Still waiting on a California budget deal

Your guide to California policy and politics
Lynn La BY Lynn La June 26, 2023
Presented by Dairy Cares, Southern California Gas Company, Climate-Smart Agricultural Partnership and Politifest 2023

Still waiting on a California budget deal

Legislators, advocates, policy nerds and reporters (including my CalMatters colleague Sameea Kamal) waited all weekend, but the big announcement of a budget deal between Gov. Gavin Newsom and legislative leaders never came.

Instead, with time running short, bills were put in print that reflect some of the negotiations, even without an overall agreement. Leaders in the Assembly and Senate had their own priorities, which they combined into a budget the Legislature passed on June 15. (A reminder of where we are in the sometimes convoluted budget timeline, leading up to the start of the new fiscal year on July 1.)

These measures, which will be voted on this week in addition to the main budget agreement, include several significant pacts:

  • In Hollywood, studios executives and labor unions collaborated to ensure that a possible five-year extension on tax credits for film and television studios would include a new provision that would refund studios in cash if their tax credit is bigger than their tax bills, reports the Los Angeles Times. The long sought-after tax credit will benefit both big and small studios as well as production staff, as it requires studios receiving the credit to abide by new set safety rules. They must also meet certain diversity targets to receive a portion of their tax credits.
  • In health care, hospitals, labor groups and insurance providers have thrown their support behind a measure that would boost reimbursements for certain Medi-Cal providers — particularly providers in primary care, maternity care and non-specialty mental health care — by using funds from a bigger tax on health insurance plans. According to Politico, the proposal would net about $35 billion for the state by 2026 (this includes additional federal funding), and much of it will go toward the state’s public health care system. The money would be the largest investment in Medi-Cal ever.

It appears that the hold-up to the overall deal remains Newsom’s demand that it include his proposal to overhaul the permitting process for major infrastructure projects — including the highly controversial Delta tunnel project — by changing the California Environmental Quality Act. The governor wants to streamline the permitting process among federal, state and local governments; limit the time courts have to hear challenges on environmental reviews; and increase funding to state agencies.

But several lawmakers, specifically those with constituents who live around the Delta, have urged delaying the plan while they work out disagreements over the proposed $16 billion tunnel project that would send water from the Sacramento-San Joaquin Delta south to 27 million people and 750,000 acres of farmland. They argue that Newsom’s bill package would result in unchecked development of the tunnel — and disrupt residents’ way of life and threaten the environment.


CalMatters is growing: Our nonprofit newsroom is adding staffers to fulfill our mission to inform Californians. Read more about the new folks from our engagement team.

CalMatters for Learning: From our engagement team: lesson-plan-ready versions of our explainers on housing and homelessness, electric vehicles, wage theft, water and state government — all especially made for teachers, libraries and community groups, as part of the CalMatters for Learning initiative.


1 The end of Roe, one year later

A crowd of people gathered at City Hall in Downtown Los Angeles as part of a nationwide effort in support of abortion rights on May 14, 2022. Photo by Raquel Natalicchio for CalMatters
A crowd of people gathered for an abortion rights event at City Hall in downtown Los Angeles on May 14, 2022. Photo by Raquel Natalicchio for CalMatters

Saturday marked the one-year anniversary of the Dobbs decision — a U.S. Supreme Court ruling that essentially overturned Roe v. Wade and returned the power to regulate any aspect of abortion not protected by federal law to individual states.

So what has happened to reproductive rights in California since then?

As CalMatters’ health reporter Kristen Hwang wrote, Newsom and Democratic lawmakers passed a litany of bills in 2022 to fortify the state’s commitment to protecting abortion rights. The bills strengthened privacy protections, protected providers and patients from being sued or prosecuted, funded procedures and travel costs for low-income individuals seeking abortions and shored up the state’s network of abortion clinics. 

Newsom also signed an executive order that banned state law enforcement from cooperating with out-of-state agencies investigating individuals who traveled to California to get an abortion.

In November, California residents voted to pass Proposition 1 — an amendment, placed on the ballot by Democrats in the Legislature, that enshrined the right to abortion and contraception in the state constitution.

But it hasn’t always been smooth sailing. After proclaiming that California will not be “doing business with Walgreens” in March because of its decision to not distribute abortion pills in states where it is illegal to do so, Newsom’s quarrel with the retail giant ultimately fizzled out a month later.

Two bills regarding crisis pregnancy centers also did not make it out of the suspense file this session: Assembly Bill 315 would have stopped the centers from advertising misleading information, and AB 710 would have required the state Public Health Department to conduct a public awareness campaign about them. (For more on this issue, watch a new TikTok video from our engagement team.)

It’s also debatable whether putting Prop. 1 on the ballot actually drove voters to the polls as much as Democrats hoped. According to the Public Policy Institute of California, turnout for the 2022 election decreased more among women than among men compared to the 2020 presidential election. It also declined more among registered Democrats than Republicans.

Regardless of how Californians view abortion rights, Democratic officials, including Senate President Pro Tem Toni Atkins from San Diego, current Assembly Speaker Anthony Rendon from Lakewood and incoming Assembly Speaker Robert Rivas from Salinas and Attorney General Rob Bonta all acknowledged Saturday’s anniversary.

Newsom released a statement and video reiterating the state’s commitment to abortion protection since the Dobbs decision. 

  • Newsom: “It goes without saying, courts should not be deciding what women do with their bodies, with their futures, or with their families. The Supreme Court did its best to undo a half century of progress. But California, we will never back down.”

