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IN THIS ISSUE – “The Latino Caucus made California more progressive and that’s a good thing”

Former State Sen. Martha Escutia, Latino Caucus Founder, marking the 50th anniversary

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 MAR. 30, 2023

Note: CN&N is published a day early in observance of Caesar Chavez Day tomorrow

 

Latino Caucus – Legislature’s Dominant Force – Marks 50 Years

Sacramento Bee

Fifty years ago, five Latinos came together to create the first ever Chicano Legislative Caucus. At the time, the lawmakers, all male and of Mexican descent, made up 4% of the Legislature. Though a small group, the establishment marked a turning point for California’s then-14% Latino population.

Over the next five decades, the caucus grew, diversified and became an influential group in the Capitol. That progress coincided with the Latino community exploding to 40% of the state population. The group, now at a record 38 (of 120 total legislators) members, has since been renamed the Latino Caucus.

It has racked up a series of major wins since its founding, including pushing back against anti-immigrant legislation in the 1990s and building a social safety net for the state’s undocumented community.

The work is not over however, said current chair and Assemblywoman Sabrina Cervantes, D-Riverside.Cervantes recently spearheaded the caucus’ annual tradition of announcing its legislative priorities for the upcoming year.

This year, caucus members voted to prioritize 14 bills spanning health, housing, education, environment and immigration. Several members spoke at Tuesday’s press conference to present their measures.

Assemblyman Joaquin Arambula, D-Fresno, presented his legislation first. Assembly Bill 4 continues a push to extend full Medi-Cal coverage to more undocumented residents. In recent years, the caucus has successfully won legislation for some undocumented residents to join Medi-Cal. AB 4 would broaden the income eligibility for undocumented adults.

Sen. Lena Gonzalez, D-Long Beach, vice chair of the caucus, authored another healthcare measure, Senate Bill 616, which aims to increase the amount of paid sick leave days that an employer is required to provide from three to seven. She cited the COVID-19 pandemic as an example of why employees, particularly “essential workers,” need additional time to care for themselves and others.

“Furthermore it can reduce employers’ overall cost by containing potential disease outbreaks and allowing workers to recover faster and return to work more productively in the fourth largest economy,” Gonzalez said.

Assembly Majority Leader Eloise Gomez Reyes, D-Colton, led the presentation of education-focused legislation with AB 278. The measure would establish dream resource centers in high schools across the state. These centers provide services to support the undocumented student population.

The end of Tuesday’s press conference centered on further bills to improve the social safety net for the state’s roughly 2.3 million undocumented residents. “It’s past time that the state acknowledged how important they are to California,” said Sen. Maria Elena Durazo, D-Los Angeles.

Durazo spoke about her legislation, SB 227, which would provide workers who are excluded from unemployment insurance, due to immigration status, with $300 per week for up to 20 weeks in 2025. Assemblymen Juan Carrillo, D-Palmdale, and Miguel Santiago, D-Los Angeles presented bills that would secure monthly cash assistance for undocumented seniors and expand food benefits to all undocumented immigrants. These measures likely face an uphill battle as the state seeks to close a projected $22.5 billion deficit without cutting programs that are already providing services to Californians.

Last January, Newsom released a proposed state spending plan that would delay the food assistance timeline for undocumented seniors by two years. Santiago referenced the delay in his comments.

Cervantes calls herself a reflection of the caucus’ diversification and progress. She is the first LGBTQ+ Latina caucus chair and marks the third consecutive woman who has led the group.

At 21 members, Latinas are now the caucus majority. But the progress didn’t come easy. It took until 1982 before the first Latina, Gloria Molina, was elected into the Legislature. Another 23 years passed until former member Martha Escutia became the first female chair. When Escutia joined the Assembly in 1992, the caucus only had six members and was on the brink of facing a series of racially charged measures. Proposition 187 came in 1994, which sought to ban immigrants from receiving social services, health care and education. Other measures followed including Proposition 209, prohibiting affirmative action, and Proposition 227, an effort to end bilingual education.

