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IN THIS ISSUE – “The governor will have to decide if his values align with the progressive values of our caucus.”

Asm. Ash Kalra, chair, Legislative Progressive Caucus, on the bills on Newsom’s desk

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 SEPT. 22, 2023

 

Five Take-Aways from the Legislature’s End-of-Session Bill Palooza

Sacramento Bee

Five of the biggest take-aways from the Legislature’s end-of-session bill palooza:

NEWSOM HAD A SUCCESSFUL SESSION: Lawmakers largely got behind the governor’s largest priorities. They cleared the March ballot so that his $6.4 behavioral health bond will go before voters in without any competing statewide bond measures.

Newsom also had some success with gun safety. Democrats passed a resolution Thursday calling a Constitutional Convention on the governor’s proposed 28th Amendment to raise the minimum age for purchase from 18 to 21, mandate universal background checks, establish a waiting period for all purchases and ban civilian ownership of assault rifles.

Constitutional scholars consider Newsom’s effort “essentially impossible.”

Two-thirds of states must pass similar constitutional convention legislation. But it reinforces the message he has been carrying into red states, where he has waged his “Campaign for Democracy” for issues like abortion access and transgender rights, financed by his PAC.

The state is on track to strengthen its concealed carry gun laws after a bill that failed to clear the legislature last year was sent to Newsom’s desk on Tuesday. The governor has already said he will sign the bill — and gun rights groups are standing ready with a lawsuit to file the same day.

PASSAGE DOES NOT GUARANTEE A SIGNATURE: Some high-profile bills could be at risk of a veto. These include legislation to give striking workers unemployment benefits and restrict the rollout of self-driving trucks.

AB 316, authored by Assemblywoman Cecilia Aguiar-Curry, D-Winters, would require a human operator behind the wheel of any autonomous truck driving on California roadways. The bipartisan bill sailed through both chambers with overwhelming support, including a 36-2 vote in the Senate.

However, the Newsom administration has been frank about where it stands on the issue — with the autonomous vehicle industry. While driverless cars have been cruising California roadways for years, the state currently bars autonomous vehicles weighing more than 10,000 pounds, like trucks. The legislation circumvents a regulatory process underway at the California Department of Motor Vehicles to begin considering unraveling the state’s prohibition.

Dee Dee Myers, the administration’s top business official, wrote to lawmakers last month that AB 316 hampers California’s competitiveness and undermines existing oversight. “Our state is on the cusp of a new era and cannot risk stifling innovation at this critical juncture,” she wrote.

BILLS THAT FAILED REPEATEDLY FINALLY PASSED: A handful of bills killed by lawmakers in past sessions had a reversal of fortune this year. A hard-fought effort more than 20 years in the making that allows legislative staffers to unionize made it to the governor’s desk.

This was at least the fifth time since 2000 that a staff unionization bill was introduced. If signed by the governor, it will take effect in 2026. A bill to place a state excise tax on guns and ammunition made it to the governor’s desk after years of previous failed attempts dating back to 2013.

BIG TECH SCORED SOME MAJOR WINS: This year shaped up to be a big one for Big Tech, which faced a number of measures on the agenda intended to curb its power. So how did those bills fare?

In a word: Poorly.

A bill to ban TikTok and other apps owned by companies based in countries with potentially hostile regimes, like China, on state-issued smartphones was amended and then pushed off until 2024, after Gov. Gavin Newsom signed an executive order for the state to study artificial intelligence.

Also shunted off to the 2024 calendar was Assembly Bill 886 from Assemblywoman Buffy Wicks, D-Oakland that would have required social media platforms like Meta and Google to pay news organizations for content that they use.

That bill faced intense pushback from Meta, owner of Facebook and Instagram, which threatened to pull news from its platforms outright if the bill became law. One major tech bill — Senate Bill 680 by Sen. Nancy Skinner, D-Berkeley — was killed outright, one of many measures quashed by the Legislature’s powerful appropriations committees.

SB 680, like SB 287 before it, would have held social media platforms accountable for children who become addicted to their platforms, as well as those who suffer an eating disorder or inflict harm on themselves or others as a result of accessing social media.

