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IN THIS ISSUE – “I’m just as surprised some days as others that we have become such friends”

Democratic state Sen. Toni Atkins on her BFF, Republican state Sen. Shannon Grove

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 SEPT. 27, 2024

 

6 Reasons Why Newsom’s Veto Rate Hits New High; Bill-Signing Deadline Nears

CalMatters

Heading into the final four days before his midnight Monday deadline, Gov. Gavin Newsom will need to decide whether to sign or veto 465 bills still on his desk.

So far, he’s blocked 102 of 526 measures he’s acted on since the Legislature adjourned Aug. 31, or nearly 20%. That compares to a 15% veto rate in 2023, when he blocked 156 bills. He had a similar veto percentage in 2022, including some significant bills. In 2021, he vetoed fewer than 8%.

While the Legislature can override vetoes, it takes a two-thirds vote in both the Assembly and Senate and that hasn’t happened since 1979. Governors can also allow bills to become law without their signature, but that doesn’t occur very often, either.

So in most cases, lawmakers try again the next session, often tailoring their proposals to avoid Newsom’s veto pen.

On some high-profile and contentious bills, whatever Newsom says publicly about why he issued a veto, there can be a healthy dose of politics involved — as well as the push and pull of various interest groups.

Here are the six main reasons Newsom gives for his vetoes. (When he gives multiple reasons, it’s counted in all categories.)

It strains the State Budget

For the third year in a row, the most common reason Newsom gave for vetoing a bill was budget concerns — about 40%.

Newsom and the Legislature had to make sweeping cuts to some programs and dip into the state’s reserves to close the $56 billion budget hole over the next two years. The deficit also played a central role in decisions during the session to shelve hundreds of bills. The state’s financial crunch accounted for 41% of vetos last year.

For example, the governor vetoed AB 1840, which would have allowed undocumented applicants to apply for a homebuyer assistance program. In his veto message, Newsom wrote that there is “finite funding” available and that this change would have to be considered in the state budget.

It’s not needed

Newsom vetoed another large percentage of bills because he sees them as unnecessary given the work the state is already doing on an issue.

SB 936 would have required Caltrans to conduct a road safety study and come up with an improvement plan. In Newsom’s message, he wrote that Caltrans is already working on road safety, so the bill would be redundant.

Despite the governor’s explanation of Caltrans’ current efforts, bill author Sen. Kelly Seyarto, a Republican from Murrieta, wrote in a press release that he is “deeply disappointed by the veto, as it sends a message that road safety isn’t being prioritized at a time when fatalities are on the rise.”

AB 2903 would have required state homelessness programs to more closely track and report spending data. However, Newsom wrote in his veto message that he’s already signed legislation that strengthens reporting requirements for California’s two largest programs.

That didn’t satisfy the bill author, Assemblymember Josh Hoover, a Republican from Folsom. “Governor Newsom is doubling down on his failed response to homelessness,” Hoover posted on X. “Our state has spent billions of taxpayer dollars in recent years only to see the homeless population increase statewide.”

It’s bad policy

Newsom cited policy problems as his reason for vetoing one third of the bills — the second largest category. These are bills that he didn’t agree with or had language that was too broad.

For example, Senate Bill 804 would have let community service officers testify at preliminary hearings. In the governor’s veto message, he wrote that the bill raises concerns about “the reliability of evidence presented at a critical stage of criminal proceedings.”

SB 1170 would have allowed candidates to use campaign funds to address mental health-related issues that arise during a campaign, but Newsom wrote that it could allow for other changes to campaign fund use that go “beyond what a reasonable donor would expect.”

It may not be legal

For a couple of bills so far, Newsom said that courts should decide on an issue before he gives his signature.

His second veto of a bill relating to undocumented Californians, SB 2586, would have let undocumented students work on campus. In his message, Newsom wrote that, “it is critical that the courts address the legality of such a policy and the novel legal theory behind this legislation before proceeding.”

It’s up to local officials

Sometimes Newsom vetoes a bill because it’s an issue that could be solved at the local level.

For example, AB 1950 would have created a state task force to research reparations for people displaced in the Chavez Ravine area in Los Angeles. In his veto message, Newsom wrote that it is “an issue best addressed by stakeholders closest to the Chavez Ravine community.”

 It’s too soon

Newsom dubbed another small portion of bills as “premature,” such as SB 1220, which would have banned agencies from staffing call centers with AI or automated decision-making systems if it gets rid of a human job.

