Newsom may declare a budget emergency this year

Gov. Gavin Newsom’s cool demeanor during his annual budget presentation Wednesday in Sacramento belied a significant fact:

California’s budget shortfall is so significant — and the appetite to reduce spending is so small — that the Democratic governor is considering declaring a budget emergency this year that would allow him to tap into the rainy day fund voters created in 2014.

The only other time California did that was during the peak of the COVID-19 emergency in 2020 when unemployment skyrocketed and the world was dealing with an unusual level of economic turbulence.

That Newsom would do it now, as unemployment is low and wages are rising in California, is an indication both of the troubled state of California’s budget and his optimism about the future.

“This is a story of correction and normalcy, and one that we in some respects anticipated — the acuity perhaps not — and one we’re certainly prepared to work through,” Newsom said to reporters and officials gathered in a state government auditorium for his presentation.

Newsom’s $291.5-billion budget proposal for fiscal year 2024-25 is about $20 billion less than California’s budget the year before. But it’s about $77 billion more than the first budget Newsom signed as governor in 2019, a reflection of his progressive agenda to expand services, including healthcare and preschool. Hours before lawmakers heard a bill to levy a new tax on wealthy Californians, the governor insisted a tax hike is not necessary to carry out his vision for the state.

For more on Newsom’s budget plan, check out these articles:

I’m Laurel Rosenhall, The Times’ Sacramento bureau chief, bringing you the week’s biggest news in California politics.

Lawmaker divests from Big Oil after Times investigation

Last year my colleagues spent months pouring over California lawmakers’ financial disclosures to see how their stock portfolios line up with their actions in the Legislature. They found some surprises: environmentalists with stock in oil companies; a vocal social media critic invested in the owners of Instagram and YouTube; and union-backed Democrats making money off the companies whose worker policies they’ve criticized.

Days after the article was published, Mackenzie Mays reports, Assemblymember Gail Pellerin (D-Santa Cruz) sold her stock in Exxon Mobil, Shell, Chevron, and Dow Chemical, as well as the mining company Freeport-McMoRan, according to a financial disclosure form filed with the Fair Political Practices Commission.

When she was elected in 2022, Pellerin was endorsed by environmental organizations such as the Sierra Club and heralded for her environmental goals, including a commitment to end California’s dependence on fossil fuels. She has supported environmental legislation since being elected to the Assembly, including a bill to increase penalties against oil and gas companies that violate regulations.

But The Times analysis of state lawmakers’ financial interests published last month revealed that among the $2 million Pellerin had invested in stocks were holdings in companies that are at odds with her political values.

“My voting record and my 36 years serving my community clearly represent my values. Since the death of my husband five years ago, my financial advisor has worked to align my investments to reflect these values, evident in my latest disclosures,” Pellerin said in a statement this week. “The L.A. Times inquiry was timely as we had been divesting since March of last year, according to fiduciary planning.”

Read the full article here: Environmentalist divests from Big Oil after Times investigation of California lawmakers’ stocks

George Skelton at the Sacramento Press Club

After writing last week about George Skelton’s 50th anniversary with the L.A. Times, I heard from many newsletter readers who are excited about his upcoming appearance at the Sacramento Press Club. The event will be on Jan. 23 at noon. Tickets are available here. Hope you can make it!

Newsom wants to see if AI can solve traffic

Being stuck in traffic is a familiar problem for many Californians, but state officials want to harness the power of artificial intelligence to discover new solutions, writes Times tech policy reporter Queenie Wong.

The California Department of Transportation is asking technology companies to propose generative AI tools that could help California reduce traffic and make roads safer, especially for pedestrians, cyclists and scooter riders. The request shows how California is trying to tap into AI to improve government services at a time when lawmakers seek to safeguard against the technology’s potential risks.

The state’s plan to potentially use artificial intelligence to help alleviate traffic jams stems from an executive order that Gov. Gavin Newsom signed in September that included a report outlining the benefits and risks of using AI in state government.

Read the full article here: California wants to reduce traffic. The Newsom administration thinks AI can help

Keeping up with California politics

Inside Kamala Harris and Doug Emhoff’s L.A.
The Brentwood home, largely concealed by its verdant surroundings, has become a sanctuary for one of the world’s most visible figures. As vice president, Harris is briefed multiple times a day, and reporters often follow her from event to event. But at home, Harris can avoid the scrutiny to recharge, cooking and chatting with her family as they watch from the kitchen table.

What rising immigration really means for California’s economy
Even as busloads of migrants sent north by border-state officials have strained cities and stirred new political firestorms in Washington, fresh data are driving home the increasingly crucial role that immigrants will play for U.S. businesses and the economy at large, especially in California.

Burger chain manager fined for using ‘straw donors’ to back ex-Sheriff Alex Villanueva’s 2018 campaign
A burger chain manager accused of using “straw donors” to repeatedly contribute to former Los Angeles County Sheriff Alex Villanueva’s 2018 bid for office has agreed to pay a $50,000 fine for campaign money laundering, according to the California Fair Political Practices Commission.

California moves closer to becoming first state to ban tackle football for kids under 12
The legislation proposed by Assemblyman Kevin McCarty (D-Sacramento) is prompted by the growing concerns over concussions and other brain trauma.

DWP board president is out amid ethics questions, power struggle at utility
Political veteran Cynthia McClain-Hill announced Tuesday that she is stepping down as president of the Los Angeles Board of Water and Power Commissioners following ethics-related complaints involving her and growing tensions over the utility’s leadership.