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Politico
9 hours ago
- Business
- Politico
California Democrats stage internal war over Gavin Newsom's late push to build more housing
SACRAMENTO, California — Gavin Newsom thought he could push an ambitious housing proposal through California's Democratic-controlled Legislature. Instead, he ran into a wall of resistance from should-be allies angrily comparing his plans to Jim Crow, slavery and immigration raids. Hours of explosive state budget hearings on Wednesday revealed deepening rifts within the Legislature's Democratic supermajority over how to ease California's prohibitively high cost of living. Labor advocates determined to sink one of Newsom's proposals over wage standards for construction workers filled a hearing room at the state Capitol mocking, yelling, and storming out at points while lawmakers went over the details of Newsom's plan to address the state's affordability crisis and sew up a $12 billion budget deficit. Lawmakers for months have been bracing for a fight with Newsom over his proposed cuts to safety net programs in the state budget. Instead, Democrats are throwing up heavy resistance to his last-minute stand on housing development — a proposal that has drawn outrage from labor and environmental groups in heavily-Democratic California. 'Anyone who believed this would not cause a giant explosion — they were living in la-la-land,' said Todd David, a San Francisco political consultant who has worked for state Sen. Scott Wiener and housing-focused groups. For Newsom, a potential 2028 presidential contender, it was a striking show of resistance from a flank of his own party over housing. A priority of the Democratic governor, Newsom had put his political capital behind an attempt to strong-arm the Legislature by making the entire state budget contingent on passing a bill to speed housing development by relaxing environmental protection rules. A spokesperson for Newsom pointed to a statement Tuesday night emphasizing partnership with lawmakers in reaching a budget deal while noting that 'it is contingent on finalizing legislation to cut red tape and unleash housing and infrastructure development across the state — to build more, faster.' The fault lines on display this week run deep. Construction unions and the statewide California Labor Federation have long resisted housing bills they see as eroding wage standards, often packing hearing rooms with members who urge lawmakers to vote no. Democrats have at times decried their union allies' hardball tactics. But Newsom's unprecedented intervention — and the forceful response from union foes — pushed the conflict into a whole new realm. 'To have legislation that is this large and this significant be forced through at the 11th hour … seems pretty absurd to me,' Democratic state Sen. Sasha Renée Pérez said at the hearing. 'I just cannot begin to explain how incredibly inappropriate and hurtful this is.' Scott Wetch, a lobbyist representing the trade unions, contended that this could be the first time since the Jim Crow era that California is 'contemplating a law to suppress wages.' Pérez, who represents a Los Angeles district, said the proposal was 'incredibly insensitive' amid immigration raids targeting mostly 'blue-collar workers who are Latino.' And Kevin Ferreira, executive director of the Sacramento-Sierra's Building and Construction Trades Council, told lawmakers the bill 'will compel our workers to be shackled and start singing chain gang songs.' In a sign of the stakes, the fight quickly spilled beyond California as North America's Building Trades Unions — an umbrella group covering millions of workers across the United States in Canada that rarely intercedes in state politics — sent Newsom a blistering letter warning the bill would 'create a race to the bottom.' Environmental groups piled on late Wednesday, with around 60 of them, including the Sierra Club and Earthjustice, blasting the proposal in a letter as a 'backroom Budget Trailer Bill deal that would kill community and environmental protections, even as the people of California are faced with unprecedented federal attacks to their lives and livelihoods.' Unions warned the governor was betraying his Democratic base. Gretchen Newsom, a representative of the International Brotherhood of Electrical Workers, said Newsom's stance was baffling to people 'looking at the Democratic Party and wondering what comes next for the governor.' 'I see this as a complete debacle and devastating to workers all across California,' said Newsom, who is not related to the governor. Labor leaders were once again at one another's throats, with many opponents faulting carpenters' unions who have backed streamlining efforts. Danny Curtin, director of the California Conference of Carpenters, said the scale of housing woes in California, where the price for the median home now tops $900,000, demanded an aggressive solution. 