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IN THIS ISSUE – “When I see the Democratic Party has endorsed a bill, that gives me notice.”
Assemblymember Gregg Hart on the legislative impact of his political party
- The Growing Game of Musical Chairs to Succeed Newsom
- Former LA Mayor & Assembly Speaker Re-Runs for Governor as Centrist
- California Democratic Party Becomes a Lobbying Powerhouse; Backs 142 Bills
- Golden State Economy Shows Small Gains in June
- Monthly Business Survey Overestimated Job Growth
Capital News & Notes (CN&N) curates 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 JULY 26, 2024
The Growing Game of Musical Chairs to Succeed Newsom
CalMatters commentary from Dan Walters
A game of political musical chairs is developing in California over who might succeed Newsom as governor two years hence.
The field of serious Democratic hopefuls increased to five Tuesday when Antonio Villaraigosa, a former speaker of the state Assembly and mayor of Los Angeles, declared his candidacy.
(More on Villaraigosa’s announcement this week in a separate article below.)
Toni Atkins, former president pro tempore of the state Senate; Lt. Gov. Eleni Kounalakis; state schools Superintendent Tony Thurmond and former state Controller Betty Yee have already declared.
More would-be governors are waiting in the wings.
Attorney General Rob Bonta is very likely to make the run, and his predecessor, Xavier Becerra, now a Biden administration official, is at least exploring the possibility. Others on the informal lists of possible candidates include LA Mayor Karen Bass, a former member of Congress and one-time speaker of the state Assembly; U.S. Sen. Laphonza Butler, who is serving the remainder of the late Dianne Feinstein’s term; and Katie Porter, an Orange County member of Congress who lost a bid for the U.S. Senate this year.
While there’s no obvious frontrunner among the declared and potential candidates, neither are they all equally viable.
Kounalakis’ family wealth — her father is developer Angelo Tsakopoulos — was quite evident in her successful campaign for lieutenant governor and gives her an obvious advantage in the all-important money race.
Bonta’s advantage, should he run, is that he occupies California’s second most influential political office, which has been the springboard for several previous governors. Scarcely a day passes without at least one news release from Bonta’s office touting some accomplishment.
What about Republicans? While it would be virtually impossible for a Republican to be elected governor in this deeply blue state, the presence of a Republican on the primary ballot could affect what happens to the Democratic candidates.
We saw that in March’s top-two primary election when three Democratic candidates for the U.S. Senate were vying for a spot on the November ballot. The winner, Congressman Adam Schiff, spent millions of dollars attacking the Republican candidate, former baseball player Steve Garvey, with the obvious — and successful — aim of helping Garvey finish second. It protected Schiff from having to face his chief Democratic foe, Katie Porter, in November.
So far the only declared Republican candidate for governor with any traction is Leo Zacky, president of Zacky Farms, a major poultry producer. However, it’s possible that Chad Bianco, the sheriff of Riverside County, might jump into the fray.
Former LA Mayor & Assembly Speaker Re-Runs for Governor as Centrist
Politico
Former Los Angeles Mayor Antonio Villaraigosa is making a second run for California governor, a 2026 comeback bid in which the Democrat is staking out a pragmatic lane, contending the state needs someone willing to make difficult — and even unpopular — decisions.
“I’ve not been afraid to take on the tough issues,” Villaraigosa, who also served as Assembly Speaker, said ahead of his announcement Tuesday.
While other Democrats in recent elections have raced to the left, Villaraigosa is eschewing an ideological pitch for a practical one. He signaled a willingness to buck party orthodoxy in Sacramento.
“I’m not looking to be the most popular guy in town. I have a record that demonstrates that I’ve been willing to take on those tough issues.”
“I’m not running for anything else,” added Villaraigosa, who is 71. “So a popularity contest is not what I’m looking for. You’re never gonna see Antonio Villaraigosa — candidate for president or vice president. I want to be a damn good governor.”
He has been teasing a potential bid for months, with allies pointing to favorable polling to demonstrate a path to victory and the former mayor appearing at political events for contenders for other offices, most recently Rep. Adam Schiff’s likely successful run for U.S. Senate.
Villaraigosa ran for governor in 2018 as a business-friendly moderate. He tacked to the right of front-runner Gavin Newsom, then the lieutenant governor, by deriding single-payer healthcare – a litmus test for progressives – as “snake oil.” He envisioned a path to victory by tapping into vote-rich Los Angeles and mobilizing Latinos throughout the state, especially in the Central Valley.
But the strategy fell short, as he struggled to compete with Newsom’s massive fundraising advantage and low turnout among his targeted voters. He finished a distant third in the primary, boxed out by Newsom and John Cox, the lesser-known Republican businessman who, thanks to a late endorsement from then-President Donald Trump, consolidated the GOP vote.
