A rebounding economy has produced a rise in government revenues but done little to quell the political and policy turmoil that has roiled the legislature and statehouse in recent years, as Democrats seeking to restore spending to programs that had been reduced or eliminated in the aftermath of the Great Recession locked horns with a popular governor pressing for fiscal restraint and singing the praises of cash reserves. Some bills were passed and signed into law, others are wending their way through the legislative process, and still others, stymied by governmental gridlock or on notice of intent to veto, will be put to the voters in November. The following summarizes key policies that were active considered:
With revenues on the rise, a popular governor championing fiscal restraint and large reserves and Democrats calling for increased spending on programs that suffered during the economic downturn, California is experiencing another year of political and policy turmoil. Add to the mix a presidential election, 100 of the 120 members of the state legislature up for election, and new leadership for an increasingly powerful Democratic Caucus that is attempting to test the limits of its influence, and the outcome of this year’s legislative session is harder to predict than ever.
Issues that have proven too controversial for the legislature to resolve will be decided by the voters this fall. So far, eight statewide propositions have been certified for the November 8ballot and one measure is slated for a June 7 vote.
However, as of February 23, 2016, more than 100 initiatives had been filed with the California Secretary of State and there remains the very real possibility that 20 or more of them could ultimately be put to the voters in November, on subjects including:
- Income taxes
- Cigarette/vaping taxes
- Legalization of recreational marijuana
- Gun control
Here is a summary of key policies that were active consideration:
Legislature, Governor approve $15 minimum wage by 2020
An initiative was approved for the November ballot that would raise the state’s minimum wage to $15 per hour by 2021, but the legislature and the Governor preempted the measure by approving legislation to hit the same $15 per hour target by 2020, which will make California the state with the highest minimum wage in the nation. The legislature rallied around a legislative fix knowing the difficulty it would have altering anything passed via the initiative process.
Legislature has gun restrictions in its sights
California has some of the nation’s toughest gun restrictions, including a 1999 ban on assault weapons, such as the AK-47, and on the importation, manufacture and sale of large-capacity ammunition magazines. With a recent report showing a national average of 92 gun deaths per day and four dozen school shootings in 2015 alone, the state legislature continues to stiffen regulations concerning the use of, and access to, firearms. Currently active are bills that would expand the classification of assault weapons, ban the use of a “bullet button” and the sale of weapons to people on the federal government’s “no fly” list, and require background checks to purchase ammunition.
Medi-Cal managed care insurers support new tax structure
The state’s health care delivery system is receiving special attention from the Governor, who called a special session to work on a key policy concern, specifically a tax on the state’s Medi-Cal managed care insurers that new federal guidelines had made “likely impermissible.” The federal government gave the state until August 2016 to revise its tax structure to either comply with the new guidelines or jeopardize more than $1 billion in federal Medicaid dollars. Last-minute negotiations to resolve the issue resulted in a replacement for the tax that had the support of most of the state’s health plans.
Funding transportation infrastructure a continuing challenge
California’s transportation infrastructure is in crisis. The state needs to invest more in its road systems but current financing methods are insufficient given the magnitude of work that needs to be undertaken. An assessment by the California Transportation Commission (CTC) in 2011 concluded that maintenance and repair of the state’s highway system are underfunded by more than $5 billion a year, and local street repair is underfunded by an additional $1.8 billion a year. A 2013 report by the Reason Foundation ranked the state 45th in overall highway performance and 46th in urban congestion. Policy debates on the most effective way to adequately fund the state’s transportation infrastructure continue. Ideas range from more of the same (e.g., increased gas taxes, additional bonds) to new ideas untested at scale (e.g., mileage-based user fees), each concept differing as to funding mechanism, amount of fiscal burden and political viability.
Vaping and smoking draws legislative scrutiny
Several measures were introduced addressing e-cigarettes (aka vaping) and tobacco use. In California, most tobacco restrictions have already been extended to vaping but additional legislation addressing tobacco and/or vaping that has been active in the legislature includes tax increases, raising the legal smoking age, expanding public places where smoking is prohibited, and eliminating smoking on community college and state university campuses.
Legalization of online poker a long shot
Legislation to legalize daily fantasy sports betting is moving through the legislature with broad support. Perhaps the fact that daily fantasy sports betting is already happening throughout the state and is arguably legal in 44 other states explains why the legislation is being moved so quickly. By contrast, online poker has been debated in the legislature for several years and 2016 has been no different, with three bills active in the process that would, in one way or another, legalize the game. None have broad support but no one’s ruling out the possibility of an agreement on this issue in the final days of session, which will be late August.
No activity on high-speed rail and water diversion projects
California’s $68 billion high-speed rail system and a $15.5 billion plan to divert water around the Delta to the south are still subjects of heated debate in Sacramento and around the state. Both are high priorities for Governor Brown that need ongoing funding—and additional legislation—if they are to become reality. As of now, however, there is no activity on either issue in the legislature.