Good morning, California.

Welcome to Campaign 2020. The election is 726 days from now, and counting.

Gov-elect Gavin Newsom

Newsom with his wife, Jennifer Siebel Newsom, on election night in L.A.

California turned a deeper blue Tuesday, electing Gavin Newsom as its governor and sending at least one more Democrat to Congress. For full results, click here and here.

Many races were too tight to call, but not the one that matters most. Newsom easily beat Republican lawyer John Cox, an Illinois transplant. The 51-year-old lieutenant governor and father of four young children promised to work to restore the California Dream, as CALmatters Laurel Rosenhall reported from Newsom’s Los Angeles campaign celebration.

Newsom: “Too many children are growing up in poverty, starting school from behind. In many ways, in many places, we are simultaneously the richest and the poorest state.”

He promises to follow in Gov. Jerry Brown’s footsteps. But, as CALmatters’ staffers report, he has an ambitious list of goals that go beyond Brown’s. All come at a cost.

Newsom wants to:

  • Combat homelessness and the housing crisis.
  • Improve care for severely mentally ill people
  • Provide universal preschool and single-payer health care.

It all could go sideways if California hits a recession, draining tax revenue and forcing cuts in programs. But for one night, Newsom, his wife, Jennifer Siebel Newsom at his side, dreamed big.

P.S.: Helping solidify Democratic control of the U.S. House of Representatives, Democratic environmental attorney Mike Levin won a San Diego-Orange County congressional seat, defeating Republican Diane Harkey. Republican Darrell Issa held the seat but quit.

  • With Levin’s victory, the GOP holds only 13 of California’s 53 congressional seats; four other congressional races were too close to call.

Once again, Californians tax themselves

Gov. Jerry Brown on election night, Sacramento.

California voters once again agreed to tax themselves Tuesday, defeating an initiative that would have repealed a 12-cent per gallon gasoline tax that is generating $5.2 billion a year for road and bridge repairs.

Gov. Jerry Brown fought the repeal, Proposition 6. It failed, thanks to $46 million in spending by construction trades and road builders.

Brown: “We need to build and we need to put people to work. People know you get what you pay for.”

Republicans led by House Majority Leader Kevin McCarthy placed the measure on the ballot, thinking it would increase Republican turnout and help Republicans retain control of the U.S. House of Representatives.

  • The gas tax played roles in some legislative and congressional races, particularly in the Central Valley. But voters in urban centers where traffic congestion is especially bad rejected the repeal.

The trend: In 2012, voters approved a $9 billion income and sales tax increase. And in 2016, voters approved an extension of the income tax surcharge on high earners. For good measure, voters on Tuesday rejected an initiative that would have extended the Proposition 13 property tax break.

Brown and Newsom wade into water fight

The Sacramento River meets the San Joaquin River.

Even before votes were fully counted, Gov-elect Gavin Newsom waded into the issue that has confronted and confounded every California governor for a century: water

  • The State Water Board is scheduled to convene in Sacramento on Wednesday to consider a plan to allocate billions of more gallons of San Joaquin River water to the environment.

Gov. Jerry Brown and Newsom sent a letter to the board Tuesday night urging that it postpone the vote to give time to negotiate voluntary reductions.

  • The board feels compelled to save dying fisheries. But that would mean less water for people.

The plan: Water flowing from Hetch Hetchy Reservoir to San Francisco and other Bay Area cities would be restricted. Same for Central Valley farmers, who depend upon water from the San Joaquin River and its tributaries. They worry the state-imposed reductions would force them to fallow fields, as the Modesto Bee’s Mike Dunbar opines.

Brown and Newsom: “A short extension will allow these negotiations to progress and could result in a faster, less contentious and more durable outcome. Voluntary agreements are preferable to a lengthy administrative process and the inevitable ensuing lawsuits.”

Ripples: Southern California, which depends on Northern California water, would not escape. If more water is allocated for the environment, less water will be available to be pumped south to the 19 million people served by the 26 agencies that make up the Metropolitan Water District of Southern California.

Also awaiting Newsom? Delta tunnel politics

Nine Democratic legislators representing the the Sacramento-San Joaquin River Delta are calling on the Trump administration to deny California’s request for a $1.6 billion loan to help pay for the twin tunnel project championed by Gov. Jerry Brown.

  • An entity known as the Delta Conveyance Finance Authority requested the loan from the U.S. Environmental Protection Agency to help construct the tunnels. The proposed $20 billion tunnels would pipe water from the Sacramento River 30 miles south to massive pumps near Tracy and then to Southern California.

The legislators’ letter obtained by CALmatters: “Based on the state’s recent track record with major infrastructure projects, final project costs are likely to significantly exceed original estimates as has been the case with the San Francisco Bay Bridge and high speed rail.”

The legislators did not name Brown. But warning that the tunnels would cause irreversible harm to the Delta, the letter is a rebuke to the outgoing governor who, like his predecessor, Arnold Schwarzenegger, advocated for the project.

What’s next: Gov-elect Gavin Newsom has said he intends to revisit aspects of the tunnel project, including the possibility of building a single tunnel.

Feds plan to cut rural healthcare clinic funding

Planned Medicare cuts will fall hard on rural California clinics.

In a cut that will fall especially hard on rural health care clinics in California, the U.S. Centers for Medicare & Medicaid Services announced plans to reduce payments by 60 percent.

  • The cut would translate into a $52 million loss for California clinics during a two-year period starting in January, California hospital officials say.

Why now? Uncle Sam is under pressure to cut spending as the deficit balloons. Medicare is one place to cut.

University of California satellites would be affected, as would those run by private hospital companies. One is Adventist Health based in the Sacramento suburb of Roseville:

  • Adventist’s hospital in Paradise outside of Chico oversees 14 clinics in Northeastern California, and would lose $1.3 million.
  • Adventist’s hospital in Sonora, the only hospital in a three-county area, operates 25 clinics and would lose $1.5 million.

Julia Drefke, Adventist’s head of governmental relations: “Our commitment to the community doesn’t change. It is another obstacle.”

The federal reductions don’t take into account higher costs in California, including those associated with meeting earthquake safety standards, said California Hospital Association’s Alyssa Keefe.

What’s next: Fourteen Californians were among the 130-plus members of Congress who protested the cuts in a letter to Seema Verma, head of Medicare. On behalf of clinics in California and elsewhere, the American Hospital Association intends to sue.

Commentary at CALmatters

Mike Males, the Center on Juvenile and Criminal Justice: The average pre-teen today is 96 percent less likely to be arrested than his or her counterpart in past decades. Arrests of girls and boys of all ethnicities and races for violence, property, drug, vandalism, felony and misdemeanor offenses are down by huge proportions. We need informed, innovative leadership to perpetuate these gains.

Dan Walters, CALmatters: The Washington-based Tax Foundation is an impeccable source of accurate information about state and local taxation, albeit one with a decidedly conservative tilt. It was a little odd, therefore, that Jerry Brown, the Democratic governor of one of the nation’s highest-taxing states, just received one of the Tax Foundation’s annual awards for “outstanding achievement in state tax reform.”

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See you tomorrow.