They say you have to spend money to make money.
California Gov. and potential 2028 Democratic presidential hopeful Gavin Newsom has paid upwards of $20 million to a consulting firm that employs his former cabinet secretary to eliminate wasteful spending, according to new reports.
However, Newsom’s so-called “budget” move has come up well short of the goal as state lawmakers blasted the move.
Newsom recently signed an executive order to cut spending in the state, in a structuring similar to that of Elon Musk’s Department of Government Efficiency, but his plan is hitting roadblocks with the plan amid a multibillion-dollar state budget deficit.
California contracted with one of the world’s largest consulting firms, Boston Consulting Group, for up to $20 million in an effort to cut $2 billion in spending from the departments of Corrections and Rehabilitation, Social Services, and Health Care Services by the 2028-’29 fiscal year.
But the group, which hired former Newsom cabinet Secretary and Department of Finance Director Ana J. Matosantos, is now expected to only find $810 million in savings, according to legislative analysts.
And sadly, that number may even go down later in May, analysts added, as indicated by the Newsom administration.
State lawmakers are scratching their heads over the miss.
“This whole Boston Consulting Group contract has me mystified,” Republican state Assemblymember Tom Lackey said during a Thursday legislative hearing, according to Politico.
“We were told that that’s what we were going to get, but we haven’t even come close to that,” he added.
Democratic state Assemblymember Nick Schultz told Politico that questions about what the administration is doing with the contract is fair game for the public to scrutinize.
“At a time when time we might be asked to cut part of the social safety net back, I think everyone’s rightfully looking at saying, ‘What are we getting for $20 million?’”
Boston Consulting Group did not comment on the findings at the time of publication.
A spokesperson for the Department of Finance said in a statement that California is still “on course to achieve savings that are significantly greater than the cost of the contract.”
The news of rampant spending comes after independent journalist and YouTuber Nick Shirley released a video last month titled “I Investigated California’s Billion Dollar Fraud Crisis,” which reportedly found operators of daycare centers, hospices, and nursing homes across the state are openly operating as fraudulent shell companies, billing California taxpayers billions for nonexistent services.
On X, Shirley claimed his investigation uncovered more than $170 million in fraud.
“We uncovered over $170,000,000 in fraud as these fraudsters live in luxury with no consequences,” Shirley posted. “Like it and share it, the fraud must STOP.”