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.
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