“We were playing defense with only six members in the middle of anti-immigration hysteria,” Escutia said. But the anti-immigrant rhetoric and bills inspired young Democrats, particularly Latinos, to get involved in politics.

Eventually, Escutia said the caucus used this momentum to create support and solutions for the state’s immigrant population. The first big breakthrough for undocumented Californians came in 2001, when a law passed allowing undocumented students to pay in-state tuition at California’s public universities.

Then in 2015, former Gov. Jerry Brown signed a law allowing residents to apply for driver’s licenses regardless of immigration status. More changes have come in the last few years with the state extending Medi-Cal eligibility.

California began allowing undocumented children to join Medi-Cal in 2015. Four years later, eligibility broadened to those younger than 26. And last year, the state started covering people aged 50 and over. Next year, all low-income undocumented residents would become eligible for the state-subsidized insurance. “The Latino Caucus has made California more progressive and that’s a good thing,” said Escuita.

https://www.sacbee.com/news/politics-government/capitol-alert/article273744635.html#storylink=cpy

 

Newsom Signs Nation’s 1st Law Regulating Oil Co. Profits; Sparks Snarky Tweets Between His Chief of Staff & Legislator

Associated Press

Gov. Gavin Newsom signed a new law Tuesday that gives state regulators the power to penalize oil companies for making too much money, the first of its kind in the country. It’s the type of legislation the oil industry might have crushed in the past. But on Monday, the bill cleared the state Assembly with only one Democrat voting against it.

“We proved we could finally beat big oil,” Newsom said Tuesday after signing the bill.

The bill is the latest in a string of defeats for the oil industry in California, a state many don’t think of as a fossil fuel powerhouse. But for decades, California was one of the leading oil producers in the United States with a bustling industry that was a key part of the state’s economy. The state is now the nation’s seventh-largest oil producer, according to federal data.

Oil production has been steadily declining since the late 1980s from a combination of exhausting supplies and the state’s changing policy priorities. A state law requires California to be carbon neutral by 2045, meaning the state would remove as many carbon emissions from the atmosphere as it emits. The state’s plan to do so would reduce demand for liquid petroleum by 94% by 2045.

State regulators have banned the sale of most new gas-powered cars in California by 2035. And last year, the state Legislature approved a bill limiting where new oil wells can be drilled, providing buffer zones around homes, schools and other sensitive sites.

“We’re never going to get it right, in terms of this transition (away from oil), unless we minimize and mitigate the power and influence of big oil in this country,” said Newsom, now in his second term in office and widely seen as a potential presidential candidate beyond 2024. “They’re the biggest impediment to a just transition.”

While its influence in California might have diminished, the industry is still asserting itself. The Western States Petroleum Association spent $11.7 million lobbying lawmakers in the 2021-2022 legislative session, far more than any other single group. Chevron followed behind it, spending $8.6 million, according to state campaign finance filings. The next closest single spender was the California Teachers Association, at $7.1 million.

Likewise, the industry spent millions on campaign contributions in the 2022 election, supporting both Democrats and Republicans. More than a quarter of all 120 seats in the Legislature are newly elected members.

Those donations did not always translate to favorable votes. New Assemblymember Esmerelda Soria, a Democrat who represents parts of the Central Valley, was the top beneficiary of money from a Western States Petroleum Association-affiliated committee. Soria voted Monday to support the legislation despite industry opposition.

The only Democrat to vote against the potential oil profits penalty was

Assemblymember Jasmeet Bains, whose district includes Kern County, home of the state’s oil industry. Her vote appeared to irk the Newsom administration.

Bains, a family medicine and addiction doctor who was first elected in November, tweeted a picture of the vote, saying: “Stand alone if you must, but always stand for truth.”

Dana Williamson, Newsom’s chief of staff, replied: “Alone and confused you shall likely remain.”

Bains said she voted against the bill because during the height of the gasoline price spike last summer, the Newsom administration and legislative leaders refused to suspend the state’s gas tax. They argued oil companies would not pass along the savings to drivers.

