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IN THIS ISSUE – “We are accelerating our global leadership”
Gov Newsom on the new $310-billion FY23-24 State Budget
- “The Budget for the Future”: Governor & Legislature Reach Spending Plan Deal
- Bills to Accelerate Infrastructure Speed Through Legislature
- New Assembly Speaker Rivas Brings New Influencers
- Speaker Rendon’s Fund-Raising Legacy: $4,400 A Day
- Is California Still “Coming Attractions for America?”
Capital News & Notes (CN&N) harvests California policy, legislative and regulatory insights from dozens of media and official sources for the past week. Please feel free to forward this unique client service.
FOR THE WEEK ENDING JUNE 30, 2023
“The Budget for the Future”: Governor & Legislature Reach Spending Plan Deal
CalMatters
Just in time for the start of a new fiscal year July 1, Gov. Gavin Newsom and legislative leaders announced a deal on the FY23-24 state budget — a $310 billion spending plan that they say protects core programs and covers a $30 billion-plus deficit without dipping into key reserves.
Despite largely agreeing on the overall structure for weeks, budget negotiations were delayed by the governor’s demands to include a sweeping infrastructure proposal that many lawmakers resisted.
The final compromise narrows the types of projects that can take advantage of an expedited approval of permits, leaving out a contentious proposed water conveyance tunnel under the Sacramento-San Joaquin River Delta.
“We are accelerating our global leadership on climate by fast-tracking the clean energy projects that will create cleaner air for generations to come,” Newsom said in a statement.
Senate President Pro Tem Toni Atkins, a San Diego Democrat, said she was “heartened” that the leaders agreed on the infrastructure package, and “in a way that focuses on equity by laying the groundwork to ensure that our most vulnerable communities will be hired first on impactful state infrastructure projects.”
The governor and legislative leaders also touted that they were able to preserve money for education and social service programs, and increase money for childcare providers.
Newsom also noted that the budget includes accountability measures for transit and homelessness, and tax credits for some industries.
“This is a budget for the future,” said Assembly Speaker Anthony Rendon, a Lakewood Democrat who is scheduled to hand over the speaker’s gavel to Assemblymember Robert Rivas, a Salinas Democrat, on Friday under a negotiated transition.
If all goes to plan, the main budget bill will be approved by both the Assembly and Senate today and signed by Newsom soon after. The Legislature began publishing a series of budget-related bills — reflecting agreements in specific policy areas — online Saturday morning to fulfill a requirement that they be available for public review for 72 hours before any votes.
Democratic lawmakers already passed a budget, reflecting their own priorities, on June 15 in order to meet a constitutional deadline. That kicked off a 12-day window for Newsom to sign or veto the bill, increasing pressure on the two sides to reach a deal by Tuesday.
This year’s negotiations were more fraught due to a $31.5 billion deficit, a sharp contrast with record budget surpluses the last two years. The deficit is the result of a downturn in the stock market — a volatile but significant source of California’s state revenues because of its reliance on income taxes, especially those of high earners. Bracing for potential further revenue declines, the budget deal allows the governor to delay, with notification to the Legislature, one-time spending commitments before March 1.
The budget process this year was also made more complicated when many Californians were granted until October, instead of April, to file income tax returns because of storm-related disaster declarations, which made it hard to pin down a precise figure on the state’s revenue.
Add to that Newsom’s insistence that legislators approve his recent proposal to overhaul the permitting process for major infrastructure projects by changing the landmark California Environmental Quality Act, a move that some housing advocates and developers have demanded for years.
The governor wanted a package of 11 measures, alongside the main budget bill, that aim to streamline the permitting process among federal, state and local governments; limit the time courts have to hear challenges on environmental reviews; and increase funding to state agencies.
Lawmakers pushed to consider the plan outside of the budget process so they would have more time to review its potential effects and to exempt the proposed Delta tunnel from the changes. That contentious $16 billion project would send water from the Sacramento-San Joaquin Delta south to 27 million people and 750,000 acres of farmland.
Here are some other highlights of the deal — how much the state plans to invest in other key policy areas that have been sticking points since Newsom kicked off the budget process in January with his initial proposal.
