I had planned to provide a more comprehensive overview of the November election, but as the editorial deadline approaches – and several California races are undecided – here is Politico’s take on some of the tightest races in California.
Races Still in Limbo Members of Congress targeted for defeat — both Democrats and Republicans — have held onto their jobs or, in one case, led a too-tight-to-determine race. Despite the tens of millions of dollars spent to dislodge officeholders in tight districts, voters chose to return their representatives to the House. But Republican challengers have a clear path to picking up a few seats in the Legislature by ousting Democratic state lawmakers — something we haven’t seen in several cycles — and a Republican could be unseated. To add to the drama, several races are separated by fewer than a thousand votes and two by fewer than twenty.
While Republicans managed to wrest control of the House from Democrats, in California, the two parties have fought to a draw. GOP Reps. Michelle Steel, Ken Calvert, Mike Garcia, and Young Kim bested Democratic challengers; Democratic Reps. Katie Porter, Mike Levin, Julia Brownley, and Josh Harder rebuffed GOP opponents. As a result, Rep. David Valadao has consistently led Democratic Assembly member Rudy Salas and had a 4,500-vote margin on Friday. However, the race has not been called (and we should note that, in 2018, it took weeks for Valadao to lose his lead for good).
On Friday, a prime legislative race came off the board as Democratic Assembly member Brian Maienschein’s Republican opponent, Kristie Bruce-Lane, conceded and ended one of the CAGOP’s preeminent seat-flipping opportunities.
But multiple Sacramento incumbents are in trouble. Republican Assembly member Suzette Valladares Martinez, whose rare pickup of a formerly Democrat-held open seat was a bright spot for the party in 2020, fell 511 votes behind Democrat Pilar Schiavo over the weekend. Democratic Assembly member Ken Cooley slipped 16 votes behind Republican staffer Josh Hoover on Friday. In contrast, state Sen. Melissa Hurtado — forced by redistricting to move rather than take on fellow Democratic Sen. Anna Caballero — trailed Republican farmer David Shepard by a few thousand votes. Democratic party PACs and outside interests spent more than $4 million to protect Hurtado and about $3.5 million to safeguard Cooley in the general election.
The final balance of power will swing on a few nailbiter contests for open seats: In the Central Valley, Republican farmer John Duarte had an 865-vote advantage over Democratic Assembly member Adam Gray for a spot in Congress, and Democrat Esmeralda Soria sat a couple of thousand votes above Republican ex-Sheriff Mark Pazin for a seat in the Legislature.
Further south, Democratic Palm Springs Council member Christy Holstege was just nine (9) votes ahead of Republican staffer Greg Wallis for a battleground Assembly seat. Holstege and Soria have participated in new member activities, including the speakership fight. [Politico]
And many of you will recall Senator Bob “Huggy Bear” Hertzberg, who authored SB 954 that prohibited the use of “industry advancement” credits on prevailing wages by non-union contractors. The Los Angeles Times noted A double defeat for the Hertzbergs: “Termed-out state Sen. Bob Hertzberg had hoped to win a seat on the Los Angeles County Board of Supervisors — but Lindsey Horvath, a progressive West Hollywood city councilmember, beat him. And Daniel Hertzberg, who sought to succeed his father in the Senate, lost to Caroline Menjivar, a military veteran who will be the first openly LGTBQ+ legislator to represent the San Fernando Valley. The two races mark a victory for political newcomers from the left over a nascent political dynasty.” So, let’s all drink a toast to LA voters!
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A Fight is Brewing Politico gave Rep. Mike Garcia’s victory over Democrat Christy Smith in CA-27 as Republicans’ 218th seat in the House — and majority control for the first time since 2018. Others gave that honor to Rep-elect Kevin Kiley (R – representing a vast swath of Northeast California). Whatever, the House is now under Republican control with Kevin McCarthy living by my eternal motto – “be careful what you ask for.” Why, you ask? McCarthy (whose election to speaker is not assured) will be tasked with leading the House with the slimmest (autocorrect kept changing that to slimiest) of majorities which means he will be continually whipsawed by a minority of his caucus who want to repeal the 2020 election, impeach the majority of Biden administration Secretaries, and subject the Biden family to countless hours of House Committee hearings while China prepares to invade Taiwan, Russia pummels Ukraine, DPRK perfects “the peoples’” ICBMs, and Iran builds more nuclear (pronounced – well – you decide) bombs. Sorry – not the best “Thanksgiving” soliloquy.
