Governor Newsom Vetoes Bill that Offered Taxpayer Dollars to Help Illegal Aliens Buy Homes

FAIR Take | September 2024

On September 6, California Governor Gavin Newsom vetoed legislation that would have used taxpayer dollars to help illegal aliens buy homes. While a welcomed step, the Governor’s veto may have been designed to impact the race for president rather than protect California taxpayers.

The legislation, AB 1840, would have expanded eligibility for the California Dream for All loan program to illegal aliens. The program, launched last year, provides interest-free loans to borrowers, who are not required to make monthly payments. However, when the borrower refinances or sells the home, he or she must repay the original loan amount along with an additional 20 percent reflecting the appreciation in the home’s value.

AB 1840, which would have made illegal aliens eligible for these loans, passed the California House in May by a vote of 56-15 and was sent to the Senate. It passed the California Senate in late August by a vote of 53-18 and was sent to Governor Newsom’s desk. 

In vetoing the bill, Governor Newsom focused on the availability of tax dollars to support expanding eligibility for the California Dream for All program, not the merits of the policy.  In a short veto message, the Governor wrote: “Given the finite funding available for [California Housing Finance Agency] programs, expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively. For this reason, I am unable to sign this bill.”

Indeed, the legislation could have been very costly to California taxpayers.  An analysis by the California Senate Appropriations Committee warned that the bill could impose “unknown significant cost pressures, potentially in the millions annually,” due to the expanded eligibility. FAIR estimates that over 3.5 million illegal aliens live in California.

But despite the anticipated cost, the New York Times suggested that Governor Newsom’s veto was, in reality, an attempt to deflate a hot button issue in this fall’s presidential race: benefits for illegal aliens.  In recent months, stories regarding AB 1840 and the California legislature’s attempt to use taxpayer dollars to help illegal aliens buy homes have made national headlines and generated widespread criticism.  President Donald Trump even vowed to end mortgages for illegal aliens during a recent speech at the Economic Club of New York. This made some Democrats nervous that if AB 1840 became law, it would add fuel to the political fire—especially with the debate between former President Trump and Vice President Kamala Harris scheduled for September 10.

After the veto, the bill’s sponsor, Assemblyman Joaquin Arambula (D-31), said he was disappointed in Governor Newsom. “I’m deeply disappointed that Governor Newsom today vetoed Assembly Bill 1840. The bill had won wide support in the Assembly and passed the Senate to get to his desk,” Arambula said.

It’s unclear, however, whether Governor Newsom will continue to oppose taxpayer-funded mortgages for illegal aliens after political spotlight dims. His veto message was vague regarding what would change his mind about the measure. Assemblyman Arambula hopes to re-introduce his legislation next year and the California legislature will likely pass it. If so, Newsom will be left with the choice of whether to appease his open-borders supporters or prioritize California taxpayers and homebuying citizens.