Monday, January 6, 2025

Budget news inbound

Inside the Golden State political arena
Jan 06, 2025 View in browser
 
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By Blake Jones and Dustin Gardiner

Gavin Newsom walks down the aisle at the California State Capitol.

Gov. Gavin Newsom will complete a media tour on jobs and the economy today and preview his initial state budget proposal. | Pool photo by Paul Kitagaki Jr.

DRIVING THE DAY — Senate Pro Tem Mike McGuire released committee assignments Friday evening when one Playbook author was already at the Kings game. He named 20 new chairs, (POLITICO Pro story here), but made a notable omission.

Assembly Speaker Robert Rivas released his picks the prior week on Friday evening, anointing a dozen new chairs. (POLITICO Pro)

THE BUZZ: RETURN RADAR — Welcome back. We hope you enjoyed the holidays, because the Legislature returns today. Gov. Gavin Newsom will be in the San Joaquin Valley to release topline numbers from his opening budget proposal. And a handful of new laws are on life support amid court challenges.

Here are five things we’re watching this week (other than the new film "Nosferatu," a display of vampiric yearning matched only by legislators snubbed from their committees of choice).

1. Newsom’s opening budget play

The governor will complete a media tour on jobs and the economy today and preview his initial budget proposal. His Department of Finance will brief the public on his full spending plan on Friday, when Newsom will be in Washington D.C. for former President Jimmy Carter’s funeral.

Newsom was planning to on Thursday give a full budget presentation that would also serve as his state of the state address, but changed plans after Carter’s death, according to his office.

The governor has already hinted in October that he’ll project a surplus after two years of large deficits, and laid out plans to spend it. He wants $420 million more for film tax credits, $100 million for a new career education masterplan and $25 million for legal fights with the President-elect Donald Trump’s White House. This week, we’ll learn how much he wants to set aside for disaster relief in case Trump withholds federal aid, along with the administration’s estimate of the surplus.

2. How much Democrats will spend to fight Trump in court  

Assembly leaders want only an extra $500,000 on top of what Newsom has proposed, but the Senate has floated a much larger, $60 million appropriation for federal litigation. The negotiations have a de facto deadline: Trump’s Jan. 20 inauguration. The administration is seeking a resolution before then so Newsom can sign a budget bill before President Joe Biden is gone. Newsom called lawmakers into a special session to expedite that priority (which is running concurrently with their regular session).

3. Whether Newsom will attempt to prevent mass deportations

His administration has drafted plans to support undocumented immigrants by connecting them with legal services and schools, among other services, as our colleague Lindsey Holden scooped while we were away. But some of the immigration advocates who are backing the Senate’s larger spending plan are unhappy with Newsom’s draft document, believing it doesn’t go far enough, the Los Angeles Times reported in a follow-up piece.

The plan to create so-called support hubs did not spell out how they’d be funded, but the incoming budget framework could shed more light.

4. McGuire’s Senate Insurance Committee conundrum

The upper chamber leader did not yet choose the members of the insurance panel after last session’s chair, state Sen. Susan Rubio, was seemingly linked to a cannabis bribery scheme in court documents that were unsealed last month. Rubio, via a spokesperson, has said she "has no reason to believe that she would be included in any criminal allegations.”

McGuire will have only a few weeks to fill out the committee before policy hearings are slated to ramp up. The decision is delicate because of the legal questions surrounding Rubio, to be sure. B, but it could hold added weight if McGuire enters the 2026 race for insurance commissioner — for which he has opened a campaign account.

5. New laws, new lawsuits 

A federal judge last week temporarily blocked a new law giving parents more control over their kids’ social media use, and the 9th Circuit Court of Appeals has until only next month to decide whether to continue blocking the rules while an industry-instigated legal fight plays out. (POLITICO Pro)

Business groups also sued the state over a law banning employers from punishing workers who don't attend anti-union meetings. (POLITICO Pro)

And tribes took advantage of a law giving them standing to sue card rooms just hours after it took effect. (POLITICO Pro)

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 dgardiner@politico.com and bjones@politico.com, or on X — @dustingardiner and @jonesblakej.

WHERE’S GAVIN? In the San Joaquin Valley previewing his budget proposal and then providing an update on high-speed rail.

SAN FRANCISCO

Daniel Lurie waves as he arrives at a news conference in San Francisco, Friday, Nov. 8, 2024. (AP Photo/Jeff Chiu)

San Francisco Mayor-elect Daniel Lurie. | AP

KUMBAYA MOMENT — San Francisco Mayor-elect Daniel Lurie is gearing up to take the oath of office on Wednesday. But the hoopla around his inauguration kicked off early over the weekend — and with an unusual display of unity for a city known for its sharp-elbowed politics.

Lurie, a former nonprofit executive and heir to the Levi Strauss fortune, joined hundreds of residents for a series of street clean-up events across the city. He was joined by at least six incoming or current members of the Board of Supervisors, including several from vastly different ideological camps. It was a noticeable shift from the experience of outgoing Mayor London Breed, who often clashed with the board's outgoing members.

“This is no longer a city where we are going to practice the politics of a knife fight in a phone booth,” Lurie told a cheering crowd of about 300 who gathered in the Mission District.

Lurie’s Sunday clean-up events in the Mission and Tenderloin neighborhoods drew incumbent Supervisors Rafael Mandelman, Matt Dorsey and Stephen Sherrill (a recent Breed appointment), as well as incoming Supervisors Bilal Mahmood, Jackie Fielder and Danny Sauter.