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Democrats Poised to Take Majority on Orange County Board of Supervisors for First Time in Decades Democrats are on the cusp of having a controlling majority on Orange County’s Board of Supervisors for the first time in nearly 50 years. The latest election results Thursday evening – which reflect 97% of all ballots cast across Orange County (OC) – had Democrat Katrina Foley holding her lead over former State Senator, Republican Pat Bates, 51.2% to 48.8%. Bates reportedly called Foley “to congratulate her.” This south OC 5th District seat decides which party will have a majority on the board. The last time Dems had control – they adopted a countywide PLA – you can bet the building trades are poised with a PLA for early adoption in 2023. [Voice of OC]
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“Back In the Saddle Again!” One week after securing his sixth term in the Assembly, Asm. Jim Patterson (R – Fresno) is throwing himself right back into the campaign trail. First elected under California's current legislative term limits scheme, Patterson is set to reach his maximum twelfth year in Sacramento in 2024. So on Wednesday, while guest-hosting lunchtime rush radio in Fresno, Patterson uncorked what has long been an open secret: he's planning on running for Fresno County Supervisor in 2024, opening up a challenge against a fellow Republican.
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Budget Deficit Projected The State’s Legislative Analyst (LAO) released a report this week – titled Economic Conditions Weigh on Revenues – that reported on several economic factors California will face next year. The LAO concludes these could push the State back into a budget deficit. Facing rising inflation, the Federal Reserve — tasked with maintaining stable price growth — repeatedly enacted significant interest rate increases throughout 2022 to cool the economy and slow inflation. The more prolonged inflation persists, the higher the Federal Reserve increases interest rates in response and the greater the risk to the economy. The chances that the Federal Reserve can tame inflation without inducing a recession are narrow. Reflecting the threat of a recession, the LAO’s revenue estimates represent the weakest performance the State has experienced since the Great Recession.
Under this outlook, the Legislature would face a budget problem of $25 billion in 2023-24. (A budget problem — also called a deficit — occurs when resources for the upcoming fiscal year are insufficient to cover the costs of currently authorized services.) The budget problem is mainly attributable to lower revenue estimates, which are lower than budget act projections from 2021-22 through 2023-24 by $41 billion. However, lower spending in certain areas has partially offset revenue losses. As a result, over the subsequent years of the forecast, annual deficits would decline from $17 billion to $8 billion. (Chump change.)
The Assembly Speaker and other legislative leaders have indicated they want to continue spending. Still, the LAO cautions, “We discuss the State’s reserves, which are the State's key tool available to address budget problems. We urge lawmakers to begin planning the 2023-24 budget without using general purpose reserves and, instead, to save those reserves for when the State faces a recession.” Let’s hope the Legislature and Governor Newsom heed this recommendation! But signals suggest “no.” Assembly Budget Chair Phil Ting (D - San Francisco) told Politico, “Projections are just that — projections.” (Awesome analysis, sir.)
As CalMatters reported earlier this year, California adopted a $308 billion budget that will provide refunds to most taxpayers in the State, pour resources into expanding abortion access, and extend health care to more undocumented immigrants. The final agreement, which includes $234.4 billion in general fund spending, is similar to a placeholder budget that the Legislature passed earlier to meet a constitutional deadline. But at Newsom’s insistence, new spending commitments were slashed by several billion dollars, and some appropriations will only be triggered in future years if revenue estimates hold up. As the state eyes another potential economic downturn, reserves will grow to nearly $38 billion, including more than $23 billion in the general rainy-day fund.
So, if the State does face a deficit, unless spending is cut or additional revenue (taxes and fees) is raised, the State would be forced to spend the entire general rainy-day fund or cut services – and this is before what some economists are forecasting – a moderate recession in 23-24!
The tax rebate program, debated for months, was the centerpiece of the budget deal. Under the $9.5 billion plan, more than 95% of taxpayers — those making as much as $250,000 a year, or $500,000 if they file jointly — are supposed to receive a payment this fall. The amounts vary based on income and whether the recipients have dependents, so a low-income family with children will receive $1,050. In contrast, a single taxpayer with a higher income will receive just $200.
With the new legislative year commencing on December 5, it will be interesting to see if the members take the deficit projections seriously – or if they will punt the ball to Governor Newsom. He might be forced to cut billions from next year’s budget.
By the way, David Crane of Govern for California agrees. Read his letter to the Legislature here..
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State Lithium Panel Recommends PLAs, Other Steps As reported in the Palm Springs Desert Sun, “California’s Lithium Valley Commission has finished a comprehensive report on how to maximize the development of the critical mineral and create jobs and economic opportunities while aiming to protect public health and benefit local communities.” The report included several recommendations urging “California to push to create a so-called ‘circular’ in-state economy related to lithium, from extraction through production, transportation and even recycling of batteries and other products. The report also calls for state and federal funding of badly needed infrastructure to implement commercial lithium production, including paved roads, transmission lines, and repaired or new bridges. It urges the State to incentivize companies to use Project Labor Agreements with area unions, to do local hiring and provide workforce training, but stopped short of asking the Legislature to mandate them explicitly in exchange for public funds.”