But there were some bright spots for lawmakers looking to push back against Big Tech.

Senate Bill 362, by Sen. Josh Becker, D-San Mateo, strengthens the California Consumer Privacy Act by allowing consumers to request that their data be deleted from data broker websites. Despite heavy tech industry lobbying against the measure, it passed an Assembly floor vote, 52-14 on Wednesday and was likely to pass on concurrence in the Senate on Thursday. Assembly Bill 1394, also by Wicks, which is intended to curb child sex trafficking and exploitation on the internet, passed out of the Legislature earlier this week and is awaiting a signature, or veto, from Newsom.

A QUIETER YEAR FOR CLIMATE LEGISLATION: This session marked a relatively quiet year for environmental policy, a clear contrast to 2022 when Gov. Gavin Newsom introduced and signed a flurry of bills meant to slash carbon emissions.

Still, some consequential environmental bills stood out. Lawmakers advanced two first-of-their-kind measures to allow Californians to assess the carbon footprint of the state’s largest corporations and gain insight into how those companies plan to handle their climate-related risks.

Assembly Bill 1373 represents a deal between lawmakers and the governor to advance California’s burgeoning offshore wind industry through central procurement. Fierce opposition from agriculture and business watered down several strong water rights measures, but Senate Bill 389 spells out the state’s powers to investigate long-standing claims to water.

https://www.sacbee.com/news/politics-government/capitol-alert/article279339299.html#storylink=cpy

 

Progressives Dominate Legislature; Though “Corporate Democrats Still Wield A Lot of Power”

Politico’s California Playbook

The California Legislature’s progressive caucus notched win after win this year — sending Gov. Gavin Newsom proposals that would expand the power of labor, enact tougher climate rules and decriminalize some psychedelic drugs.

They’re by no means dominating the scene — moderate Democrats still hold the line on progressives’ biggest goals.

But some lobbyists and industry groups are grimacing over the shift, fretting that they have lost power to shape legislation because of a larger progressive caucus and the growing power of organized labor.

“On the business side, we’re not feeling like we have a seat at the table, and we need to earn one and we need to do it quickly,” said Jim Wunderman, president and CEO of the Bay Area Council, which opposed a late-in-the-session push to allow striking workers to access unemployment benefits.

That bill, which previously failed in 2019, ultimately made it out of the Legislature this session along with other policies the body rejected just a year or two ago. They include a push for unionization of legislative staff, a bill to legalize the use of psychedelic mushrooms, and another requiring the corporate disclosure of emissions.

The progressive policy proposals put a potentially awkward spotlight on Newsom. He’s committed to signing state Sen. Scott Wiener’s corporate emissions disclosure bill. He’s hemmed and hawed when asked about the psychedelic substances as well as whether to grant unemployment benefits to striking workers.

“These bills are what the majority of the Democratic caucus believes in and fights for,” said Assemblymember Ash Kalra, the progressive caucus chair. “The governor will have to decide if his values align with the progressive values of our caucus.”

Assemblymember Blanca Rubio, who leads the wing of moderate Democrats, acknowledged that progressives moved the ball on several issues this year. Rubio said, however, that it was the centrists who helped land deals on the year’s big-ticket items: fast food and minimum wage for health care workers.

“The progressives certainly had some wins — I can’t deny that,” Rubio said. “But if you look at what got on the floor, a lot of it didn’t get on. And a lot of it was heavily negotiated.”

Jane Kim, a former San Francisco supervisor and state director for Bernie Sanders’ 2020 presidential campaign, helped found the California chapter of the ultra-progressive Working Families Party last year. The group helped to elect nine of the Capitol’s most left-leaning lawmakers last cycle — a boost she said contributed to lawmakers “finally taking some big swings” this session.

Even though progressives have expanded their clout in Sacramento, some activists remain frustrated that California won’t tackle their white whale issues, such as creating a single-payer health care system and ending oil and gas drilling.

“The corporate Democrats still yield a lot of power,” said Amar Singh Shergill, former chair of the state Democratic Party’s Progressive Caucus.