Last year, Newsom signed an executive order for the state to evaluate how to use AI in its workforce, so the bill would create guidelines before the ones from the order are announced, he wrote in his veto message.

SB 1050 would have allowed Californians who had land taken from them or their families for racially motivated reasons to apply for compensation. But implementing the bill is “impossible,” according to Newsom, because there’s no agency to do so.

https://calmatters.org/politics/capitol/2024/09/newsom-vetoes-bills-reasons/

 

Newsom Signs Bills to Crack Down on Oil Drilling

CalMatters

California will accelerate cleanup of the state’s idle oil wells, shut down one low-producing oilfield and allow cities and counties to restrict oil drilling under three measures that Gov. Gavin Newsom signed into law today.

Under one of the new laws, Assembly Bill 2716, an oilfield in unincorporated Los Angeles County will be shut down, with oil wells plugged by the end of 2030. Another new law, Assembly Bill 1866, requires oil companies to eliminate between 5% and 15% of their idle wells each year between 2025 and 2027, ramping up to between 10% and 20% in all subsequent years.

Addressing drilling of new wells, the third law, Assembly Bill 3233, would give local governments the authority to “limit or prohibit oil and gas operations or development in its jurisdiction.” The measure was prompted by court decisions that blocked local ordinances in Monterey County and Los Angeles.

Newsom lauded the new laws as his get-tough approach on the oil industry. However, his administration took another major step during this legislative session that delays protection of communities with oil wells.

Newsom’s administration requested delays in an existing law requiring monitoring of oil and gas wells near homes and schools for leaks into air and water, saying regulators needed more time. In response, the Legislature passed a bill granting a three-and-a-half year delay, which means wells will not have to be monitored until July, 2030. Newsom has not yet signed it; at a press conference today, he declined to comment.

The Center for Biological Diversity, an environmental group, told CalMatters that the new laws are a good step, but the delays in the measures to protect communities from leaking wells demonstrates that “there’s more work to do.”

“The delay is extremely troubling and will force frontline communities to wait longer for much-needed pollution protections,” said Hollin Kretzmann, an attorney at the group’s Climate Law Institute. “We’re celebrating the landmark achievements these bills represent, but we won’t rest until all Californians get the future free from oil and gas pollution that they deserve.”

The oil industry had sought to eliminate the two-year-old law entirely through a ballot measure, but decided in June to abandon that effort.

More than 2.5 million Californians live within 3,200 feet of an oil or gas well, predominantly in low-income communities of color,  including in Long Beach, Los Angeles and Kern County. Research has linked an array of health effects, including a higher incidence of premature and low birthweight babies, to proximity of wells.

Newsom, speaking at a soccer field in the Los Angeles neighborhood of Baldwin Hills with the Inglewood Oil Field as a backdrop, hailed one of the measures as “empowering local communities to go further than the state itself.” He added that Legislature was “absolutely right” to hold oil companies accountable for idle wells.

Starting in 2026, low-producing wells in the Inglewood Oil Field cannot operate for more than 12 months. All wells in the sprawling field will be shut down and plugged by the end of 2030. More than 600 wells now operate there.

State officials estimate that California has about 40,000 idle oil and gas wells that haven’t produced oil in two years and need to be plugged.

Catherine Reheis-Boyd, chief executive of the Western States Petroleum Association, dismissed the governor’s actions as “political theater,” adding that the new mandates will drive up gasoline costs for Californians, result in lost jobs and increased reliance on imported oil. “More mandates won’t lower gas prices or help California families,” she said.

Newsom lambasted the companies. “They’re ripping you off,” Newsom said. “Big Oil has been ripping you off and then lying to you.”

Newsom called the Legislature into a special session to address gas prices, giving him more time to persuade lawmakers to act on a package of energy bills he failed to jam through in the final weeks of the regular session.

https://calmatters.org/environment/2024/09/newsom-california-oil-well-laws/

 

Democrat Lawmakers Embrace a Conservative Colleague

Politico

Shannon Grove is a Trump-supporting, anti-abortion Republican from the beating red heart of California’s Central Valley.

She’s also one of Democratic lawmakers’ most beloved colleagues.

