Elon Musk takes another swing at California

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

Jul 16, 2024 View in browser   By Lara Korte, Catherine Allen, Tyler Katzenberger and Wes Venteicher Elon Musk said — again — that he's moving some of his companies' headquarters to Texas. | Leon Neal/Getty Images X MARKS THE SPOT: Elon Musk is at it again. The billionaire tech entrepreneur has issued a fresh threat to relocate some of his companies’ operations to Texas in response to a state policy he disagrees with. This time, he’s vowing to move the headquarters of social media platform X and rocket maker SpaceX out of California in protest of new protections for transgender and gay students in schools. It’s similar to a threat he made in 2021 when he ran out of patience with California’s Covid protocols and decided to move Tesla HQ to Texas. Just two years later, Musk brought part of Tesla’s operations back to California, opening up its global engineering hub in Palo Alto. The law at issue today, signed by Gov. Gavin Newsom on Monday, prevents schools from requiring staff to notify parents whose children show signs of being transgender and from sharing information about students’ sexual orientation. It was drafted in response to a so-called parents’ rights movement that has seen at least seven school boards in the state adopt rules that forced teachers to tell parents if their child starts using a name or pronoun that doesn’t match their sex assigned at birth. “This is the final straw,” said Musk, who has a transgender daughter from whom he is reportedly estranged. Musk wrote on X that he would move the headquarters for SpaceX from Hawthorne in Southern California to Starbase in Texas. X, which is headquartered in downtown San Francisco, will move to Austin, Musk said. This decision, he said, was "because of this law and the many others that preceded it, attacking both families and companies." However, prior media reports had indicated he was contemplating relocation for X even before Newsom signed the law. The bombastic billionaire — and his increasingly conservative language — has long presented a quandary for Newsom, who is trying to burnish his national image as a Democrat who stands up to red-state rhetoric while also protecting California’s status as an economic powerhouse. Musk’s companies — Tesla, SpaceX and X — are bright jewels in the crown of California’s tech world and are helping to create the kind of clean-energy future Newsom regularly touts. The governor’s office did not immediately respond to a request for comment. Newsom in the past has lavished praise on the billionaire, despite Musk’s criticism of the state, with the governor saying in 2021 that he has “reverence and deep respect for that individual.” It’s not just Musk raising hackles. Conservative attorneys are now asking Roger Benitez — a conservative federal court judge whom Newsom has targeted for blocking California gun laws — to halt the trans student law. Benitez, sidelined from deciding criminal cases, previously blocked an Escondido school district policy preventing teachers from alerting parents if their child shows signs of being transgender. Attorneys for the Thomas More Society and individual firms are now asking the court to go further and rule that the Fourteenth Amendment gives school districts the right to require staff to out students to their parents. — with help from Blake Jones IT’S TUESDAY AFTERNOON. This is California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check on California politics and a look at what our policy reporters are watching. Got tips or suggestions? Shoot an email to lkorte@politico.com, callen@politico.com, tkatzenberger@politico.com or wventeicher@politico.com.   Understand 2024’s big impacts with Pro’s extensive Campaign Races Dashboard, exclusive insights, and key coverage of federal- and state-level debates. Focus on policy. Learn more.     