| | | | |  | | By Lara Korte, Blake Jones and Dustin Gardiner | Presented by Salesforce | | 
California Gov. Gavin Newsom, left, listens as Finance Director Joe Stephenshaw, right, answers a reporte'rs concerning Newsom's revised 2024-25 state budget during a news conference in Sacramento, Calif., Friday, May 10, 2024. (AP Photo/Rich Pedroncelli) | AP | THE BUZZ: WAITING ON A DEAL — Legislators might’ve passed a budget bill last week, but the real work is happening now behind the scenes. The negotiations that began in January are days (or perhaps hours) away from a resolution as legislative leaders convene with Gov. Gavin Newsom’s administration to hash out a final deal. The bill that cleared both chambers last week met the Legislature’s constitutional deadline to pass a budget, but it only reflects legislators’ priorities, not the final spending agreement. Those details come later, after extensive meetings between Newsom, Senate leader Mike McGuire and Assembly Speaker Robert Rivas. Historically, budget discussions between the “Big Three” have meant round-the-clock sessions with the administration, the Department of Finance and legislative staff — fueled by pizza and Starbucks runs — to finalize hundreds of billions of dollars worth of spending. It’s the annual penultimate moment of drama in Sacramento, where the three key players make final attempts to apply pressure and gain leverage over other parties. The Assembly, for example, has in recent years held out longer than the Senate on some budget disputes with the administration in an attempt to extract concessions. “It’s a lot like Texas Hold ‘Em,” said Bill Wong, a veteran Democratic consultant who spent years in the Legislature working under Appropriations and Budget subcommittee chairs. “Everyone at the poker table is trying to use their bets or passes to signal or ascertain what the other person is trying to do.” The bargaining chips in that game, of course, are state programs. A negotiator can threaten to withhold funding for their adversary’s pet issue — unless they secure money for their own priority. Leadership and the governor don’t typically bless any one part of a deal until there’s consensus on a full package, a practice that allows them to hold onto as much leverage as possible until the endgame. It’s the first round of budget negotiations led by Rivas and McGuire. And with a nearly $30 billion budget deficit, there’s far less money to go around, making the task in front of them more painful than usual. Much of the budget has already been settled through hours of public hearings. Now, final negotiations are taking place behind the scenes between staff representing the respective branches — a stage where discussions can get tense or sometimes hostile. Senior-level staff will handle contentious issues that haven’t been resolved by other negotiators. It’s typically only when those conversations reach an impasse that Newsom or the legislative leaders themselves step in. If things really reach a standstill the governor could threaten to veto the entire budget bill, as former Gov. Jerry Brown did in 2011. Veto power is one reason governors usually have the most leverage in budget bargaining, and Newsom, like his predecessor, has taken advantage. In 2023, he vowed to reject the budget if lawmakers didn’t approve his infrastructure plan. Some remaining points of contention: The governor in May proposed cutting billions in housing programs, Medi-Cal spending and other social services — moves that the Legislature rejected in its own plan. The lawmakers also want to cut about $920 million more in prison spending than the governor. Adding to the drama is a looming June 27 deadline to finalize the November ballot. The Legislature for the last year has been negotiating an array of bond measures that would borrow billions to pay for education, climate and housing programs. And with a cash-strapped budget, those dollars could be critical for legislators. Lawmakers could leverage the bonds to extract more program funding from the budget, or make up cuts or deferrals through the measures. GOOD MORNING. Happy Monday. Thanks for waking up with Playbook. You can text us at 916-562-0685 — save it as “CA Playbook” in your contacts. 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. The governor did spend the weekend rubbing shoulders with celebrities at President Joe Biden’s Hollywood fundraiser. More on that below. SACRAMENTO HAPPY HOUR ALERT — Join the POLITICO California team for networking over drinks and hors d'oeuvres at Fox and Goose Public House TOMORROW. Event starts at 6 p.m. Register here to save your spot. | | | | A message from Salesforce: Artificial intelligence (AI) is accelerating innovation across industries, but its rapid development demands careful governance. Regulations must balance innovation with risk mitigation while recognizing the distinction between Enterprise AI, designed for business needs, and Consumer AI. Effective AI governance requires transparency, data security, and ethical considerations. Learn more about Salesforce’s Trusted AI and our support