POLITICO California Playbook PM: How to solve a $31.5 billion puzzle

Your afternoon must-read briefing on politics and government in the Golden State

Jun 14, 2023 View in browser   By Camille von Kaenel With help from Jeremy B. White and Rachel Bluth BOTTOM LINE: Two seemingly contradictory things can be true at the same time: The Legislature will pass a budget Thursday and the Legislature will not have a budget Thursday. Lawmakers are indeed set to pass a budget bill, fulfilling an obligation that enables them to get paid. But the fight over how to close a $31.5 billion budget deficit is not over. The “Big Three” — the Assembly and Senate leaders and the administration — are still going back and forth on some of the details on how to address the shortfall. And major sticking points on transportation, hospitals and climate remain. But key lawmakers said today they are close. Senate Budget Chair Nancy Skinner this morning called talks with the administration “productive.” “I'm very confident that we will reach an agreement on that budget,” she said, adding that she expects the final version to be similar to what passes Thursday. Nancy Skinner | Rich Pedroncelli/AP Photo The vote lets lawmakers continue to get their paychecks by meeting a requirement installed by voters in 2010 after decades of blown deadlines caused the state to enter most new fiscal years without a budget in place. They’ll have to craft a compromise with the administration and finalize the spending details before July 1. Here’s where they still differ. Transit: The Legislature wants to soften the blow of budget cuts to the state’s public transportation systems, which have been sounding the alarm as low ridership during the pandemic sent revenues spiraling downward. Their plan would restore $1 billion to transit funding and increase money for electric buses and other low-emission alternatives. Health care: Lawmakers have also pushed back on the Newsom administration’s proposal to use part of the multibillion-dollar Managed Care Organization Tax to balance the budget. The Legislature ceded some ground, allowing a few billion to go into the general fund this year to balance the budget, but it still differs with the governor on the timing and wants more money out the door faster.  Climate: Most of Newsom’s proposed reductions hit spending related to climate change, and Democratic lawmakers want to save projects like coastal resilience and water recycling. How? By taking $937 million from a reserve fund that was created last year to help sustain the electrical grid. That proposal prompted Assemblymember Vince Fong (R-Bakersfield) to note dryly that he was more in agreement with the governor than with his Democrat colleagues in the Assembly on energy reliability. Permitting: One of the biggest hang-ups remains Newsom’s push to streamline permitting for energy and water projects, which both the Senate and the Assembly have opposed because they say they want more time to review the proposal. HAPPY WEDNESDAY AFTERNOON! Welcome to California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check of California politics and a look at what our policy reporters are watching. Got tips or suggestions? Shoot an email to cvonkaenel@politico.com or send a shout on Twitter. DMs are open!   PLAYBOOK TRIVIA NIGHT! Think you know a lot about politics? PROVE IT! Compete in California Playbook’s inaugural Trivia Night. Grab a drink, kick back, and put your knowledge on display! Join top political power players on Wednesday, June 21st at Fox & Goose Public House for a night of fun and competition that you won’t want to miss. REGISTER HERE.     WHAT YOU NEED TO KNOW TODAY GETTING ATTENTION: A handful of Republicans in Congress joined most Democrats today in voting to table a measure to censure Rep. Adam Schiff (D-Calif.) for his previous leadership of the House Intelligence Committee and probes into then-President Donald Trump, write POLITICO’s Nicholas Wu and Daniella Diaz.  The 225-196 vote, with 20 Republicans voting alongside most Democrats, stops the effort from advancing to a full House vote. The measure — by a Republican from Florida — would have formally reprimanded Schiff for his conduct on the Intelligence Committee, which has elevated his national profile and drawn ire from Republicans. “It’s a continuation of a downward spiral,” Schiff, a Senate candidate, told reporters after the vote. “There are a number of members here now who are just kind of ugly performance artists. It’s all about getting attention, doesn’t matter whether it’s good attention or bad attention, it’s all about the notoriety.” On The Beats PRICED OUT: Los Angeles City Council President Paul Krekorian has filed a motion to suspend member Curren Price, who was charged Tuesday on 10 counts of embezzlement, perjury and conflict of interest. The motion will next