'The housing crisis is the most politically, socially, economically destabilizing crisis in California,' Curtin said. 'I would give the governor credit for trying to cut through another year of arguing.' In the broader budget negotiations, Newsom had largely capitulated to pushback from lawmakers over the steepest cuts he had proposed making to the state's Medicaid program, particularly for undocumented immigrants. Now, he is putting his political capital behind affordability proposals. But in a sign that Newsom's influence may be waning, lawmakers on Wednesday delayed a vote over wage provisions tucked into a separate budget bill. The proposal would allow developers to set a minimum wage standard for construction workers on certain affordable housing projects that could be lower than what union workers currently command. 'It's not a simple thing around the edges,' said state Sen. Maria Elena Durazo, a Los Angeles Democrat. 'It is a massive change. It challenges the role of collective bargaining in this state that has never been done before.' Wiener, a state budget negotiator who for years has fought to remove obstacles to denser housing development in California, defended the proposal at the hearing as setting a 'floor, not a ceiling' for wages. But he admitted that the swift and ferocious opposition led him to delay the vote. 'It's always appropriate for people to say, 'This needs to be changed, that needs to be changed. This wage is too low, that wage is too low,' Wiener said. 'That's always appropriate.' The governor was markedly less aggressive this year in his efforts to wring a budget deal out of lawmakers. Newsom did not attend caucus meetings in person to make his case for the housing legislation, as he has with previous proposals, although he has been in touch with some lawmakers via text message. Some of that was a matter of timing: Newsom has been preoccupied by the White House launching sweeping immigration raids and then deploying federal troops to Los Angeles, fomenting a standoff that overlapped with budget negotiations. Corey Jackson, a Democrat from Southern California who chairs an Assembly budget committee on human services, said that while he wasn't privy to Newsom's involvement in discussions, California needs a governor who is '24/7 going to be focused' on the state. 'Because our issues are that complicated,' Jackson said. 'And the number of crises that come up in California, as you've seen, will continue to happen every year.'
San Francisco Chronicle
12 hours ago
- Politics
- San Francisco Chronicle
What the shocking NYC mayoral race means for two of California's biggest politicians
A Democratic Socialist winning New York's Democratic mayoral primary doesn't mean the Big Apple is more progressive than San Francisco. But the victory by 33-year-old Zohran Mamdani over former New York Gov. and political scion Andrew Cuomo, 67, sends a loud message that is reverberating to the West Coast: Democratic voters want candidates with a fresh voice and a more populist economic message. That could portend bad news for former Vice President Kamala Harris, the epitome of an establishment candidate who is pondering running for California governor next year. She has said she will announce her decision before the end of the summer. Lorena Gonzalez, president of the 2.1 million-member California Labor Federation, said Mamdani's win taps into the same sentiments she has been hearing from focus groups the federation has been conducting with working-class voters for the past six months across California. 'It's clear that there is a hunger for an economic message that is just not being satisfied by either party,' Gonzalez said Wednesday. 'It's time for the party to step up on economic issues.' Ludovic Blain, executive director of the California Donor Table, an organization that has invested over $50 million in progressive candidates and ballot measures over the past two decades, said, 'What we saw in New York is an echo of what's been happening around the country, concentrated here in California.' He pointed to progressive mayors being elected in Los Angeles, Chicago and Oakland over the past two years. While the winner of Democratic primary in deep blue New York City starts with a huge advantage, Mamdani's road will be tougher than many previous primary winners. In the general election, he will face the incumbent, Mayor Eric Adams, running as an independent after federal corruption charges against him were dismissed at the behest of President Donald Trump's Department of Justice. Cuomo also may run as an independent, potentially splintering the Democratic vote. Warning signs for Harris: 'The NYC mayoral election results are a bad sign for an establishment politician trying to make a comeback like Kamala Harris,' said San Francisco