There is no direct online link to the final report, but it should be posted on the commission’s docket when it is complete.
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Do People Not Want to Work in Construction Anymore? Most of you probably saw this in Construction Dive but in case you missed it, “Construction is no stranger to labor shortages. Over several decades, funding that advocates for higher education as the primary career route for young adults has continued to increase, drying the well of entry-level workers for the trades. Many believe there is a sentiment that people don’t want to work with their hands anymore in what can be a dirty, back-breaking job.” Story
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Candidates Galore A combined 2,998 candidates ran for president in 2016 and 2020. On Nov. 15, former President Donald Trump (R) announced he would run for a second term — and filed the paperwork to make it official. Anyone can file to run for president with the Federal Elections Commission (FEC). In 2016 and 2020, 2,998 individuals filed to run for president with the FEC. In 2016, 1,786 candidates filed with the FEC; in 2020, that figure was 1,212.
Of the candidates who filed in 2020:
· 323 filed as Democratic candidates
· 164 filed as Republican candidates
· 65 filed as Libertarian candidates
· 23 filed as Green candidates
Of the candidates who filed in 2016:
· 228 filed as Democratic candidates
· 288 filed as Republican candidates
· 56 filed as Libertarian candidates
· 14 filed as Green candidates.
[Ballotpedia]
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CSLB Shares Additional Details Regarding Workers’ Compensation Insurance Requirement for Four License Classifications The Contractors State License Board (CSLB) is informing active licensees starting January 1, 2023; renewals will not be processed without proof of workers’ compensation insurance for license classifications C-8 (Concrete), C-20 (Warm-Air Heating, Ventilating and Air-Conditioning), C-22 (Asbestos Abatement), and D-49 (Tree Service), regardless of whether the contractor has employees. The new workers’ compensation insurance requirement for C-8, C-20, C-22, and D-49 licensees results from Senate Bill 216, which takes effect January 1, 2023. The only exception in SB 216 is for joint venture licenses, which will still be able to file a certificate of exemption if one of the joint venture license entities has a workers’ compensation insurance policy.
SB 216 also requires that all active contractors – with or without employees – have a valid Certificate of Workers’ Compensation Insurance by January 1, 2026.
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Brand Offers a Spicy Response in Lawsuit Defense A name is just a name on a bottle of hot sauce, especially when the back of the label and the company’s website says so. That’s the gist of the defense offered by Garner Foods Co. of Winston-Salem, North Carolina, in a federal lawsuit that contends the name “Texas Pete” and its packaging are deceptive because the product is not made in the eponymous state but rather in North Carolina. Attorneys for Garner Foods filed their response in the case recently seeking dismissal on numerous grounds, but particularly noting that the company is not in the least deceptive or misleading toward consumers because it makes clear products with the Texas Pete brand name are not made in Texas, reports Triad Business Journal's David Hill. “The back label of the product clearly states the location of its source as Winston-Salem, North Carolina,” states the motion to dismiss. “Nowhere on any of the product's labels does it state or represent that the product is made in Texas or is a product of Texas.” Plaintiff Philip White said in the initial complaint filed Sept. 12 in the Central District of California federal court that Garner Foods violated laws regarding unfair competition and false advertising by presenting or implying Texas Pete as made in Texas.
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And what will surely bring tears to faithful readers - NLRB Feels the Heat: The National Labor Relations Board “will likely be forced to pursue furloughs” if its funding isn't boosted in the next congressional spending deal, the agency's top officials warned last week. “At this point, the Agency has exhausted its ability to absorb cost increases through staff attrition, and operational efficiencies," board Chair Lauren McFerran and General Counsel Jennifer Abruzzo told key congressional appropriators. McFerran and Abruzzo’s appeal makes public what the NLRB had been signaling in communications with the unions representing agency staff. Now, don’t get me wrong. Having been furloughed once or twice in my adult life, I am empathetic to those being cast aside (Governor Wilson notified a small group of former Senate employees who were establishing the California Research Bureau, including yours truly, of cancelation of our employment MOU – on Christmas Eve. Who said Wilson had no sense of irony – or humor?) But come on, who thinks the House in the 118th Congress will toss a life ring to the NLRB?