And for more on how California became a national leader in abortion access, read our explainer.

2 More cash for transgender prisoners?

A guard tower at Kern Valley State Prison on Nov. 15, 2022. Photo by Larry Valenzuela, CalMatters/CatchLight Local
A guard tower at Kern Valley State Prison on Nov. 15, 2022. Photo by Larry Valenzuela, CalMatters/CatchLight Local

Taxpayer spending on prisons and gender-affirming health care — these are two polarizing issues that are coming to head as advocates for transgender inmates are pushing the state to move faster in providing services to eligible prisoners.

According to CalMatters’ justice intern Anabel Sosa, California provides care for transgender prisoners in two notable ways: It grants gender-affirmation surgery and its prisons are required to ask gender-specific questions to determine whether inmates should be housed in facilities for men or for women.

Since passing the first of these two requirements in 2017, the California Department of Corrections and Rehabilitation has reported an annual increase in the number of transgender inmates. Some quick stats:

  • In 2022, there were 1,617 transgender, intersex and nonbinary prisoners — a 234% increase since 2017.
  • From 2017 to December 2022, 20 inmates received gender-affirming surgery. Another 150 surgeries had been approved, but not completed. 
  • In the 2021-22 budget year, 270 inmates requested gender-affirming surgeries — up from 99 the previous year. 
  • Of 364 housing transfer requests the department received since 2021, only 35 were approved.

While the state estimates 348 inmates will request gender-affirming treatment this year and 462 the next, the department says its staff can only evaluate no more than three requests each week. For the 2023-24 budget, the department is also seeking a $2.2 million boost in funding to provide the mandated care. It is part of the draft deal published by the Assembly.

  • Trisha Wallis, a department senior psychologist during a March budget committee hearing: “The vulnerable, transgender and transgender diverse population in CDCR has grown and continues to grow and there are enduring needs that need to be met.”

Conservative-leaning and some feminist groups are pushing back, however. In 2021, the Women’s Liberation Front sued California to stall certain transfers to a women’s state prison. It argued that “men and women are actually, materially, immutably different” and that the transfers put female inmates at greater risk of violence and sexual assault. 

The lawsuit is ongoing. Meanwhile, a handful of other states have followed suit to adopt gender-affirming policies for prisoners. In Massachusetts and Connecticut, prisoners are allowed to transfer to facilities according to their chosen gender identity. And in New Jersey, New York City and Rhode Island, inmates are required to be housed at facilities appropriate to their gender.

3 Why Californians are leaving

A moving truck in Sacramento on June 23, 2023. Photo by Miguel Gutierrez Jr., CalMatters
A moving truck in Sacramento on June 23, 2023. Photo by Miguel Gutierrez Jr., CalMatters

The hysterical headlines about a mass exodus from California are overblown.

Still, it’s a fact that California’s population is declining for the first time in its 173-year history — for the third consecutive year in 2022. (Because of slower growth, the state lost one of its 53 U.S. House seats after the 2020 Census.)

In his tit-for-tat with Gov. Newsom, Florida Gov. Ron DeSantis has harped on Californians fleeing for his and other states, even filming a campaign spot in San Francisco last week to say that due to “leftist policies” it’s “no wonder” why people in the city have moved to Florida.

Survey after survey has shown that the cost of living, especially housing, is driving people away. 

A new poll takes a broader look at what’s pushing Californians out — and what draws them to stay. 

On the one hand, more than 40% of respondents said they’re thinking about leaving, citing high living costs and, to a lesser extent, political views, according to the survey commissioned by several nonprofits and the Los Angeles Times.

But on the other hand, about 70% of respondents said they’re happy here, mentioning California’s diversity, economic opportunity and lifestyle. Not surprisingly, Democrats (38%) are far more likely than Republicans (12%) to say they’re very satisfied.

Among Black respondents, higher percentages cited economic hardship as a reason to consider leaving — and feeling accepted as a reason to stay.

But pocketbook concerns have heightened in general: About 46% say they struggle with unexpected expenses, an increase of 10 percentage points from 2020.

  • Ben Winston, the pollster, to the Los Angeles Times: “Even if folks make the same income as they did even just three years ago, their sense of financial security has fallen dramatically.”

CalMatters Commentary

CalMatters columnist Dan Walters: A proposed constitutional amendment to declare a “fundamental human right to housing” is virtue signaling that could backfire on California.

California should slash oil and gas subsidies, not spending for the climate change transition, writes Laura Deehan, state director of Environment California.


Other things worth your time

Some stories may require a subscription to read

CA attorneys must now report other attorneys’ misconduct // San Francisco Chronicle

LA city attorney tries to weaken state public records law // Los Angeles Times

California Supreme Court broadens right to sue police // San Francisco Chronicle

Inside the Black church fighting for reparations from CA // The Washington Post

US Navy accused of cover-up over radioactive waste at CA shipyard // The Guardian

Newsom’s pestering of DeSantis seeps into presidential race // Los Angeles Times

Fox News’ misinformation centered in campaign to kill CA bill // San Francisco Chronicle

ChatGPT creator tells SF crowd he can’t be trusted // The San Francisco Standard

Qualcomm to lay off hundreds of workers at its San Diego headquarters // KPBS

Is pickleball the answer to SF’s retail vacancy crisis? // The San Francisco Standard

Napa Valley wine grapes thrive after record rainfall // AP News

Opinion: California must prepare for a recession // The Orange County Register

See you tomorrow


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