Newsom Fails to Repay $20 Billion Federal Loan, Sticks Business Owners with the Bill Instead

Ah, California, the land of sunshine, high taxes, and even higher levels of government incompetence. Governor Gavin Newsom and his merry band of Democrat legislators have managed to deliver another gut punch to small businesses in the Golden State. This time, it’s in the form of surprise payroll taxes, courtesy of their failure to repay a $20 billion federal loan on time.

Here’s the rundown: During the pandemic, California borrowed $20 billion from the federal government to cover unemployment benefits after Newsom’s shutdown policies left millions out of work. Instead of repaying that loan, like any fiscally responsible government would, the state spent $27 billion in federal stimulus funds elsewhere. You know, priorities. Oh, and let’s not forget that a whopping $32 billion of unemployment benefits went to fraud. Stellar job, guys.

Now, because of this epic financial mismanagement, California’s business owners—already battered by pandemic shutdowns and one of the worst tax climates in the nation—are being forced to foot the bill. Each employer is getting hit with an extra $21 per employee in payroll taxes this year. By 2026, that figure will climb to $42, then $63 in 2027, and it will keep rising $21 annually until the loan is repaid. Small business owners, many of whom barely survived Newsom’s lockdowns, are now being taxed into oblivion to clean up the state’s mess.

And just to rub salt in the wound, let’s talk about priorities. Earlier this year, California Democrats tried to push a bill giving $150,000 interest-free home loans to illegal immigrants. While businesses are drowning under surprise taxes and the state can’t pay its debts, they wanted to hand out taxpayer money to people who aren’t even citizens. Thankfully, the bill was vetoed—not because of a sudden outbreak of fiscal sanity, but because the budget was so depleted they couldn’t scrape together the cash.

This is what happens when Democrats run a state like a social experiment instead of a functioning government. They ignore fiscal responsibility, mismanage funds, and pass the buck—literally—to the people they claim to champion. Small business owners in California are being forced to clean up the mess, and it’s no wonder so many are fleeing to greener pastures.

Newsom can keep his slick hair and smug press conferences. California deserves leadership that won’t treat businesses as ATM machines for the state’s failures. Until then, the “Democrat hellhole” moniker sticks.