News : Bills, bills, bills

Monday, May 16, 2022

Bills, bills, bills

May 16, 2022

By Jeremy B. White, Lara Korte, Chris Ramirez and Juhi Doshi

Presented by Southern California Edison

THE BUZZ: Perhaps we should call it the Superlative Spending Schema.

Pick your breathless adjective to describe the $300.6 billion budget Gov. Gavin Newsom unveiled on Friday. Astonishing. Staggering. Gigenormumental. Newsom went with "simply without precedent" (for an estimated $97.5 billion surplus that more than doubled his January assessment), or "you've never seen a number like this" (discussing education funding guarantees under Proposition 98). However you frame it, it is a historic marker of California's economic potential.

It testifies to what happens when the wealthy thrive in a state whose accounting relies heavily on top earners. That means ample volatility and the possibility of swift turnarounds. Just a couple of years ago, the precipitous coronavirus recession had California budget planners dreading years of painful deficits. Now the state is setting revenue records. Many liberals would argue that vindicates California asking the affluent to shoulder a larger share. "I am proud of California's progressive tax system," Newsom said, "and we're the beneficiary of that."

But in a characteristic California story, that wealth is not evenly distributed. Mounting gas prices and other forms of inflation have strained many Californians and cemented an underlying economic pessimism. Hence a roughly $18.1 billion relief package, the centerpiece of which is an $11.5 billion pot for refunds offsetting fuel costs in the form of $400 per vehicle — a central sticking point given legislative leaders' well-established reluctance to tie the money to car ownership. Health care workers could get up to $1,500 apiece in a version of the "Hero Pay" bonuses that organized labor unsuccessful sought in the Legislature.

GANN UP: Newsom also hinted at a potential tactic in Democrats' quest to alter the so-called "Gann Limit," a voter-passed mechanism requiring the state to return excess funds to taxpayers. While this year's budget does not trigger the limit, legislators have argued Gann overly constrains spending and pushed for changes. Newsom called an update "overdue" — and argued it could be paired with a change allowing California to deposit more in a Rainy Day fund, which will soon contain its statutory maximum. That could be easier to pitch to voters.

BY THE NUMBERS:

$49.2 billion: Amount of the surplus that's discretionary — or, available.
94 percent: Share of that excess cash stash that would go to one-time allocations.
$37.1 billion: Total reserves, including $23.3 billion in the Rainy Day fund.
$65 million: Bonus to courts to implement "Care Court" plan providing homeless people with — and compelling them into — treatment.
$9.5 billion: Extra money to fight climate change over the next four years, including $5.2 billion to keep the lights on and nearly $1 billion for residential solar.
$1.6 billion: Additional drought relief outlay
132: Number of minutes Newsom spoke, coming in between an indie film and a Marvel movie.

BUENOS DÍAS, good Monday morning. The likely imminent demise of Roe v. Wade spurred protests across fervently pro-abortion California this weekend — underscoring why residents will broadly support Newsom's push to fund reproductive care, including for an expected influx of out-of-state abortion seekers.

Got a tip or story idea for California Playbook? Hit us up jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte.

QUOTE OF THE DAY: "No other state in American history has ever experienced a surplus as large as this." Newsom on an oceanic excess.

TWEET OF THE DAY: Strategist @RussellLowery10 on a coming Capitol cash clamor: "A $97.5 BILLION surplus puts enormous pressure on #caleg lobbyists. Clients understand losing when there is no money. They are less understanding when the State is flush. The requests will multiply even faster than the surplus. #cabudget"

WHERE'S GAVIN? Nothing official announced.

A message from Southern California Edison:

We believe everyone should have the right to breathe clean air. That's why we're leading the charge for more clean, renewable energy. We're a national leader in battery storage and delivering solar energy to our customers. We're working to cut emissions from buildings and freeways. And we proudly support the growth of green jobs.