Lurie basked in the kumbaya vibe, but it could be short-lived. Beyond the city’s deep problems with homelessness and drug addiction, Lurie must contend with a massive budget deficit that will require tough cuts that could alienate key voting blocs. His campaign rhetoric was often lofty in ambition, but shorter on details. And he's been coy since winning the election about getting into specifics.

Many City Hall insiders say they’re still sussing out what kind of mayor they expect Lurie to be.

“I think I know what I’m getting,” Mandelman joked as he walked behind Lurie, picking up trash in Dolores Park. “There was clearly a call for change in the election and from the electorate, but change is also complicated.”

STATE CAPITOL

FIRST IN PLAYBOOK: UNION UNSETTLED — The Media Guild of the West restarted lobbying against last year’s journalism and artificial intelligence deal this morning, recommending a near total makeover in a letter to Newsom and legislative leaders that was obtained exclusively by Playbook.

The union pushed back on a agreement in which Google and the state would together direct millions of dollars to journalism initiatives but also earmark funding for artificial intelligence development. It hasn’t yet been funded in the state budget, and the guild sees an opening to reshape the nation’s first deal of its kind to rely on funding from only the private sector.

It also reintroduced a central criticism from labor: that the deal won’t provide enough funding.

“The relatively modest Google and state contributions, once diluted as an across-the-board subsidy for an unknown number of California publishers and journalists, 6 will likely prevent the Journalism Fund’s goal of stimulating journalist job growth across California’s ailing news sector,” union President Matt Pearce wrote.

TOP TALKERS

President-elect Donald Trump

President-elect Donald Trump. | Evan Vucci/AP Photo

NEW KIND OF RESISTANCE — Democrats in California are once again leading the resistance to Trump. But as David Siders writes for POLITICO Magazine, they’re still figuring out how that resistance needs to be different the second time around. And they're grappling with signs of a conservative shift in parts of the Golden State. Many Democrats say it’s a time for self-assessment. “Everyone ought to look in the mirror,” former Gov. Gray Davis told Siders, “because they’re working for voters who are marching to a different drummer.”

HOW TO HANDLE ELON — European governments are still working out how to deal with being on the bad side of Elon Musk, the billionaire and Trump’s new BFF. As our EU colleagues write, Muck’s biggest beef appears to be with the liberal government of British Prime Minister Keir Starmer. Other governments are delicately courting Musk, in hopes of avoiding his haphazard ire.

SURVEILLANCE CITY — San Francisco police have dramatically expanded their surveillance apparatus over the last year, due to policies implemented by outgoing Mayor Breed. The expansion includes a fleet of drones and 400 automated license plate readers, which help police track suspect vehicles. As Megan Cassidy of the San Francisco Chronicle writes, the license readers typically take about three million photos per average weekday.

AROUND THE STATE

— San Joaquin Valley farmers are now banned from burning agricultural waste in the field. That could help clean up the region’s air quality, which is routinely among the worst in the nation. (Los Angeles Times)

— Being a police chief is an especially tough gig these days. That’s especially true in San Diego County, where seven out of the region’s 11 police forces lost chiefs in 2024. (The San Diego Union-Tribune)

— Survivors of the so-called Golden State Killer, who murdered 13 Californians and committed dozens of rapes, have launched a nonprofit to help sexual-assault victims as they heal and interact with police. (The Sacramento Bee)

PLAYBOOKERS

PUT A RING ON IT — Jackie Berkowitz, a communications exec at Netflix and a CBS News alum, and Scott Kend, real estate developer at DTM, got engaged on Dec. 28 on a morning hike in Los Angeles, where Scott proposed on a scenic vista overlooking the Pacific Ocean before surprising Jackie by inviting all their friends over for an engagement party. The couple met on a dating app in 2022, when their first date was Friday the 13th at LA bar The Black Cat. Pic ... Another pic

WADING IN — Assemblymember John Harabedian will introduce his first bill today, one that would create a separate category when the state collects demographic data for people of Middle Eastern and North African descent. Harabedian represents a Southern California district with many Middle Eastern and North African constituents, and is of Armenian descent himself.

PEOPLE MOVES — Tim Del Monico is now chief of staff for incoming Rep. Sam Liccardo; Del Monico was previously an associate administrator at the EPA. In addition, Izzy Olive is Liccardo’s comms director; she was previously spokesperson for Michigan Rep. Hillary Scholten.

— Rachel Tochterman is now comms director in Rep. Ami Bera's office. She previously served as deputy chief of staff for Sacramento Mayor Darrell Steinberg. In addition, Asha Samuel is joining Bera's office as senior health policy adviser. She previously served as legislative director for Oregon Rep. Earl Blumenauer.

— Mackenzie Mays has left the Los Angeles Times and will join Bloomberg as an investigative correspondent.

— Margaret Moodian has been appointed to the Orange County Historical Commission by county Supervisor Katrina Foley.

Leadership California has three new board members: Amy Costa, founder of lobbying firm Full Moon Strategies; April Barnes, president of Vital Link; and Liliana Bernal, CEO of the firm Balanced Diversity.

Republican Lance Christensen said he has decided against another run for state superintendent and is taking the lead at California Policy Partners. He was previously with the conservative California Policy Center.

— Francis Barraza, chief of staff to Assemblymember Greg Wallis, announced she’s leaving his office after two years.

BIRTHDAYS — Newsom spokesperson Daniel LopezAshley Bittner Julia Blakeley

BELATED B-DAY WISHES — (was Saturday): Deborah Matteliano … (was Dec. 28): consultant Michael TrujilloGeorge Andrews with the Assembly GOP Caucus … (was Dec. 22): Matt Kaplan at Endeavor & WME …

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