The Bakersfield lawmaker has gained widespread notoriety in recent years for challenging the majority party’s reluctance to increase criminal penalties, often gathering support from even the most liberal Democrats to increase sentencing for human trafficking and set new protections for children. Just yesterday, the governor signed SB 1414, Grove’s bill that charges the solicitation of a minor as a felony, rather than a misdemeanor. It received near-unanimous support in the Senate, and was even championed by First Partner Jennifer Siebel Newsom.

Grove’s crusades have been backed, in large part, by the conservatives like her who are outraged over the state’s approach to crime, but have also gained a boost from the unlikely alliances she’s forged with the opposing party over her nearly 15 years in the building.

“She’s a likable person and she does extend herself and show kindness,” said former Senate President Pro Tem Toni Atkins, who previously led the Democrats in the upper chamber and is running for governor in 2026. The two share a close bond and have been known to dress up as one another for the Legislature’s annual “twin day” — down to the matching shoes.

“I’m just as surprised some days as others that we have become such friends.”

It’s not unheard of for Democrats and Republicans to find common ground, especially among moderates, but Grove’s politics don’t exactly fall in the middle. She’s a close ally of former Speaker Kevin McCarthy and was the first female veteran elected to the California Legislature when she entered the state Assembly in 2010.

Since then she has been a fierce opponent of many key Democratic priorities, including efforts to reduce California’s domestic oil production. Her comments outside of the chambers have been known to raise eyebrows: In 2015, she suggested in a Facebook post that God might be responsible for the drought, and in 2021 blamed the Jan. 6 riots on antifa — a tweet that eventually lost her the top spot in the Senate’s Republican Caucus.

Yet Democrats and Republicans alike routinely praise Grove for her demeanor in the Capitol, describing her as a hardworking, personable lawmaker who will fight you on the dais and bring you birthday cake the next day, or invite you to her district for horseback riding.

“My colleagues and I may not always agree on everything, but I do have some pretty incredible friends on the other side of the aisle,” Grove told Playbook in an interview. “And regardless of our differences and the debate that takes place, I really do believe that they know I really do care about them as individuals.”

Both Grove and Atkins were elected to the Assembly in 2010, but it wasn’t until they each moved into leadership positions in the Senate that they discovered all their similarities. Atkins’ twin sister, like Grove, served in the military; both lawmakers grew up poor in rural parts of the country; and they both share a deep love of Dolly Parton.

“Do we agree on policy? Not in a million years,” Grove said of Atkins. “But then we still have a friendship. That’s all friendships, right? You have arguments or disagreements with your friends. It shouldn’t be any different in the Legislature.”

The one time Grove really irritated Atkins, she said, was when the Republican organized a Zoom call with Parton without her.

“That is the one time I just looked at her like, ‘you’re kidding me, right?’” Atkins recalled.

Among Grove’s other high-profile bills this year is a measure that would require youth centers to disclose more information about potential abuse, going after what’s commonly known as the “troubled teen industry.” Hotel heiress and Hollywood socialite Paris Hilton traveled to the Capitol to support Grove’s cause in April. But perhaps more unusual were the two Democratic co-authors standing alongside her.

“We’re all here today asking ourselves: what is an heiress, a Republican, a single mom and a former foster youth have in common?” Hayward Democratic state Sen. Aisha Wahab told reporters at a press conference. “The honest truth is we want to protect children.”

Grove’s intentions have not always been well-received, especially in the Assembly. Last year her human trafficking bill, SB 14, was rejected by the progressive Democrats on the Public Safety Committee, resulting in a maelstrom of backlash online, including some from tech billionaire Elon Musk. Eventually, Gov. Gavin

Newsom stepped in and compelled the Assembly to reconsider Grove’s bill, which then led to its passage and his signature.

Grove passed up an opportunity last year to run for Congress, declining to run for McCarthy’s empty seat in a race where she would have easily been the frontrunner. She said she plans to continue fighting for kids next year, and terms out of office in 2026.

Senate Republican Leader Brian Jones praised Grove’s tenacity — and her adherence to her beliefs.

“One of the things I think defines Sen. Grove is that she’s very vocal about the policies that are important to her,” he said. “Everybody knows where she stands on things and yet she’s flexible enough to build these relationships with members on the other side of the aisle.”

 

State Revenues Go Positive for August; Jobless Rate Ticks Up

Dept. of Finance

Preliminary General Fund agency cash receipts were $710 million, or 5.5 percent, above the Budget Act forecast for August. Strength in August was driven by sales tax and personal income tax which exceeded the forecast by $435 million and $332 million, respectively.