WHAT YOU NEED TO KNOW TODAY GARVEY’S BIG INNING: Republican Steve Garvey outraised Democratic rival Rep. Adam Schiff from April through June, a surprise fundraising win in the former MLB star’s longshot bid for U.S. Senate. Federal Elections Commission filings released last night show Garvey raked in $5.4 million during the second quarter of 2024, over $1 million more than Schiff’s $4.2 million. Garvey also spent over $3.8 million last period — nearly $1 million more than Schiff — the vast majority of which was tied to fundraising costs. Over three-quarters of his spending went to postage, printing, mailing and digital fundraising. Only 12 percent of this was spent in California, with the majority spent in Virginia. But a deeper look at second-quarter fundraising numbers underscore Garvey’s status as a political novice. Unlike Schiff, Garvey had to build his fundraising machine from scratch in a deep-blue state, and it shows: Schiff has outraised Garvey over the campaign cycle, accumulating about $41 million compared to Garvey’s $11 million as of June 30. Schiff’s campaign declined to comment on the second-quarter figures but pointed to the FEC’s cash-on-hand totals, where Schiff’s $6.5 million holds double Garvey’s $3.3 million. That’s after Schiff spent well over $10 million on TV ads boosting Garvey ahead of the March primary to knock fellow Democratic Reps. Katie Porter and Barbara Lee out of the running. Garvey’s second-place primary finish saved Schiff from a potentially messy Dem-on-Dem general election campaign. A June survey from the nonpartisan Public Policy Institute of California showed Schiff leading Garvey 62 percent to 37 percent among likely voters. Meanwhile, in California’s key House races, the new FEC filings show Democratic candidates largely still lag behind Republican incumbents. But in two Los Angeles-area races, Districts 27 and 41, Democratic candidates George Whitesides and Will Rollins ended the quarter with a higher cash advantage and more money raised overall compared to the incumbents they’re challenging, GOP Reps. Mike Garcia and Ken Calvert, respectively. Multiple Democratic candidates like Adam Gray (District 13), Rudy Salas (District 22) and Derek Tran (District 45) saw larger growth in their cash on hand from the previous quarter compared to their GOP incumbent opponents. ON THE BEATS SCHIFF SOUNDS THE ALARM: Schiff told New York donors over the weekend that he thinks Democrats will suffer massive losses if President Joe Biden remains on the ticket, according to a report today from the New York Times. “I think if he is our nominee, I think we lose,” Schiff reportedly said during a meeting that occurred before the attempted assassination of former President Donald Trump on Saturday. “And we may very, very well lose the Senate and lose our chance to take back the House.” Schiff, who is running for the seat that was held by the late Sen. Dianne Feinstein, joins a growing number of Democrats who are increasingly worried about how the president’s age could have down-ballot effects. Schiff is also a close ally of former Speaker Nancy Pelosi, who has been working the phones since the debate last month in hopes of finding a way to ease Biden off the ticket. NEWSOM SOUNDS IT TOO: Newsom told the Democrats who receive his fundraising emails this morning that Trump’s Ohio running mate should make them worried about the U.S. Senate. In an email seen by Playbook, Newsom said the Democratic Party needs Sen. Sherrod Brown to win re-election in his race against Republican Bernie Moreno in the red Buckeye State to hold onto its majority in the chamber. “Trump's selection of J.D. Vance, Ohio's Republican senator, makes that more difficult,” the email said. “It puts a spotlight on Ohio. It will motivate Ohio Republicans to vote.” Vance’s selection will also bring more outside money into the race, making it more important to donate to Democrats, his pitch continued. Trump announced Vance, a former Trump critic and author of the autobiography “Hillbilly Elegy,” as his VP pick at the Republican National Convention on Monday. WHAT WE'RE READING TODAY — A former top Homeland Security Department official weighed in on what the Trump shooting says about domestic extremism. (POLITICO) — California Republicans have lots of like-minded company in Milwaukee, a change of pace from the group’s usual position in the minority. (Los Angeles Times) — Tesla is looking to fill more than 800 positions nationwide, including hundreds of new Bay Area jobs, after major layoffs earlier this year. (San Francisco Chronicle) AROUND THE STATE — Los Angeles Mayor Karen Bass vetoed a proposed ballot measure that would let the LAPD chief fire problem officers, which could result in its removal from the November ballot. (Los Angeles Times) — A San Francisco Muni train incident revealed some key passenger safety features didn’t work as planned. (San Francisco Standard) — Sacramento is closing a city homeless shelter that has more than 800 families on its waitlist, citing plumbing issues. (Sacramento Bee) — compiled by Tyler Katzenberger   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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