Fight escalates between Newsom, oil industry

Your guide to California policy and politics
Emily Hoeven BY Emily Hoeven October 3, 2022
Presented by New California Coalition and California Water Service

Fight escalates between Newsom, oil industry

Gov. Gavin Newsom hadn’t even finished dispensing with all of the bills on his desk ahead of Friday’s midnight deadline before he issued a call for new legislation.

“We’re not going to stand by while greedy oil companies fleece Californians,” the governor said in a stern Twitter video, citing a lopsided surge in gas prices that has resulted in Californians paying about $2.50 more per gallon at the pump than the national average.

Newsom asked state lawmakers to introduce a windfall tax that would cap oil companies’ profits, tax at a higher rate any earnings above that ceiling and return the money to taxpayers via rebates — potentially similar to those the state is set to begin depositing in millions of residents’ accounts this week.

  • Democratic State Senate President Pro Tem Toni Atkins of San Diego and Assembly Speaker Anthony Rendon of Lakewood said in a statement: “We’ll look at every option to end the oil industry profiteering off the backs of hard working Californians.” (Democratic Assemblymember Alex Lee of San Jose proposed enacting a windfall profits tax on oil companies earlier this year, but it failed to advance.)
  • Assembly Republican Leader James Gallagher of Yuba City said in a statement: “The Governor just doesn’t get it. … The problem in California is policy. We need major action on these prices, starting with suspending the gas tax and additional fees that make our gas so much more expensive here.”

Newsom on Friday also directed the state’s air regulators to allow refineries to begin producing winter-blend gasoline immediately, rather than waiting until after Oct. 31 as required by law. Winter-blend gasoline is easier and cheaper to make than summer-blend gasoline — which refineries are required to produce in hotter months — but it also emits more pollutants, the latest example of Newsom contradicting his own climate goals in order to address kitchen-table issues.

Meanwhile, the California Energy Commission sent a letter to five refinery executives, demanding they respond by today to a series of questions, including: “Why have gasoline prices risen so dramatically in the past 10 days despite a sharp downturn in global crude prices, no significant unplanned refinery outages in the state, and no increases in state taxes or fees?”

The oil industry is taking actions of its own: On Thursday, Secretary of State Shirley Weber cleared for signature-gathering a proposed referendum to overturn a law Newsom signed last month to prohibit new or extensively retrofitted oil or gas wells within 3,200 feet of homes, schools, nursing homes and hospitals.

It’s the latest example of industry turning to the ballot box to challenge laws coming out of Sacramento: A proposed referendum has already been filed against a law Newsom recently signed to create a state-run council to regulate working conditions for the fast food industry while setting workers’ minimum wage as much as $22 per hour next year. The coalition behind the referendum has already raised nearly $13 million, with Starbucks, In-N-Out Burger and Chipotle each contributing $2 million, the Wall Street Journal reported Saturday.

Even more business-backed referenda could be on the way, given that Newsom signed many of organized labor’s priority bills into law: “Every loose end I had in the legislature when I left (unsigned, or unpassed bill) is now law. Except legislative staff unionization,” tweeted Lorena Gonzalez, leader of the California Labor Federation and former state Assemblymember.

  • However, as CalMatters higher-education reporter Mikhail Zinshteyn noted to me, private-sector unions appeared to fare better than public-sector unions — at least when it comes to the California State University system, whose staff and faculty unions saw two pretty big vetoes. One possible reason: Students, not shareholders, would bear the budgetary brunt of higher labor costs. “I do want us to be mindful, there isn’t some magic solution, this money isn’t just going to appear from somewhere, it’s going to have real consequences on students, and unfortunately, probably on our most vulnerable students,” Democratic Assemblymember Jesse Gabriel of Van Nuys said at an August committee hearing on one of the bills that was ultimately vetoed. (Gabriel voted to support the bill.)

If labor won big, Newsom’s bill signings and vetoes sent a more mixed message on criminal justice, another progressive priority. Many of his vetoes also struck a moderate tone by urging fiscal constraint ahead of a possible economic downturn: “The Governor vetoed 169 bills, saving the state billions in taxpayer dollars,” Newsom’s office said in a Sunday press release.

Some political observers suggested this balancing act could reflect Newsom’s possible national ambitions.

