May 20, 2022
California Legislative Update
What’s Happening in Sacramento?
Gov. Gavin Newsom released his revised $300.7 billion 2022 - 2023 state budget proposal on May 13, 2022, building on the state’s ongoing work to confront California’s greatest existential threats, bolster economic growth, and make historic investments in California’s future. Newsom announced an estimated $97.5 billion surplus for this year’s budget, which is the largest any state has ever experienced, and an intention for his proposal to spend 99% of the surplus on one-time spending and 94% of the total budget on one-time spending, as ongoing programs can be trickier to fund in the long term. Newsom also noted that people are not leaving California because of taxes; instead, he argued that people are leaving because of housing unaffordability and limited supply. California lawmakers now have until June 15 to send a budget to Newsom’s desk for the upcoming fiscal year, which begins July 1.
To quote Newsom, the budget is “simply without precedent”. From the budget surplus, $18.1 billion will provide financial relief for Californians struggling with rising inflation, $37 billion will go to infrastructure investments, and an additional $2.3 billion will go towards fighting COVID-19. The governor proposed spending a total of $32 billion in climate investments, including $100 million will be put towards carbon removal technologies and an additional $1.3 billion in drought and water resilience spending.
Newsom also reiterated his plan to send $400 direct payments to California car owners. As negotiations continue with the legislature, it is likely that those payments would be distributed in September. The cap on car value will be a negotiation point with the legislature.
In COVID-19 news, the California Senate recently voted 21-7 to approve SB 866, Sen. Scott Weiner’s bill allows teenagers to get vaccines without parental consent, barely reaching the approval threshold of 21 votes. A controversial bill, the legislation now moves to the Assembly for consideration.
The governor’s office and multiple lawmakers are consolidating different legislative proposals to change the states’ tax rate on cannabis products, with a goal of reaching a deal in time for the state budget’s passage in June. This would allow the tax changes to go into effect this summer. Cannabis industry insiders are expecting the legislation to include an elimination of the cultivation tax and a reduction of the excise tax. It is likely that the proposal will include a means to offset lost cannabis tax revenue, which supports a range of childcare, substance abuse and law enforcement programs.
State Senate leaders recently released details for a homebuying assistance plan to offset high housing costs. The ‘California Dream for All’ program would cost $10 billion over the next decade and cover 17% of the total purchase price for first-time homebuyers. Unlike other programs, the Senate proposal does not include price limits on purchases, arguing that the program would allow renters in expensive regions like Los Angeles and San Francisco to stay in their neighborhoods. The state would eventually recover those funds when the home is sold or refinanced and would then send the funds to other applicants.
The California Air Resourced Board (CARB) revealed an updated climate change roadmap that seeks to minimize job losses and costs while achieving carbon neutrality by 2045. CARB’s scoping plan outlines policies that focus on reducing reliance on oil, capturing carbon dioxide emitted by industries, and increasing dependence on renewable power sources, such as wind, solar and electric cars. It also commits to eliminating 91% of oil used in the state by 2045. The plan purports to fulfill state mandates to reduce carbon dioxide and other emissions 40% below 1990 levels by 2030 and achieve carbon neutrality by 2045. The strategies would cost an estimated $18 billion in 2035 and $27 billion in 2045. According to the roadmap, cap and trade will play a smaller role in meeting the state’s goals as it transitions to renewable energy.
The Assembly Judiciary Committee unanimously passed AB 2408, which opens social media companies up to lawsuits if their apps are shown to addict children. AB 2408 is one of the first major challenges to the way social media companies design their algorithms. During committee discussions, the authors removed a provision that would have made the law retroactive. The latest version clears companies of liability if they halt any feature or algorithm that they know damages children by April 2023. There is also a safe harbor provision for social media platforms that regularly audit their products for addictive or harmful elements and correct them. The measure now moves to the Assembly for a floor vote.
California’s minimum wage will increase in January to $15.50 an hour for all workers. Newsom announced the wage bump and said that the projected increase is needed due to inflation exceeding 7%. Currently, California has two minimum wages: $15 an hour for employers with 26 or more employees, and $14 an hour for employers with 25 or fewer. The minimum wage was set to increase to $15 an hour for all employers in January 2023, but now will increase to $15.50.
What’s Happening in Los Angeles?
Joe Buscaino, one of the earliest entrants in the mayoral race, dropped out of the Los Angeles mayor’s race and has thrown his support behind billionaire developer Rick Caruso. City Attorney Mike Feuer has also dropped out of the race and endorsed Congresswoman Karen Bass. According to the most recent polling data from April 2022, Caruso, with backing from 24% of likely voters, and Bass, with 23%, would move to the November runoff. Councilman Kevin de León is also still in the race, but trailing behind Caruso and Bass.
The Los Angeles County Registrar-Recorder/County Clerk has already started sending out vote-by-mail ballots to all registered voters for the June 7 primary election. Voters will determine which two candidates will advance to the November election for key city positions, including: mayor, city attorney, city controller, city councilmembers for eight total districts, and three members of the board of education. It is important to remember that the June 7 election is not accurately described as a “primary” because there will only be a runoff if one candidate does not win over 50% of the vote.