By Dustin Gardiner and Lara Korte

California Gov. Gavin Newsom signs off on two proposals in Los Angeles, Thursday, Oct. 12, 2023, to transform the state's mental health system. | AP

THE BUZZ: POWER OF THE PEN — Gov. Gavin Newsom wrapped up bill-signing season, delivering his final action on proposed laws the Legislature passed in 2023.

This year’s vetoes were especially telling as Newsom leans closer to the political center in California — a shift that comes as he’s seen as a future presidential contender. Newsom vetoed several high-profile progressive bills related to criminal justice and labor unions. At the same time, he delivered labor several major wins.

Four key lessons we learned from Newsom’s bill bottleneck:

1. He’s a labor ally — conditionally: Newsom delivered another major win for labor unions Friday as he signed a bill to raise the minimum wage for health care workers to $25 per hour. That measure by María Elena Durazo was the last big union-related bill on his desk — and the decision came down to the wire.

Labor unions — especially SEIU California — ran the board at the Capitol this session. Newsom also signed bills to raise the minimum wage for fast-food workers and to allow legislative staffers to unionize.

But that’s only part of the story. Newsom also tested his alliance with union leaders in a pointed way. He vetoed top labor priorities, including unemployment benefits for striking workers, and legislation that would require human safety drivers on autonomous semi-trucks. He also rejected a bill to set workplace safety protections for domestic workers, such as nannies and maids.

2. He’s tightening the purse strings: The governor signaled in one veto message after another that he’s focused on fiscal responsibility. Newsom vetoed many bills simply because lawmakers sought funding that wasn’t included in the budget they adopted this past summer. An analysis of Newsom’s veto messages by our POLITICO colleague Eric He found that cost was Newsom’s most common rationale, cited in 64 of his 156 vetoes. The governor ultimately signed 890 bills and vetoed 156, a veto rate of nearly 15 percent , according to an analysis from veteran lobbyist Chris Micheli.

Newsom has been cautious to avoid new spending amid an uncertain revenue outlook, largely due to a sluggish stock market.

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3. He’s moderating on criminal justice: Newsom’s veto of a bill that would decriminalize some psychedelics, including magic mushrooms, was a stinging blow to justice-reform advocates. The governor wrote in his veto message that research has shown psychedelic medicines can be effective in treating PTSD, depression and other mental illnesses. But he said state Sen. Scott Wiener’s bill didn’t set enough treatment guardrails around dosing and underlying psychoses. He also recently suggested that the issue concerns him as a parent.

The governor did say he would sign a decriminalization bill next year, provided it includes those checks. But it’s hard not to view his veto as another instance of Newsom moving closer to the political center. He also vetoed Assemblymember Matt Haney’s bill that would have allowed for Amsterdam-style “cannabis cafes” that allow on-site consumption. Newsom said that measure could hamper the state’s smoke-free workplace rules.

4. He’s a YIMBY, even if he doesn’t engage: The governor has rarely used his political clout to lobby the Legislature over bills that would promote the construction of housing. Nevertheless, Newsom signed every major housing bill that landed on his desk this session. It was a banner year for the YIMBY (Yes in My Back Yard) movement, as he inked bills that will streamline permit approvals in cities that aren’t meeting their state-mandated housing goals and to make it easier to sell or rent backyard cottages. Bottom line: Newsom seems willing to sign nearly all pro-housing bills. But the heavy lifting to broker compromises with unions, environmentalists and others? That’s on lawmakers.

GOOD MORNING. Happy Monday. Thanks for waking up with Playbook. We hope you had a restful weekend. Our team gathered for a lovely brunch in the East Bay.

PLAYBOOK TIP LINE — What surprised you the most about Newsom’s bill vetoes this session? Give us a ring or drop us a line.

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Or drop us a line at [email protected] and [email protected], or on Twitter —@DustinGardiner and @Lara_Korte 

WHERE’S GAVIN? Nothing official announced.