“What’s to stop them from passing on the cost of this new tax with high prices at the pump?” Bains said. “That inconsistency is even more frustrating.”

Though the industry couldn’t stop the legislation, its presence could be felt in the final version. Newsom initially called for the Legislature to pass a new tax on oil company profits. Then he asked lawmakers to instead impose a penalty if oil company profits surpassed a certain threshold.

Finally, Newsom and lawmakers agreed to let the California Energy Commission decide, punting the decision to a five-person panel appointed by Newsom with the consent of the state Senate. The bill also creates a new state agency with the power to monitor the petroleum markets, including requiring oil companies to disclose lots of data about their pricing.

Next year, the oil industry will be looking to exert its influence in another arena — public opinion. The industry is challenging a new state law that bans drilling new oil wells nearby homes, schools and other sensitive areas. Voters will decide in 2024 whether to uphold the law.

Newsom acknowledged Monday the importance of oil for the global economy, telling reporters: “I’m driving home tonight” and “I’m flying this weekend.”

“Oil has built the American economy, built the industrial economy, I get it,” Newsom said. “But we are transitioning. And all I’m asking for is don’t rip us off anymore.”

https://apnews.com/article/california-oil-company-profits-penalty-bill-7092c33a80bcab63658e118bbcbabf11

 

CEQA Lawsuit Blocks State’s Largest Housing Development

Bakersfield Californian

Tejon Ranch Co. said it was weighing options Monday after a Southern California judge last week struck down an environmental review at the heart of the company’s master-planned residential project near Interstate 5 by Gorman.

To revive Centennial, the 19,333-unit, 12,000-acre project approved in 2019 by the Los Angeles County Board of Supervisors, Tejon Ranch said it is considering working with the county to complete additional environmental analysis. Alternatively, the company said it may appeal two court decisions related to the project.

The company emphasized in a news release it does not plan to walk away from Centennial, which was the subject of a legal settlement agreed to in 2021 in an effort to move the project forward. It is currently the largest housing development planned in California.

“While we are disappointed in the court’s ruling, we remain committed to Centennial’s ultimate development,” Vice President of Real Estate Hugh F. McMahon said in Monday’s release. “More than ever, the state desperately needs the 19,333 housing units Centennial will provide, including the nearly 3,500 affordable units.”

Los Angeles Superior Court Judge Mitchell Beckloff ordered the project’s approval rescinded after finding the county review does not comply with the California Environmental Quality Act. Specifically, he agreed with plaintiff Climate Resolve’s assertion the document was unclear about aspects of the state’s cap-and-trade regulatory program, and that the county didn’t look closely enough at risks from off-site fire ignition.

Climate Resolve’s suit was one of two aimed at Centennial, the other being a challenge by the Center for Biological Diversity and the California Native plant Society. Although that case was rejected in April 2021, CBD was granted prevailing-party status in February 2022 on two claims in which Climate Resolve won.

Tejon Ranch said it may appeal Friday’s ruling as well as the one from February 2022. It added in the news release that further environmental review of Centennial would assume implementation of the company’s 2021 settlement with Climate Resolve.

That agreement was two-fold: Tejon Ranch offered to fund electric vehicle charging stations and purchase incentives in order to cut greenhouse gas releases such that the community would be considered to have net-zero emissions. The accord also obliged the company to institute a fire safety grant program to help nearby communities with fire prevention and management.

Centennial, proposed to include 10.1 million square feet of commercial and industrial space near I-5 and Highway 138, is one of three residential communities by Tejon Ranch. The others, both approved by Kern County, are Mountain Village at Tejon Ranch, which would have 3,450 homes, 750 hotel rooms and 160,000 square feet of commercial space on the east side of I-5 near Frazier Park, and Grapevine, a master-planned community proposed to include 12,000 homes at the bottom of The Grapevine.

https://www.bakersfield.com/news/tejon-undecided-on-next-steps-after-centennial-ruling/article_2b560898-ccef-11ed-9222-bfcf7caefdd8.html?utm_source=CalMatters+Newsletters&utm_campaign=3fd87ea3a3-WHATMATTERS&utm_medium=email&utm_term=0_faa7be558d-3fd87ea3a3-150181777&mc_cid=3fd87ea3a3&mc_eid=2833f18cca

 

California Chamber Posts Influential “Job Killer” List of Legislative Bills

Chamber of Commerce

The California Chamber of Commerce on Wednesday released its most recent list of 13 so-called “Job Killer” bills, measures that the pro-business group alleges would damage California’s economy.