  • Political analyst Dan Schnur told the Mercury News: “He’s trying to sign everything he can to make the left happy unless it would also frighten swing voters in purple states. If he goes hard left enough on environmental and social issues, it gives him cover for sticking with the center on crime and spending bills.”

Join CalMatters and the Milken Institute on Tuesday from 12-1:30 p.m. for a free, virtual event exploring California’s path to creating more climate-friendly job opportunities and helping underserved communities access them. Register here.


1 A look at Newsom’s last bill signings

Katie Duberg (left) and Jennifer Richard, chief of staff for state Sen. Maria Durazo (right), embrace in front of the state Capitol after hearing that Gov. Gavin Newsom signed Durazo's paid family leave bill on the last day for the governor to sign the bill, Sept. 30, 2022. Photo by Fred Greaves for CalMatters
Katie Duberg, left, and Jennifer Richard, right, chief of staff for state Sen. Maria Durazo, embrace in front of the state Capitol after hearing that Gov. Gavin Newsom signed a paid family leave bill on Sept. 30, 2022. Photo by Fred Greaves for CalMatters

Let’s take a closer look at Newsom’s bill signings and vetoes: Before the legislative session ended in August, state lawmakers sent Newsom 1,166 bills, of which he signed 997 and vetoed 169, according to his office. That makes for a veto rate of 14.5%, slightly lower than the 16.5% he notched in 2019, his first year in office, but higher than in the pandemic-impacted years of 2020 and 2021, when he vetoed 13% and 7.9% of bills, respectively, according to veteran Sacramento lobbyist Chris Micheli. That’s more or less in line with Newsom’s predecessor, fellow Democrat Jerry Brown, who vetoed between 10% and 15% of bills that reached his desk during his second eight-year term as governor, according to Micheli.

Here are the outcomes of some key bills included in the six batches on which Newsom took action Friday:

  • A bill to make it easier for low-income Californians to take paid family leave to care for a new baby or sick family member. The law will, starting in 2025, allow lower-income workers to recoup 90% of their wages while on leave and all other workers to receive 70%. Larger payroll tax contributions from higher earners will pay for the expanded benefits, CalMatters’ Jeanne Kuang reports.
  • A bill to make it harder for prosecutors to include rap lyrics as evidence in criminal cases. “The whole music industry uses violence in their songs, you know? But my son is not violent. Those lyrics don’t portray who he is,” Denise Holdman told CalMatters’ Nigel Duara. Holdman’s son, Gary Bryant Jr., was convicted with first-degree murder and sentenced to life in prison in a case that cited his rap lyrics as evidence of his “criminal mindset.” Bryant is set to have a hearing for a new trial.
  • A bill to limit law enforcement officers’ ability to stop a pedestrian for jaywalking, permitting it only when “a reasonably careful person would realize there is an immediate danger of a collision.”
  • A bill to make it easier for the Medical Board of California to punish doctors who deliberately spread false information about COVID-19, vaccines and treatments by classifying disinformation as “unprofessional conduct.” Newsom noted in a signing statement that the “narrowly tailored” law “does not apply to any speech outside of discussions directly related to COVID-19 treatment within a direct physician patient relationship.” He added that he’s “concerned about the chilling effect other potential laws may have on physicians and surgeons who need to be able to effectively talk to their patients about the risks and benefits of treatments for a disease that appeared in just the last few years.”
  • A bill to limit conservatorships following pop star Britney Spears’ high-profile lawsuit to emerge from the legal arrangement that for years governed nearly every aspect of her life.
  • A bill to limit remedial courses at community colleges by ensuring more students enroll in classes required to transfer to a UC or Cal State campus. The new law comes as UC prepares this spring to launch a dual-admission pilot program in which high school seniors rejected from the UC can enroll at a California community college with a conditional offer of admission to one of six UC campuses, Megan Tagami reports for CalMatters’ College Journalism Network. “It really creates this incentive for students to be like, ‘I’m not getting rejected because I’m not good enough for the school, I’m being deferred to admission later,’” said Abeeha Hussain, a fourth-year UCLA student and the transfer student affairs officer for the UC Student Association. “‘Of course I’ll go to my community college if it means that I’ll eventually get to go to the UC of my dreams.’” 

