The governor's race wakes up

Politico

05-06-2025

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MIND YOUR BUSINESS — California is overtaxed, strangled by red tape and too darn pricey — so say prominent Democrats running for governor.
Of the six gubernatorial hopefuls (including two Republicans) on stage for the California Business Outlook Dinner last night in Sacramento, the harshest barbs about the state's economic health arguably came from members of the party that has held unfettered power at the Capitol for years.
'This is the worst state for business in the United States of America,' said Antonio Villaraigosa, the former Los Angeles mayor, landing one of his bigger applause lines of the night.
Yes, yes, the audience was a large roomful of Chamber of Commerce members, so denouncing regulations is not exactly going out on a limb.
But the way the candidates broached California's affordability crisis and other issues offered some important revelations about the state of this governor's race (at least as it stands with Kamala Harris still undecided on a run):
BUH-BYE BERNIECRATS? Raising the minimum wage and increasing taxes on corporations — policies that are typically red meat for Democratic base voters — got a noticeably cool reception from the four Democrats on stage.
Lt. Gov. Eleni Kounalakis was the only contender to unabashedly back raising the statewide minimum wage to $20 an hour, arguing that not doing so is akin to 'throw[ing] poor people under the bus.' As for raising taxes to deal with the state's current budget crunch — an option floated by labor groups and some Democratic lawmakers — Toni Atkins, the former legislative leader, was the only Democrat to even consider the possibility, taking pains to specify it was 'absolutely a last option.'
It was a notable contrast from last month's gathering at the California Labor Federation, where most Democrats clambered over each other to cozy up to organized labor (one exception: Villaraigosa, who seemed to relish saying no to labor's face and opposing unemployment benefits for striking workers).
But it's clear that, so far, no candidate has seized the progressive banner, tapping into the left flank that was galvanized by national figures like Sen. Bernie Sanders or Rep. Alexandria Ocasio-Cortez.
Former Orange County Rep. Katie Porter, who pundits sometimes place in the progressive lane, seemed eager to shed any perceptions that she was Elizabeth Warren 2.0. She talked about attracting tech jobs and 'winning the AI race,' which would be anathema to labor unions that are leading the charge for more regulation. She spoke sympathetically about the challenges facing businesses, lamenting the 'regulatory death by 1,000 papercuts.'
Speaking to Playbook after the forum, Porter pointed to a recent proposal by state Sen. Steve Padilla that would have required plastic bottles to be manufactured with attached caps as an example of small-bore legislating that's missing the forest for the trees.
'LA is literally on fire, and that is what a legislator is working on,' Porter said. 'I would love to work with that legislator on his goal of reducing plastic waste. … He's focusing on the wrong thing. I want him to think bigger.'
TRUST THE PROCESS: Despite President Donald Trump's unpopularity in California, Republicans Steve Hilton and Chad Bianco didn't appear all that interested in putting daylight between themselves and the Republican in the White House.
Hilton, the Fox News personality, defended tariffs as a chance to lure back manufacturing to the U.S., while Bianco, the Riverside County sheriff, offered a full-throated endorsement of Trump's stop-and-go trade policy — reducing concerns to 'fear mongering' and advising people to 'just wait and see what happens.'
'Just buckle down with what we have going on, let the president take care of it,' Bianco said. 'If he fails miserably, then somebody's going to come in and we're going to rescue it.'
California's a tough state to make that case. And Democrats on stage all used the setup to tee off in front of the business crowd.
Villaraigosa retorted that 'tariffs are taxes' to applause. The other Democrats agreed, with Kounalakis tearing into the duties as hard as anyone. She warned the growing expenses of imported drywall and appliances will jack up home costs and took a direct shot at Bianco.
'You're not a businessman. You're a government employee. You've got a pension. You're going to be just fine,' Kounalakis said, to a chorus of 'ooooo's' from the crowd.
REAL TALK: Playbook could hear the candidates salivate over moderator John Myers' prompt to describe an instance when they told 'hard truths' to display leadership. It played right into Villaraigosa's wheelhouse about how he tangled with unions in Los Angeles. It gave Hilton a chance to tout his early activism against Covid-19 lockdown mandates. And it gave Atkins the opportunity to give some blunt talk to her audience about what she cast as a major obstacle to building housing in California — a reality that often gets elided when politicians make sweeping promises about building scores of new units.