Part of the challenge, Kim said, is that it’s become more popular for lawmakers to call themselves progressive regardless of whether they really are. She said some progressive caucus members don’t fit the label, but declined to name names.

Which lawmakers have the street cred to match is apparently in the eye of the beholder.

 

Let the Lobbying Begin…

CalMatters

The Legislature is done and gone until January. So let the lobbying begin — of Gavin Newsom and his key advisers for the governor to sign, or veto, bills on his desk.

Advocacy groups are ramping up their Governor’s Office lobbying this week:

In all, about 900 bills are on Newsom’s desk for his decisions, with an Oct. 14 deadline.

 Last year, in issuing vetoes, the governor repeatedly cited the need for fiscal discipline with lower-than-expected state revenues. And that was before the $30 billion-plus budget deficit this year.

But on Monday, his state Department of Finance reported that revenues came in more than $1.3 billion, or 11%, above projections in August, putting the state on track in the first two months of the fiscal year. While the approved state budget accounts for the tax filing deadline being extended to October for Californians impacted by the winter storms, it’s possible that revenues could surge again in September.

CalMatters Bill Tracker:

https://calmatters.org/explainers/new-california-laws/?utm_source=CalMatters+Newsletters&utm_campaign=0a7e604edf-WHATMATTERS&utm_medium=email&utm_term=0_faa7be558d-0a7e604edf-150181777&mc_cid=0a7e604edf&mc_eid=2833f18cca

 

State Monthly Revenue Beats Forecast by 11%

Dept. of Finance

Preliminary General Fund agency cash receipts were $1.344 billion, or 11.1 percent, above the forecast of $12.158 billion in August as receipts from nearly all revenue sources exceeded the forecast. Receipts for the first two months of the 2023-24 fiscal year were $75 million, or 0.3 percent, above the forecast of $21.906 billion.

Sales tax was $441 million above forecast in August, offsetting a $453-million shortfall in July that was due to processing delays that shifted over $650 million receipts from July to August.

Personal income tax withholding exceeded the forecast by $367 million in August, up 7.2 percent year-over-year, and was 4.8 percent higher cumulatively from May to August compared to the same period last year. (The Budget Act monthly cashflow reflects the expected impact of delayed payment and filing deadlines for Californians in most counties to October 16. The delay affects personal and corporate income tax categories other than withholding, however the extent to which variance relative to the forecast is caused by taxpayers’ behavior differing from assumptions is unknown.)

TAX RECEIPTS

Preliminary General Fund agency cash receipts for the entire 2022-23 fiscal year were $980 million above the 2023-24 Budget Act forecast of $167.627 billion.

Personal income tax cash receipts were $416 million above the forecast of $7.298 billion in August, largely due to withholding. Following year-over-year decreases in nine out of ten months from July 2022 to April 2023, withholding growth has generally been positive and above forecast in recent months. Personal income tax refunds were $236 million higher than projected in August. Estimated payments, final payments, and other payments were cumulatively $282 million above forecast in August.

Corporation tax cash receipts were $102 million above the forecast of $384 million in August, due to higher Pass-Through Entity Elective Tax (PTE) payments. August corporate tax refunds were $130 million higher than projected. PTE payments were $208 million above the month’s forecast of $69 million in August. Excluding PTE payments, net corporation tax revenues were down $106 million relative to the forecast in August.

Sales and use tax cash receipts were $441 million above the forecast of $3.557 billion in August. This gain is related to the timing of collections as higher-than-expected cash receipts shifted from July to August. August receipts included a portion of the final payments for second-quarter taxable sales, which were due on July 31, as well as the first prepayment for third-quarter sales.

JOBS

California’s unemployment rate remained unchanged at 4.6 percent for the third straight month in August 2023, as unemployment rose by 9,800, civilian employment fell by 27,900, and 18,000 people left the labor force.

California’s labor force participation rate in August was 62.4 percent, unchanged from July. California added 23,100 nonfarm jobs in August, and July’s month-over job gain was revised down from 27,900 to 8,900 jobs.

