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CMA Capitol Insight: Sept. 15, 2015



September 15, 2015
Area(s) of Interest: Advocacy 

CMA Capitol Insight is a biweekly column by veteran journalist Anthony York, reporting on the inner workings of the state Legislature.




The end of the road


After years of having his way in the state legislature, Gov. Jerry Brown suffered a series of defeats at the end of this legislative year. Some came at the hands of Republicans – like Brown’s failure to muster support for new gasoline taxes to pay for road construction and repairs. Others were handed out by fellow Democrats, including a cluster of members in the state Assembly who bucked key provisions of the governor’s main environmental legislation.


As the new moderates in the Assembly flexed their power, major legislative proposals were dropping like flies in the final days of this year’s legislative session and fights between the parties, and internal battles among Democrats, derailed much of Gov. Jerry Brown’s legislative agenda for 2015.


While some deals were struck in the final hours, including a series of new regulations on the production and sale of medical marijuana, the 2015 legislative year ended as one of the most disappointing in recent memory for the majority party, and handed Gov. Brown his most visible and significant series of defeats since his first months back in the governor’s office, more than four years ago.


We also got a glimpse of the continued power of the oil industry – even in solidly Democratic California. The highest profile of Brown’s defeats was the failure of the Democratic leadership to pass a provision that would have mandated the state cut petroleum use in cars and trucks by half by the year 2050. Brown and Senate leader Kevin De León, who sponsored the legislation that would have put the goal into statute, stripped the oil regulations from the bill after it became clear that a cadre of Democrats in the Assembly, led by Fresno Democrat Henry Perea, were not prepared to go along with the proposal.


Environmental moderates honed in on a central enemy in the environmental fight – the California Air Resources Board (CARB). One of the main sticking points in the debate was the power of CARB, one of the most powerful regulatory agencies in the state, if not the nation. Critics including oil companies, utilities and others have long charged that the agency has become too influential since the passage of the state’s first greenhouse-gas regulation law, AB 32, in 2006. In the end, the Brown administration was unwilling to curb the agency’s regulatory authority in exchange for a legislative victory.


Attention now shifts to Brown, who has made implicit threats to use his executive powers to effectively launch an end-run around the legislature. Activists are urging Brown to take an aggressive stand against the companies that mobilized to block his agenda, in what could set up a major battle for the governor during his last three years in office. Brown has played nice with the oil industry thus far, staking out a middle ground on fracking and earning its support for taxes and even his reelection in 2014. But Brown vs. Oil is emerging as the main event in Sacramento for years to come.


The administration’s plan to pass a new gas tax to fix the state’s crumbling roads also failed to pass the legislature last week. But this was a more traditional squabble between Democrats and Republicans. GOP members refused to go along with the higher gas levies, even though many business groups were lobbying for the higher taxes to help pay for the estimated $50 billion in state infrastructure needs.


Ironically, the problem has been exacerbated by some of the environmental success the state has seen in the past. Road funds are generated from a flat, per-gallon tax on gasoline. But in recent years, as cars become more efficient, per capita gasoline consumption has dropped dramatically. As a result, the funds generated from the gas tax have been insufficient to deal with the maintenance and construction needs for state and local roads.


Efforts to regulate tobacco and to restore a tax on health plans to increase Medi-Cal reimbursement rates also failed to move through the legislature. But those fights are likely to spill over into next year, with a statewide election on the horizon. Though there may be renewed legislative efforts to restore the managed care organization (MCO) tax, a coalition of health care providers and labor groups is moving forward with a plan to increase tobacco taxes to help pay for higher reimbursement rates for health care providers who treat low-income patients.


Another bill to fall by the wayside was AB 533, an effort to cap payments to doctors who treat out-of-network patients. The bill, which was opposed by the California Medical Association (CMA), was one of the intense, late fights in the final hours of the legislative session. CMA argued that the measure would have particularly impacted physicians in rural areas, who would have been less likely to volunteer to be “on-call” for hospital emergency rooms, since they would be paid significantly lower than commercial rates and Medicare rates in urban areas.


A bill that did find its way to the governor’s desk was one that Brown had said he would have preferred not be sent to him at all. Lawmakers passed a measure that will allow doctors to prescribe life-ending drugs to people with terminal illnesses.


Brown has not indicated whether he will sign the bill, but did say that he did not think this year’s legislative special session dedicated to health care issues was an appropriate place to debate the controversial proposal.


While Brown weighs his options on that and hundreds of other bills on his desk for the next four weeks, the unfinished business from this year will set the tone for 2016, as we head into an election year. With three new leaders in the legislative caucuses, and some signs of stress between Gov. Brown and the two Democratic leaders (De León and incoming speaker Anthony Rendon), the stage is set for another contentious legislative year, not just between the parties, but among the broad and increasingly independent Democratic leaders.

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