'We've done some CEQA reform. We've done zoning regulations … If we could get housing built faster, we would do it,' she said. 'The problem is our communities that do not want density.'
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WHERE'S GAVIN? In Los Angeles County for a roughly 12:15 p.m. announcement about 'literacy and student success.' Watch the governor's news conference here.
STATE CAPITOL
DRIVER'S SEAT — California's latest battle over the gig economy will continue after the Assembly narrowly passed legislation to let Uber and Lyft drivers unionize. The measure was expected to pass given the clout of backers like SEIU California and Appropriations Chair Buffy Wicks.
But the relatively narrow 44-vote margin, with numerous Democrats holding off, underscored how fights over app-based workers remain contentious years after they first came to dominate Sacramento's agenda. In that time, the struggle shifted from the courts to the Legislature to the ballot to the courts to the Legislature again. Now it moves to the Senate. Per Wicks, there are still 'many conversations to have.' — Jeremy B. White
Number of the day
61.2 CENTS — That's how much California's gas tax will increase to per gallon, effective July 1. It's a slight hike from the current rate of 59.6 cents per gallon. The annual inflationary increase is baked into the state's fuel tax that lawmakers approved in 2017, which was signed into law by then-Gov. Jerry Brown.
Republicans at the state Capitol tried — once again — this session to freeze the gas tax. They were rebuffed, per usual, by the Democratic supermajority. The tax pays for highway repairs and construction, as well as mass transit projects.
CLIMATE AND ENERGY
RAILROADED — California Democrats rallied around the state's high-speed rail project Wednesday after Trump announced he'd withhold $4 billion previously allotted for construction.
Sens. Alex Padilla and Adam Schiff in a statement accused Transportation Secretary Sean Duffy of seeking to 'appease President Trump and punish Californians who didn't vote for him.'
'In Donald Trump's corrupt world, there's no need for high-speed rail when you can accept a $400 million jet from a foreign government,' the senators wrote. 'But for the millions of Californians left to pick up the tab for Trump's reckless trade wars and rising costs of living, today's announcement is devastating.'
Read last night's California Climate on why Trump's attacks are strengthening Democrats' support for the controversial project.
Top Talkers
GOING TO THE MATT — San Jose Mayor Matt Mahan defended his Pay for Performance initiative on X after Councilmember David Cohen told the San Jose Spotlight that the effort came 'straight out of the toolkit of authoritarian governments.' Mahan's plan would tie the pay raises of some city employees to performance metrics, like in many private-sector jobs.
'I'm tired of my fellow Democrats crying authoritarianism whenever they disagree with something — that is something that shouldn't be taken lightly or used as a catchall for discontent,' the mayor wrote.
PALM SPRINGS UPDATE — U.S. Attorney Bill Essayli says Daniel Park has been charged with providing and attempting to provide material to support a terrorist in connection with the car bombing at a Palm Springs fertility clinic last month, the Los Angeles Times reports.
Park is accused of helping Guy Edward Bartkus, the other suspect who died in the attack, secure 270 pounds of ammonium nitrate.
AROUND THE STATE
— A federal judge ruled that San Diego must allow beach yoga classes to resume immediately after they began cracking down on the practice in 2024. (The San Diego Union-Tribune)
— Despite San Francisco's downtown slump, two shopping destinations are booming thanks to Asian retailers and restaurants. (San Francisco Chronicle)
— The San Jose City Council will vote next week on Mahan's Responsibility to Shelter proposal, which would allow police to arrest or cite homeless people who repeatedly refuse shelter. (The Mercury News)
Compiled by Nicole Norman
PLAYBOOKERS
PEOPLE MOVES — Louie Kahn of Rep. Ami Bera's office has been promoted from deputy communications director and digital director to communications director.
— Joe Arellano is now spokesperson for the Stop the Recall campaign in support of San Francisco Supervisor Joel Engardio. He's a veteran SF comms pro and worked for former Mayors London Breed and Gavin Newsom.
BIRTHDAYS — former Assemblymember Evan Low, CEO of LGBTQ+ Victory Fund (favorite cake: rainbow) … actor Mark Wahlberg … musician Kenny G
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.