Democratic pollster Ben Tulchin, who has helped to elect California governors (Gray Davis and Gavin Newsom) and a New York mayor (Adams in 2021). Mamdani's win is a 'an encouraging sign for candidates focusing on pocketbook issues, such as (former Los Angeles Mayor) Antonio Villaraigosa, who has been emphasizing the high cost of groceries and gas prices.' Harris, much like Cuomo, would enter the governor's race with near universal name recognition, deep pockets and likely the backing of the party's establishment. But Cuomo didn't grow his base during the campaign while Mamdani surged. Mamdani's win was a rebuke of the Democratic establishment: Cuomo was backed by a record-breaking $25 million super PAC, privilege (his father, Mario Cuomo, served two terms as New York's governor) and endorsements from the party's elders like former President Bill Clinton. His super PAC was funded with $8.3 million from billionaire former Mayor Michael R. Bloomberg, $1 million from DoorDash and $500,000 from investor Bill Ackman, a Trump supporter. The message: Billionaires, Trump supporters and yesterday's leaders are not the path to victory in a blue city in the Trump 2.0 era. Meanwhile, candidates supported by Run for Something, which backs progressive younger candidates, have won 50 races nationwide this year. 'The next generation of leaders isn't coming — it's already here,' said Run for Something President Amanda Litman. 'Young people have lived the consequences of the gerontocracy's failures and are doing something about it. They've won elections, yes, but they've also won real concessions for the people they represent. Voters are hungry for change. If their leaders don't give it to them, they'll happily find someone else who will.' Former Barack Obama adviser and San Francisco-based 'Pod Save America' co-host Dan Pfeiffer wrote Wednesday on X: 'What's happening in NYC is a blaringly loud message to those in the Dem establishment who cling to the old politics, recite focus-grouped talking points and are too afraid to say what needs to be said. We have a lot to learn from (Mamdani's) campaign.' One San Franciscan bolstered by Mamdani's win was Saikat Chakrabarti, 39, who is challenging Speaker Emerita Nancy Pelosi, 84, for Congress in 2026. Chakrabarti, who was a founding software engineer at the tech firm Stripe, led the Justice Democrats progressive group and was chief of staff to New York Rep. Alexandria Ocasio-Cortez, has not announced if she is running for re-election. 'The next (Mamdani) could be (Chakrabarti) running against Nancy Pelosi,' wrote Cenk Uygur, CEO of 'The Young Turks,' progressive online news show. 'If he beats Pelosi, the old guard of the party will be devastated. Time for a new Democratic Party.' Gonzalez said being a Democratic Socialist didn't hurt Mandami, just like it hasn't impeded Vermont independent Sen. Bernie Sanders and Ocasio-Cortez, who both endorsed Mandami, from drawing huge crowds across the country this year for their 'Fighting Oligarchy' tour. 'Young people especially don't care (about the socialist label). 'They're not buying into that in the same way that older voters have historically,' Gonzalez said. It's about the economy — and joy: In a fundraising email to supporters Wednesday, the progressive Justice Democrats group praised Mamdani for campaigning 'on lowering costs for New Yorkers through free buses, a rent freeze, no-cost childcare, city-owned grocery stores, taxing corporations and the 1 percent, raising the minimum wage to $30 by 2030, and more. Surprise! That's what working people want from their leader.' Adams previewed his general election campaign strategy Wednesday when he slammed Mamdani's agenda Wednesday as the unrealistic promises of a 'snake oil salesman' during a Fox News interview. In an fundraising email to supporters Wednesday, Justice Democrats contrasted Mamdani with other Democrats, saying he 'notably did not throw marginalized communities like trans youth, immigrants, or Palestinians under the bus like so many in the Democratic Party are so quick to do in an attempt to win elections.' Earlier this year, California Gov. Gavin Newsom said on his podcast that it was 'deeply unfair' for transgender athletes to participate in girls' sports during a podcast with conservative activist Charlie Kirk — an attempt by Newsom to try to broaden the party's appeal by talking with conservatives, but which offended many core Democratic supporters. Mamdani appeared as a guest on many podcasts from across the political spectrum without betraying his base. 'Enthusiasm and energy carried the day in New York,' said Graeme Joeck, director of organizing and advocacy for Abundance San Francisco, a centrist group. 'What Zohran offered New Yorkers was positivity, authenticity and energy. And we Democrats are operating with quite the deficit of those characteristics at present.'