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Bills to Accelerate Infrastructure Speed Through Legislature
CalMatters
California lawmakers and Gov. Gavin Newsom are poised to enact a package of bills that aim to speed up lawsuits that entangle large projects, such as solar farms and reservoirs, and relax protection of about three dozen wildlife species.
Newsom and Senate and Assembly leaders unveiled the five bills earlier this week as they negotiated the state’s $310 billion 2023-24 budget. The deal ended a standoff over the governor’s infrastructure package, which he unveiled last month in an effort to streamline renewable energy facilities, water reservoirs, bridges, railways and similar projects.
The package of bills will make its way through the Legislature on an accelerated schedule. The bills include an urgency clause — meaning they would take effect immediately when Newsom signs but they also will require a two-thirds vote to pass.
Hearings have been scheduled for committees in both houses. Debate may largely end up being a formality as the package has already been negotiated by Newsom and lawmakers behind closed doors.
The debate and negotiations focused on how California can speed up major projects that benefit the public while ensuring the environment is protected. The wide-ranging collection of bills take aim at broad swaths of state environmental policies shaping how state agencies approve large projects. For instance, the plan to build the Sites reservoir to add dams and store more Sacramento River water has been stalled for years as it undergoes environmental reviews and engineering planning.
The proposals “are really going to help move the needle on water infrastructure projects that are needed to address the impacts of climate change.”
One of the bills sets a time limit for legal challenges for specified water, transportation and energy projects under the landmark California Environmental Quality Act (CEQA), which can entangle projects in court for years.
Another gives the state Department of Fish and Wildlife new authority to issue permits allowing species that are designated “fully protected,” such as the greater sandhill crane and golden eagle, to be harmed by similar types of projects.
The compromise that Newsom and lawmakers reached seems to have accomplished what compromises rarely do: Environmentalists who initially criticized Newsom’s package say they are satisfied with the changes, and businesses and water agencies, which have backed the package from the beginning, support the changes, too.
The proposals “are really going to help move the needle on water infrastructure projects that are needed to address the impacts of climate change,” said Adam Quinonez, director of state legislative and regulatory relations at the Association of California Water Agencies.
The changes won over the Natural Resources Defense Council, which had pages of concerns about the potential environmental harms caused by Newsom’s original proposals, such as provisions that might have expedited the deeply divisive Delta tunnel.
“It’s good that it’s resolved, and that it’s better than it was and that the budget was able to move forward,” said Victoria Rome, the Natural Resource Defense Council’s director of California government affairs. “But I would say to accelerate clean energy infrastructure, we have a lot more to do as a state.”
Although the wildlife bill would ease some existing protections, Mike Lynes, Audubon California’s director of public policy, hopes that in practice it would actually increase enforcement. “Ultimately, it really will fall on the Department of Fish and Wildlife to make sure that these are good permits, and that the law is enforced,” he said.
So what’s in these bills? And what impact will they have on infrastructure projects and the environment?
One of the bills, SB 149, takes aim at the often lengthy lawsuits brought under CEQA, which tasks public agencies with assessing possible harms of proposed development. Lawsuits by the public and advocacy groups can entangle projects like housing developments, highway interchanges, and solar farms for years.
The bill would set a 270-day limit for wrapping up these environmental challenges for water, energy, transportation and semiconductor projects. The projects must be certified by the governor by 2033 and meet certain criteria. These could potentially include water recycling plants, aqueduct repair, bikeways and railways, wildlife crossings, solar and wind farms, zero-emission vehicle infrastructure, among others.
In a nod to concerns that this would expedite the Delta tunnel, there’s now an explicit carveout saying that particular water project no longer qualifies for the faster timeline.
There’s a big caveat, though: The 270-day limit only applies “to the extent feasible” — a decision that judges would make.
So will the time limit actually speed up cases? That remains to be seen, said David Pettit, senior attorney at the Natural Resources Defense Council. “I think it sends a signal to the judiciary that the Legislature wants these cases hustled up,” Pettit said.
But in practice, he said, there are other major time sinks for the legal process beyond the length of litigation, such as preparing the paperwork behind an agency’s environmental assessment to create what’s called the administrative record. This is critical ammunition in legal challenges.
