THE BUZZ: NAIL-BITER — The razor-thin margin on a $6.4 billion mental health bond isn't just troubling news for Gov. Gavin Newsom — it could be a warning sign for the slate of other borrowing requests lawmakers want to send voters this fall. It will likely be days before we know for sure whether Proposition 1 has passed. As of last night, support was hovering around 50 percent. The campaign is staying outwardly optimistic, and as spokesperson Anthony York noted, we are still waiting for millions of votes — many from large, urban counties. “We know in California that elections aren’t settled on Election Day,” York said in a statement Wednesday. Regardless of the outcome, the tepid support is troubling for Newsom and Democrats in the Legislature who have been counting on voters to OK billions of dollars for housing, education and climate change-related projects this year — policy goals the state wouldn’t otherwise be in the position to pursue, given California’s estimated $73 billion budget shortfall. Lawmakers for months have discussed just how much the state can borrow through bonds. Negotiations on who gets to put what on the November ballot are already underway in the Capitol. If voters are reluctant to accrue more debt — as they indicated in the primary — it could make Newsom hesitant to back more bond measures this year. Assemblymember Al Muratsuchi and state Sen. Steve Glazer want to tackle deferred maintenance in schools. Assemblymember Eduardo Garcia and state Sen. Ben Allen want climate bonds to offset budget cuts. And Assemblymember Buffy Wicks is looking for $10 billion for affordable housing — a top issue for Californians and Democrats. The proposals, as they currently stand, would total close to $35 billion — and that doesn’t even include the $6.4 billion in Prop 1. In reality, California can likely take on only about $15 billion to $16 billion in additional bond debt this year, Assembly Speaker Robert Rivas said at a press conference last month, after a meeting with the governor and Senate President pro Tempore Mike McGuire. Whether or not lawmakers are keen on passing more bonds, we can expect advocates to keep them under steady pressure to do so. Housing activists insisted they weren’t discouraged by Prop 1’s lackluster showing. They noted that housing and homelessness are consistently top issues for Californians, and that a higher turnout in November, which is expected to include a larger share of Democratic voters, is likely to make bond measures easier to pass. “Housing remains the issue that people want their elected officials to be working on," said Laura Foote, executive director of YIMBY Action. "People want the affordable housing crisis to end, so this is not something that should make politicians nervous." State Sen. Scott Wiener, who previously served as head of the Housing committee, said he expects the larger electorate in November will provide better results for bonds. He acknowledged that voters may be frustrated with the lack of progress on homelessness, but emphasized that California has only recently started to combat the issue in earnest. "It's only been in the last five years that we've been making these investments,” he said. “Housing production does not happen overnight." GOOD MORNING. Happy Thursday. 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? Nothing official announced.
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