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IN THIS ISSUE – Breaking Brown
NEW LAWS & VETOES
- Legislature Passed 1,042 Bills; Governor Signed 870; What’s the Bottom Line?
- Newsom’s Record to the Right of the Legislature
- Feds Revise Delta Water Management Plan
- California Health Coverage Rate Stagnates
- Pay Increases Due for Two-Thirds of State Workers
FOR THE WEEK ENDING OCT. 25, 2019
Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests. Please feel free to forward.
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Banning is the name of a small city in Southern California, but also applies to a pervasive theme of the Legislature this year.
The 1,042 bills that passed the Legislature and the 870 signed by Gov. Gavin Newsom included an extraordinary number that used the state’s police powers to prohibit activities deemed to violate the Capitol’s often unique sensibilities.
They ranged from the semi-ridiculous, such as banning tiny plastic bottles of shampoo and other toiletries from hotel rooms, to the obviously justified, such as tightening up the ban on unvaccinated school children.
Guns and gun owners were the targets of several legislated bans, such as one on gun shows in San Diego County’s Del Mar fairgrounds and another to limit purchases of rifles to no more than one every 30 days, emulating a pre-existing limit on handgun purchases.
Some of the newly minted prohibitions would affect, or even erase, whole economic sectors, such as eliminating cash bail, banning the sale of some animals, barring circuses from using elephants and other wild animals in their shows, or making it difficult, if not impossible, to work on contract, rather than as a payroll employee.
The latter, if not overturned by voters, is one of several union-sponsored bills aimed at changing employer-employee relationships in favor of the latter. Another would prohibit employers from requiring binding arbitration of disputes as a precondition to employment.
In signing both the binding arbitration ban and another measure prohibiting smoking on state beaches and in state parks, Newsom departed sharply from his predecessor, Jerry Brown, who had a streak of libertarianism and sometimes rejected bills he saw as going too far down the path of official nannyism.
Brown vetoed beach smoking bans three times, saying last year, “Third time is not always a charm. My opinion on the matter has not changed. We have many rules telling us what we can’t do and these are wide open spaces.”
Newsom is a more conventional liberal, or “progressive” in the preferred nomenclature of those on the left side of the political scale, and generally endorses their latter-day puritanism.
That said, during his first experience with the Legislature’s 11th-hour blizzard of more than 700 bills approved before adjournment in September, Newsom did show a bit of political fortitude.
Clearly worried about a slowing economy, the freshman governor rejected several bills that would have committed the state budget to multi-billion-dollar spending increases backed by influential interest groups.
One would have reinstated a new version of redevelopment, which local governments once used to remake neighborhoods deemed to be blighted. Brown and the Legislature eliminated redevelopment seven years ago, and the revised version Newsom vetoed would have cost the state budget as much as $2 billion a year. In doing so, he bucked local governments and construction unions.
Newsom also vetoed legislation that local governments and their unions had wanted to change the wording of local ballot measures for a tax increase and bond as they were presented to voters. Such measures must now be up-front with voters on their financial consequences, but local officials wanted to bury that information in the voter pamphlet.
Finally, Newsom signed a bill to require the state’s middle and high schools to eliminate early classes that, pediatric physicians said, were depriving teenagers of much-needed sleep. The entire education establishment, including the very influential California Teachers Association, wanted Newsom to veto the bill that Brown had previously rejected.
Scarcely two months hence, the Legislature will return to Sacramento and the whole process will begin again.
In what may come as a surprise to both California Republicans and the governor himself, Gavin Newsom might just be one of the most moderate Democrats in the Capitol.
Based on an analysis of the 1,042 bills that the governor signed or vetoed this year, Newsom is more conservative than any other Democratic state senator and sits to the left of only two Democrats in the Assembly.
It makes use of a political sorting algorithm written by political scientists from UCLA, the University of Southern California, Rice University and the University of Georgia that takes “yes” and “no” votes in a legislative session and groups lawmakers together based on how frequently they vote with one another.
Treating each of the governor’s bill signatures as a “yes” and each veto as a “no,” we’ve added Newsom to the chart.