for effective AI regulatory frameworks. Learn more. | | | |  | STATE CAPITOL | | |  A Waymo driverless taxi stops on a street in San Francisco for several minutes because the back door was not completely shut, while traffic backs up behind it, on Feb. 15, 2023. | Terry Chea/AP | LOSING CONTROL — The Assembly Transportation Committee is proposing major amendments to a bill that would give counties and cities more say over robotaxis — changes that would strip the legislation of its local control provisions, effectively nullifying its original intent. Senate Bill 915 by state Sen. Dave Cortese was drafted in response to a growing chorus of frustrated local officials who, feeling shut out by the Department of Motor Vehicles and the Public Utilities Commission, want to set rules for how autonomous passenger vehicles can operate on their streets. Cortese proposed authorizing cities and counties with more than 250,000 people to regulate certain aspects of robotaxi services. It is co-sponsored by the powerful California Labor Federation, which is broadly concerned about job replacement with artificial intelligence. In a bill analysis published late Friday, the Assembly Transportation Committee proposed striking provisions of the bill that it says would impose "unnecessary local control" over autonomous vehicles. The committee, chaired by Lori Wilson, argues the local control provisions could give rise to outdated regulatory schemes, like taxi medallion caps, fare regulation, and safety inspections, and that authorizing locals to set fines for autonomous vehicles could offer perverse incentives to over-police the programs. “As autonomous vehicles look to bring our personal driving experience into the future, SB 915 looks to set us back,” Wilson said in a statement. Cortese stressed to Playbook that he had not agreed to the amendments. He argued that there would "be nothing left" of the legislation after those changes, and that he feared a lack of local regulation would lead to pedestrian injuries or even deaths. "I think the unfortunate thing is that, if this bill indeed does not go forward with the local control provisions, there will be tragedy," he said. The bill is set to be heard today in the committee. FIRST IN PLAYBOOK: RENDON GETS PUSHBACK — A group of travel companies including Expedia Group, Airbnb, and Booking Holdings are opposing a bill by former Speaker Anthony Rendon that would require short-term rental sites to list cleaning tasks before booking, as well as disclose any fees or penalties that could accompany them. The Travel Technology Association, or Travel Tech, sent a letter of opposition to the Senate Judiciary Committee ahead of a Tuesday hearing on Assembly Bill 2202, asking for several amendments. Travel Tech wants the bill to differentiate the responsibilities of the platforms and the hosts — who, the group says, don’t always disclose cleaning tasks to the websites. The companies also want Rendon to reduce the penalties for non-compliance, which are set at $10,000 per violation. Rendon introduced the bill after his own frustrating experience at a short-term rental near Tahoe, where he said he and his guests discovered a laundry list of cleaning tasks just as they were checking out. The proposal easily made it through the Assembly last month and is now moving through the Senate.
| | | | HAPPENING 6/18 — A TALK ON THE FUTURE OF TRANSPORTATION IN CA: California’s adoption of zero-emission vehicle policies will change the transportation landscape over the next two decades. How will the transition impact current transportation infrastructure and how will lawmakers fund future changes? Join POLITICO on June 18 to hear from lawmakers, industry officials and stakeholders to examine the future of transportation infrastructure, from transit, pedestrian and bike lanes to local streets, roads, highways, bridges and overpasses. REGISTER HERE. | | | | | | | ON THE HILL | | |  Rep. Ro Khanna speaks to a group on Thursday, Feb. 22, 2024, in Dearborn, Michigan. | Carlos Osorio/AP | SILICON VALLEY SLIDE — A small but growing number of tech entrepreneurs, venture capitalists and crypto enthusiasts are throwing their 2024 support behind former President Donald Trump over Biden. And Rep. Ro Khanna (D-Calif.), a progressive who represents a swath of Silicon Valley, warns Democrats shouldn’t take the liberal stronghold for granted. On POLITICO Tech, Khanna tells host Steven Overly why the Democratic defectors have him worried and how Biden should borrow from former President Barack Obama’s pro-tech playbook. | | | | A message from Salesforce:   | | | | | ON THE AGENDA | | FLOOR SESH — The Assembly and the Senate will convene at 1 p.m. and 2 p.m., respectively. | | CLIMATE AND ENERGY | | MET TOO — Metropolitan Water District's decision to put its top exec on administrative leave while it investigates allegations of cultivating a toxic work environment came so suddenly and shockingly last week some environmental groups saw an old-guard coup against a water reformer. “Instead of being able to look at this only with the kind of solidarity that should be there with women, I’m left questioning everything,” said one. Read more in Friday’s California Climate. | | Top Talkers | | | | 