Seven of the eleven major sectors added jobs in August, driven by gains in private education and health services (14,000). Six other sectors added jobs: government (5,200), construction (4,700), other services (3,800), leisure and hospitality (2,800), manufacturing (1,300), and professional and business services (400). Information (-9,000) and financial activities (-100) lost jobs in August, while trade, transportation, and utilities; and mining and logging had no change in employment.

HOUSING

Through July 2023, the latest available data, California permitted 108,000 units on a seasonally adjusted annualized rate basis, down 0.6 percent from June 2023 and down 11.1 percent from one year ago. July 2023 permits were evenly split with 54,000 single-family units (up 0.4 percent from June, but down 20.5 percent year over year) and 54,000 multi-family units (down 1.7 percent from June but up 0.9 percent year over year.

https://dof.ca.gov/wp-content/uploads/sites/352/2023/09/Finance-Bulletin-September-2023.pdf

 

Newsom v. Big Oil…It’s Personal

CalMatters commentary from Dan Walters

When Ken Cory, an assemblyman from Orange County, was running for state controller 49 years ago, he portrayed himself as “the man oil companies fear the most.”

Ever since, California politicians have periodically – when it seemed advantageous – denounced the companies that supply Californians with automobile fuel and other petroleum-based products.

The latest is Gov. Gavin Newsom, who seized upon a spike in gasoline prices last year to portray petroleum suppliers as price-gouging leeches. He persuaded the Legislature to impose state oversight on their finances and, if warranted, fine them for excess profits.

Newsom also signed legislation to restrict the siting of new oil wells, and the industry responded by collecting signatures on a referendum that would, if voters agree, repeal the measure.

Newsom struck again a few days ago with a lawsuit, filed by Attorney General Rob Bonta, accusing major oil companies of concealing research proving petroleum use is a major cause of climate change.

“For more than 50 years, Big Oil has been lying to us – covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet,” Newsom said. “California taxpayers shouldn’t have to foot the bill for billions of dollars in damages – wildfires wiping out entire communities, toxic smoke clogging our air, deadly heat waves, record-breaking droughts, parching our wells.”

It’s a little surprising that Newsom didn’t include the heartbreak of psoriasis in his list of oil industry sins.

His announcement of the suit coincided, not accidentally, with Newsom’s sojourn to a climate change conference in New York and a flurry of network television interviews, and thus is a new wrinkle in his vigorous effort to build a national image as a major political figure.

It’s noteworthy that suing “Big Oil” for its role in climate change is not exactly new. Many other such suits have been filed but none has yet achieved the holy grail of making oil companies pay many billions of dollars to counteract climate change.

It’s at this point that a couple of other facts warrant mention – that Newsom and his entourage traveled to New York aboard an airliner that burns petroleum and that his personal wealth is grounded in money originating in J. Paul Getty’s oil empire.

The trust of Newsom’s patron and surrogate father figure, Gordon Getty – one of J. Paul Getty’s sons – provided the seed money for Newsom’s wine and restaurant business.

Newsom’s late father, a long-time Getty family lawyer and advisor, was director of the trust at the time. Without that investment, it’s questionable whether Newsom would have achieved the wealth that allowed him to pursue a political career.

Does that make Newsom a hypocrite? Perhaps, but at least he should acknowledge that when the oil industry was concealing research into climate change – if it did – it also was providing the wherewithal to make him a multimillionaire.

With Newsom in New York this week, another oil-related issue arose in Sacramento: a demand from Consumer Watchdog that the governor veto a bill that the Legislature approved just before it adjourned last week.

The measure, Senate Bill 842, makes a seemingly minor tweak to the oil profit legislation Newsom championed, requiring the state Energy Commission to consult with the Department of Industrial Relations and oil refinery labor and management before issuing regulations on refinery maintenance shutdowns.

The Western States Petroleum Association sponsored the bill and Consumer Watchdog alleges that it creates a loophole that would weaken the price-gouging law.

With gas prices spiking again, it’s another opportunity for Newsom to burnish his credentials as a crusader against the industry.

https://calmatters.org/commentary/2023/09/newsom-national-image-oil-industry/