Washington reality check hits Sacramento

Politico

2 days ago

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KEEPING SCORE: California Democrats are working to hammer out their moving target of a budget while keeping their eye on the storm clouds from Washington.
As we reported this morning, Democrats are weighing potential revenue options to offset the state's $12 billion spending gap and are keenly aware that deep cuts in federal health care spending being negotiated in Congress would upend their plans. That tension became clear today as the Congressional Budget Office estimated the House budget plan would increase the federal deficit by $2.4 trillion within a decade — even after booting 7.8 million people off Medicaid nationwide.
'They can't throw enough people off health care to pay for this tax cut,' Senate Budget Chair Scott Wiener told Playbook.
If Assembly Budget Chair Jesse Gabriel's caffeine stack of coffee and Coke Zero is any indication, weary state lawmakers still face a fiscal climb as they oscillate between spending negotiations and hitting the Friday deadline to move their bills from one house to the other.
'The more we learn about the details of this awful bill the more concerned we become,' Gabriel said in a statement to Playbook. 'It is an absolute horror show that would have disastrous consequences for our state.'
While lawmakers are busy circulating vote cards and feverishly pushing their colleagues to vote for their bills, budget drama is unfolding in the background. Gabriel has spent much of the marathon floor sessions off the green carpet in meetings with budget leaders in both houses that at least once stretched into the evening, necessitating an emergency pizza delivery.
California was struggling to afford its health care programs even before the threat of federal cuts intensified. Last month, Gov. Gavin Newsom proposed capping Medi-Cal enrollment for the state's undocumented population following a years-long expansion that became far more costly than initially thought.
Progressive Democrats are pushing hard for their colleagues to consider corporate tax hikes to help pay for those Medi-Cal benefits.
Those involved in the efforts insist lawmakers in both the Senate and the Assembly are taking proposals to make wealthy individuals and corporations pay up seriously. In the Assembly, Democrats have circulated a revenue survey obtained by Playbook.
It asks members their opinion on how the body should 'approach potential new revenue/taxes.' Lawmakers could select from three options:
Playbook was still awaiting the results at the time of publication, if any friendly parties are interested in sharing them (wink wink, nudge nudge).IT'S WEDNESDAY AFTERNOON. This is California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check on California politics and a look at what our policy reporters are watching. Got tips or suggestions? Shoot an email to [e-mail].
WHAT YOU NEED TO KNOW TODAY
HIGH-SPEED SNAG: President Donald Trump's administration today announced that it's moving to terminate two grants totaling roughly $4 billion that were previously awarded to California's beleaguered high-speed rail project, our Sam Ogozalek reports for POLITICO Pro subscribers.
In a letter to Ian Choudri, CEO of the California High-Speed Rail Authority, the Federal Railroad Administration blasted the state, saying the agency 'has no confidence CHSRA will ever deliver an operating high-speed rail system,' wrote Drew Feeley, acting FRA administrator.
The grant cancellations would affect a planned portion of the line from Merced to Bakersfield.
A spokesperson for the rail authority in a statement said CHSRA disagrees with the federal government's conclusions, calling them 'misguided' and not reflective of the 'substantial progress' made on the project. The spokesperson added that the majority of funding has come from the state, not the FRA, and that Newsom's latest budget proposal would provide enough money over the next 20 years to complete the project's initial operating segment.
'The Authority will fully address and correct the record in our formal response to the FRA's notice,' the statement read.
IN OTHER NEWS
SOLAR STANDOFF: The Assembly left solar advocates fuming last night when it suspended a procedural waiting period to advance a proposal that would reduce subsidies to legacy rooftop solar customers, our Camille von Kaenel reports for Pro subscribers.
The procedural rule in question requires the chamber to wait a 'full calendar day' after any amendments in order to vote on a bill. But lawmakers suspended that rule to approve Assemblymember Lisa Calderon's AB 942, which she had amended Monday to exempt schools and farms. The bill is now in the state Senate.
ANTI-RTO CAUCUS: Republican Assemblymember Josh Hoover, Democratic Assemblymember Robert Garcia and 15 other lawmakers signed a letter urging Newsom to delay his mandate that state workers return to the office four days per week, which is set to start on July 1.
Hoover and Garcia pushed the governor to delay the executive order until the state auditor can complete a study the Joint Legislative Audit Committee approved after the governor ordered state workers back to the office two days per week last spring. They noted the potential for the mandate to 'exacerbate our budget shortfall and hamper our ability to protect important programs from devastating cuts.'
'Given the significant implications of the return to work order, we believe it is critical to fully understand the impacts of telework on our state budget and workforce prior to making a decision to reduce its use,' the letter said.
WHAT WE'RE READING TODAY
— The FBI arrested Daniel Park, a 32-year-old from Washington, for charges related to the bombing of a fertility clinic in Palm Springs. (The Associated Press)
— Yucca Valley resident Thomas Eugene Streval pleaded not guilty to three felony counts of making threats online to shoot President Donald Trump shortly after the 2024 election. (Los Angeles Times)
— The San Jose City Council settled a civil-rights lawsuit on Tuesday with a $620,000 payout to seven people who say they were targeted and injured by police during protests related to the death of George Floyd. (Mercury News)
AROUND THE STATE
— The San Diego City Council approved an 18 percent fee hike for ambulance rides over the next three years, but they say those increases will mostly be paid by insurance companies. (San Diego Union-Tribune)
— The Santa Clara Valley Transportation Authority ratified a new contract with their workers' union and awaits approval from their board of directors. (Mercury News)
— San Francisco budget officials considered and then quietly discarded a plan to charge property owners $100 a year for their driveways. (San Francisco Chronicle)
— compiled by Nicole Norman