2 Inside the Catholic Church’s campaign to defeat abortion measure

The Cathedral of the Blessed Sacrament in Sacramento on Sept. 12, 2022. Photo by Rahul Lal, CalMatters
The Cathedral of the Blessed Sacrament in Sacramento on Sept. 12, 2022. Photo by Rahul Lal, CalMatters

No later than one week from today, county elections offices will begin mailing ballots for the Nov. 8 general election to every active, registered California voter — increasing pressure on candidates and initiative campaigns to get their message in front of voters as soon as possible. Newsom’s reelection campaign recently contributed nearly $1 million to the campaign supporting Proposition 1, which would enshrine the right to abortion and contraception in the California Constitution. That’s nearly as much as the total raised to date by the opposition campaign, which faces an uphill battle in a state where voters consistently express support for abortion rights.

  • Another challenging statistic: As of Sept. 9, about 47% of California’s nearly 22 million registered voters — representing 81.4% of eligible voters — were Democrats, compared to 24% Republican and 23% no party preference, according to a Friday report from Secretary of State Shirley Weber. At the same point ahead of the 2018 gubernatorial general election, less than 44% of registered voters were Democrats, compared to nearly 25% Republican and 27% no party preference.

Given these stark figures, the fate of the long-shot campaign to defeat Prop. 1 may largely depend on the effectiveness of strategies stemming from the Catholic Church. Over the summer, the church started training clergy and parishioners, registering voters and developing educational resources about Prop. 1, which it says would usher in the “most egregious expansion of abortion this country has ever seen” by legalizing the procedure up until the moment of birth, CalMatters’ Alexei Koseff reports. The Yes on 1 campaign describes that characterization as “misinformation and fear-mongering.”

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3 Big money enters speakership fight

From left, Democratic Assemblyman Robert Rivas and Speaker of the Assembly Anthony Rendon. Photos by Rich Pedroncelli/AP Photo and Miguel Gutierrez Jr./CalMatters
From left, Democratic Assemblymember Robert Rivas and Assembly Speaker Anthony Rendon. Photos by Rich Pedroncelli/AP Photo and Miguel Gutierrez Jr./CalMatters

From CalMatters political reporter Ben Christopher: The money is really starting to flow. Last week, a political action committee set up to support Salinas Democratic Assemblymember Robert Rivas’ bid to replace fellow Democrat Anthony Rendon as Speaker of the Assembly started throwing money around the state.

The Democratic Leadership Coalition PAC spent more than $450,000 on campaign mailers to support 13 Democratic candidates for Assembly, with more funds on the way, said spokesperson Matthew Herdman. 

  • Herdman: “We’re working hard to expand the Democratic majority and ensure that Rob Rivas is the next Assembly speaker.” 

After Rivas’ unsuccessful May attempt to take Rendon’s job, the speaker issued a statement saying only that Rivas had secured “the support of a majority of the current Democratic Caucus” to succeed him at some point. 

Emphasis on the “current” Democratic caucus. After the Nov. 8 election, there could be as many as 20 new Assembly Democrats — a potentially decisive bloc. So, as part of the continuing fight over the speakership crown, backers of Rivas and Rendon have been courting and cajoling potential members of the Democratic caucus who will take office in December.  

The PAC’s beneficiaries include Esmerelda Soria of Fresno and Christy Holstege of Palm Springs, who are both facing intensely competitive races for open seats. 

But most of the candidates on the PAC’s list aren’t likely to need the extra help. They include David Alvarez in San Diego and Diane Papan in San Mateo, whose fellow Democratic opponents ended their campaigns. Also on the list are Dawn Addis in San Luis Obispo and Avaleno Valencia in Anaheim, who are facing Republican opponents in overwhelmingly Democratic districts.

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According to campaign finance filings, all of the PAC’s money came from 17 current or departing members of the Assembly who supported Rivas’ speakership bid. The top contributors are Rivas’ own campaign, along with Democratic Assemblymembers Cecilia Aguiar-Curry of Woodland and Jim Wood of Santa Rosa.

Bill Wong, a political consultant who formerly worked for Rendon, said the Democratic caucus would be better served by spending money to support candidates who really need it.

  • Wong: “We’re sacrificing supporting at-risk incumbents for what is, I would say, blatantly a power play.”

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