply cutting it back.

“You won’t save money that way. You will have more people who are homeless. You will have more people who are sicker. You will have more pandemics,” Batjer said. “Elon Musk doesn’t know shit from Shinola about how government works. He’s a little piggy that’s been at the trough.”

The Trump transition team did not respond to a request for comment.

Yet embracing government efficiency, at least rhetorically, could be a boon to Newsom, who has sought ways to moderate his image after a tough November election for Democrats in which the party lost ground with working-class voters.

Ever eager to be on the vanguard of the Democratic Party, especially as he reportedly mulls a future campaign for president, Newsom has embarked on a tour to promote jobs and economic development in communities that voted for Trump. His budget preview last week in Turlock was the latest stop.

As the governor tries to navigate a fraught relationship with Trump going forward, expressing interest in the president’s ideas could also be a way to build a bridge to the federal government, which controls many of the resources that California needs.

“Language is diplomacy,” said Elizabeth Ashford, a communications strategist who has worked for both Democratic and Republican governors in California. “It would be malpractice if there’s no dialogue.”

Newsom’s early tenure as governor coincided with surging tax revenues and then federal aid from the COVID pandemic, which ballooned the state budget by tens of billions of dollars and underwrote an ambitious and wide-ranging agenda. Total budget expenditures are nearly $100 billion more this fiscal year than before Newsom took office.

Some of that money has gone to one-time projects or to extending existing services, whether because of ideology (making undocumented immigrants eligible for health care and free transitional kindergarten available to all children) or necessity (hiring thousands more state firefighters).

But Newsom, known for his “big, hairy audacious goals” and love of making history, has also consistently added programs and positions with entirely new objectives for state government, swelling its ranks as he transformed its role in Californians’ lives.

The impulse was visible on Newsom’s very first day in January 2019, when shortly after being sworn in, he established the position of California surgeon general to address the root causes of health conditions, alongside an executive order that would allow the state to more broadly negotiate with pharmaceutical companies to lower the costs of prescription drugs.

In his first budget a few months later, Newsom created his 50-person Office of Data and Innovation (then known as the Office of Digital Innovation) and spun off a Department of Youth and Community Restoration to focus on supporting young people in the corrections system.

New government infrastructure has followed regularly in the years since. These include:

• A 106-person Wildfire Safety Division in the California Public Utilities Commission, which grew into the Office of Energy Infrastructure Safety at the California Natural Resources Agency, with nearly twice as many funded positions.

• The Department of Finance Protection and Innovation, a reboot of a business oversight department, with dozens of new employees in divisions to combat consumer financial abuse and study emergency financial services technologies.

• A 13-person office of equity and a 14-person disaster cost tracking unit within the Governor’s Office of Emergency Services.

• The Office of Community Partnerships and Strategic Communications, with more than two dozen staff to manage community engagement and public awareness campaigns.

• California’s first chief equity officer, tasked with developing a statewide equity and inclusion framework.

Additional expansions represent major pieces of Newsom’s platform, including his recent battle against the oil industry. In 2023, he strong-armed the Legislature to create the Division of Petroleum Market Oversight within the California Energy Commission, a watchdog to investigate alleged price gouging.

Though he has not followed through on his campaign promise to set up a single-payer system in California, the governor in 2022 did launch the Office of Health Care Affordability, a regulator that aims to slow the rising cost of care. The California Volunteers office has quintupled in size under Newsom to manage his new initiatives to engage young people in community service and climate action.

Even in his latest budget plan unveiled last week, Newsom proposed creating two new state agencies, to oversee housing and homelessness programs and consumer protection programs. Additional details are not yet available, though state officials said these would largely be a reorganization of departments that already exist.

It’s difficult to get a comprehensive picture of how Newsom’s priorities have enlarged state government.

His Finance Department was unable to answer questions about whether several of his biggest and most expensive initiatives added new positions to the state payroll, including CalAIM, a first-of-its-kind overhaul of medical care for low-income patients; Homekey, which funds the conversion of hotels and motels into homeless housing; the trash pickup program Clean California; and CARE Court, a system to push people with mental illness off the streets and into treatment.

The increase in the workforce is also driven by laws predating Newsom, including a gas tax hike that has funded thousands of new jobs to repair California’s roads.

