California Governor's Race Pits Newsom Against Trump-Backed Cox

(Bloomberg) -- Lieutenant Governor Gavin Newsom and Republican businessman John Cox won the most votes in California’s gubernatorial primary, advancing to a general election that will test the state’s position as leader of the resistance to President Donald Trump.

Newsom, a Democrat who was long considered the front-runner, captured the biggest share of votes Tuesday, according to the Associated Press. Cox, who has never won a political race and was endorsed by Trump, placed second in a crowded field of 27 contenders. Under California’s system, the top two finishers in the primary advance regardless of party.

Newsom and Cox will vie in November to succeed Jerry Brown, the 80-year-old Democrat who over the last 17 months has become the outspoken chief of blue states’ resistance to Trump’s policies. California has challenged the U.S. government at the pace of two lawsuits per month since the president’s inauguration, with flash points including immigration policies and auto-emissions limits.

Newsom, a former San Francisco mayor who gained national recognition for being an early promoter of gay marriage, is an outspoken critic of Trump’s policies.

“It’s time for change, but not just here,” Newsom, 50, said in an email to supporters Tuesday night. “All of America’s future is defined by California’s present.”

Cox, 62, has said Californians want him to work with the administration. He faces a tough general-election fight going against Newsom in a state with a heavy liberal tilt. Not only do registered Democrats outnumber Republicans -- by 44.4 percent to 25.1 percent -- but so do unaffiliated voters at 25.5 percent.

The primary was a disappointment for Antonio Villaraigosa, a former Los Angeles mayor and state assembly leader who was an early frontrunner in polls before falling behind Cox in recent weeks. He initially called for voting to be extended after more than 100,000 people were left off the roster at polling places in Los Angeles County, but conceded defeat late Tuesday and threw his support behind Newsom.

Fiscal Questions

The governor’s race holds importance to Wall Street, which has rewarded Brown’s fiscal discipline in an economy that has become the world’s fifth-largest. In the past eight years, the governor whittled down a $27 billion deficit and turned around state finances, leaving his successor a $9 billion surplus. California bonds are so in demand, they are trading similar to top-rated municipal debt.

But with Brown warning that an economic downturn is overdue given the length of the current expansion, investors want to know how the next governor would avoid a return to an era of crippling deficits, especially since the candidates haven’t addressed how they would deal with a recession.

"We know one is coming at some point," said Gabriel Petek, an analyst at S&P Global Ratings. "That will test the state’s fiscal resilience, and it will only be harder if they extended their commitments further."

To contact the reporter on this story: Romy Varghese in San Francisco at rvarghese8@bloomberg.net

To contact the editors responsible for this story: James Crombie at jcrombie8@bloomberg.net, ;Jeffrey Taylor at jtaylor48@bloomberg.net, Kara Wetzel

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