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And Before You Go, Some Good News California’s new poet laureate, Lee Herrick, is a community college teacher from Fresno. Herrick, 52, is a writer and professor at Fresno City College and a teacher at the University of Nevada, Reno, at Lake Tahoe, The San Francisco Chronicle reports. He was born in South Korea and adopted by a family in Modesto as an infant. In appointing Herrick as California’s 10th poet laureate, Gov. Gavin Newsom praised his “vivid celebration” of the California experience. “Lee’s dedication to highlighting the diverse experiences of Californians, and making them so accessible through his poetry, makes him a perfect candidate for poet laureate,” Newsom said in a statement on Friday.
Happy Thanksgiving!
Elk Grove City Council Adopts City-wide PLA Last night, the Elk Grove City Council (located in Sacramento County) adopted a PLA (which they called a “Community Workforce and Training Agreement”) for all city work greater than $1.0 million on a 3-1-1 vote. Councilmember Stephanie Nguyen (who has tired of city life and is running for State Assembly against Sacramento councilmember Eric Garcia, who also loves PLAs) made the motion to adopt the boilerplate PLA, which Vice Mayor Darren Suen quickly seconded. Suen explained that he supports PLAs because he believes that every person in the United States should have a defined benefit pension, which was a step in that direction. Mayor Bobbie Singh-Allen (who is the only councilmember up for re-election this year) provided the third ‘aye’ vote and read from a union-prepared statement that all of the criticisms about PLAs were fabricated and untrue – based upon her own extensive and personal examination of the PLA supporting studies from the UC Berkeley Labor Center.
Councilmember Kevin Spease was the only opponent on the council who insisted the PLA could not apply to a local contractor (“local” is defined in the PLA as the seven counties surrounding Sacramento) and that no construction worker should be forced to change health plans or contribute to union pension plans that have a vesting period. Councilmember Pat Hume said he couldn’t support the PLA with the pension language but abstained instead of joining Spease with a “no” vote. Hume is running for Sacramento Supervisor and believes he can straddle the fence – although the construction unions are all full blast in support of Hume’s opponent, the “union-owned” Jaclyn Moreno. Moreno facilitated the PLA in her current position at the Cosumnes Community Services District, which provides fire protection and parks for Elk Grove and Galt.
Some points in the five-year PLA are unresolved – but with the council telling the City Manager to get the PLA signed, sealed, and delivered, his ability to negotiate benefits for the city further seems – well, challenging.
WECA member Ian van der Linden and a number of his staff spoke in opposition, but the deals had been done in advance of the meeting, and all that was left was for the three PLA supporters to follow the script as written by the unions.
Ironically, the vote took place after a 90-minute celebration of DEI by the council and acknowledgment of Diwali – the Hindu religious festival that celebrates “victory of light over darkness, good over evil, and knowledge over ignorance.” I wonder if any of those three picked up on the irony?
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Where Was Gavin? President Joe Biden’s three-day October trip to Southern California featured events with a who’s who of California Democrats — but not Gov. Gavin Newsom. Many of the party’s biggest names — including U.S. Sen. Alex Padilla; Los Angeles Mayor Eric Garcetti; U.S. Reps. Karen Bass, Katie Porter, and Ted Lieu; state senator and congressional candidate Sydney Kamlager — turned out alongside the president as he made stops in Los Angeles and Orange County to tout federal infrastructure investments and plans to lower healthcare costs. Biden also headlined a fundraiser with House Speaker Nancy Pelosi in Los Angeles. Some called Newsom’s absence “strange,” given that “it certainly is the tradition that the governor of the state — particularly when the governor’s from the same party — will see the president” when he’s in town, Jessica Levinson, a Loyola Law School professor and California political commentator, told CalMatters. NBC News political director Chuck Todd described the situation to KCRA as a “head-scratcher.”
Newsom spokesperson Alex Stack explained: “The Governor, unfortunately, had scheduling conflicts. For example, he had an event in Sacramento on Friday morning for his book, in addition to state commitments.” The White House could not explain why Newsom’s book was more important than POTUS.
Levinson said she was skeptical of the governor’s claim: “‘Scheduling conflict’ is the equivalent of ‘I’m dropping out of this political race that I’ll never win to spend more time with my family.’ Nobody really believes it.” Levinson suggested a few possibilities for why Newsom and Biden may have avoided meeting with each other:
“Biden has been kind of out ahead of Newsom on a couple of issues.” First, the president last month took the rare step of wading into a California legislative battle and endorsing a farmworker unionization bill that Newsom had opposed. The move infuriated the Governor, who ended up signing the bill on the condition that it be significantly amended next year. Second, Biden called on three Los Angeles City Council members to resign for making racist comments and plotting to consolidate Latino political power during last year’s redistricting process — a step Newsom hasn’t taken, though he applauded former council president Nury Martinez’s decision to step down. Third, Biden has endorsed Rep. Karen Bass for Los Angeles mayor over her opponent, billionaire businessman Rick Caruso — while Newsom thus far has kept out of the race, telling Fox 11 earlier this year that he’s known both candidates for years and has “deep respect” for both.