The governor is hardly known as a moderate. In contrast to the reputation for fiscal restraint and pick-your-battles political style that his predecessor Gov. Jerry Brown cultivated during his most recent eight-year tenure, Newsom has been the governor of “big, hairy audacious goals.” In 2018, he ran on a promise to enact a single-payer health insurance system for the state (a promise yet to be realized).
In his first year, Newsom has broken with Brown in ways both legislative and otherwise.
President Donald Trump’s administration rolled out an aggressive plan to ship more water from the Delta to farmers in the San Joaquin Valley, a move that’s certain to trigger lawsuits by environmentalists concerned about endangered fish species.
The move, fulfilling vows Trump made as a candidate and as president, potentially sets up another confrontation with California officials. State officials have been worried that Trump’s plan would hurt the fish that ply the Delta — and force the state to cut back its own water deliveries through the Delta to compensate.
Gov. Gavin Newsom’s administration said it would study the plan.
Capping months of anticipation, the administration unveiled new “biological opinions” from scientists at the U.S. Fish and Wildlife Service and National Marine Fisheries Service that will serve as a blueprint for how water will be funneled through the Sacramento-San Joaquin Delta — and how much will be pumped south to Valley farmers.
The administration insisted its plan, while designed to deliver more water to the Valley, will protect Delta smelt, Chinook salmon and other fish that are listed under the Endangered Species Act.
The plan “will not jeopardize threatened or endangered species or adversely modify their critical habitat,” the administration announced.
Under the current system, which has been in place for a decade, the state and federal pumping stations in the south Delta sometimes have to be shut off to safeguard fish, allowing water to run out to sea. Yet Trump administration officials said the existing rules rely on rigid and outdated scientific standards that limit pumping operations without really helping fish, whose numbers have declined dramatically in recent years.
The administration said it will deploy “smarter Delta operations” to balance water deliveries with fish protections and promised “to use the newest science and the latest scientific thinking to ensure (the) updated operations are benefiting fish.” It also pledge “significant investments” in fish hatcheries and other programs to prop up smelt populations.
Critics in the environmental community, however, said the plan is a sham and the fish populations will suffer even more as additional water is moved south and fish get sucked into the pumps.
“It looks like this administration is trying to shut us down again — permanently,” said John McManus, president of the Golden State Salmon Association, which represents commercial and recreational fishermen.
In August, The Sacramento Bee and other media outlets reported that after federal scientists concluded that the plan would bring the salmon closer to extinction, their superiors ordered them to redo their study to downplay the impact on fish.
The release of the biological opinions could put Gov. Gavin Newsom in an awkward spot. His administration has shown disdain for practically every Trump initiative, and pledged originally to fight Trump’s Delta plan, saying the state’s “commitment to environmental values is unsurpassed.”
The Delta plan creates other potential headaches for the state. The State Water Project and the federal government’s Central Valley Project both move water through the Delta to their respective customers — mainly Valley farmers for the feds and millions of urban Southern Californians for the state.
If the feds push more water through the pumps, the state could have to leave more water in the Delta to comply with state environmental laws, meaning there would be less water available for the State Water Project.
Yet Newsom has also tried to forge compromises with Valley farmers on water issues. In September he infuriated environmentalists by vetoing SB 1, a bill designed to negate every environmental policy proposed by Trump. His reasoning: SB 1 was so rigid that it would have killed a delicate truce between environmentalists and agriculture on reallocating the state’s major rivers.
Moments after Trump’s Delta plan was released, spokeswoman Lisa Lien-Mager of the California Natural Resources Agency said: “California is, and will continue to be, a leader in the fight for clean air, clean water and endangered species. We will evaluate the federal government’s proposal, but will continue to push back if it does not reflect our values.”
Trump has been adamant about his desire to help the Valley, a Republican stronghold that is chronically scrambling for water. His Interior secretary, David Bernhardt, is a former lobbyist for Westlands Water District — the Valley’s largest agricultural water user.
Just about a year ago, he signed a presidential memorandum directing agencies to speed up their review of rules governing the movement of water throughout California.
“I hope you’ll enjoy the water you have,” he told a group of Republican Valley congressmen as he signed the memorandum.
