California Government Relations Update - June 2022

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Governor Gavin Newsom, Senate President Pro Tem Toni Atkins, and Assembly Speaker Anthony Rendon revealed their joint $300 billion spending plan for the 2022-2023 fiscal year after months of debate. The relief plan includes a suspension of the diesel sales tax, which will decrease the price by 23 cents per gallon. The budget does not include a suspension of the state’s gas tax, which will increase by three cents on July 1.

The focal point of the bill is a $17 billion package that includes direct payments to an estimated 23 million Californians. Households earning up to $75,000 for individuals or $150,000 for joint filers would receive $350 per taxpayer, plus an additional $350 if they have at least one dependent. Households earning more than $75,0000 but less than $125,000 – or $250,000 for joint filers – would receive $250 per taxpayer and $250 or $200 if they have at least one dependent. The tax rebate will not be tied to vehicle ownership, as Newsom previously wanted. Lower- and middle-income taxpayers and families with children will receive more money than individuals with higher incomes. In addition, $1.1 billion will be distributed to recipients of Supplemental Social Security or CalWORKs. Californians likely won’t receive rebates until October.

Many details of the budget bill were outlined in “trailer bills” published over the weekend. These bills can include major policy changes seemingly unrelated to the budget and are drafted without public oversight. The Legislature is considering these bills in hearings that began June 27 and will likely approve many of them before leaving for summer recess on July 1.

Statewide Elections

California’s primary election was held on June 7, but ballots continue to be counted after Election Day during the canvass period. County elections officials must report final official results to the Secretary of State by July 8 and the Secretary of State will certify the results on July 15. Republican state Senator Brian Dahle will advance to a November runoff with Democratic Gov. Gavin Newsom, who held a comfortable lead in the race. San Francisco District Attorney Chesa Boudinwas recalled, succumbing to a confluence of crime concerns and massive opposition spending. His loss is a blow to the national progressive prosecution movement.

Current Attorney General Rob Bonta holds a comfortable lead in the race, with lead challenger Republican U.S. Attorney Nathan Hochmanalso advancing to the November runoff. Independent Anne Marie Schubert was unable to overcome her no party preference and did not advance. Campaigns regularly contemplate a no-party-preference option as a more viable pick, but this election demonstrated that California’s five-million-plus Republicans tend to vote the party line. 

Republican Lanhee Chenwill advance in the state’s controller race, as one of the Republican party’s most promising November prospects, and will face Democrat Malia Cohen, chairperson of the state Board of Equalization. In the U.S. Senate race, Sen. Alex Padilla and Mark Meuser, a Republican constitutional attorney,will advance to the November general and special elections.

Broadband

The California legislature has authorized the California Public Utilities Commission (CPUC) to gather internet companies’ carrier information through a few recent laws, including SB 156. The state’s mandate has sparked a standoff with internet companies over legislative orders that they share their customers’ addresses with officials. The mandate is meant to show which households don’t have internet, as officials try to provide universal broadband across the state. CPUC has been trying to persuade internet companies to share their broadband customers’ addresses and internet speeds for months; carriers declined to meet the June 1 deadline.

Internet companies have argued that providing the addresses and broadband services purchased by their customers would violate confidentiality and privacy concerns and would also jeopardize proprietary trade secrets. Some legislative members are concerned that having incomplete state broadband data could minimize the federal dollars allocated for California’s broadband expansion.

Labor

SB 1162, introduced by Sen. Monique Limón, builds on a 2020 law that requires businesses with 100 or more employees, with one based in California, to annually report the demographics of their in-state workforces across job categories and pay bands to the California Department of Fair Employment and Housing (DFEH). The proposed bill would require DFEH to expand its reporting to include the pay data of specific companies and would require employers to provide data on median and mean hourly rates paid by race, ethnicity, and gender. In addition to pay data, private companies with more than 15 employees would be required to include the pay range for a position advertised in a job posting. SB 1162 would enact the most comprehensive pay transparency law in the United States and would affect businesses headquartered inside and out of California. The proposal has cleared two Senate committee hearings and now heads to the Senate Appropriations Committee.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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