“Biden may feel that Newsom is waiting in the wings … There could be a little personal bad blood because Newsom has become such a national presence and seems to be positioning himself to fill a potential void.” Newsom’s efforts to amplify his national profile — including by slamming the Democratic Party for failing to aggressively counteract the GOP on such hot-button topics as abortion and LGBTQ rights — have seemingly irked some members of the Biden administration. But Newsom, who insists he has “sub-zero” interest in a presidential run, has repeatedly praised Biden, saying that he’s delivered “a master class … on substance and policy” in his first two years in office.
Meanwhile, the Governor’s office published a recap of events showing how “the Newsom administration was hard at work this week taking action for Californians across a variety of issues,” including breaking ground on a 10,000-mile broadband network to help expand high-speed internet access and cracking down on illegal cannabis operations. [CalMatters]
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California to end Covid state of emergency early next year Gov. Gavin Newsom announced Monday that California would end its Covid-19 public health state of emergency on Feb. 28, marking the official end of the public health crisis. "The State of Emergency was an effective and necessary tool that we utilized to protect our state, and we wouldn’t have gotten to this point without it,” Newsom said. “With the operational preparedness that we’ve built up and the measures that we’ll continue to employ moving forward, California is ready to phase out this tool.”
The four-month lead time allows the state to unwind remaining pandemic provisions while giving time to respond to a potential winter surge. Administration officials stressed that the emergency order allowed the state to create the framework necessary to mount a centralized response to the pandemic and that infrastructure could be scaled up if necessary to manage an increase in Covid cases or another health crisis.
Newsom declared a state of emergency on March 4, 2020, which gave him broad powers to issue executive orders to direct how the state controlled the pandemic response. Republicans have long been clamoring for the governor to end what they've considered an overbearing and controlling approach to Covid restrictions and an abuse of executive privilege.
Many of the key provisions of the pandemic restrictions ended in 2021 and this year. These include travel restrictions, facial masking requirements, and other Covid health protocols. In September, the California Department of Public Health said visitors to healthcare facilities, including hospitals and nursing homes, will not have to provide proof of vaccination or be tested for Covid-19 to visit their loved ones.
Less than five percent of the original orders — or just 27 of the 596 provisions of the state of emergency — remain. Many of those are operational and no longer needed. Administration officials said Monday they intend to work with the Legislature on statutory fixes for two provisions: one that would allow nurses to order and dispense Covid medications and another to ensure the ability of lab workers to process Covid tests.
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Employers Should Continue to Use the Current Version of Form I-9 After Oct. 31, 2022 On October 12, 2022, the USCIS announced that employers should continue to use the current Form I-9 after its expiration date of October 31, 2022, until further notice. It is anticipated that the Department of Homeland Security will publish a new one-page Form I-9 in the coming months. Thus, until the new version of the Form I-9 is published and effective, employers should continue to use the current version of the I-9 form. Learn More
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IRS Releases 2023 Annual Limits for Retirement Plans The IRS just announced the 2023 annual limits that will apply to tax-qualified retirement plans. For the second year in a row, the IRS increased the annual limits, allowing participants to save even more in 2023. Employers maintaining tax-qualified retirement plans must ensure their plans’ administrative procedures are adjusted accordingly. Story
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The Mega-Donors Funding the Midterm Campaigns Private groups and individuals pour a lot of money into the elections to decide which party controls Congress. The Washington Post (I can hear the groans already) compiled a list of the top 10 individuals and groups bankrolling this midterm cycle. The top 50 donors this election cycle have pumped $1.1 billion into political committees and other groups competing in the midterms. Who are these donors? Billionaire investors, shipping magnates, casino moguls, and others. Many are longtime donors, but some new faces have made their money through cryptocurrency. How do they vote? The group skews Republican, though the top donor is a Democrat.
Legislative Calendar:
- Sept. 30 – Last day for governor to sign or veto bills passed by the Legislature before Sept. 1 and in the governor’s possession on or after Sept. 1
- Nov. 8 – General Election.
- Nov. 30 – Adjournment Sine Die at midnight
- Dec. 5, 12 noon – Convening of the 2023-24 Regular Session and special session
- Jan. 1, 2023 – Statutes take effect