| DRIVING THE DAY — It’s budget time, y’all. Gov. Gavin Newsom this morning will unveil his plan this morning to close a gaping budget hole, and just how big of a deficit we should expect. POLITICO’s team will be there watching. Stay tuned for more coverage. THE BUZZ: A longshot effort to tax millionaires and billionaires is suddenly the talk of the town. But make no mistake: It isn’t likely to make it to the governor’s desk. Multiple news outlets have jumped on the story this week that Assemblymember Alex Lee’s wealth tax proposal has been scheduled for a hearing, prompting rumors that the governor may be considering revenue-side options to close the budget gap. The speculation has forced Newsom’s press team to repeatedly rebuke the idea in no uncertain terms. “The governor has no interest in broad-based tax increases,” Communications Director Anthony York said when asked about the bill. “That’s not how he plans to close the budget gap.” Even the bill’s author was surprised to see it on today’s Revenue and Tax Committee agenda. Last year, his proposal didn’t get so much as a hearing under Speaker Anthony Rendon. When asked why he thought the bill was on the agenda, Lee chuckled and said, "I'm not sure." "Obviously, I'm going to give it my best shot,” he said. “But the fact of the matter is that there are people who disagree with me on this policy, and there are a lot of them, specifically on this committee, who don't like to increase taxes, even on the ultra-wealthy." Jacqui Irwin, the Democrat heading the tax committee, said she scheduled Lee’s tax proposal for a hearing only because Speaker Robert Rivas requested that all bills have a chance to be heard. The decision suggests Rivas will take a different approach than his predecessor, who typically gave committee chairs broad discretion to block legislation. “The Speaker believes legislation introduced in good faith deserves an opportunity to be heard, and expects authors to collaborate with Chairs and all our colleagues,” Rivas spokesperson Cynthia Moreno said in a statement. Rivas is new to the role, and still forming alliances with lawmakers. The bill hearing could very well be his attempt to satiate progressive Democrats, who have a voracious appetite for taxing the riches of the rich, without explicitly backing the policies. Lee wouldn’t be crazy for thinking lawmakers might be coming around to a wealth tax. His bill would tax the net worths of multi-millionaires and billionaires to the tune of an estimated $20 billion in additional annual revenue for the state. In tough budget years like this one, Lee said, that’s not something Democrats should be rejecting out of hand. "There's a fundamental promise that we want to keep all the nice things that we've done and balance the budget. It begs the question: How?” he told Playbook. To an outsider, whether a bill gets a committee hearing could seem of little consequence. But cable news pundits love to bash California’s tax burden and cost of living, and news that lawmakers are even entertaining the idea of taxing the rich could spin up a batch of headache-inducing headlines for Democrats, especially Newsom. That may be why the governor’s press shop was trying to get out ahead of the tax news before today’s budget presentation. “…Newsom has said repeatedly over many years, a wealth tax is not part of the conversation,” Deputy Communications Director Brandon Richards tweeted this week. “Wealth tax proposals are going nowhere in California.” GOOD MORNING. Happy Wednesday. Thanks for waking up with Playbook. Now you can text us at 916-562-0685 — save it as “CA Playbook” in your contacts now. Or drop us a line at lkorte@politico.com and dgardiner@politico.com, or on X — @DustinGardiner and @Lara_Korte WHERE’S GAVIN? In Sacramento presenting his budget blueprint at 10:30 a.m. DEBATE ALERT: WE WANT YOUR HELP — POLITICO is co-hosting the first debate for California's Senate race on Monday, Jan. 22. All four major candidates have accepted our invite to appear onstage: Democratic Reps. Adam Schiff, Katie Porter and Barbara Lee and Republican and former Dodgers player Steve Garvey. This will be a televised battle between those top candidates. Tell us what we should ask them, and we just might use your question during the debate. Fill out this form by Wednesday, Jan. 17 to be considered. NOTE: We’ve reached our quota from the Pascucci followers, so chill for a minute.
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