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| By Blake Jones and Dustin Gardiner |
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 State Assembly GOP Leader James Gallagher said "excitement was palpable" when Republicans in Sacramento gathered after flipping three legislative seats. | Rich Pedroncelli for POLITICO |
PROGRAMMING NOTE: NEW CO-AUTHOR INCOMING — I’m Blake Jones, the new co-author of California Playbook. I could not be more excited to join the premier newsletter in California politics alongside a stellar journalist in fellow co-author Dustin Gardiner. I’ve been our bureau’s education reporter since I started at POLITICO in May of 2022, and for the last year, I’ve also covered the state budget. It’s been a pleasure getting to know many of the professionals and power brokers who drive policy in California, and I look forward to introducing you to more of them. I’ll continue to be based in Sacramento, working with Dustin and the rest of our still-growing team to provide even deeper and more timely insight into the way power functions in this great state. We’ll have fun, too. Please do reach out. And happy holidays. — Blake
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| A message from Food & Water Action: Will Gov. Newsom side with the oil and gas industry or Californians after the “worst gas leak in US history?" In 2015, the Aliso Canyon Gas Storage Facility released 100,000 tons of methane and toxic chemicals, endangering public health. Governor Newsom vowed to shut down Aliso Canyon, but his Public Utilities Commission appointees voted to expand it. The PUC will decide Aliso Canyon’s future on December 19th. Learn more. |
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THE BUZZ: FEELING GIDDY — Statehouse Republicans are basking in the red glow of this fall’s election results — and for good reason. They wrested three seats from the majority party in Sacramento even as California Democrats flipped swing congressional districts. Voters also sided with Republican lawmakers (and against many Democrats) by increasing penalties for theft and drug crimes through Proposition 36. Adding to the GOP glee: Vice President Kamala Harris’ place atop the ticket did not save her party from those outcomes, and she trailed President Joe Biden’s 2020 performance in her own home state. “Our morale is high,” said Assemblymember Alexandra Macedo, a newly sworn in Republican whose Central Valley district overlaps with Republican Rep. David Valadao. “Of course,” she added, President-elect Donald Trump’s victory and blue state gains have left her caucus “feeling empowered.” Seven Republican lawmakers and staffers, asked about their social calendars, said they have not partied the last few weeks away in celebration of their pickups in the Assembly (Leticia Castillo and Jeff Gonzalez) and state Senate (Steven Choi). But they did gather the evening before swearing in last week for a toast at the Grange Restaurant & Bar in downtown Sacramento, where “the excitement was palpable,” according to Assembly GOP Leader James Gallagher. The same night, Choi attended what he described as a collegial bipartisan dinner where he caught up with former colleagues from his first stint in the Legislature and chatted with Democrats including Sen. Tom Umberg. After being sworn in, Choi joined fellow Republicans for a jubilant celebration at party headquarters in Sacramento where hopes were high about making further inroads in 2026. The party is preparing to capitalize on its momentum by finalizing legislative packages focused on public safety, homelessness and affordability. The Assembly GOP also expects to re-surface its fight against non-disclosure agreements in legislative negotiations, which it initiated after it was revealed that NDAs were used when the Newsom administration brokered a controversial fast food minimum wage deal that affected one of the governor’s donors. There is one looming threat: The party that wins the presidential election typically loses ground in the midterms. But Republicans aren’t dwelling on the possibility. “Hopeful,” is how Gonzalez described the caucus’ vibe at the moment. Gallagher was downright bullish, arguing the GOP has a “realistic chance” to eliminate Democrats’ supermajority in Sacramento within the “next couple of cycles.” We’ll see.
