Newsom's 11th-hour infrastructure push

Presented by CCIA: Jeremy B. White and Lara Korte’s must-read briefing on politics and government in the Golden State

Jun 27, 2023 View in browser   By Jeremy B. White, Lara Korte and Sejal Govindarao Presented by CCIA THE BUZZ: A $31.5 billion deficit didn’t end up being the biggest budget deal obstacle. Instead, the most contentious budget debate in years revolved around Gov. Gavin Newsom’s push for a set of bills accelerating infrastructure development. After legislators dug in, the administration signaled Newsom would veto a fiscal plan without an accompanying infrastructure deal — a serious escalation of a magnitude that we haven’t seen in years. Newsom and lawmakers were closing last night on a compromise that jettisoned a controversial water project acceleration while adopting a modified version of Newsom’s push to relax CEQA reviews. Many lawmakers saw Newsom’s infrastructure demands as a fundamental test of the Legislature’s autonomy. They take seriously their status as a coequal branch of government. The budget process typically yields more negotiation and debate with the administration than, say, bills that face sign-or-veto outcomes. So legislators chafed at Newsom using the budget as a mechanism to speed through a streamlining ask. Consider the history. Newsom’s first term was defined by the Covid-19 pandemic. While lawmakers agreed Newsom needed extraordinary executive powers to manage the crisis, a perception that he was running the show without input still fueled discontent. Last year, he impelled reluctant lawmakers to back his nuclear power plant extension as part of an end-of-session climate push and then bragged about needing to “jam my own Legislature.” Within a few months he was seeking votes for an oil profits penalty that, once in print, cruised through the Legislature. That’s not to elide genuine policy disagreements. Newsom ignited a new skirmish in a long-running water war by pushing to accelerate the Delta water conveyance project, rallying local lawmakers in fervent opposition. Environmental groups balked at the governor’s aggressive timeline and in some cases struggled to identify the concrete benefits for clean energy generation, which was the stated purpose. In overarching budget talks, lawmakers’ insisted on more transit and childcare money than Newsom offered. But beyond the merits of the individual infrastructure bills, we heard a pervasive desire to avoid getting jammed. Legislators understood Newsom was looking for a win so he could tout untangling red tape in the name of climate progress. They also were wary of appearing to simply acquiesce and vote aye, in part because of the precedent it sets for the next round. That next round could well include another deficit-plagued budget cycle — and perhaps a recession — unless revenues dramatically rebound. It will also entail a Speaker Robert Rivas (and likely a new budget chair) negotiating in place of Assembly Speaker Anthony Rendon, who just forged his last budget pact. We’ll see how much more Newsom pushes environmentalist allies whose relationship with him has run hot and cold. One constant amid those variables: Both branches will work to assert their authority. BUENOS DÍAS, good Tuesday morning. Single payer, many disputes: A Senate bill going before the Assembly Health Committee is dividing Democrats, earning the formal opposition Monday of the progressive lawmaker who carried last year’s failed single-payer bill and intends to try again next year. And former state Sen. Richard Pan is formally kicking off his Sacramento mayor campaign this morning, joining a field that included Assemblymember Kevin McCarty and former City Councilmember Steve Hansen.  Got a tip or story idea for California Playbook? Hit us up at jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte.    A message from CCIA: A link tax is the last thing California needs. Oppose AB886.   WHERE’S GAVIN? Nothing official announced. QUOTE OF THE DAY: “We didn’t win more House seats in California because Gavin’s numbers were much lower, the margin, than they should have been … I think the message that says ‘Make America California’ is not a winning message.” Rep. Ro Khanna on Newsom campaigning outside of California in 2022, via Vanity Fair.   PLAYBOOK MEET & GREET! Join POLITICO in welcoming our new Playbook Author, Dustin Gardiner, at Cafeteria 15L on Wednesday, July 12, 2023. We're convening our most influential readers in Sacramento and beyond as we expand our footprint across the Golden State. Swing by and have a cocktail on us—you never know who you might run into! Register here.     