Tick tock goes the budget clock

Jun 26, 2023

By Lara Korte, Jeremy B. White and Sejal Govindarao

Presented by CCIA

THE BUZZ: After marathon rounds of negotiations that went the entire weekend, Gov. Gavin Newsom and the Legislature still don’t have a budget deal.

Newsom is up against a Tuesday deadline to sign the bill lawmakers passed on June 15, but we expect the governor will want to tie up the details of the other budget trailer bills before he picks up his signing pen. And as we wrote about last week, the final deal is hinging on his push to speed up development of the Delta Conveyance Project, a building massive tunnel that would transport water from the Sacramento-San Joaquin Delta to South California.

For Newsom, the hesitancy around easing permitting for the tunnel is the exact problem he’s been complaining about: “We've proven we can get it done for stadiums,” he said in May when he introduced a package of bills to fast-track transportation, water and energy infrastructure projects. “So, why the hell can't we translate that to all these other projects?"

But as much as Newsom touts his proposals as a boon for clean energy, some environmentalists disagree: “Digging into the policy proposals, that’s not what they do,” Sierra Club California Director Brandon Dawson told POLITICO last week. “They could permit bad projects and decimate habitats and ecosystems like the Delta.”

While we waited for the white smoke from negotiating chambers, we did see movement on a number of fronts on Saturday when the Legislature released a new slate of budget trailer bills that are heading to floor votes on Tuesday.

Chief among the new developments is news of a deal on the health care plans, or MCO, tax. As POLITICO’s Rachel Bluth first reported, this is a big deal. In past years, lawmakers have used the billions of dollars generated by the tax to pad the general fund — something Newsom was hoping to do again this year as the state faced a $31.5 billion deficit — but now, for the first time, much of the revenue will be spent to improve the state’s publicly subsidized health care system.

With federal matching funds taken into account, the tax is expected to generate more than $35 billion for California.

It’s the “the largest-ever investment in Medi-Cal,” Rachel writes, and it took months of negotiating from top health-care players, including Jodi Hicks, the head of Planned Parenthood Affiliates of California, and California Medical Association CEO Dustin Corcoran, who told Rachel he’s even had dreams about the tax.

News of a deal could come as soon as this morning. But regardless of where the governor stands, both budget committees will meet today to take up their package of budget trailer bills introduced Saturday. Stay tuned.

BUENOS DÍAS, good Monday morning. State Sen. Scott Wiener and other Bay Area electeds are holding a press conference this morning to discuss new legislation to create self-funding for Bay Area public transportation, ensuring the agencies “avert service cuts and improve cleanliness, reliability, and safety.”

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’ve done a s— job with Eastern California. You draw a straight line through California. Coachella, Inland Empire, Central Valley up to Redding and up. We’ve done a s— job of making sure there’s anything close to equity in terms of resources on their side of the line.” Outgoing Speaker Anthony Rendon reflecting on his tenure with Los Angeles Times columnist Gustavo Arellano.

CROWDSOURCING: Californians: Have you asked Sens. Dianne Feinstein or Alex Padilla for help recently? Send us your receipts.

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TOP TALKERS

— BRUTAL — "4 in 10 California residents are considering packing up and leaving, new poll finds," by the Los Angeles Times’ Benjamin Oreskes: “With its unmatched natural splendor and cultural attractions, California is a beacon that attracts people from around the world who put down roots and call it home.”

— L.A. TAKES THE LONG VIEW — "Doubts emerge about charges against L.A. City Councilmember as suspension vote put off," by POLITICO’s Alexander Nieves: “Members of the Los Angeles City Council expressed doubts Friday about suspending a colleague facing criminal charges as they put off a decision on the matter.”

CAMPAIGN MODE

RECORD RIFTS — Rep. Adam Schiff raised eyebrows over the weekend for claiming to be “more progressive” than fellow senatorial candidate Rep. Katie Porter on Inside California Politics. “When you look at my voting record and compare it to Porter and (Rep. Barbara) Lee’s, it’s more moderate than Lee’s and more progressive than Porter’s,” Schiff said.