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| REGISTER NOW: As the 118th Congress ends, major decisions loom, including healthcare appropriations. Key focus: site neutrality. Can aligning hospital and clinic costs cut federal spending, reflect physician costs, and lower patient expenses? Join policymakers and providers to discuss. |
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GOOD MORNING. Happy Tuesday. 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 dgardiner@politico.com and bjones@politico.com, or on X — @DustinGardiner and @jonesblakej. WHERE’S GAVIN? In Colusa County for a press conference to highlight economic development efforts and to announce water and infrastructure projects. The 11:20 a.m. event will be streamed on Newsom's YouTube channel.
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 | SILICON VALLEYLAND | |
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State Attorney General Rob Bonta. | AP |
FOR THE CHILDREN — Democratic lawmakers and consumer advocates are gearing up for battle with Big Tech companies over a bill that would require social media platforms to display warning labels about the risks posed to children. They’re sure to face tough opposition from deep-pocketed industry groups, backed by companies like Meta and TikTok. Bill author Asssemblymember Rebecca Bauer-Kahan and its key sponsors, state Attorney General Rob Bonta and Common Sense Media CEO Jim Steyer, held a news conference in San Francisco yesterday to unveil the proposal and their messaging. Key takeaways: 1) They’re ready to get sued: Steyer made it clear that they expect social media giants to fight them, especially in the courts, if the bill passes. “The companies have spent hundreds of millions of dollars, just in the past few years alone, trying to stop legislation,” Steyer said. “So they’ll sue. We’ll win, Attorney General Bonta has a great team.” 2) They want California to shape national rules: Bauer-Kahan’s measure, AB56, will be closely watched because it could influence whether other states enact similar child-safety rules (and whether tech companies implement the same warning labels nationally by default). Bauer-Kahan said California must act because tech lobbyists have been effective at blocking any form of regulation in Congress. “The attention economy is using our children and their well being to make money,” she said. 3) They hope to split the industry: After the press conference, Steyer told Playbook that a strategy for bill sponsors will be to win buy-in from at least a few tech companies. He wasn’t ready to name names, but we’ll be watching. Bonta hinted at a similar strategy, suggesting it’s in the best interest of tech companies to come along willingly. “It’s time that we step up and demand change,” the attorney general said. Meta, the parent company for Facebook and Instagram, declined to comment. But online child-safety regulations could be gaining unexpected momentum in Washington, all thanks to Elon Musk… more on that below.
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| STATE CAPITOL | |
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The state Capitol building in Sacramento. | Juliana Yamada/AP |
DREAM ON — Only one in three Californians think the American Dream still holds true, according to the latest Public Policy Institute of California poll. The survey finds the state’s residents hold an increasingly jaundiced economic outlook, including the nugget that more than half of respondents said they used to believe in the American Dream of getting ahead if you work hard but no longer do. The poll found strong majorities support more public funding for job training and child care. And the threat of artificial intelligence looms large; half of employed Californians think AI will reduce the number of jobs in their fields. Read PPIC’s write-up here for a deep dive into the economic mood in the nation’s most populous state. — Melanie Mason
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| A message from Food & Water Action:   |
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COMEBACK TRAIL — California received good budget news Monday as Moody’s revised its outlook on state finances from “negative” to “stable.” The bond credit rating business downgraded its view of California finances in May of 2023 as the state faced a deficit. It left its assessment unchanged for most of this year as the state grappled with one of its largest ever shortfalls. “The state's fiscal challenges have eased in light of both the implementation of spending adjustments and favorable revenue performance supported by a strong economy,” Moody’s said of its improved outlook. “State reserves have come down from an unprecedented height, but will likely remain at a satisfactory level as the state moves through fiscal 2025 and into fiscal 2026.” The nonpartisan Legislative Analyst’s Office has projected California faces a $2 billion deficit this year and much larger shortfalls in years to come. But Moody's analysts said they expect the state will manage those gaps “to maintain a satisfactory financial profile.”