TOP TALKERS — "Takeaways from the California budget deal between Newsom and Democratic lawmakers," by the Los Angeles Times’ Taryn Luna: “Gov. Gavin Newsom and Democratic legislative leaders on Monday agreed to a $310.8-billion budget spending plan that will reduce investments in fighting climate change and reflects a compromise on the governor’s last-minute proposal to speed up infrastructure projects across California.” — "Homelessness vs. children’s mental health: Newsom’s budget trade-off," by the San Francisco Chronicle’s Kristen Hwang: “Come March, California voters will get the chance to weigh in on sweeping changes proposed by Gov. Gavin Newsom to the state’s mental health funding system — including a $4.68 billion bond measure to add treatment beds — but critics say the proposal pits children’s mental health services against the state’s ballooning homelessness crisis.” — "Gavin Newsom, California lawmakers face looming budget deadline. Here’s what they’re debating," by The Sacramento Bee’s Lindsey Holden and Maggie Angst: “California Gov. Gavin Newsom and Democratic legislative leaders have negotiated major elements of the state budget — although they remain at odds over Newsom’s eleventh-hour push to streamline large-scale infrastructure projects.”   A message from CCIA:   CALIFORNIA AND THE CAPITOL CORRIDOR FIRST IN PLAYBOOK: SCHWARZENEGGER SWEET ON FOOD DYE BILL — It’s not often that the former governor weighs in on Sacramento affairs, but Arnold Schwarzenegger today is backing AB 418 by Assemblymember Jesse Gabriel, which would ban five processed food additives already banned in Europe, including red dye No. 3, which can be found in candy such as Skittles. In a letter to his 400,000 “Pump Club” newsletter subscribers this morning, Schwarzenegger argues bills like Gabriel’s are non-partisan — “I’m a small government guy. But I’ve also seen that sometimes, in a world where every big industry has an army of lobbyists and our kids have no one fighting for them, government has to step in,” he writes. “You wouldn’t believe the crap lobbyists said to me when I limited junk food in schools or banned trans fats as governor.” Gabriel’s bill is set to be heard in the Senate health committee on Wednesday. — "More California prisoners are requesting gender-affirming health care, including surgeries," by CalMatters’ Anabel Sosa: “The population of transgender inmates in California prisoners surged by 234 percent in the years since the state adopted a first-in-the nation policy allowing gender-affirming health care.” — "Column: Why Wendy Carrillo is a natural alternative to Kevin de León on L.A.’s City Council," opines the Los Angeles Times’ Jean Guerrero: “In her bright red blazer, Wendy Carrillo stood out in the tattooed crowd of ex-gang members at Homeboy Industries, a nonprofit that runs gang rehabilitation and reentry programs. But as Carrillo, a state assemblywoman whose district includes East Los Angeles, took the microphone, she was in her element. ‘I’m so proud to represent you,’ she said.” — "Is California rolling back public access to police misconduct records?" by The Mercury News’ John Woolfolk: “In September 2021, Gov. Gavin Newsom and Democratic lawmakers touted a package of bills creating a system to decertify law enforcement officers for serious misconduct and increasing transparency of their personnel records — a move aimed at weeding cops with a history of troubling behavior out of law enforcement.” — "$60-million state grant to aid L.A. County in expanding homeless services in Skid Row," by the Los Angeles Times’ Ruben Vives: “A $60-million state grant recently awarded to L.A. County’s Department of Health Services will jump-start a plan to provide interim housing and services for more than half of Skid Row’s homeless population over the next three years.”   SUBSCRIBE TO POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don’t miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY.     MIXTAPE — "‘They’re making up stuff’: How the narrative of S.F. as dystopian hellscape is affecting the city," by the San Francisco Chronicle’s Carolyn Said — "'Nuclear option’? Supersized housing projects are planned for Bay Area’s wealthiest cities. Is one coming to your neighborhood?" by The Mercury News’ Ethan Varian — "These high school grads are the COVID Class of 2023 and have the stories to prove it," by the Los Angeles Times’ Milla Surjadi — "‘We need some fun’: Party after S.F. Pride Parade gives Civic Center a needed boost," by the San Francisco Chronicle’s St. John Barned-Smith   A message from CCIA: Lawmakers are proposing a bill that would charge websites every time they link to a news article. A new tax is the last thing CA needs. Oppose AB886.   CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this subscriber-only service offers, click here. Want to make an impact? POLITICO California has a variety of solutions available for partners looking to reach and activate the most influential people in the Golden State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Jesse Shapiro to find out how: jshapiro@politico.com   Follow us on Twitter Jeremy B. White @JeremyBWhite Lara Korte @lara_korte POLITICO California @politicoca   Subscribe to the POLITICO Playbook family Playbook  |  Playbook PM  |  California Playbook  |  Florida Playbook  |  Illinois Playbook  |  Massachusetts Playbook  |  New Jersey Playbook  |  New York Playbook  |  Ottawa Playbook  |  Brussels Playbook  |  London Playbook View all our political and policy newsletters Follow us

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