That prompted almost instantaneous backlash from progressive orgs: “Adam Schiff was nowhere to be found as the Biden White House was working with leaders like Katie Porter to push progressive priorities like child care, elder care, climate investment, lower price prescriptions and taxing billionaires,” Adam Green, co-founder of the Progressive Change Campaign Committee, said in a statement. “Showing up for the final vote is not impressive — playing a leadership role behind the scene and making the public case for progressive priorities is impressive and what Katie Porter does consistently."

— "Newsom’s pestering of ‘sixth grade bully’ DeSantis seeps into presidential race," by the Los Angeles Times’ Taryn Luna: “Appearing on Sean Hannity’s Fox News show, a conduit into the bloodstream of former President Trump’s America, California Gov. Gavin Newsom seemed to delight in trolling Republican presidential candidate Ron DeSantis.”

— "Former California assemblyman running for Sean Loloee’s Sacramento City Council seat," by The Sacramento Bee’s Theresa Clift: “Former California Assemblyman Roger Dickinson is running for Sacramento City Council in 2024. Dickinson, a Democrat who served in the Assembly from 2010 to 2014, is running for the 2nd District seat currently held by Councilman Sean Loloee.”

A message from CCIA:

CALIFORNIA AND THE CAPITOL CORRIDOR

— "Newsom and lawmakers cut a grand deal for Hollywood: Refundable tax credit and new set safety rules," by the Los Angeles Times’ Laurel Rosenhall and Matt Hamilton: “Hollywood studios will get a lucrative tax benefit they have long sought and workers on film productions will get new safety protocols they’ve wanted since the deadly “Rust” shooting under new legislation that Gov. Gavin Newsom is expected to sign into law by the end of this week.”

— "S.F. lawmakers propose bridge toll hike to bail out transit agencies," by the San Francisco Chronicle’s Dustin Gardiner: “To help BART and other Bay Area transit agencies avoid cutting rail and bus service, a group of progressive state lawmakers is proposing raising tolls on seven state-owned bridges in the region.”

—  "SAG-AFTRA leaders cite ‘extremely productive’ contract talks with Hollywood studios," by the Los Angeles Times’ Anousha Sakoui: “Leaders of SAG-AFTRA signaled they are making good headway in contract negotiations with the major studios, suggesting Hollywood may avert a second strike.”

— "Is there a ‘war’ between California and home insurers? State insurance commissioner responds," by the San Francisco Chronicle’s Claire Hao: ”Since March, Kevon Cottrell has had a hard time finding coverage for his home in South Lake Tahoe after Connect Insurance canceled his plan, citing fire hazards. On the social network Nextdoor, he found numerous posts by neighbors experiencing similar difficulties finding coverage for their homes.”

NEW GOALLLLLLLLL— "Bulldoze Westfield mall for a soccer stadium? S.F. Mayor Breed floats ideas for downtown," by the San Francisco Chronicle’s Mallory Moench: “Could Westfield San Francisco Centre become a soccer stadium? A lab? An office?

"Those are some of Mayor London Breed’s ideas, thrown out during an interview at the Bloomberg Technology Summit this week, as she pushes visions to reimagine a downtown struggling with office vacancies and closing stores.”

— "Inside the Black church fighting for reparations from California," by The Washington Post’s Scott Wilson: “The Gospel reading at the Third Baptist Church on this cool early-summer Sunday is from Luke, who relates the story of a meeting between Jesus and a particularly avaricious tax collector.”

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MIXTAPE

— "Fights, beatings and a birth: Videos smuggled out of L.A. jails reveal violence, neglect," by the Los Angeles Times’ Keri Blakinger

— "Walgreens pharmacist cites his religion for denying a transgender man's hormone replacement meds," by the Los Angeles Times’ Salvador Hernandez

— "He took an OceanGate sub trip to the Titanic. Now he has 'survivor's guilt'" by the Los Angeles Times’ Noah Goldberg

— "Missing Titanic sub riders OceanGate CEO Stockton Rush and Pakistani businessman had Bay Area ties," by the San Francisco Chronicle’s Laya Neelakandan

— "This Alameda deep sea engineer warned Stockton Rush against carbon fiber years before Titan implosion," by the San Francisco Chronicle’s Claire Hao

— "Human remains found in Mt. Baldy wilderness amid search for missing actor Julian Sands," by the Los Angeles Times’ Matt Hamilton

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.

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