Politico
05-06-2025
- Business
- Politico
The governor's race wakes up
Presented by 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.' GOOD MORNING. Happy Thursday. 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@ and bjones@ or on X — @DustinGardiner and @jonesblakej. 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.
San Francisco Chronicle
25-05-2025
- Automotive
- San Francisco Chronicle
Newsom is trying to have it both ways when it comes to the petroleum industry. Pick a lane, Gov.
While Gov. Gavin Newsom is doubling down on electric vehicles, some of the Democrats running to succeed him are calling for keeping California refineries open until the state is truly ready to transition to renewable power. Which ain't now. It's a remarkable shift for Democrats, who usually tout their fealty to protecting the environment when running statewide in California. But the specter of high gas prices with two major refineries set to close in the next year, plus the potential job losses resulting from those closures, is causing some Democrats to adjust. It also is a response to Republicans making inroads with blue-collar voters who used to be a core part of the Democratic Party until the party stopped responding to their needs. All eyes were on a key Washington vs. Sacramento battle last week after the Senate killed California's signature climate change policy — mandating that all new cars sold be electric by 2035 — and Newsom responded by announcing the state would sue to keep California's emission standards in place. Newsom said the GOP-controlled Senate's move not only would increase pollution in a state where 20% of the new car sales are EVs, but also would cede dominance in the electric vehicle market to China. 'We won't stand by as Trump Republicans make America smoggy again — undoing work that goes back to the days of Richard Nixon and Ronald Reagan — all while ceding our economic future to China,' Newsom said Thursday. 'We're going to fight this unconstitutional attack on California in court.' But some of the Democrats vying to replace Newsom in 2026, when he is termed out of office, are saying something more fossil-fuel friendly — at least when they appeared at a candidate forum this month in Sacramento sponsored by the California Labor Federation and the State Building Trades Council. Their members work at petroleum refineries, which provide some of the last blue-collar jobs that pay enough to enable workers to buy a home in the Bay Area. But those jobs are disappearing. The Phillips 66 Los Angeles refinery is scheduled to close by the end of this year, stranding 600 employees and 300 contractors. The Valero Benicia refinery, which has 400 permanent employees and hundreds of contractors, is scheduled to close by 2026, six months after air quality regulators issue the refinery a record $82 million penalty for its toxic emissions. Combined, the two refineries produce 21% of the gasoline that California produces. And that is only the start of an anticipated wave of closures. Newsom realizes this wave is coming. Last month, he wrote a letter to California Energy Commission Vice Chair Siva Gupta urging the commission to 'redouble the State's efforts to work closely with refiners on short- and long-term planning,' to seek ways to 'reinforce the State's openness to a collaborative relationship (with refiners),' and to reassure that 'refiners can profitably operate in California.' Pick a lane, Gov. It sounds like Newsom, who continues to shape-shift in the sunset of his tenure, is trying to have it both ways when it comes to the petroleum industry. As University of Southern California business professor Michael Mische noted, 'There's a perversion to this logic as only a few years ago the Governor boldly declared that the oil companies and refiners had been 'ripping' off consumers for decades. … Now he's concerned with their profits.' There is little doubt where the industry is headed, at least in California. Or more accurately, out of California. In January, the San Francisco Bay Area Refinery Transition Analysis — written by a coalition of union and environmental justice advocates with the UC Berkeley Labor Center — anticipated 'that a 65% to 92% reduction in (refinery) production capacity is likely by 2045. By that time, the region may have one large or two small oil refineries to serve the remaining market, or no oil refineries at all, depending on the pace of transition.' There are 3,000 direct and 15,000 indirect jobs in Contra Costa County related to the refineries there. Cities in the county receive $136 million in direct taxes from the refining industry and $836 million in indirect tax revenue. Then there's the potential spike in gas prices — which will hit nearly all of us. Californians consume 13.1 million gallons of gasoline a day, according to Mische. In a study he released this month, Mische predicted that gas prices in California will spike to $6.43 a gallon by the end of this year, and to $8.43 a gallon by the end of 2026 — soaring at the same time as the 2026 governor's race will be peaking. As you noticed during your Memorial Day weekend travels, the average price of a