san francisco

SAN FRANCISCO — With California facing deep budget uncertainty and widening economic divides, Gov. Gavin Newsom on Friday vowed to protect residents on both ends of the income spectrum — from wealthy business leaders he fears could leave the state to unhoused Californians relying on state-funded services.

That balancing act was on display as Newsom sharpened his criticism of a proposed ballot measure to tax billionaires, a measure opponents say may push tech companies and other businesses out of the state and wound California’s economy.

“It’s already had an outsized impact on the state,” said Newsom, speaking to reporters in San Francisco’s Mission District.

Newsom is trying to head off a union’s plan for a November ballot measure that would put a one-time tax on billionaires. If approved by voters, it would raise $100 billion by imposing a one-time wealth tax of 5% on fortunes.

Service Employees International Union-United Healthcare Workers West, the union behind the proposal, wants to raise money to help millions of Californians affected by widespread healthcare cuts by the Trump administration.

California political leaders, facing a tough budget year, warn that the state does not have the financial capacity to backfill those cuts.

Newsom, who is working behind the scenes with SEIU-UHW in an effort to stop the ballot measure, on Friday appeared doubtful that a deal could be struck with proponents of the measure.

“I don’t know what there is to compromise,” said Newsom, calling the measure “badly drafted” and arguing the money raised wouldn’t be spread among other groups.

“It does not support our public educators. Does not support our teachers and counselors, our librarians. It doesn’t support our first responders and firefighters. Doesn’t support the general fund and parks.”

Two top Newsom advisors, Dan Newman and Brian Brokaw, are raising money and have formed a committee to oppose the measure.

The billionaire tax measure is dividing political leaders in California and the rest of the country, with both Rep. Ro Khanna (D-Fremont) and Sen. Bernie Sanders (I-Vermont) supporting the tax.

“It’s a matter of values,” Khanna said on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have the Medicaid.”

Already, some prominent business leaders are taking steps that appear to be part of a strategy to avoid a potential levy.

On Dec. 31, PayPal co-founder Peter Thiel announced that his firm had opened a new office in Miami, the same day venture capitalist David Sacks said he was opening an office in Austin.

Suzanne Jimenez, chief of staff for SEIU-United Healthcare Workers West, called it a myth that billionaires are leaving the state and criticized Newsom.

“Right now, his priority seems to be protecting roughly 200 ultra-wealthy individuals,” she said. “Healthcare workers are focused on protecting emergency room access and lifesaving care for all 39 million Californians.”

The proposed tax has reverberated throughout the Silicon Valley and Bay Area, home to some of the world’s most lucrative tech companies and financially successful venture capitalists.

Newsom was in San Francisco on Friday, where he served two terms as mayor, to address a separate, more pressing concern for Californians on the opposite end of the economic spectrum — those living in poverty and on the city streets.

Newsom, who is weighing a 2028 presidential run, spoke at Friendship House, a substance-use treatment provider, where the governor said California is turning around the state’s homelessness crisis.

He pointed to a recent 9% statewide drop in unsheltered homelessness as evidence that years of state investment and policy changes are beginning to show results.

That was the first such drop in more than 15 years on an issue that is a political vulnerability for the two-term governor. California still accounts for roughly a quarter of the nation’s homeless population, according to the Public Policy Institute of California.

Newsom said Friday that the decline reflects years of expanded state investment in shelter, housing and behavioral healthcare, combined with stricter expectations for local governments receiving state funds. He said the state’s efforts contrast with what is happening elsewhere, pointing to homelessness continuing to rise nationally.

The governor’s budget proposal, which was released Jan. 9, includes $500 million for California’s Homeless Housing, Assistance and Prevention program, which provides grants to cities, counties and local continuums of care to prevent and reduce homelessness.

That money is paired with investments from Proposition 1, a 2024 ballot measure backed by Newsom and approved by voters. The measure authorized billions in state bonds to expand mental health treatment capacity and housing for people with serious behavioral health needs.

Following Newsom’s budget proposal, legislators, housing advocates and local officials said the funding falls short of the scale of the problem.

That concern is unfolding against a constrained budget backdrop, with the governor’s finance director warning that even as AI-related tax revenues climb, rising costs and federal cuts are expected to leave the state with a projected $3 billion deficit next year.

The nonpartisan Legislative Analyst’s Office said Newsom’s plan leaves California financially exposed, noting that the administration’s higher revenue estimates exclude the risk of a stock market correction that could significantly worsen the state’s budget outlook.

The analyst’s office said those risks are compounded by projected multiyear deficits of $20 billion to $35 billion annually, underscoring what it called a growing structural imbalance.