head to the council’s rules committee, which is scheduled to hold a meeting June 23. The committee could hold a special meeting before then to discuss the suspension motion, Krekorian told reporters this morning. Separate motions were filed to nominate Councilmember Marqueece Harris-Dawson for the president pro tempore position, which Price vacated Tuesday. Price has also been removed from his committee assignments at his request, Krekorian said during today’s Council meeting. Los Angeles District Attorney George Gascón has accused Price of voting to approve development projects of firms that paid more than $150,000 to a company owned by his wife, Del Richardson, and failing to report them in financial disclosure forms. Price is also accused of securing more than $33,000 in city funds for Richardson’s medical premiums while still married to another woman. — Alexander Nieves MORE ON MIGRANTS: The latest chapter in the Florida-California migrant saga might seem a little anticlimactic. Attorney General Rob Bonta announced today that he’s submitted a request for public records from the Sunshine State. He describes it as a “crucial” move to learn more about the circumstances under which the administration of Florida Gov. Ron DeSantis flew 36 asylum-seekers to Sacramento on two chartered planes earlier this month. Newsom initially appeared to threaten DeSantis with kidnapping charges. Bonta then downgraded it to potential criminal action of an unspecified nature. This week, he said it could be civil fraud charges against anyone involved in the transport for misleading migrants into believing that jobs awaited them upon arrival in California. Bonta’s request seeks any communications between DeSantis’ office and Florida’s Division of Emergency Management, which carried out what it portrayed as a voluntary transport. The AG also wants details on payments to the private contractor that carried out the operation. Bonta says California wants the information for an ongoing investigation. His request may be fruitful because — as many journalists know — Florida has what many consider to be the among the strongest open records laws in the country. But Bonta might be late. POLITICO has already asked for the same records from Florida. — Sejal Govindarao FANNING FLAMES: Federal agents arrested two Orange County men today over allegations they used a Molotov cocktail to cause a fire at a Planned Parenthood clinic in Costa Mesa two months ago. The damage forced the clinic to close the next morning and cancel around 30 appointments. Tibet Ergul, 21, of Irvine, and Chance Brannon, 23, of San Juan Capistrano, an active-duty Marine stationed at Camp Pendleton, were scheduled to make their initial appearances this afternoon in U.S. District Court in Santa Ana.   GET READY FOR GLOBAL TECH DAY: Join POLITICO Live as we launch our first Global Tech Day alongside London Tech Week on Thursday, June 15. Register now for continuing updates and to be a part of this momentous and program-packed day! From the blockchain, to AI, and autonomous vehicles, technology is changing how power is exercised around the world, so who will write the rules? REGISTER HERE.     AROUND CALIFORNIA — “Reparations for Black Californians face uphill climb in state Legislature,”  by The Wall Street Journal’s Christine Mai-Duc: State political leaders, including Black legislators who support reparations, say it could take years for many of the task force’s recommendations to be adopted. Direct financial compensation to Black Californians, they said, may not happen at all. — “Westfield gives up San Francisco mall, signaling more pain ahead,” by The New York Times’ Jordyn Holman and Thomas Fuller: The city has the highest office vacancy rate of any large American city. Asking rents for retail spaces have dropped 21 percent since before the pandemic. And even as tourists are visiting San Francisco again, the amount of money they spend in the city is 77 percent less than it was in 2019. — With key Democratic senators undecided, Julie Su’s bid for Labor secretary languishes by the Los Angeles Times’ Owen Tucker-Smith: Former California labor chief Julie Su’s bid to become President Biden’s Labor secretary is languishing, showing how hard it can be for a progressive Californian to win Senate confirmation in a deeply divided Washington. MIXTAPE — BART thanks A’s protesters, K-pop fans for huge 1-day ridership numbers by the San Francisco Chronicle’s Jessica Flores. — How California schools are spending billions in record pandemic aid by the Los Angeles Times’ Howard Blume. — Wildfire burn areas in California are growing ever larger due to greenhouse gas emissions by the Los Angeles Times’ Hayley Smith.   Follow us on Twitter Katy Murphy @katymurphy 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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