gallon of gas is $4.86 in California ($5.13 in San Francisco), according to AAA. East of the Left Coast it's $3.19. So at the candidates forum hosted and moderated by organized labor, seven of the announced governor candidates were asked several loaded questions, including: 'As governor, would you be pragmatic to stop targeting California's oil and gas industry in ways that jeopardize union jobs and force us to rely on dirty or imported energy?' Not surprisingly in a hotel conference room filled with top local labor leaders from across California, all of them agreed. But most tried to walk a fine line between appeasing their labor hosts and not offending environmentalists whose support they need to win in the nation's most naturally beautiful state. Key to note is that all stressed the need and/or desire to keep fossil fuel industries going. Said Lt. Gov. Eleni Kounalakis, who has made the protection of the environment a central piece of her two campaigns for statewide office: 'Jobs are sacred. We have to make sure refineries stay open until we're ready for transition. … Our state is burning and these projects will create good jobs, allow California to lead in clean energy and combat climate change.' Former state Controller Betty Yee told the audience that 'we can't create a clean environment on the backs of workers. … It's offensive to say we can just retrain workers. It's not about retraining. It's about expertise. We will continue to have oil and gas as we get to a renewable economy.' But it was former Los Angeles Mayor Antonio Villaraigosa who took the boldest stand in favor of the oil and gas industry and the blue-collar workers they employ: 'We can't continue to be a party of just people who drive a Tesla and not people who drive a pickup or take the bus. We're putting (the) notion of just renewables on the backs of working people. We have the highest gas prices in America. We have the second-highest utilities in America. Because we don't have an 'all of the above' strategy to take on climate change, we're closing down refineries, and that's why we have the highest gas prices.' I asked the candidates who didn't respond to the question what they thought. Their responses were similar. None wanted to see the refineries close. Former Orange County Rep. Katie Porter said, 'Clean energy is California's future. Renewable power sources are healthier for residents and cheaper for consumers over the long haul. … But as we transition to a fully clean energy fueled economy, we can't also be blind to our state's current energy needs and where we are falling short when it comes to clean energy production. … We are not yet generating enough clean energy to shut down our existing supply of traditional fuels.' Superintendent of Public Instruction Tony Thurmond said: 'We need to be moving full steam ahead to expand renewable energy options — while making sure we have a just transition that includes workers and doesn't leave working families behind. But closing refineries will not advance our state's environmental goals. Until we get to a place where renewable energy on its own can consistently and reliably power our state's needs, we should not be shutting down refineries if it means we are just going to be importing that oil from outside of California.' Former Health and Human Services Secretary Xavier Becerra agreed that 'We must be smart as we deploy an 'all of the above' strategy to keep Californians' energy costs low. … It's a false choice to say we must decide between good-paying jobs in our current energy sector and a clean future for our families. California will lead the way in adapting today's energy infrastructure to achieve energy independence and environmental durability.' Former state Senate President Pro Tem Toni Atkins said, 'There's no 'just transition' if workers are left behind. … Refineries are facing headwinds nationwide, including in states like Texas, and we need a clear-eyed strategy that prepares us for the future, protects workers and lowers costs for families. We can grow good union jobs and build a future with cleaner air, cars and energy — it's not one or the other.' It's not just these Democrats who are embracing the reality that California isn't ready to ditch the internal combustion engine anytime soon. In Washington, 35 House Democrats supported revoking the state's electric vehicle waiver, including two Californians: Reps. Lou Correa of Santa Ana and George Whitesides of Santa Clarita (Los Angeles County). 'The message we got in November was to represent working-class people. But in my district we have a lot of workers — union workers, that drive to and from work. Ninety percent of them drive gas-powered vehicles,' Correa, who owns four hybrid and one gas-powered car, told the Chronicle. 'Long term, EVs are less expensive, but it's called cash flow. … I'm a big environmentalist, but you can't hurt people this way.' And that is the argument that California Democrats are going to continue to have for at least the next year: When — and how — can we quit our fossil fuel addiction without screwing over blue-collar workers or the environment? For now, there are no definitive answers.