Top Talkers

ANOTHER SHOOTING — "1 dead, 5 wounded by gunman at Laguna Woods church; alleged shooter is detained, hogtied by crowd," by the OC Register's Eric Licas, Erika I. Ritchie and Josh Cain: "It's not clear how the parishioners were able to subdue the man, but as soon as they had him on the ground, they tied his arms and legs with electrical or extension cords."

WHICH WAY HOME? — "Zinke's wife declaring primary residence in California as he runs in Montana, " by POLITICO's Ben Lefebvre and Daniel Lippman: "In Montana, there's enough wariness of outsiders that Democrats in 2018 tagged then-GOP Senate candidate and now-Rep. Matt Rosendale as 'Maryland Matt' — even though he'd moved to Montana a decade-and-a-half earlier."

METAMORPHOSIS — " California launched a high-stakes plan to save its monarch butterflies. Scientists say it's working," by the SF Chronicle's Tara Duggan: "The latest California count, announced in January, shot up to 250,000, which gave conservationists hope for a rebound, though insect populations can swing wildly from year to year."

NOT SO FAST — " Elon Musk Trolls Twitter," by Bloomberg's Matt Levine: "The merger agreement contains a provision that allows Musk to walk away if Twitter's securities filings are wrong … but only if the inaccuracy would have a 'Material Adverse Effect' on the company."

STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.

CAMPAIGN MODE

'TIL NEXT TIME — "Passing new taxes in California won't get tougher this year," by POLITICO's Jeremy B. White: "The statewide ballot initiative, spearheaded by the California Business Roundtable, would have raised the thresholds for legislators to pass both statewide and local taxes."

ENDORSEMENT — "Trump endorses Kevin Kiley for California's 3rd Congressional District seat," by the Sac Bee's David Lightman.

CALIFORNIA AND THE CAPITOL CORRIDOR

TAKE IT BACK NOW, Y'ALL — "Embattled DA Gascón reverses course on controversial zero-bail policy," by the Daily News' Scott Schwebke: " As a result, prosecutors can request cash bail for defendants charged with misdemeanors, nonserious felonies, or nonviolent offenses who have committed crimes while awaiting trial and those who pose an exceptional risk to public safety."

LET'S GET DIGITAL — "California's broadband plan would get $1.1B infusion under Newsom proposal, " by POLITICO's Susannah Luthi: "The funding boost request, coming so early on in the project, could heighten some lawmakers' qualms about the broadband plan's long-term prospects."

NO WAY HOME — "In California's high-risk fire country, Airbnb offers guests no warning or escape plan, " by the LA Times' Ben Poston and Alex Wigglesworth: "More than 23,000 California Airbnb listings were in wildfire-prone areas in January, accounting for about 20% of the company's short-term rentals in the state, The Times' analysis shows."

PRESSURE COOKER — " Rice is Sacramento Valley's gift to the world. Can it withstand California's epic drought?" by the Sac Bee's Dale Kasler: "In a good year, California rice growers plant a half-million acres or more, almost all of it in the Valley. In 2022, the footprint will shrink to around 250,000 acres, said Daniel Sumner, an agricultural economist at UC Davis."

DRY TIMES — " What about my koi pond? A wealthy L.A. enclave copes with water restrictions," by the LA Times' Brittny Mejia: "Las Virgenes, which serves about 75,000 residents in western L.A. County, relies on the State Water Project, a Northern California water supply that officials say is dangerously low after the state's driest-ever start to the year."

MONEY MOVES — "California schools to see $635 million in grants to transform schools for needy students with wraparound services," by the SF Chronicle's Richard Cano and Annie Vainshtein: "Oakland, in fact, was one of the first large school districts in California to create a network of community schools when it first rolled out its program in 2011. Currently, more than 50 of its 80 school sites are community schools."

THE STAKEHOLDERS — "Lithium Valley: A look at the major players near the Salton Sea seeking billions in funding, " by Desert Sun's Janet Wilson and Erin Rode: "Worldwide, lithium production increased in 2021 by 21% to approximately 100,000 tons, according to the U.S. Geological Survey, in response to strong demand for lithium ion batteries and rising prices."