Newsom’s original version of the bill sparked a battle over which emails should be disclosed in the administrative record by excluding any internal communications that didn’t make it to the final decision makers. Assembly consultants warned this could allow state agencies to pick and choose which documents to disclose.
Now, under the latest iteration, all emails related to the project must continue to be revealed in the administrative record, and only emails over minutia like scheduling can be excluded.
“The bottom line is most emails that are actually pertinent to the project — not like, ‘How about those Dodgers?’ — they will go into the record,” Pettit said. “That is important, because sometimes people will talk candidly over email in a way that others might not.”
SB 147 would allow projects to receive permits to kill certain wildlife species that are classified as “fully protected.” Thirty-seven species — including the golden eagle, greater sandhill crane, bighorn sheep, several coastal marsh birds, 10 fish and several reptiles and amphibians — are listed as fully protected.
Under the bill, only certain types of projects that are considered beneficial to the public could get the new permits, including repairing aqueducts and other water infrastructure, building wind and solar installations, and transportation projects, including wildlife crossings, that don’t increase traffic.
State and federal Endangered Species Acts would still protect rare wildlife and be unaffected by the bill. But it would alter another, stronger protection under state law: “Fully protected” species began in the 1960s as part of an early effort to protect California’s animals, such as the California condor and southern sea otter. Of those, all but 10 are also listed under the California Endangered Species Act.
Unlike the endangered species acts, which allow wildlife agencies to grant permission to “take” or harm a species, so-called “fully protected” species cannot be killed except in rare cases, such as scientific research.
To obtain the new permits, developers and other applicants would need to show that their plans to compensate for the harm to these species actually improves conservation — a more stringent standard than required by the California Endangered Species Act.
This addresses an enforcement gap: Regulators have little authority to make developers work with them to ensure projects take steps to reduce their impacts on those species. “There’s no hook for the regulatory agencies to demand avoidance and mitigation measures, because they’re unwilling to enforce the laws as written,” Audubon’s Lynes said.
Fish and Wildlife Director Chuck Bonham told a Senate committee that without a permit process to allow harm to fully protected species, project developers are left with little recourse if their projects could disrupt these animals. As a result, “every project proponent faces an unnecessary risk for project planning, financing and construction.”
Three species would also lose their status as fully protected: the American peregrine falcon, brown pelican and a fish called the thicktail chub. The falcon and pelican had been listed as endangered species but are now considered recovered, largely due to the 1972 ban on the pesticide DDT; the chub is considered extinct.
“We certainly don’t want to be reducing protections for pelicans and peregrine falcons, but it’s also understandable to be looking to transition them off the list,” Lynes said.
The latest version overhauls Newsom’s original proposal to scrap the “fully protected” designation entirely, which environmentalists worried would significantly weaken protections for these species. Delta communities were especially concerned, seeing it as one of several moves to push the Delta tunnel project forward by targeting the greater sandhill crane, which winters in the region.
The new version of the bill explicitly says that a Delta tunnel project would not qualify for permits to take the crane or any other fully protected species.
The multi-billion dollar question is will these regulations will actually help California build big things faster.
The Newsom administration said they are critical to bolster California’s chances when competing against other states for $28 billion in discretionary funds from the federal Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
“It’s going to be extremely difficult if not impossible to draw a straight line that if you pass judicial streamlining, we get the federal dollars here in California,” said Adam Regele, a vice president at the California Chamber of Commerce. “But what it does do is it makes us more competitive.”
The Natural Resources Defense Council’s Pettit is skeptical that this will in fact streamline lengthy and litigious approvals under CEQA. He pointed to the loophole establishing a 9-month time limit for court challenges only “to the extent feasible.”
“How do we know that this package will actually speed things up? Because I’m not seeing it,” Pettit said.
Newsom’s deputy communications director, Alex Stack, said he couldn’t name any specific projects that would benefit or ones that had been specifically denied federal funding because of California’s existing laws.
But he said he expects the bills to cut the timeline for major builds in California by up to almost a third. That includes for transit projects, wind and solar installations, semiconductor plants and water storage projects like Sites reservoir.
