CMA Capitol Insight: August 18, 2014

August 18, 2014
Area(s) of Interest: Licensing & Regulatory Issues 

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

Making a Deal

In what is becoming an increasingly common sight around California these days, the closing weeks of the legislative session brought Democrats and Republicans together to strike an 11th hour deal – this time on a slimmed down water bond proposal.

The measure will now head to the November ballot (joining health care measures such as Proposition 46), where voters will decide its ultimate fate.

The compromise package, which received wide bipartisan support, is another political victory for Gov. Jerry Brown, who is for all intents and purposes the governor by acclamation through 2018.

For state Republicans, it signifies another baby step in the long rebuilding and rebranding process currently underway. True, water fights don’t often break along the same kinds of party lines that fights over, say, taxes or the minimum wage do. But Republicans held out for as much money as they could for new water storage. Republicans in California showed yet again that they are willing to cut deals with Democrats when the stars align correctly.

Republicans had been asking for $3 billion in any bond proposal. They got pretty close – $2.75 billion – and declared victory, joining hands with Brown and Democratic leaders in a late-night press conference in the Capitol.

The $7.5 billion bond replaces an $11 billion water bond deal that was reached back in 2009. Under the new smaller proposal, there will be some money for storage, groundwater clean-up and other top environmental priorities. The package contains significantly less money for Delta restoration than the 2009 deal, and less of the pork that was added to the old bond to make it politically palatable.

Now the challenge will be selling it to voters this fall. Clearly, water is increasingly on the minds of Californians as we continue to suffer through another hot summer, while 80 percent of the state remains affected by the worst drought in recorded history.

But remember, this election is in the middle of the rainy season. Will fall rainfall diminish the urgency in voters’ minds? Or will they be willing to put down the credit card and invest in water infrastructure that environmentalists, farmers and urban water districts alike say is vital for the state’s future?

Everything Else Under the Sun

Prospects are not so bright for a school bond measure, which many Democrats were hoping to get on the ballot this year. Gov. Brown has been reluctant to endorse any new borrowing, seeking instead to ride the image of Brown the Fiscal Tightwad through the November election. He was publicly reluctant to back a water bond proposal until just a few weeks ago, and was said to be actively discouraging legislative leaders from sending him a school bond.

The bond was the dominant issue on the legislative agenda for the end of session, but there are other fights yet to come. Among them is a proposed ban on single-use plastic bags.

Similar legislation died in the state Senate last year, but that had as much to do with internal Latino Caucus politics as it did with any deep policy disagreement. A group of Latino senators loyal to incoming Pro Tem Kevin De Leon sided with Republicans on last year’s bill, which was authored by Democratic Sen. Alex Padilla.

That vote was just a short time after Padilla had endorsed Robert Hertzberg for state Senate. De Leon had not yet locked down the leadership job, and Hertzberg, a former Assembly speaker, was seen as a potential threat to De Leon’s promotion.

But De Leon is on board this year, leaving the plastics industry on its own to try to beat back the ban.

Other big fights include efforts to impose new regulations on ride-sharing services like Uber. The legislative activity has spurned Uber into action, loading up with high-powered lobbying and PR firms to kill the effort.

And what would the end of a legislative session be without another effort to offer an exemption to state environmental laws for one major project? In past years it has been sports stadiums – a hypothetical NFL stadium in Downtown LA, another in the city of Industry and a new Downtown arena for the Sacramento Kings – that were given the special treatment.

This year, it’s electric car maker Tesla, which has gotten fat off state subsidies and tax credits. Tesla is seeking to open a new battery manufacturing plant – a business that would bring regulatory attention from a number of state and local agencies. California has the toughest environmental standards in the nation, and Tesla, which remains headquartered in California, has expressed a preference to built its new manufacturing plant in New Mexico, Arizona or Texas – anywhere where the regulatory burden is lighter.

A bipartisan cabal has come up with a plan to try to lure Tesla to keep its factory in California, complete with tax credits and some environmental leeway. But it remains to be seen whether a deal can weave through the legislative gauntlet.

And if you thought the water wars were over, think again. Democrats and Gov. Jerry Brown are pushing for a new regulatory framework to control how people and businesses access groundwater. California, unlike other states, does not regulate groundwater use. But many Democrats, again hoping to cash in on the political awareness brought on by the drought, want to change that this year.

All of this should be coming to a head over the next two weeks. We’ll offer a full roundup then, as we gird ourselves for the 2014 election season.

Until then…


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