Cover for Mike Madrid's new book, "The Latino Century." | Courtesy photo | BOOK TALK — Mike Madrid, the veteran political strategist and expert on Latino voters, has a new book on how America’s largest minority is transforming democracy. Madrid dives into why both major political parties have struggled in their courtship of Latino voters and he busts long standing myths about what it takes to win them over. On Tuesday, Madrid will appear with POLITICO’s Christopher Cadelago for a discussion and book signing in downtown Sacramento. You don’t want to miss this.Tickets for the noon and evening sessions are available here. — Why weren’t police called in as protesters trashed Cal State Los Angeles student services center? (Los Angeles Times) — Fire crews evacuated more than 1,200 people north of Los Angeles as the Post Fire continues to blaze. (The Associated Press) | | | | A message from Salesforce: AI is revolutionizing business, accelerating business, and even helping you plan your next vacation. But its safe deployment requires robust frameworks. That’s why Salesforce is building Trusted Enterprise AI, distinct from Consumer AI, and enhancing business operations through optimized supply chains, fraud prevention, and personalized customer service. Salesforce balances innovation with data privacy and security, ensuring that our Enterprise AI remains transparent and trustworthy. Nuanced AI regulations will help create an innovative, effective, and inclusive AI future. Learn more about how Salesforce is providing AI solutions that empower businesses while maintaining high standards of data protection and trust. Learn more. | | | | |
— Food 4 Less workers in California voted to authorize a strike if their chain owner, Kroger, continues with alleged labor violations. (Los Angeles Times)
— In woodsy communities surrounding Lake Tahoe, California’s insurance woes are creeping across state lines. (San Francisco Chronicle) — Biden’s executive order limiting asylum has been slow to take effect in San Diego, where more than 2,700 migrants have been released by Border Patrol in the week and half since the order was issued. (San Diego Union-Tribune) — San Jose has become the first California city to allow the sale of accessory dwelling units separate from primary houses on the same lot, potentially launching a new generation of low-cost starter homes. (Los Angeles Times)
| | | PLAYBOOKERS | | | SPOTTED: The stars — and politicos — were out for President Joe Biden’s fundraising swing through Hollywood Saturday night, hosted by George Clooney and Julia Roberts. Among the celebrities in attendance: Movie mogul Jeffrey Katzenberg, “Roastmaster” Jeff Ross, Keegan-Michael Key and Barbra Streisand. We also saw a good swath of LA Democrats make an appearance, including Mayor Karen Bass, Antonio Villaraigosa and City Councilmember Kevin de León, whom, you might recall, was encouraged by the Biden administration to resign following the 2022 leak of a racist recording. The fundraiser reportedly raised more than $30 million for the president’s reelection campaign, the largest haul from a one-night event in Democratic party history. Also in attendance: Gov. Gavin Newsom… California Reps. Ted Lieu… Maxine Waters… Grace Napolitano… Julia Brownley… Salud Carbajal… Raul Ruiz… Mark Takano… Tony Cardenas… Nanette Barragán… Sara Jacobs… and Robert Garcia… Colorado Rep. Joe Neguse… New Hampshire Rep. Annie Kuster… Los Angeles City Councilmember Monica Rodriguez… City Controller Wendy Greuel… BIRTHDAYS — Sam Garrett, Vice President of J&Z Strategies…Rep. Scott Peters (D-Calif.) … Nora Taktajian of Rep. Doris Matsui’s (D-Calif.) office … Jessica Boulanger… BELATED B-DAY WISHES — (was Sunday): Hailey Heer … Alison Gopnik … (was Saturday): former House Majority Whip Tony Coelho (D-Calif.) … Rebecca Rutkoff … Liz Bourgeois … Daniel Lacesa ... Jeffrey I. Abrams ... (was Friday): Dr. Beryl A. Geber ... Lilly Rapson WANT A SHOUT-OUT FEATURED? — Send us a birthday, career move or another special occasion to include in POLITICO’s California Playbook. You can now submit a shout-out using this Google form. Disclaimer: All information will be verified. CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this subscriber-only service offers, click here. Want to make an impact? POLITICO California has a variety of solutions available for partners looking to reach and activate the most influential people in the Golden State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Rebecca Haase to find out how: rhaase@politico.com. | | | | Follow us on Twitter | | | | Subscribe to the POLITICO Playbook family Playbook | Playbook PM | California Playbook | Florida Playbook | Illinois Playbook | Massachusetts Playbook | New Jersey Playbook | New York Playbook | Ottawa Playbook | Brussels Playbook | London Playbook View all our political and policy newsletters | | Follow us | | | | |
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