New Assembly Speaker Rivas Brings New Influencers
Politico’s California Playbook
Robert Rivas takes control today of the California Legislature’s lower chamber, closing out a fraught ascent to one of the most powerful positions in the nation’s most populous state.
The ascension elevates not just Rivas, but the close circle of allies around him who spent much of last year whipping votes in his favor.
Rivas has been tight-lipped about what changes he wants to make to the Assembly power structure, or when. And while this is by no means a comprehensive list of his friends in the Assembly, a look at those who are closest to him gives an indication of who could be on the short list for leadership positions or top committee appointments.
BUFFY WICKS — Wicks was the top lieutenant for Rivas early in his bid to take the speaker’s gavel — directing other allies and dispatching them to members’ houses late into the night as the coalition hustled to gather signatures. When that bid ultimately failed, and Rivas fled from the caucus chambers without talking to the press, it was Wicks who convinced him to return to the rotunda and stood by his side as he read a statement to reporters.
An Oakland Democrat, Wicks hails from the Clinton and Obama schools of political campaigning, where she earned the nickname “Buffy the Bernie Slayer.” She had a very public dispute with Anthony Rendon over proxy voting in 2020 that led to a viral photo of her voting with a newborn baby in her arms. Although she’s become a force as chair of the Housing Committee, many members expect her to land one of the big committee chairmanships — budget or appropriations.
JESSE GABRIEL —The Los Angeles-based lawmaker joined the Assembly via a special election just months before the speaker-to-be entered office in 2018. He and Rivas had already developed a good rapport when Rivas approached him in 2022 about a speakership bid, and was a steadfast backer over the course of caucus deliberations.
Gabriel’s campaign was also among the top donors to Rivas’ breakaway PAC last year. The two remain close allies outside the Capitol as well, hosting a joint fundraiser at Sacramento’s Golden One Center during March Madness. Gabriel, who worked as an aide in the U.S. Senate and has argued before the Supreme Court, is seen as a candidate for head of the Judiciary Committee or another powerful gig. His chief of staff, Alicia Isaacs, is transitioning to serve as Rivas’ deputy chief of staff.
ISAAC BRYAN — Upon winning the special election to replace now-Rep. Sydney Kamlager, Bryan expressed leadership aspirations of his own, going so far as to talk with Rendon about a path to the speakership, Bryan told POLITICO. But his relationship with Rivas was positive from the start. And when it was clear he had significant support from the caucus, Bryan got onboard with a speakership bid.
Bryan, who came up through community organizing, is one of the body’s loudest voices for criminal justice reform and one of the few renters in the building. He chairs the body’s Elections Committee and this year is championing a constitutional amendment to allow incarcerated Californians to cast ballots. His name has been floated as a possible new chair of the Assembly’s Public Safety Committee.
MATT HANEY — The San Francisco lawmaker, like other close Rivas allies, came to the Capitol in a special election, and had barely settled into the Legislature when the fight over the speakership began last spring. Haney, three weeks into being an assemblymember, quickly backed Rivas. He was among the few Democratic lawmakers who attended an event hosted by Rivas’ PAC in Sausalito last summer.
Over that same summer, Haney traveled the state supporting incoming Democratic members, often with Rivas. “I think I went on the most visits with Rob,” he said.
Haney is seen as a possible candidate for the Housing Committee, should Wicks ascend to a higher position.
REBECCA BAUER-KAHAN — Bauer-Kahan, colloquially called RBK, has been a steady supporter of the speaker-to-be throughout the transition process and was active in collecting signatures for him during the caucus. She hails from the same small 2018 cohort that included Rivas and Wicks and was among those who worked late into the night collecting signatures last spring. As a former speaker pro tem, her knowledge of parliamentary proceedings helped Team Rivas in the vote process. She’s seen as a possible candidate for the Judiciary Committee or a majority leader.
Also an attorney, she’s been focused in recent years on abortion protections. She currently chairs the Water, Parks and Wildlife Committee.