During his lone 2016 campaign appearance in Fresno, he belittled environmental rules that “protect a certain kind of 3-inch fish,” a reference to the nearly-extinct fish.
Farm groups applauded the new Delta plan. “This is the dawn of a new science-based approach to water and ecosystem management,” said Mike Wade of the California Farm Water Coalition. “We are anxious to put these new policies into practice and expect to see a positive response for water users and the environment in the years to come.”
New federal biological opinion for Delta flows:
The rate of Californians without health insurance in 2018 remained the same as 2017, at 7.2 percent, according to the California Budget and Policy Center.
Close to 3 million people are uninsured, according to the new report. The budget center cited two primary factors in explaining the flat rate of uninsured: The federal government is working to roll back provisions of the Affordable Care Act and state lawmakers have shifted their focus to protecting, rather than boosting, coverage.
The number of Californians without coverage fell by nearly 4 million since 2013 and the state’s uninsured rate is below the national average of 8.9 percent.
“This means that around 3 million Californians missed out on the benefits of health coverage, including earlier diagnosis of chronic conditions, improved use of preventive services, better access to mental health treatment, a reduction in preventable mortality and protection from financial distress,” wrote the report’s authors, Scott Graves and Monica Davalos.
The two note that Californians without coverage face additional barriers to accessing health insurance since President Donald Trump’s administration has targeted the so-called Obamacare initiative, pushing state legislators toward a more protective policy stance.
However, because Gov. Gavin Newsom created a state individual mandate and signed new laws that will cover additional populations, the report said that nearly 230,000 Californians will likely enroll for coverage next year.
“If California’s near-term economic outlook remains positive, with growing state revenues,” the report concluded, “State policymakers will be strongly positioned in 2020 to prioritize additional investments aimed at further improving coverage and affordability, potentially benefiting hundreds of thousands of low and middle-income Californians.”
California’s governor has asked the attorney general to investigate why the state’s gas prices are so high, pointing to a new report suggesting big oil companies are “misleading and overcharging customers” by as much as $1 per gallon.
Name brand retailers — including 76, Chevron and Shell — often charge more because they say their gasoline is of higher quality. But a new analysis from the California Energy Commission could not explain the price difference, concluding “there is no apparent difference in the quality of gasoline at retail outlets in the state.”
The commission said California drivers paid an average of 30 cents more per gallon in 2018, with the difference getting as high as $1 per gallon in April of this year. The result is California drivers paid an additional $11.6 billion at the pump over the last five years.
“There is no identifiable evidence to justify these premium prices,” Newsom wrote in a letter to Attorney General Xavier Becerra. “If oil companies are engaging in false advertising or price fixing, then legal action should be taken to protect the public.”
Becerra’s office said in an email it had received Newsom’s request and “will handle accordingly.”
The California Energy Commission said it “does not have any evidence that gasoline retailers fixed prices or engaged in false advertising.” But it said the industry did not provide any proof that its gasoline was better than what the state requires all retailers to sell.
Catherine Reheis-Boyd, president of the Western States Petroleum Association, said the industry trade group is reviewing the report. But she said it was important to note California’s fuel taxes and standards, which are more strict than other states, account for the first $1.07 per gallon at the pump.
“Everyone has to have a seat at the table to ensure policies provide adequate, affordable, reliable energy to the communities we serve,” she said.
While California is known for its environmentally conscious fuel standards, the state was the seventh-largest producer of crude oil in the country in March of this year. The oil industry is a powerful force in California politics, working to halt legislation in the state Assembly earlier this year that would have limited new oil and gas production around homes and schools.
But Newsom has expressed a desire to take on the oil industry during his first year in office. In July , he fired the state’s top oil and gas regulator for doubling the state’s fracking permits this year.
“This is the first time a governor has requested an investigation and prosecution by the Attorney General in modern history into the oil industry,” said Jamie Court, president of Consumer Watchdog, which has criticized the oil industry. “I think it’s a pretty big step.”
Nearly two-thirds of California state workers will receive raises in the coming months based on new contracts their unions negotiated with Gov. Gavin Newsom’s administration this year.