Now Villaraigosa is launching into a field with no clear front-runner in a state that has struggled with homelessness, lack of affordable housing, higher unemployment and an increasingly dour electorate that’s grown tired of more government spending without results.
In a video accompanying his entry into the race, Villaraigosa says the state needs a “problem solver” with bipartisan credentials. He touted his past support for law enforcement, improvement of city schools and closing big budget shortfalls during the Great Recession.
His back-to-basics approach focuses on balancing the state budget, improving public safety and education and bringing down costs for small businesses and middle-income earners.
“People are more interested in what you’re going to do for them,” Villaraigosa said. “And the best way to know what you can do for them is to demonstrate what you’ve done before.”
Villaraigosa also nodded to the Democratic Party’s growing problems with lower-wage workers and people without college degrees — including white and Latino men. “If we’re bleeding white working-class and, increasingly, Latino working families, it’s in no small part because we’re not focused on an economy that’s not working for middle-class families,” he said.
MORE:
California Democratic Party Becomes a Lobbying Powerhouse; Backs 142 Bills
CalMatters
The California Democrat Party is a multimillion-dollar powerhouse whose endorsements and campaign cash can make or break a politician’s aspirations for state or federal office.
The party, as it turns out, also regularly throws its weight around on individual pieces of legislation in the California Capitol, where Democrats hold supermajorities in both chambers.
So far, in the ongoing 2023-24 session, the party has supported 142 bills, according to combined records from party officials and the CalMatters Digital Democracy database.
Few other organizations have weighed in on more legislation, making the party, whose primary function is electing Democrats, one of the most prolific – and successful – lobbying organizations in the Capitol.
“California Democrats are committed to uplifting all Californians and moving our state forward,” the party’s chairperson, Rusty Hicks, told CalMatters in a statement. “The work of Democrats in the state Legislature is an important part of making that commitment a reality. (The party’s) inclusive, thorough process ensures the legislation we support reflects our shared values.”
The bills on which the party takes a position are typically deep in the weeds of state policy. For instance, the party supported a bill that Gov. Gavin Newsom signed into law last year that requires judges to take into account the needs of impoverished communities and small farmers in disputes over groundwater.
The party also supports a pending bill that would require artificial intelligence developers to disclose what data they use to “train” their systems.
A Digital Democracy analysis last month found that the Democratic Party was one of the most successful lobbying groups in the Capitol. The analysis was based on whether bills advanced or died in accordance with a group’s position.
Gregg Hart, a Democratic Assemblymember from Santa Barbara, said it’s not a sure thing he’ll vote for a bill if the party supports it. But he said the party is one of the organizations, including labor and environmental groups, whose opinions he values as he’s casting hundreds of votes in a given year.
“When I see the Democratic Party has endorsed a bill,” he said, “that gives me notice.”
That doesn’t mean the party’s endorsement is a guaranteed ticket to a bill getting signed into law. One in three of the bills the party supports don’t advance, according to Digital Democracy.
One recent example: The party supported a bill that Newsom vetoed last year that would have prevented local governments from punishing public employees for going on strike in solidarity of other striking workers.
Newsom’s veto message said he couldn’t support the legislation out of fears simultaneous “sympathy strikes” at various levels of local government could “seriously disrupt or even halt the delivery of critical public services.”
Another bill the party supported last year that stalled out is legislation aimed at creating a grant program to compensate new teachers in credential programs as they go through student teaching.
To get the Democratic Party’s official endorsement on a bill, party leaders, a Democratic legislator, an official county Democratic organization or the various caucuses inside the party can file a request with the party’s legislation committee to consider endorsing or opposing a bill. Party officials say lobbyists or other individuals outside the official party apparatus are not allowed to submit applications.
The 30 people on the committee are all delegates for the party’s central committee who apply for the position. Party leaders choose members every odd numbered year based on their professional backgrounds and experience as well as their demographic characteristics such as age, sexual orientation and race, party officials say.
The party’s legislation committee’s co-chairs are Margaret Granado, a Los Angeles-area teacher who’s a California Teachers Association official and Amar “A.J.” Thomas, a San Francisco lawyer and city official.
Party officials say they typically don’t oppose legislation, unless they’re Republican-authored bills. This session, the party never formally opposed a bill.
If the legislation makes the cut, the bills are forwarded to the party’s 400-plus member executive board for an official sign off. The executive board is made up of members of the party’s county central committees, co-chairs of the various state party committees and the members of Democratic National Committee. Democratic members of the California Senate, Assembly and U.S. Congress also have an executive board seat.
