Becerra and Hilton Head to November as California’s Next Governor Inherits a Fiscal Time Bomb
California will elect a new governor this November for the first time in eight years, and whoever wins inherits a state finances problem considerably bigger than the budget deal covered elsewhere on this page: a structural deficit some projections put at $35 billion within a few years, a hostile relationship with the federal government, and a housing and cost-of-living crisis that’s outlasted several governors’ attempts to fix it.
The general election come down to two candidates who emerged from a crowded June 2 primary: Democrat Xavier Becerra, who served as U.S. Secretary of Health and Human Services under President Biden and as California’s Attorney General before that, and Republican Steve Hilton, a political commentator. Under California’s top-two primary system, the two highest vote-getters advance regardless of party — and this cycle, that means a Republican made the general election ballot for governor for the first time since 2006, when the state last elected a GOP governor.
That’s a notable result given how the primary field looked heading in. More than 60 candidates filed to run, including several prominent Democrats with real statewide profiles — former Congresswoman Katie Porter, San José Mayor Matt Mahan, and former Los Angeles Mayor Antonio Villaraigosa among them — alongside Democratic activist Tom Steyer. For much of the race, the visible anxiety among Democratic strategists was the opposite of what actually happened: worry that splitting the Democratic vote across too many candidates could let two Republicans advance to the general election. Instead, the primary consolidated enough behind Becerra to secure his spot, while Hilton’s positioning as the clearer Republican choice — including a public call for fellow Republican and Riverside County Sheriff Chad Bianco to exit the race — kept the GOP side from splitting its own vote.
Becerra enters the general election with a public record built substantially around confrontation with the first Trump administration. As California’s Attorney General from 2017 to 2021, he led the state through numerous lawsuits against federal policy, a track record that positions him as a continuity candidate against a second Trump administration his campaign has framed as an ongoing adversary — not a small consideration given how directly federal policy already shapes the state’s fiscal picture, from the healthcare funding cuts driving this November’s separate billionaire tax measure to the tariff disputes affecting California trade.
Whoever wins doesn’t get a honeymoon period on the budget. The $35 billion structural deficit projection sits on top of, not separate from, today’s headlines — the delayed Medi-Cal cuts and asset test changes built into this year’s budget deal only kick in starting July 2027, meaning the next governor will be the one actually implementing decisions the outgoing administration pushed down the road rather than resolved. If Proposition 40’s billionaire tax passes and survives the legal challenges almost certain to follow, the next governor inherits a potential $100 billion revenue stream tied up in litigation rather than available to spend. If it fails, the funding gap it was designed to address doesn’t go away — it just becomes the next governor’s problem to solve some other way.
Beyond the budget, the incoming governor faces the same unresolved list that’s shadowed California politics for years: housing costs that keep the state’s homeownership rate near historic lows even as this November’s separate housing bond measure tries to chip away at supply, a homelessness crisis that state spending has slowed but not reversed, and wildfire risk that keeps growing regardless of which party holds the governor’s office.
Political observers have called this the most competitive and wide-open gubernatorial primary California has seen since 1998, and the fall campaign is likely to keep that intensity — not because the presidency of the nation’s largest state economy is genuinely up for grabs by party (Republicans haven’t won it in two decades, and California hasn’t elected a Republican governor other than in a recall since the 1990s), but because the scale of the problems awaiting whoever wins make this a race about competence and priorities as much as ideology.