Politico
18-05-2025
- Business
- Politico
Bad budgets are straining California mayors' labor ties
OAKLAND, California — Barbara Lee will soon have to deliver tough news to the union leaders who powered her mayoral victory as Oakland faces its deepest budget shortfall since the Great Recession. Los Angeles Mayor Karen Bass, another staunch labor ally, recently warned she may have to slash 1,600 city jobs. And unions in San Francisco are already mobilizing against potential cuts as Mayor Daniel Lurie, a political novice, prepares his first budget while facing a more than $800 million chasm. Bleak budgets and economic uncertainty gripping some of California's major cities will test Democratic mayors' relationships with a mainstay of civic power: public employee unions. Trump administration funding cuts and fears of a trade war and recession have only deepened the threat to local and state coffers — setting the stage for bitter spending fights. 'They can't roll over. They can't give grace, if you will,' said Lorena Gonzalez, leader of the California Labor Federation, of labor leaders. 'They've got to push for alternative ways to fill budgets in bad years. That is their job.' The tensions playing out in California are likely a preview of what's on the horizon in other blue cities across the country as they're buffeted by economic turbulence and big cuts in federal funding wrought by Trump's Washington. Chicago, for example, is facing a $1 billion budget shortfall for 2026 and Mayor Brandon Johnson has clashed with some of the city's biggest unions. And Portland, Oregon's new mayor is already jousting with organized labor as he tries to navigate a $93 million deficit. The looming battles could decisively shape the upcoming campaign cycle for Bass, whose 2026 reelection bid has grown more daunting since the January wildfires. They will also set the tone for the tenures of Lee, who takes office next month, and Lurie, who both won on pledges to bring stability but now will open their terms with tense negotiations. And two-term San Diego Mayor Todd Gloria is facing similar challenges as he confronts a $300 million-plus budget shortfall. Lurie is a relative unknown to organized labor, while Lee and Bass have been ardent union supporters for decades. That long history may help smooth over some tension. But it won't stop labor leaders from going to the mat to ward off job losses. 'For any elected official, balancing the books while keeping that support intact is truly the ultimate test of their political skill,' said Jeremy Oberstein, a Democratic strategist and veteran of Los Angeles City Hall. 'That especially rings true during a crisis. It's not just about cuts, it's about whether you can lead without abandoning that coalition that got you to the dance.' Labor unions are indispensable players in Democratic politics, donating substantial sums to campaigns and activating vital voter-turnout operations. Both were key factors in Lee's victory over a moderate opponent who argued Lee's labor backing bound her to a set of insiders who had undermined the city's finances. One union's endorsement of Lee specifically noted a looming contract fight. 'Oakland is pretty much dominated by special interests,' said longtime political consultant Larry Tramutola, 'and the special interests in Oakland are the labor unions who have been on the winning side of the mayor's race for years.' Lee has rejected that critique, arguing she has the singular ability to mediate Oakland's political factions and deliver tough truths in a special election triggered by the recall of the former mayor. She ran on her ability to both unite in a time of turbulence and to draw outside financial support from business, philanthropy, and the state. 'It will take all of us, including people who do not always agree — labor, business, and community organizations — working together to transform Oakland,' Lee said in a statement. In a show of unity, the leader of the city's Chamber of Commerce is co-chairing her transition team with Alameda Labor Council Executive Secretary-Treasurer Keith Brown. The two appeared shoulder to shoulder at Lee's first press conference. 'We reached out to our members, the working families in Oakland, and they're looking for a leader that can bring people together in making the tough decisions and not just blame the problems of our city on the working people of Oakland,' Brown said in an interview, 'but at the same time be able to analyze all of the information and to be able to make those hard decisions.' The situation is dire. Oakland faces a shortfall last estimated at $87 million, and while a newly passed sales tax increase will help, the city in the long term is projected to spend far more than it collects in tax revenue. A document leaked last year indicated Oakland is at risk of declaring bankruptcy. That will all land in Lee's lap when she takes office. 