The executive board typically votes on the packages of bills through what’s known as a consent calendar process that doesn’t involve discussing each individual bill. But members of the board can request to pull bills off the consent calendar for a full vetting, party officials say.
California’s Republican Party, by contrast, doesn’t take positions on individual bills other than on ballot initiatives that first need to make it through the Legislature. The party instead focuses on political campaigns.
“Our role as the (party) is to support and elect Republicans, and we leave the legislating to the legislators,” party spokesperson Ellie Hockenbury said in a statement. “We follow their lead to help them spread the message about important bills and issues. However, we do not have a formal endorsement process for those.”
California Economy Shows Small Gains in June
State Dept. of Finance
California real GDP grew by 1.2 percent in the first quarter of 2024 on a seasonally adjusted annualized rate (SAAR) basis, following 3.1-percent growth in the fourth quarter of 2023. California’s first quarter growth was much lower than the pre-pandemic 2019 average annualized quarterly growth of 4.8 percent.
Preliminary General Fund agency cash receipts were $361 million, or 1.2 percent, above the Budget Act forecast for June, and $3.2 billion, or 1.5 percent, above forecast for the entire 2023-24 fiscal year.
June is an important month for personal and corporate income tax receipts because it contains the due date for second quarter estimated payments, when 40 percent of estimated payments for tax year 2024 are due for both taxes, as well as the prepayment for the Pass-Through Entity Elective Tax (PTET). Both taxes exceeded projections modestly for estimated payments, while PTET payments were only $6 million, or 0.1 percent, below forecast.
Personal income tax receipts were negatively affected by withholding receipts being below the June forecast by $607 million, or 7.7 percent; however, this shortfall was the result of timing factors, and withholding remains above forecast by $554 million, or 0.6 percent, for the entire fiscal year.
Personal income tax cash receipts were $145 million, or 1 percent, below forecast in June but they remained $1.3 billion, or 1.1 percent, above forecast for the entire fiscal year. Withholding should generally be evaluated over multiple months for longer-term trends, as single-month readings can be misleading due to calendar changes affecting when payments are recorded and the timing of stock-based compensation.
While withholding declined 9.9 percent year-over-year in June, it is up 7.8 percent year-over-year in the first half of calendar year 2024. Estimated payments for June were $331 million, or 5.6 percent above forecast.
Corporation tax cash receipts were $263 million, or 2.4 percent, above forecast in June and $1 billion, or 2.5 percent, above forecast for the entire fiscal year. Estimated payments for June were $85 million, or 2.1 percent, above forecast. Other payments were $241 million above projections due to higher final and extension payments from corporations and higher fee collections from limited liability companies (LLCs). June refunds, which are volatile from month to month, were $58 million, or 24.3 percent, above forecast, however, refunds remained $66 million, or 1.3 percent, below forecast for the entire fiscal year.
Preliminary sales and use tax receipts were $65 million, or 1.9 percent, above forecast in June and $7 million above forecast for the entire fiscal year. June cash receipts included the second prepayment for second quarter taxable sales.
California’s unemployment rate was unchanged at 5.2 percent in June 2024 (national is 4.1 percent), as the state’s labor force and civilian household employment increased by 7,200 and 17,500 persons, respectively, while unemployment declined by 10,300. California added 22,500 nonfarm payroll jobs in June 2024, driven by trade, transportation and utilities (9,800).
Six other sectors gain jobs in June: government (5,200), Information (4,000), private educational and health services (3,200), financial activities (2,200), leisure and hospitality (1,500), and professional and business services (1,400). Manufacturing (-2,900) had the largest job loss in June, followed by other services (-1,300), construction (-500), and mining and logging (-100).
Year-to-date through May 2024, California has permitted 106,000 housing units (SAAR), up 2.4 percent from April 2024 and up 5.1 percent from a year ago in May 2023. May year-to-date annualized total permits consisted of 62,000 single-family units (up 0.5 percent from April, and up 21.4 percent year-over-year) and 44,000 multi-family units (up 5.1 percent from April, but down 11.7 percent year-over-year).
The statewide median sale price of existing single-family homes decreased to $900,720 in June 2024, down 0.8 percent from the record high of $908,040 in May 2024, but up 7.5 percent from $837,850 in June 2023. Sales volume of existing single-family homes in California were 270,200 (SAAR) in June 2024, down 0.8 percent from May 2024, and down 2.7 percent from June 2023.
https://dof.ca.gov/wp-content/uploads/sites/352/2024/07/Finance-Bulletin-July-2024.pdf
Monthly Business Survey Overestimated Job Growth
State Legislative Analyst’s Office
Charts and summary blog: