In summary

Voters to decide fate of Uber, Lyft. Assembly to gather for historic budget hearing. Newsom clears places of worship for partial reopening.

Good morning, California. It’s Tuesday, May 26.

Are gig drivers employees? CA voters to decide

Service Employees International Union members at a Sacramento rally in support of AB5 on Aug. 28, 2019. Photo by Anne Wernikoff for CalMatters

In such a deep blue state, the clash between labor unions and gig-economy companies over employee classification may be the biggest fight on the November ballot.

California voters will decide whether Uber, Lyft and DoorDash drivers should be exempt from a state law that reclassified many of them as employees instead of independent contractors, after a measure championed by the three companies qualified for the statewide ballot Friday.

The initiative would require companies to provide more benefits to independent contractors but not state-mandated employee protections like unemployment insurance and workers’ compensation. 

Earlier this month, California Attorney General Xavier Becerra and three city attorneys sued Uber and Lyft for refusing to reclassify half a million independent contractors as employees, depriving them of key benefits while also avoiding paying into the state’s unemployment fund. 

If the drivers had been classified as employees, Uber and Lyft would have paid $413 million into California’s unemployment fund between 2014 and 2019, a recent report from UC Berkeley’s Institute for Research on Labor and Employment found. That’s about the same amount of money as California borrowed from the federal government in April to pay a staggering number of unemployment claims.

But some say AB5, the law that reclassified many independent contractors as employees, has made it harder for them to work. Legislators are currently revising the law to allow freelance journalists, musicians and youth sports coaches, among others, to regain independent contractor status. 

Meanwhile, Gov. Gavin Newsom’s revised budget proposal set aside more than $20 million to enforce AB5, a move that has drawn scorn from some lawmakers. 

  • Assemblyman Kevin Kiley, a Rocklin Republican: “It’s sick, to be perfectly honest with you. … The governor tells us that this budget is stripped down to our most essential priorities, and apparently that includes $20 million to target independent contractors, to harass small businesses … at a time when so many are struggling to remain in business at all.”

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The Bottom Line: As of 9 p.m. Monday night, California had 90,631 confirmed coronavirus cases and 3,589 deaths from the virus, according to a CalMatters tracker.

Also: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. And we’re tracking the state’s coronavirus hospitalizations by county.

Other stories you should know

1. Entire state Assembly to gather in historic budget hearing; prepare for a battle with the Newsom administration

Members of the Assembly budget committee during a COVID-19 oversight hearing on April 20. Photo by Rich Pedroncelli, AP Photo/ Pool

Today, all 80 members of the state Assembly are scheduled to meet and discuss Newsom’s revised budget proposal via a parliamentary process that hasn’t been used in 25 years. Normally, lawmakers analyze the governor’s budget proposal in dozens of smaller committee hearings before agreeing on a plan of action by June 15. But this, of course, is no normal year.

One topic that’s sure to come up: the limits of a governor’s power. Lawmakers have expressed frustration at being left out of the loop as Newsom exercises emergency powers. The nonpartisan Legislative Analyst’s Office recently also warned that the governor’s proposed budget limits the Legislature’s decision-making authority. The issue came to a head again late Thursday when Newsom announced that he plans to spend an additional $1.8 billion on the state’s emergency response.

2. Newsom clears places of worship to reopen at 25% capacity

Joan Knego observes Good Friday at Sacred Heart Catholic Church in Sacramento on April 10. Photo by Rich Pedroncelli, AP

Newsom on Monday cleared churches and other places of worship to reopen at 25% of building capacity or with up to 100 attendees, whichever is lower, with the approval of the county public health department. Religious institutions are also encouraged to follow the guidelines outlined in a 13-page document, including “discontinuing singing,” which has an “increased likelihood for transmission from contaminated exhaled droplets,” and discouraging the use of shared items.

The announcement came after a week of sustained pressure on Newsom to reopen places of worship from the U.S. Department of Justice, President Donald Trump and more than 1,000 California churches. (Newsom also faces at least four lawsuits from churches and other religious institutions.)

Newsom’s Monday announcement included guidelines for in-person protests — also limited to 25% of building capacity — and cleared the way for in-store retail shopping to reopen statewide.

3. Public left in dark about lobbying behind CA coronavirus contracts

California signed a $1 billion contract for N95 masks. Image via iStock

California has spent around $3 billion procuring supplies related to the coronavirus pandemic, but the public can’t see whether paid lobbyists helped companies secure these contracts, information central to understanding who is influencing state spending, CalMatters’ Laurel Rosenhall reports. Under California law, lobbyists are not required to disclose their work on government contracts. But as the state comes under scrutiny for a series of failed or incomplete contracts and its vendor vetting process, some public officials say the law should change.

  • State Treasurer Fiona Ma: “Any measures that seek to create more transparency, especially in public contracting, I think is always the right course of action.”

CalMatters commentary

CalMatters columnist Dan Walters: It’s the multibillion-dollar question of the moment: Would California voters accept tax increases in the midst of a severe recession to help struggling state and local governments?

Higher education equity: Increasing college access will be essential to California’s economic recovery. Here are four priorities the state should focus on, writes Monica Lozano, president and CEO of College Futures Foundation.

Protect public lands and rivers: After returning from my deployment to Iraq, spending time in nature was healing for me and many other vets. Our leaders need to pass protections for public lands, writes Kate Hoit, California state director with Vet Voice Foundation.

Smartly repurposing state funds: Green Means Go, a four-year pilot program in Sacramento, will accelerate new housing and cleaner transportation options, all while demonstrating a smarter use of existing funding, argues Dr. Richard Pan, a Democratic state senator from Sacramento.

Expand access to reproductive health care: Gov. Newsom should take executive action to eliminate cost-sharing for abortion services under health insurance plans during the COVID-19 pandemic, argues Assemblywoman Sydney Kamlager, a Culver City Democrat.

Other things worth your time

The Republican National Committee and California Republican Party sue Newsom over statewide vote-by-mail executive order. // CalMatters

How homelessness and coronavirus are converging in San Francisco. // The New Yorker

Coronavirus testing would cost the UC system $24 million per week. // CalMatters

For Muslim students, Eid celebration caps an unusually isolating Ramadan. // CalMatters College Journalism Network

Check out these reopening photos from across California. // The Los Angeles Times

California’s remote getaways are anxious about summer visits: Some are worried about outbreaks, others say tourists can’t return fast enough. // The San Francisco Chronicle

Coronavirus widens health care divide between red and blue states, as exemplified by California and Texas. // The Los Angeles Times

Thanks to coronavirus, San Francisco and Los Angeles could see an exodus of residents to cities like San Jose. // The Mercury News

California’s Klamath Basin faces renewed conflict as drought saps the water and farmers run out of time. // The San Francisco Chronicle

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See you tomorrow.

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Emily Hoeven writes the daily WhatMatters newsletter for CalMatters. Her reporting, essays, and opinion columns have been published in San Francisco Weekly, the Deseret News, the San Francisco Business...