Other lawmakers who have stayed close to Rivas: Mia Bonta and Jim Wood, a top donor to his PAC whose former staffer Liz Snow is now Rivas’ chief of staff. That list also includes seatmate Ash Kalra, Marc Berman, who was among those who attended last summer’s Sausalito event, Cottie Petrie-Norris and Cecilia Aguiar-Curry.
Speaker Rendon’s Fund-Raising Legacy: $4,400 A Day
Politico
It turns out the Assembly speaker doesn’t just get a gavel; they also benefit from an influx of campaign cash.
Rendon has always been better at raising money than Rivas. In 2018, as speaker, he reported raising twice as much as his successor. But that changed after the two announced the transfer of power that takes effect today.
This year, Rivas has raised an average of more than $3,500 every day, his fastest rate ever, for a total of more than $640,000, compared to $385,200 for Rendon in 2023.
Still, Rivas has yet to raise the kind of money Rendon did. In 2016, his first year as speaker, he pulled in an average of $4,400 each day, nearly 25% more, not accounting for inflation.
Is California Still “Coming Attractions for America?”
Vanity Fair
Once in a while, an East Coast journalist will come out to California to find out what’s happening in the land of dreams. As Los Angeles goes, so goes the nation; if San Francisco loses its charm, what then? “It’s what’s coming next for you,” Pelosi says, portentously.
Earlier that afternoon, I’d walked through the Tenderloin and seen drug addicts splayed out on street corners and a hundred human tragedies strewn across UN Plaza, City Hall looming helplessly in the background. Dickens meets Dante. “Oh, it’s sad,” Pelosi remarks. “It’s worse now.”
That morning, after a freak snowfall, I’d hiked to the top of Mount Tamalpais in Marin County to survey the preposterous beauty of California and found a snowman with a frown carved into its face. “A couple of days ago was the coldest day in, like, 150 years,” Pelosi notes.
“Well, it is what it is,” she shrugs, and tells me how the Spanish missionaries used to follow their livestock to the warmest grazing area with water and then build their settlement, which is how San Francisco got the Mission District. No snowmen down there.
“We consider it heaven on earth,” she says of her kingdom. “Just start at the beginning. The Gold Rush, the movies, agriculture throughout. And now technology. And technology is just—we haven’t seen nothin’ yet. Technology continues to grow. So, economically, for our country, this is where most of it starts.”
Setting aside that California started with the decimation of Indigenous people by those missionaries following their cattle, it’s also the engine room of the modern Democratic Party, soon to be the fourth-largest economy in the world, bigger than Germany’s, and lousy with tech billionaires and Hollywood honchos.
And ever since Speaker Pelosi began muscling more seats into Congress decades ago, California has shaped progressive policy, from the environment to gun control to gay and trans rights. “I mean, so many people just flock here to raise money and find kindred souls in terms of the environmental, the LGBTQ, the fairness, health care, you name the subject, saving the planet, whatever it is,” she continues. “It’s not really pragmatic money.”
Governor Gavin Newsom has upped the ante by branding California the “True Freedom State,” a rejoinder to Governor Ron DeSantis’s “Freedom State” slogan, pitching Florida as a kind of anti-woke protectorate. Newsom, perhaps teasing a future White House bid, offers California as the left-wing alternative, a liberal’s shining city on a hill, where diversity and tolerance, science and innovation, money and opportunity form a cutting-edge vision of America. I ask Pelosi what she makes of the motto. “I would like to think of our whole country as a freedom country,” she says. “But we”—California—“certainly lead the way in everything.”
The Golden State has always been as much an idea as a place, a fantasyland for Easterners to pine for and put down. As a model for America, however, it’s giving off decidedly mixed signals: encampments of homeless people, floods and mudslides, drought and wildfires, earthquakes and depleted waterways, home invasions and mass shootings, tech layoffs and entertainment and teacher strikes, drained government coffers and spooky economic shudders. If, as one Democratic consultant told me, California is the “coming attractions for America,” it looks like a trailer for Mad Max: PCH.
Trying to write about the whole of California is akin to the proverbial blind man trying to describe an elephant. But California, by any measure, is undergoing a vibe shift. As a pal of mine in San Francisco put it, “The liberal atom has been split.”
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