Newsom on Friday called the LAO’s projections about the budget too pessimistic, but said the office is “absolutely right about structural problems in the state.”

Newsom’s budget does not include significant funding to offset federal cuts to Medicaid and other safety-net programs under President Trump and a Republican-led Congress, reductions that local officials warn could have far-reaching consequences for local governments and low-income residents.

Addressing those broad concerns, the governor defended his budget and suggested the spending plan will change by May, when the state’s financial outlook is more clear.

Times staff writer Seema Mehta and Caroline Petrow-Cohen contributed to this report.

ATLANTA — The Rams wanted to make the playoffs in the worst way.

Mission accomplished. They’re headed to the playoffs in the worst way imaginable.

Monday night’s 27-24 loss to the Atlanta Falcons was an abomination — you could feel that vibe in the postgame locker room — but the Rams need to study it, even if it requires contraptions to pry open their eyes.

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Gary Klein breaks down what went wrong for the Rams in their 27-24 loss to the Atlanta Falcons on Monday night.

“I think if we play the way that we did in the first half … we’re going to be at home watching everything go down in two weeks,” defensive tackle Kobie Turner said. “We’ve got to get our stuff together.”

This was one of only three times in Sean McVay’s nine seasons that his team was held scoreless in the first half, which is bad enough. But that the going-nowhere Falcons built a three-touchdown halftime lead is absurd. Not so long ago, Atlanta lost seven of eight.

The Rams looked nothing like the team that just about everyone had at the top of their power rankings for most of the season. Matthew Stafford had three interceptions. Fill-in left tackle D.J. Humphries had a pair of penalties that wiped out two huge receptions. And Atlanta’s Bijan Robinson would still be running now but decided to stop once he reached the end zone (after a 93-yard touchdown, mind you.)

Those Rams who started 9-2 (and should have won those games against Philadelphia and San Francisco) are a fading memory. Since, they have lost three of five.

Now, all the other NFC contenders are getting hot — Seattle, San Francisco, Philadelphia, Chicago — and the Rams are shuddering in an emotional ice bath.

Suddenly, their erstwhile insignificant finale against Arizona on Sunday is vitally important. They need to rediscover their rhythm rather than hoping to do so in the first round of the playoffs. They can’t change their swing in the middle of this golf tournament. They need to work out the kinks on the practice range.

Getting receiver Davante Adams back is key, and he looked good in warmups, running as if his hamstring problems are behind him. But he’s desperately needed in the red zone, and that will lift some weight off the shoulders of Puka Nacua.

Just as important, the team needs left tackle Alaric Jackson and right guard Kevin Dotson back from injuries. The Rams are getting a taste of what the Chargers have been through all season, their offensive line going through a reshuffle every week.

And the defense should benefit greatly from the return of Quentin Lake, a quarterback on that side of the ball.

Regardless, good teams overcome the loss of key players and find ways to win with backups. Every team would love to be at full strength.

Rams wide receiver Puka Nacua pulls in a long pass over Atlanta Falcons cornerback C.J. Henderson in the first half Monday.

(Brynn Anderson / Associated Press)

And while the Rams should have been in position to kick the tying field goal down the stretch — there was an unflagged pass interference against Tutu Atwell, who made a good attempt to catch a deep ball with his hand that wasn’t being grabbed — they shouldn’t have been in that predicament in the first place.

As they watched their lead evaporate, the Falcons had to be having flashbacks to their catastrophic 25-point collapse to New England in the Super Bowl. After all, the Rams outscored them in the second half, 21-6.

But all of that was cold consolation to the visitors, who couldn’t close the deal.

The Rams have lost back-to-back games, and were looking for a boost after blowing a 16-point fourth-quarter lead in Seattle. Instead, they got a slap in the face.

Rams quarterback Matthew Stafford speaks to reporters after a 27-24 loss to the Atlanta Falcons on Monday.

(Brynn Anderson / Associated Press)

It’s ultra-rare for a team to head into the playoffs on a down note yet still reach the mountaintop. The last franchise to do that was Baltimore in 2012, a club that lost four of its last five games — albeit missing a slew of injured stars — then beat in succession teams quarterbacked by Andrew Luck, Peyton Manning, Tom Brady and an in-his-prime Colin Kaepernick.

So it can be done. A bumbling team can find its way. And it looked for a moment Monday night as if the Rams had turned a corner.

Jared Verse blocked a Falcons field-goal attempt, recovered the bouncing ball and returned it for a 76-yard touchdown. As he tore past the Atlanta sideline, he glanced over and playfully raised his hand to form a G-rated gesture.

Unless a dramatic change is coming, it’s a message the rest of the playoff teams could be saying to the Rams.

Peace out.