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| Billions in spending. Critical foreign aid. Immigration reform. The final weeks of 2024 could bring major policy changes. Inside Congress provides daily insights into how Congressional leaders are navigating these high-stakes issues. Subscribe today. |
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| CLIMATE AND ENERGY | |
NEWSOM'S THIRST — Newsom is concerned enough that Southern California won’t support his controversial proposal to route more water south around the Sacramento-San Joaquin River Delta that he’s sent top aides on a pressure campaign ahead of a key vote today. Read more about who stands where in last night's California Climate.
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| TOP TALKERS | |
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Billionaire and Tesla CEO Elon Musk. | Francis Chung/POLITICO |
ELON FOR THE CHILDREN — Speaking of child safety, Musk surprised Silicon Valley insiders on Sunday when he threw his support behind federal legislation to shield children from harmful content online. “Protecting kids should always be priority #1,” Musk posted on X, the social platform he owns. It's unclear if House Republicans will allow the bill to come up for a vote. But support from Musk, the Tesla CEO and a confidant of President-elect Donald Trump, gives a jolt of energy to the bipartisan proposal from Sens. Marsha Blackburn and Richard Blumenthal.
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| A message from Food & Water Action: Will Gov. Newsom side with the oil and gas industry or Californians after the “worst gas leak in US history?" In 2015, the Aliso Canyon Gas Storage Facility released 100,000 tons of methane and toxic chemicals. SoCalGas’ disaster forced thousands to evacuate their homes to avoid further exposure to cancer-causing benzene and other chemicals.
SoCalGas took four months to seal the gas leak. Families near Aliso are still suffering the consequences. Instead of shutting it down like Gov. Newsom promised, the PUC allowed Aliso to expand by 3,000%, perpetuating the public health threat.
Over 150 organizations have come together to call for a shutdown of Aliso by 2027, but the PUC is considering kicking the can down the road instead of protecting communities. Gov. Newsom and allies should stand with families, not SoCalGas’ profits. On December 19th, the PUC will decide the future of Aliso Canyon. Learn more. |
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HARMEET GOES TO DC — Trump will nominate Harmeet K. Dhillon, the former vice chair of the California GOP, to be the assistant attorney general for civil rights at the Department of Justice. As our colleagues Rachel Bluth and Melanie Mason report, Dhillon is best known for filing free speech-suits on behalf of conservative clients, including the Berkeley College Republicans and a Google engineer who was fired for his memo blasting the company’s diversity policies. Dhillon, who is Sikh, also delivered a prayer onstage during the 2016 and 2024 Republican National Conventions. CALIFORNIA CONNECTION — The man arrested for allegedly gunning down UnitedHealthcare CEO Brian Thompson has a strong California connection. As Megan Cassidy and Nora Mishanec of the San Francisco Chronicle write, authorities said the suspect has ties to both San Francisco and Stanford University. A man with the same name as the suspect, Luigi Mangione, was previously the head counselor at Stanford’s Pre-Collegiate Studies program.
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| | AROUND THE STATE | |
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A rendering of the proposed California High-Speed Rail | Courtesy of the California High-Speed Rail Authority |
— Musk wants to kill California’s high-speed rail project in the Central Valley, which he’s labeled as an example of wasteful spending. (The Sacramento Bee) — Southern California utilities are considering shutting off power to 350,000 residents, a preemptive move to mitigate the wildfire risk heightened by intense Santa Ana winds this week. (Los Angeles Times) — A housing construction boom has emerged at university campuses in Southern California, thanks to a major infusion of state funds. (The Orange County Register) — Farmers are debating whether to continue funding the Almond Board of California. Supporters argue the board is a crucial marketing arm to help the industry recover following a global collapse in almond prices. (GV Wire)
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| | PLAYBOOKERS | |
| PEOPLE MOVES — Mark Ruffo has been named chief advancement officer at the California Academy of Sciences in San Francisco. He was previously the chief of outreach, development and communications at the nonprofit Landesa. BIRTHDAYS — Kevin de León … Raven-Symoné … Bobby Flay 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. 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. |
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