CalChamber President Jennifer Barrera said in a statement that while private employers account for more than 17 million jobs and $1.6 trillion in annual wages, the bills on the group’s list will “stifle job creation, reduce investent in our economy, and drive outward migration.

“Job killing policies make California unattractive both to current employers and entrepreneurs who, incidentally, generate the preponderance of the state’s tax revenue, and to those who might want to come here to invest in our future economy,” she said.

LIST:

https://advocacy.calchamber.com/policy/bill-tracking/2023-job-killers/?ac_cid=DM781044&ac_bid=-1770144347

 

Two Economic Downers for California:

Wall Street Journal excerpts

  1. Rising High-Rise Office Vacancies

Defaults and vacancies are on the rise at high-end office buildings, in the latest sign that remote work and rising interest rates are spreading pain to more corners of the commercial real-estate market.

For much of the pandemic, buildings in central locations that feature modern amenities fared better than their less-pricey peers. Some even were able to increase rents while older, cheaper buildings saw surging vacancy rates and plummeting values. Now, these so-called class-A properties, whose rents generally fall into a city’s top quartile, are increasingly coming under pressure.

The amount of U.S. class-A office space in central business districts that is leased fell in the fourth quarter of last year for the first time since 2021, according to Moody’s Analytics. The owners of a number of high-end properties recently defaulted on their mortgages, highlighting the financial strain from rising interest rates and vacancies.

“Any property owner who says ‘Oh we’re fine’ is a little bit fooling themselves,” said Thomas LaSalvia, director of economic research at Moody’s Analytics.

New leasing data and recent defaults indicate that many of these high-end properties aren’t immune to the office market’s crisis.

Take 777 South Figueroa St. in downtown Los Angeles. Completed in 1991, the 52-story tower features a lobby with 30-foot ceilings and rose-marble-covered walls, a landscaped plaza, valet parking and concierge services. Many of its tenants are financial companies and law firms, according to data from CoStar Group.

The owner, Brookfield Asset Management, recently defaulted on more than $750 million in debt backing the building and another Los Angeles tower. Meanwhile, asset manager Pimco recently defaulted on a mortgage backed by a portfolio of office buildings including Twitter offices in New York and San Francisco.

Older high-end properties are struggling in part because they face competition from towers built in recent years. In downtown Los Angeles, 28 office buildings have been completed since 2000, according to Moody’s Analytics.

  1. Plummeting Import Freight Traffic

Freight companies are dialing back expectations that demand will recover strongly in the second half of the year amid growing economic uncertainty and signs retailers are growing more guarded about placing big orders in 2023.
Container imports at the ports of Los Angeles and Long Beach, the nation’s busiest port complex, plummeted 38% year over year in February.
U.S. freight rail volumes were down 5.2% in the first 11 weeks of 2023 compared with last year, according to the Association of American Railroads. The intermodal truck-rail business that includes a large share of retail traffic was off 9.6% in that time, including a 15.2% year-over-year slide in the week ended March 18.

Freight demand started slowing midway through 2022 as consumer spending pivoted from goods to services and big retailers found themselves overstuffed with inventories following a pandemic-driven rush to fill store shelves.

Transport companies from truckers to container shipping lines have pointed to an anticipated rebound in the second half of this year, saying they expected companies to return to more typical, prepandemic ordering patterns after working through excess inventories.
That prospect has looked more questionable as retail sales have declined and more retailers and their suppliers display caution as they remain focused on keeping inventories in check.
Shipping figures are showing signs of weakening demand as companies hold back new orders and global trade volumes falter.