In summary

Gov. Newsom’s predecessor poked a hole in his budget bubble by calling the state’s spending “not sustainable” and predicting “fiscal stress.”

Money talks — and Gov. Gavin Newsom knows it.

In front of a mostly masked crowd of children and families waving “California Roars Back” and “California for All” signs, the governor on Tuesday signed into law a budget bill containing his oft-touted $100 billion stimulus plan. The package, made possible by federal relief funds and a state surplus that Newsom said had swelled from $76 billion to more than $80 billion, served as a launchpad for the governor to campaign against the quickly approaching recall election without ever mentioning it. He ran through the budget’s highlights: stimulus checks for two-thirds of Californians, rent relief, small-business aid, a historic investment in public education.

  • Newsom: “People that have been directly impacted by this pandemic … we will pay 100% of your rent going back to April of last year … and going forward to Sept. 30 of this year. 100% of your rent. … And you say, ‘That’s great, but I’ve got this water bill, I’ve got this electric bill.’ We will pay 100% of those bills as well.”

Although the governor’s speech projected confidence and control, other developments appear to be more frenetic — potentially complicating Newsom’s attempts to prove his competency to voters.

For example: The new fiscal year began two weeks ago, but Newsom still hasn’t signed the full budget into law, leaving key details up in the air. On Monday, the state Department of Public Health issued a rule ordering schools to ban unmasked students from campus — only to reverse itself hours later, giving districts discretion in handling students who refuse to wear face coverings. Also Monday, a judge ruled that Newsom will not be able to list himself as a Democrat on the recall ballot due to a filing error his lawyers made last year.

Meanwhile, his predecessor and fellow Democrat Jerry Brown poked a hole in Newsom’s budget bubble by calling the state’s spending “not sustainable” in an interview with NBC News Los Angeles. Brown also worried out loud about the federal government going into debt and spending “wildly.”

“We need a more frugal, sustainable, prudent way of doing business. I would predict, certainly within two years, we’re going to see fiscal stress,” he said — a prediction potentially reinforced by figures released Tuesday by the U.S. Labor Department. The Consumer Price Index, a key measure of inflation, jumped 5.4% in the year through June — marking the biggest rise since 2008.

In the Bay Area, for example, that translated to unleaded gas prices rising nearly 42% and used car and truck prices skyrocketing 44%.

Keep up with the recall using CalMatters’ new guide.


The coronavirus bottom line: As of Tuesday, California had 3,736,999 confirmed cases (+0.1% from previous day) and 63,478 deaths (+0.01% from previous day), according to a CalMatters tracker.

California has administered 42,529,493 vaccine doses, and 60.6% of eligible Californians are fully vaccinated.

Plus: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. We’re also tracking the state’s coronavirus hospitalizations by county and lawsuits against COVID-19 restrictions.


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1. Su leaves state Labor Department

California Labor Secretary Julie Su in Sacramento on Sept. 10, 2019. Photo by Anne Wernikoff, CalMatters

Well, another Californian is headed to Washington, D.C. In a party-line vote, the U.S Senate on Tuesday confirmed California Labor Secretary Julie Su as deputy secretary of the U.S. Department of Labor — more than five months after President Joe Biden nominated her for the position. While fiercely supported by immigrant, labor and women’s groups, Su also faced intense scrutiny for what critics deemed lax oversight of the state’s beleaguered Employment Development Department, where more than 1 million unemployment claims remain unresolved and fraud reports seem to surface every day. She vacates the top post at the state’s labor department at a critical time: Not only does Bank of America want to end its exclusive contract with EDD to deliver unemployment benefits via debit cards, but thousands of open jobs are going unfilled even as California’s economy fully reopens for the first time in over a year.

  • Newsom: “Julie has been fighting for workers’ rights from California for nearly three decades. And now, as Deputy Secretary of Labor, she will help our country build a more inclusive economy that works for all Americans as we recover from a once-in-a-lifetime pandemic.”