'The budget is going to be very, very unkind to [Lee]. She's going to be inheriting all of it but will still be expected to wave the magic wand she's perceived to have built over the past few decades in Congress,' said political consultant Jason Overman, who was not involved in either of the mayoral campaigns. 'This existential of a budget crisis has a funny way of shortening political honeymoons.' Fault lines have already emerged. Some unions have blamed police overtime for driving up costs, while the Oakland police officers union argues its members are being scapegoated. The labor group warns the city doesn't have a viable path to boosting its police force to the 700 uniformed officers required by a recent ballot measure, as Lee pledged to do. The specter of severe federal cutbacks looms over everything — sharpening labor's message that, now more than ever, their Democratic allies must stand behind besieged public employees and shore up public services against the Trump administration. 'We have a federal government that clearly is anti-worker, so it's a double whammy,' said SEIU 1021 President Theresa Rutherford, whose union staunchly backed Lee and is rallying against cuts across the Bay Area. 'If you lay off the workers who do the work and affect the resources of the city, there's no way that city can thrive.' Lee brings considerable advantages to the table. In addition to her longstanding ties to labor, the city council is unified behind her, with acting Mayor Kevin Jenkins saying soon after her win that members 'will be aggressive about implementing' Lee's early action plan for the city. 'If she asks for concessions, because of her reputation and the support she has among council members, the council will back her up,' said former Oakland Council Member Dan Kalb, who endorsed Lee. 'If it's not just the mayor but her and council together in lockstep, I think the public employee unions will say, 'OK, we'll see what we have to do to compromise.'' The task is bigger than this year, said former Mayor Libby Schaaf, who pointed to a bleak long-term outlook and a credit downgrade that could raise borrowing costs for years. 'Oakland just never says no,' Schaaf said. 'It's going to be tough times for years now, and the city needs to be more realistic about what its priorities are.' Bass' alliance with organized labor was pivotal to her mayoral win in 2022. Unions plowed more than $6 million into independent expenditures to aid her campaign, giving her a much-needed boost in the face of Bass' billionaire opponent, developer Rick Caruso. Now, with her 2026 reelection bid nearing, Bass finds herself in the most politically fragile moment of her career. She's been hobbled by lingering public dissatisfaction over her handling of January's historically destructive wildfires. A recent poll by the UCLA Luskin School of Public Affairs found that, nearly four months after the blazes, her popularity is underwater and her unfavorability rating has surged by 17 points compared with last year. Support from labor will be pivotal to staging a political comeback. In office, Bass has been a boon for unions, striking generous contract deals with city workers, as well as the police and fire rank-and-file. The mayor presented the deals as necessary pay raises to ensure the city's workers could still afford to live in pricey Los Angeles and to swell the ranks of the diminished police force. Those deals appear to have cemented Bass' alliance with labor. During the peak of public outrage about her early fire missteps, a number of unions, including SEIU, the largest public-sector union in Southern California, held a press conference to defend Bass from the barrage of criticism. Even the police officers union, which endorsed her opponent in 2022 and spent $3.4 million against her, came to her defense and has already endorsed Bass for reelection. (One key exception to the labor love has been the firefighters union, which publicly sparred with the mayor over her February decision to sack the fire chief.) Her recent budget proposal threatens to test the limits of organized labor's goodwill. The city faces a roughly $800 million deficit — a gap fueled in part by rising personnel costs, as well as declining tax revenues and costly liability payouts. To plug the hole, Bass has put more than 1,600 layoffs on the table. Bass is more familiar than most with wrenching cuts: As Assembly speaker during the Great Recession, she faced a budget with a $42 billion shortfall. She and her fellow legislative leaders were awarded the John F. Kennedy Profile in Courage Award for hammering out a politically fraught deal, a crucible that allies say will benefit her during this current crisis. 'I'm not saying it's easy — it's not,' said John Pérez, a former Los Angeles labor leader who later became Assembly speaker. 