California Government Relations Update – April 2022 | McGuire Woods Consulting
The Los Angeles Unified School District lifted its mask mandate for students and staff on March 23, 2022, a significant development for California’s largest school district. Per the agreement with the teachers’ union, the district will maintain its weekly testing program through the end of the school year, at a cost of approximately $5 million per week.
California Democrats have rejected a resolution by Republican Senator Melissa Melendez that would have ended Gov. Gavin Newsom’s two-year-old COVID-19 state of emergency, which allows the governor to access federal funding and… overrule state laws. Republicans argue that the state of emergency gives Newsom too much power and that local governments should lead the COVID response. Newsom argued that the state of emergency is necessary to implement state policy SMARTER planthe next phase of the pandemic response in California.
March 31 was the last day for California residents to apply for the state’s COVID rent relief program. On April 1, landlords can begin evicting non-paying tenants in cities or counties without local eviction protections. Acknowledging the slow distribution of relief funds, a group of Democrats submitted a proposal to extend eviction protections until June 30and for Californians who have applied for the COVID Rent Relief Program. The bill passed the Assembly and the Senate and was signed into law by Lieutenant Governor Kounalakis.
What’s going on in Sacramento?
Gas prices have started to decline nationwide, but remain high across California, with the average price of a regular gallon exceeding $6 in Southern California. Since Newsom’s initial announcement, four gas rebate proposals have been introduced that would be funded by California’s large budget surplus. Newsom’s $11 billion plan would send a $400 debit card to Californians who own cars statewide for up to two licensed vehicles, $750 million in grants to transit agencies to provide Californians three months of free rides, up to $600 million to pause part of the diesel sales tax for a year and $523 million to suspend a planned July increase in the excise tax on gasoline and diesel.
Pro Tempore Chairman Toni Atkins and Speaker Anthony Rendon have introduced a proposal to give $200 per person to California taxpayers, including their dependents, but rebates would be capped for households with incomes over $250,000. Notably, Atkins and Rendon do not support suspending the gasoline tax increase in July. A group of Democratic lawmakers has unveiled a plan to send a $400 rebate to every Californian, regardless of income and car ownership, to ease high gas prices across the state .
The California Energy Commission (CEC) met the first week of March to discuss AB 525 and to review its strategic plan for offshore wind power (OSW) in California, which is due for completion by March 30 June 2023. By June 1, 2022, the CEC shall assess and quantify the maximum achievable capacity of OSW to achieve reliability, ratepayer, employment and decarbonization benefits and establish planning targets for megawatt OSW for 2030 and 2045. While OSW has been seen as a clean energy powerhouse for many, members of the Northern Chumash Tribe are protesting the development of a floating wind turbine project off Morro Bay on behalf of tribal preservation.
Tribal affairs were again at the forefront of California politics with Newsom’s announcement of a budget proposal to give Native American tribes $100 million to purchase and preserve their ancestral lands. The tribes could also use the money for climate change programs and workforce development. Although enthusiastic about the proposal, some tribal leaders have expressed concern about competing claims to the same land.
The Office of the Legislative Analyst recently released its assessment of the costs associated with CalCare, the single-payer health care proposal that failed to clear the Assembly. The analysis predicts that a single-payer system would cost the state between $494 billion and $552 billion per year. The analysis reveals a significantly higher price than previous estimates for single-payer care and projects the plan would have a funding gap of $70 billion to $193 billion. This assessment could impact future incremental attempts to establish statewide health care.
A new state budget proposal introduced by Governor Newsom would ask California to spend $100 million to produce its own insulin, according to a letter from the Treasury Department to legislative budget officials. This proposal reflects Newsom’s efforts to have California create its own generic label — under the name CalRx — to reduce prescription drug costs for residents. Insulin is Newsom’s top target, driven by his belief that diabetes drugs “embodied the failures of the pharmaceutical industry.” If successful, California could become the first state to manufacture its own drugs. In their letter, finance officials called for a one-time injection of $100 million in the 2022-2023 budget “to support the development of three low-cost, interchangeable biosimilar insulin products and a manufacturing facility for California-based insulin”. Newsom’s plan would require California to enter into partnerships to manufacture the diabetes drug and develop its own manufacturing capabilities.
What’s going on in Los Angeles?
USC hosted a mayoral debate between the top five candidates: Joe Buscaino, Kevin de León, Karen Bass, Mike Feuer and Rick Caruso. Most of the debates have focused on key issues such as homelessness and crime, with most of the attacks aimed at Caruso, appearing in his first debate since announcing his candidacy. Ironically, the sheer number of attacks directed at Caruso gave him – apparently – the most airtime and attention. On the other hand, Bass didn’t attack Caruso, staying above the fray as the current race leader.
George Gascón continues to be a polarizing figure in the Los Angeles mayoral race, despite not being a candidate. As Angelenos’ crime fears escalate, many voters are focused on candidates who endorsed Gascón’s recall. Both Buscaino and Caruso endorsed Gascón’s impeachment. Bass, Feuer and De León all disagreed with some of Gascón’s policies, such as zero bail for misdemeanors and liability for low-level infractions, but did not approve of a recall.
A total of 55 people qualified to run for 11 Los Angeles city offices in the June 7 election. The election will generate the highest political turnover at city hall since 2013, with the chance to elect a new mayor, city comptroller, city prosecutor and vote in eight races for city council, including three have no incumbent. The general election will be held on November 8 between the top two candidates in each primary.