2. Cannabis industry at a crossroads

Containers of marijuana flower on display at Hi Fidelity in Berkeley on July 3, 2019. Photo by Anne Wernikoff, CalMatters

Nearly five years after California voters approved a ballot measure championed by then-Lt. Gov. Gavin Newsom to create a legal marijuana industry, it’s run into so many challenges that state lawmakers recently approved a $100 million plan to help it stay afloat. One of the biggest hurdles facing would-be cannabis entrepreneurs? A maze of complicated, costly procedures that has pushed license processing times to as long as four years. Cannabis businesses were originally required to obtain permanent licenses by 2019, but the bureaucratic barriers were so high that state lawmakers twice delayed the deadline — first until Jan. 1, 2020, and then until Jan. 1, 2022. Now, Newsom wants to delay that deadline by another six months.

  • The Newsom administration: “Absent this extension, it is possible that a significant number of these licensees could fall out of the legal cannabis system, significantly curtailing the state’s efforts to facilitate the transition to a legal and well-regulated market.”

The transition does not appear to be going smoothly. On Monday, a federal judge sentenced the sixth defendant connected to an illegal marijuana grow in the Shasta-Trinity National Forest. That’s the same area where a cannabis farmer was shot and killed last month after allegedly firing a gun at officers urging him to evacuate the Lava Fire; for months, growers tending illegal farms have been facing off with Siskiyou County authorities. And last week, more than 400 law enforcement officers seized $1.2 billion of illegal pot in Southern California — representing just 40% of unauthorized grows in the area. For context, California’s legal cannabis sales in 2020 totaled $4.4 billion.

3. Free pads, tampons at public schools?

Menstrual activist and UC Santa Cruz student Amanda Safi holds a selection of pads and tampons. Photo by Lluvia Moreno for the CalMatters College Journalism Network

Should California’s public high schools and colleges be required to provide free menstrual products for students? They would have to start doing so next school year under a bill that has so far flown through the state Legislature with unanimous support, Emily Forschen reports for CalMatters’ College Journalism Network. Students advocating for the bill say they’re trying to eradicate taboos surrounding a matter of basic hygiene and address “period poverty,” which blocks many low-income students from affording the pads and tampons they need.

Assemblymember Cristina Garcia, the Bell Gardens Democrat who introduced the bill, has come to be known as the “Tampon Queen” for her work on menstrual equity. In 2016, then-Gov. Jerry Brown vetoed a proposal supported by Garcia that would have ended the state tax on menstrual products.

  • Garcia: “We legislate on experience, and the vast majority of (legislators) don’t menstruate.”

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CalMatters commentary

CalMatters columnist Dan Walters: A squabble between two politically influential California unions is an example of the pot calling the kettle black.

Curbing the spread of fentanyl: In the absence of state action, ask your local district attorney to issue notices to convicted dealers that they could be charged with murder if someone dies from fentanyl they supplied, writes Nathan Hochman, a 2022 Republican attorney general candidate.

Adapting to drought: Well-managed drought in California will have economic impacts, and sometimes severe local damages. But with diligent preparation, it shouldn’t be a statewide catastrophe, argues Jay Lund, a UC Davis professor.


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Other things worth your time

Sacramento sheriff used inmate welfare money for travel, salaries. // Sacramento Bee

Half of people released from city jail before trial were accused of a new crime while free, according to four-year study. // San Francisco Chronicle

California prison sentencing error confuses inmate firefighters expecting release. // Sacramento Bee

California spent over $1 billion on emergency wildfire suppression last year. // San Francisco Chronicle

Faulconer calls for ‘war footing’ to fight California fires. // Associated Press

Stock market drives gains for CalPERS public pension fund. // Sacramento Bee

Three key takeaways for California small business owners. // CalMatters

Latino caregivers in need of support get help from California program. // Democrat and Chronicle

University of California will consider raising tuition for the first time since 2017. // San Francisco Chronicle

California community college students will soon be required to take ethnic studies. // EdSource

American Forests Tree Equity Score: Fresno needs more trees. // Fresno Bee

Young Sikh farmers in California keep up a long tradition. // New York Times

Pesticide caused kids’ brain damage, California lawsuits say. // Associated Press

17 million gallons of sewage discharged from Hyperion treatment plant, closing some beaches to swimming. // Los Angeles Times


For the record: The first item was changed to clarify that former Gov. Jerry Brown was talking about both state and federal spending.

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...