Conversely, the governor has shrunk some parts of the state government, such as by closing several prisons.

But the overall trend is up. There are 436,435 government positions in the state budget that Newsom just proposed, including at the public university systems, according to the Finance Department, or about 11.1 state employees per 1,000 Californians. That number has increased from 9.5 before Newsom took office — and is a record high going back to at least 1970, when the Finance Department’s tracking begins.

His office did not respond to a question about how efficiency fits into Newsom’s governing philosophy. But a spokesperson provided a list of initiatives from the Office of Data and Innovation “that are building efficiencies across state departments,” including new tools to forecast community water systems at risk of running dry, evaluate housing projects for streamlined approval, and enhance public participation in the permitting process for toxic substance storage.

State Sen. Suzette Valladares, a Lancaster Republican, told CalMatters that it was “laughable” for Newsom to claim California has been a leader in government efficiency.

“It’s scary to think that he thinks we’re doing good,” she said. “From my perspective, instead of taking shots at the D.O.G.E., he should be taking notes.”

She pointed to the underfunded high-speed rail project and homelessness services as bloated spending by Newsom. Republicans have been highly critical that California’s homeless population continues to increase, despite the governor dedicating tens of billions of dollars in additional money to the problem.

“He’s been at the helm of this mess, yet he has the audacity to mock the federal government’s efforts to cut waste,” Valladares said.

Now the trajectory appears to be shifting course. With growing budget deficits projected in the coming years, Newsom has been forced to tighten California’s belt.

His administration has identified about 6,500 vacant positions that it plans to eliminate and imposed a nearly 8% cut to state operations, which it projects will collectively save almost $5 billion.

“We also have an imperative and that is to meet you where you want us to be,” Newsom said at his budget preview event in Turlock. “That’s leaner, just like you have been in your household. Just like I’ve been in mine. We all have to be more efficient.”

He’s not the first California governor to take this stance — and those previous experiences suggest how difficult it could be to go further, if Newsom wants to. His office did not respond to a question about whether the governor is planning further cuts to the size of state government.

In 2004, then-Gov. Arnold Schwarzenegger, a Republican, commissioned the California Performance Review to overhaul state bureaucracy. The 2,500-page report recommended more than 1,000 steps to shrink the state government and save billions of dollars annually, including consolidating departments and agencies, eliminating 118 boards and commissions, and cutting 12,000 jobs.

Joanne Kozberg, a veteran of a similar “reinventing government” effort under another previous Republican governor, Pete Wilson, co-chaired the California Performance Review. She told CalMatters that, based on feedback to the report, she suggested focusing their work on just 11 main initiatives, but the Schwarzenegger administration wanted to “go big and bold.” Instead, up against tremendous resistance from Democrats to such sweeping changes, Schwarzenegger dropped his plan and moved onto other priorities.

“Here’s the trouble you run into: How do you implement? Every program has a constituent,” Kozberg said. “It takes a coalition of the enthusiastic. Because nobody really wants to give up their authority.”

Kozberg said that, to succeed, you need not just a leader who is devoted to achieving more efficiency, but also champions inside of government.

“It isn’t sexy. It takes knowledge of government,” she said. “You could do it and you should do it, but it’s going to take a lot of tenacity.”

Eight years later, Democratic Gov. Jerry Brown did push through a reorganization and consolidation plan to “make government more efficient,” aided by a political environment in which an economic recession and steep budget deficits were the prevailing concern. It included eliminating 20 departments, offices and boards, merging the state’s personnel agencies and slashing funding for employee travel and cell phones.

Bosler, who served under Brown before working for Newsom, said some of what California governors have done in the name of efficiency is to demonstrate their values to the public — and some of it is just for show. But it’s difficult to eliminate more than a minor part of state government, she said, because the vast majority of money in the budget pays for services, which are much harder to take away from people.

“Government is not the bastion of efficiency. It’s just not what the incentives are,” she said.

Bosler expressed trepidation about Newsom’s latest approach, demanding an across-the-board 7.95% spending cut for every agency and department. Though it’s easier and appears value neutral, she said, that’s not the effect that it ultimately has on Californians.

“There isn’t a real evaluation of whether this is making government better,” Bosler said. “I worry about all the things that are not going to get done.”