By Blake Jones and Wes Venteicher

Teamsters rally outside the state Capitol in Sacramento, Calif., on Sept. 19, 2023, urging Gov. Gavin Newsom to sign a Bill to require a safety driver in self-driving trucks. | Forest Hunt/POLITICO

BACK IN BLACK: A year of grim news for California’s budget has taken a turn in recently released revenue numbers.

But that’s unlikely to stop Gov. Gavin Newsom from citing costs to veto legislation — something he’s done in better budget years.

Tax income in August came in $1.3 billion above more pessimistic predictions for the month made by the state in May, the Department of Finance announced yesterday. That’s a rebound from July, when revenue came in $1.2 billion below the state’s projections.

The upshot: California has taken in $75 million more than expected this fiscal year.

A big number? Not when compared to the $27 billion deficit that the state’s recently passed budget sought to alleviate. Newsom’s Department of Finance is still anticipating that it will have to take further action next year to close shortfalls in the state’s multi-year budget. And a spokesperson in an interview did not sound eager to spend big after a one-month turnaround.

“Before everybody busts out their credit cards, take a look at last month's numbers, July’s numbers,” said Department of Finance spokesperson H.D. Palmer. 

Much of the state’s balance will depend on October. Most California tax filers don’t have to pay until then after winter storms led the IRS to delay deadlines across most of the state.

And those numbers won’t come out until November, weeks after the governor must sign or veto bills passed this year – including legislation that wasn’t accounted for in the budget, like a high-profile bill that would allow striking workers to access unemployment benefits.

Newsom hasn’t shied away from vetoing bills citing finances. Just look at last summer, when the state was riding high on a surplus that neared $100 billion at its peak. Even then, the governor rejected several proposals over their unknown or unaccounted for price tags – pointing to signs of an economic downturn.

HAPPY TUESDAY AFTERNOON! Welcome to California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check of California politics and a look at what our policy reporters are watching. Got tips or suggestions? Shoot an email to [email protected] or send a shout on Twitter. DMs are open!

SACRAMENTO SPLINTERS — The city and county’s bickering over homelessness escalated to court action today as Sacramento County District Attorney Thien Ho filed a civil suit against the City of Sacramento, alleging it created a public safety crisis by not enforcing its own homeless ordinances. The new rules in question are supposed to prevent camping in public spaces and provide shelter for people who don’t have homes.

The aggressive move from Ho mirrors tensions in cities across California, where local officials are struggling to address their homeless populations amid increasing constituent complaints.

Sacramento Mayor Darrell Steinberg, who has been working with Newsom on statewide programs to address homelessness this year, called the lawsuit “performative.”

“The Council has endorsed and is pressing for strong enforcement of our codes and the law,” he said in a statement. “But the DA's lawsuit will not clear a single sidewalk nor get a single person off the streets.”

EMISSIONS HICCUP: The most contentious climate legislation of the year in California looked like it was wrapped up on Sunday, when Newsom said he would sign a measure requiring large corporations to disclose their emissions. But a statement from the Chamber of Commerce saying it plans to try to “clean up” the bill next year sparked fresh concerns from state Sen. Scott Wiener (D-San Francisco), the author of Senate Bill 253.

“I’m confident that the Chamber of Commerce by ‘clean up’ means gutting the bill, which they were trying to do all year,” Wiener told POLITICO on Tuesday at the Climate Week conference in New York.

Wiener said he’s not sure exactly what the governor has in mind but that the changes would come through legislation to be hashed out next year after his bill is signed this year. He said industry groups are likely looking to remove or make optional the requirement that companies disclose scope 3 emissions — emissions from furthest down the supply chain but also that tend to be highest. He said that change would make the bill “useless.”

DRIVING OPPOSITION: Teamsters union members descended on Sacramento today urging Newsom to change his mind about self-driving trucks.

The influential union has been pushing to ensure there is a trained human driver in every self-driving truck over 10,000 pounds, and secured near-universal support in the Legislature for a bill that would have done that. But Newsom’s administration has forcefully opposed Assembly Bill 316, arguing in a letter to lawmakers the state “cannot risk stifling innovation at this critical juncture.”

On hand at this morning’s rally outside the Capitol were bill author Cecilia Aguiar-Curry (D-Winters) and coauthor Tom Lackey (R-Palmdale). Lackey said he worried the governor was distracted by national politics, but that he hoped Newsom could be swayed to sign the bill.

Teamsters General President Sean O’Brien told the crowd that Newsom “needs to understand not only California is watching this, but we’ve got 1.5 million members nationwide that are willing to stand up.”

CRISIS CALL: California’s federal officials are joining Newsom in urging President Biden to declare Tropical Storm Hilary a major disaster. Today the bipartisan 54-member Congressional delegation, led by Sen. Alex Padilla, Sen. Dianne Feinstein, Rep. Ken Calvert and Rep. Zoe Lofgren, penned a letter to the president making this request so nine hard-hit California counties – Imperial, Inyo, Kern, Los Angeles, Riverside, San Bernardino, San Diego, Siskiyou, and Ventura – could obtain additional federal coordination and public assistance.

– SHAKING UP SAN FRANCISCO: Former state Sen. Quentin Kopp is proposing a March 2024 ballot measure that would shake up San Francisco politics by allowing “at large” supervisors by district. All city voters would vote for the 11 members of the board of supervisors, though each would still represent a specific district – a hybrid system intended to stay within the bounds of a recent California Supreme Court decision. (The San Francisco Standard)

– UTOPIA, DEFINED: Jan Sramek, the former Goldman Sachs trader leading the effort to develop California Forever in rolling farmland outside Travis Air Force Base in Solano County, resists calling the project a “utopia.” He pushed back on the word in an interview. “If it's the case that a place where everyday Californians can afford to live and their kids can walk to school and they can walk to a grocery store and they can have a good paying local job and they don't have to spend an hour and a half every day and commute each way is a utopia, then that's a very sad day in California.” (NPR)

– THE PERKS OF BEING ELON MUSK: A federal investigation of perks that Elon Musk may have illegally obtained from Tesla and other entities has reportedly expanded to go back to 2017. (The Wall Street Journal)

Follow us on Twitter

Subscribe to the POLITICO Playbook family

Playbook  |  Playbook PM  |  California Playbook  |  Florida Playbook  |  Illinois Playbook  |  Massachusetts Playbook  |  New Jersey Playbook  |  New York Playbook  |  Ottawa Playbook  |  Brussels Playbook  |  London Playbook

View all our political and policy newsletters

Follow us

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings

This email was sent to [email protected] by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA

Please click here and follow the steps to unsubscribe.