The state is boosting pay for about 147,000 of its 235,000 employees through the contracts, giving raises of about 3 percent per year to most while increasing salaries for some hard-to-fill jobs by as much as 25 percent.
Pay, benefit and health care changes in their contracts, which have terms of one to three years, will cost the state about $5.6 billion, according to the California Department of Human Resources.
Last year, the state spent about $18.4 billion on wages and about $8.2 billion on retirement and health benefits, for a total of about $26.6 billion, according to State Controller’s Office data. That’s up from about $19 billion 10 years ago.
The state’s total payroll hovered between $14 billion and $15 billion from 2009 to 2014, when it started ticking upward as the economy recovered.
Newsom took office in a year when contracts with six state worker unions were expiring, including its agreement with SEIU Local 1000, the largest state worker union representing about 100,000 workers. The state also was sitting on a budget surplus.
After a slow start, negotiations went relatively smoothly, avoiding the strike threats and standoffs that peppered some of the negotiations with former Gov. Jerry Brown’s administration. Newsom signed legislation Oct. 13 finalizing the new contracts.
State workers with the new contracts received salary increases that are in line with those being negotiated by cities and counties, where workers’ unions have been negotiating 3 to 5 percent raises, said Tim Yeung, a labor and employment lawyer with Sacramento-based firm Sloan Sakai.
Newsom’s bargaining team demonstrated willingness to offer special raises for job classifications with recruitment and retention problems, authorizing hefty increases for workers in select jobs. This year’s contract agreements include a couple novel arrangements, such as a new $3,100-per-year health insurance stipend and the diversion of part of a California Highway Patrol raise to help pay for retirement benefits.
Taken together, the contracts reflect a bargaining approach aimed at bolstering the state’s workforce while minimizing the pay increases that add the most to the state’s pension burdens, Yeung said.
“Historically the state has been conservative in their general salary increases for public employees, and I think these contracts preserve that position,” he said. “To the extent they’re having retention problems, it sounds like they’re trying to target particular raises for those positions, which makes sense to me.”
In addition to new raises and perks, many of the contracts call for slight increases to what state workers pay toward their retirement benefits, including changes that move employees closer to a 50-50 split with their employers in making annual pension contributions.
Just one union with an expired contract, the California Association of Psychiatric Technicians, didn’t reach a new agreement. A spokesman for the union, whose workers care for mentally ill and developmentally disabled people in state facilities, declined to comment on where negotiations stand. When contracts expire, employees keep working under their last contract’s terms.
Highlights of the six new contracts are below:
▪ The Local 1000 contract was the first to include the new health care stipend. The $260-per-month stipend, which isn’t pensionable, is equal to the average monthly health insurance premium payment for Local 1000 members. The union’s represented workers, ranging from nurses to IT specialists to food inspectors and custodians, will receive a 7 percent raise over their three-year contract, with some specific job classifications receiving additional 5 percent raises.
▪ The California Correctional Peace Officers Association, representing about 28,000 employees, will receive a 3 percent raise in a one-year contract.
▪ The California State Law Enforcement Association, representing about 7,300 workers in jobs ranging from dispatchers and security officers to park rangers, will receive a 10 percent raise over four years, with some receiving special salary increases of up to 24 percent.
▪ The California Association of Highway Patrolmen’s 6,700 members receive automatic pay increases based on an average of raises among peace officers in the state’s largest local departments in Southern California and the Bay Area. In its new contract, the union agreed to give up a half-percent of an anticipated 3.5 percent raise next year to help pay down pension debt.
▪ State attorneys and administrative law judges will receive the same health care perk as Local 1000, plus a 2.75 percent raise, in a one-year agreement. California Attorneys, Administrative Law Judges and Hearing Officers in State Employment, representing about 4,300 workers, is eager to return to the bargaining table to try to close pay gaps between its workers and attorneys working for other public organizations.
▪ A group of about 1,000 blue-collar workers who maintain heating and cooling systems at state prisons, manage water and waste at state parks and handle HVAC at other state facilities will receive raises of 8.5 percent over three years. Some of the International Union of Operating Engineers’ tenured workers in high-cost areas will receive salary increases up to 25 percent.