HERE WE GO AGAIN — " As Bay Area COVID cases swell, health officers reinstate mask recommendations," by the SF Chronicle's Aidin Vaziri and Erin Allday: "The Bay Area reported about 30 new daily cases per 100,000 residents on Friday, substantially higher than the statewide average of 19 per 100,000."

BIDEN, HARRIS AND THE HILL

SUBPOENAED — "Why the Jan. 6 panel bet its legal hand against the House GOP," by POLITICO's Nicholas Wu and Kyle Cheney: "The select committee's subpoena of Minority Leader Kevin McCarthy, Cheney's former partner in the House GOP's upper echelon, and four members of the Trump-aligned House Freedom Caucus puts the panel on the fast track to a court battle — raising the prospects that it blows past its self-imposed deadline to finish its work."

SHIFTING PRIORITIES — " Infant formula shortage suddenly Topic A in Washington," by POLITICO's Helena Bottemiller Evich and Meredith Lee: "Democrats, for their part, are now raising red flags about market consolidation and what role that may have played in the shortage."

SILICON VALLEYLAND

— "A Crypto Emperor's Vision: No Pants, His Rules," by the NY Times' David Yaffe-Bellany: Now Mr. Bankman-Fried is trying to leverage his fame to set policy in Washington, at a moment when the risks of crypto trading are growing increasingly stark; he makes regular trips to the Capitol from his base in the Bahamas, meeting with regulators and testifying in Congress."

— " Elon Musk could soon have a Trump-sized headache," by POLITICO's Rebecca Kern: "Trump's critics say his past tweets crossed that line repeatedly — and if Twitter lets him return, his flagrant disregard of the social network's rules will become Musk's headache."

— " Facebook, Twitter Are Pulling Back on Hiring—Will Others Follow?" by the Wall Street Journal's Chip Cutter: "The shift by these technology giants raises questions about the direction of the overall U.S. job market and comes during a period of volatility in the stock market amid concerns over rising interest rates."

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MIXTAPE

— "LAPD overlooked 3 dead children inside home for 7 hours after mother taken away," by the LA Times' Richard Winton and Nathan Solis.

— "SpaceX launches Starlink satellites from California," by the AP.

— " Zero-bail policy instituted during pandemic to end at San Diego County jails," by City News Service via ABC10.

— " Exclusive: Castro's 100th birthday bash to be capped with day of San Francisco films," by the SF Chronicle's G. Allen Johnson.

— " Why Laguna Niguel fire was so destructive: Flying hot embers, huge homes, dry brush," by the LA Times' Tony Briscoe, Alex Wigglesworth, Hannah Fry and Paul Duginski.

WEEKEND WEDDING

Jackie Rooney, head of internal strategic response at Meta and a Mitt Romney alum, and Halter Cunningham, a senior manager at 160over90, an Endeavor company, got married Saturday in a beachside ceremony at the Hillsboro Club in Hillsboro Beach, Fla. They met through his sister and began their relationship while on a skiing trip to Deer Valley in spring 2019.

BIRTHDAYS

Today: Lyft's Jodi Seth … Mike Long … Colleen McCain Nelson

(was Sunday): Jen Stout … Nick Papas of Airbnb

(was Saturday): Mark Zuckerberg … Rep. Jackie Speier (D-Calif.) … Erwin Chemerinsky … Mike Feuer ... Daniel L. Lehmann … former Rep. Mimi Walters (R-Calif.) (6-0) … former DHS Secretary Kirstjen Nielsen

A message from Southern California Edison:

This is a time of great change and uncertainty. But what remains constant is our commitment to building a clean energy future for everyone. That's why SCE is standing with California, leading the charge to reduce greenhouse gas emissions, improve local air quality and support continued economic growth. We're a national leader in battery storage and delivering solar energy to our customers. We're working to cut emissions from buildings and freeways. And we proudly support the fastest the growth of green jobs. We're more than 13,000 employees serving 15 million Californians. When we work together, we can move full speed ahead into a clean energy future.

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