'But she's got the most skill set to act on it, and a lot of goodwill from people who know that she's not approaching cuts out of a desire to cut, but more out of a need to balance the budget of the city.' In her State of the City address last week, Bass ruefully addressed her remarks directly to the public employees — whom she called 'the city's greatest asset' — to break the news about the possible job losses, which she vowed she would try to stave off by getting help from Sacramento. When Bass traveled to the state Capitol later that week, her agenda included meetings with legislative leaders and the presidents of two of the biggest labor powerhouses in the state, the California Labor Federation and the SEIU state council — but not Gov. Gavin Newsom, which raised eyebrows among budget watchers back in Los Angeles. In response to her plan, the biggest public-sector union indicated it was ready for a throwdown. David Green, president of SEIU 721, which represents more than 10,000 city workers, vowed to fight for 'every single one of these jobs.' To some City Hall veterans, the rhetoric from both camps is typical budget negotiation posturing, with both sides staking out maximalist positions before they are able to meet somewhere in the middle. Already, budget watchers are eyeing a delay in the union's annual cost-of-living increase as an offramp to find some savings without sacrificing a slew of jobs. In a surprising twist, Bass has faced more heat from the liberal-leaning city workers union than she has from the more conservative public safety unions, who are spared any layoffs of sworn officers under her plan. Tom Saggau, a spokesperson for the Los Angeles Police Protective League, said the union held off on panicked reactions about Bass' plan — even though she has called for cutting hundreds of civilian jobs from the police department — because they trust the ultimate number of layoffs will be below that initial 1,600 figure. 'We're taking the budget process at this early stage for what it is, the first step,' Saggau said. 'We're not firing off salvos as if the end of the world is coming because it's too soon for that.' It's unclear whom the liberal public-sector unions would back in next year's mayor's race aside from Bass. Despite her wounded stature, Bass has not attracted any challengers yet and those that are eyeing the job — particularly Caruso — would run to her right, which is not quite the alternative these unions would be hoping for. For Bass, the risk is less that organized labor would choose to endorse someone else and more that deflated unions would just choose not to play much in the mayor's race. Bass waved away any political considerations while speaking to reporters during her jaunt to Sacramento. 'My issue is about solving an $800 million deficit,' she said. 'It is not about my reelection.' In San Francisco, Lurie faces similar challenges but has a different political footing as a newcomer in a city famous for its vicious factional infighting. Unlike Lee, he entered office without an extensive relationship with unions. An heir to the Levi Strauss fortune, he largely self-funded his campaign, inoculating him from depending on financial support from labor or business titans. He is now working to cultivate trust and goodwill with unions that are still feeling him out — while dealing with a more than $800 million shortfall. He has already instituted a hiring freeze. 'In Oakland, labor, because of the long history we have with the mayor-elect, we're less skeptical,' said Jim Araby, strategic campaigns director at UFCW Local 5, who was on Lurie's transition team. 'In San Francisco, it's an open question, and I do think the mayor is trying to bridge those divides.' Labor has trained its fire on large companies like Airbnb that are suing to claw back tax revenue they say they are owed. They have sought Lurie's support in pushing the businesses to drop their lawsuit. Lurie notched an early win in December, before he took office, by helping mediate a hotel workers' strike, and has agreed to delay a back-to-work mandate after negotiating with labor. 'He's going through the learning curve right now,' said Rutherford, of SEIU. 'Labor has indicated to him that we are a partner, and that is a relationship we'd like to forge going forward.' San Francisco's new mayor will also be hammering out a budget with a transformed Board of Supervisors after voters, encouraged by well-funded centrist groups, flipped the formerly progressive-led panel to a moderate majority that will likely be less aligned with labor. 'He was fortunate in some of the turnover of the Board of Supervisors,' said Board President Rafael Mandelman, who added Lurie may have more space to operate because he won as an outsider and is 'sort of beholden to no one.' Whether these relationships with labor are nascent — as in Lurie's case — or decades in the making like Bass' and Lee's, the coming budget cycle will test their ability to maintain those bonds while balancing the books. 'It's gonna be tough. But good policy is good politics,' Pérez said. You can't be so worried that your friends aren't going to love you that you make irresponsible choices. You still have a responsibility to be responsible.'