The August overage in sales tax receipts follows a shortfall of $306 million in July as a larger-than-anticipated portion of July cash receipts shifted to August. Strength in personal income tax was primarily due to withholding exceeding the forecast by $225 million and refunds being $140 million less than expected.

Cumulatively since April when the forecast was finalized, preliminary General Fund agency cash receipts were $4.9 billion above projections. This includes an overage of $3.2 billion attributed to cash collected during the 2023-24 fiscal year.

Personal income tax cash receipts were $332 million, or 4.1 percent, above forecast in August and $2.1 billion above forecast cumulatively since April. Withholding contributed $225 million to the August personal income tax overage and withholding receipts were $766 million above forecast cumulatively since April.

Year-to-date withholding growth for the first eight months of the calendar year was 8.5 percent, on track to outpace the 6.5-percent growth projected for the entire year. Additionally, refunds were $140 million lower than projected in August and $664 million lower cumulatively since April. Non-withholding payments were $34 million below forecast in August but they remain $740 million above forecast cumulatively since April with estimated payments and final payments contributing $446 million and $212 million to the cumulative overage, respectively.

Corporation tax cash receipts were $1 million, or 0.4 percent, below forecast in August as strength in estimated payments and other payments were offset by lower pass-through entity elective tax payments and higher refunds.

Corporation tax receipts remain $1.9 billion above forecast cumulatively since April, primarily due to other payments exceeding the forecast by $884 million and higher estimated payments of $669 million.

Preliminary sales and use tax receipts were $435 million, or 12.1 percent, above forecast in August. This strength in August is primarily related to the timing of collections as higher-than-expected cash receipts shifted from July to August. August includes a portion of the payments related to the final payment for the second quarter of 2024, which was due on July 31, and the first prepayment for the third quarter of 2024. Sales tax receipts were $133 million above forecast cumulatively since April.

California’s unemployment rate ticked up 0.1 percentage point to 5.3 percent in August 2024, as the state’s labor force and civilian household employment increased by 20,000 and 9,000 persons, respectively, and unemployment increased by 11,000 persons. California added 6,800 nonfarm payroll jobs in August 2024 in five sectors led by leisure and hospitality (6,800), followed by private education and health services (4,900), other services (3,900), professional and business services (3,800), and trade, transportation, and utilities (2,900).

The remaining six major sectors lost jobs in August driven by information (-5,100) and manufacturing (-4,700), followed by construction (-3,300), government (-2,200), mining and logging (-100), and financial activities (-100).

Year-to-date through July 2024, California has permitted 104,000 housing units, unchanged from June 2024 and down 2.1 percent from a year ago in July 2023.

July year-to-date annualized total permits consisted of 61,000 single-family units and 43,000 multi-family units, up 13.1 percent and down 17.7 percent from the previous year, respectively.

The statewide median sale price of existing single-family homes decreased to $888,740 in August 2024, up 0.2 percent from the previous month, and up 3.4 percent from $859,800 in August 2023. Sales of existing  single-family homes in California were 254,820 (SAAR) in August 2024, down 8.9 percent from July 2024, and little changed from August 2023.

https://dof.ca.gov/wp-content/uploads/sites/352/2024/09/Finance-Bulletin-September-2024.pdf

 

2024 Election Burn-Out? Cheer-Up…the 2026 Governor Candidates Debate Sunday

Sacramento Bee

While most of us political insiders are watching the 2024 election like hawks, it’s easy to forget that there’s a statewide election in just two years, where voters will choose a new governor.

So if you just can’t get enough campaign excitement, you’re in luck: This weekend, the National Union of Healthcare Workers is teaming up with reporters from the Associated Press, Los Angeles Times and Politico California to host a 2026 gubernatorial candidate forum featuring former Senate President pro Tem Toni Atkins, Lt. Gov. Eleni Kounalakis, Superintendent of Public Instruction Tony Thurmond and former State Controller Betty Yee.

This marks the first time these four Democratic gubernatorial heavyweights are meeting in the same place to discuss the race and issues facing Californians.

There’s one notable absence: former Los Angeles Mayor Antonio Villaraigosa, who declined to attend.

The event is being held Sunday, from 10 a.m. to 11:30 a.m., in San Francisco. It will be livestreamed by both the LA Times and the NUHW YouTube page.