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U.S. Rep. Adam Schiff speaks at AFSCME California’s forum for Senate candidates in San Diego over the weekend. | Courtesy of AFSCME

THE UNION LABEL  — The rhetorical contest to be the most union-friendly Democratic candidate running for California’s Senate seat has quickly escalated.

U.S. Reps. Adam Schiff, Katie Porter and Barbara Lee all gathered in San Diego over the weekend to make their pitch to members of AFSCME California, one of the largest unions for state, county and municipal workers in the country.

Porter sought to distinguish herself from the pack by portraying Schiff and Lee as beholden to special interests. “I am the only person that you're going to hear from today who has never taken corporate PAC money,” she said. “Corporate profits are at a 70-year high.”

But Schiff was more focused on his record, bragging that he is one of the most labor-friendly House members. He also waxed philosophical about the broader challenges facing working-class people in America today. Schiff said the problem is wage disparities, not a lack of worker productivity.

“There is no shortage of people who are willing to serve the public,” he said. “There’s a shortage of people willing to do the work for poverty wages.”

Lee, meanwhile, also touted her long record as a labor champion. She expressed her support for campaigns to unionize more private-sector workers in the state, saying, “If we unionize California, we’ll be able to unionize the rest of the country.”

Sen. Laphonza Butler, who Newsom appointed to replace the late Sen. Dianne Feinstein, wasn’t at the forum and hasn’t announced whether she plans to run for a full term. Her decision could be delayed for at least several more days because Butler tweeted Sunday that she had tested positive for Covid-19.

LEE’S FUNDRAISING LAG — Lee had a dismal fundraising showing in the third quarter. She raised a little more than $1 million, bringing her total cash on hand to $1.3 million — a thin warchest in a highly-competitive statewide race.

Schiff ended the quarter with $32 million in the bank, and Porter had $12 million cash on hand.

Rep. Kevin McCarthy (R-Calif.) | Francis Chung/POLITICO

SPEAKER NO MORE — Kevin McCarthy’s ouster from House leadership likely hampers his ability to wield speakership-level dollars for toss-up seats — but California Republicans who represent contentious swing-districts insist they aren’t concerned.

The Bakersfield Republican raised $15.3 million in the third quarter — a personal record — and $78 million this cycle. His fundraising capabilities played a vital role in House Republicans winning a slim majority in 2022 by maintaining seats in California and securing the speakership in January. He especially helped California Reps. Mike Garcia, Michelle Steel and John Duarte, swing-district Republicans whose seats will likely be decisive in determining the majority in 2024.

Garcia, who raised $764,000 in the third quarter and entered October with $1.55 million cash on hand, said while McCarthy’s influence will diminish, he does not think it will determine the outcome of those races. He said McCarthy can prioritize supporting GOP candidates in swing races in California now that he’s not required to spread funds throughout the entire caucus.

“The donor base in California does support Kevin McCarthy,” Garcia told POLITICO. “So they also recognize that the swing seats are important, and they recognize that California is the path to the majority.”

Rep. Young Kim said McCarthy told the conference that he would continue to raise money to fight for the majority. Steel also said she is “not worried” about the collapse of his speakership affecting funding in her race.

Rep. Duarte, who raised $454,800 in the third quarter and has $1.24 million cash on hand, said McCarthy will remain relevant in campaigns. He said he assumes McCarthy will prioritize California races, though he hasn't spoken directly to him about it.

If McCarthy does follow through, it would be an unprecedented move. He’d be doing so out of party and even regional loyalty rather than an incentive to hoist himself up the leadership ladder and into the speaker’s seat — as he’d been doing for years.

— Sejal Govindarao

WHOSE PERSPECTIVE: Tensions over the Israeli-Palestinian conflict have reverberated through school systems looking to adopt new ethnic studies courses for high school students. The Santa Ana Unified school board has been especially polarized over the issue. (Los Angeles Times)

CRUISIN’ MAIN: Newsom signed a bill over the weekend that prohibits new local restrictions on lowrider cruising and custom classic car displays. Advocates say such laws are discriminatory in targeting a common Latino community pastime. (The Sacramento Bee)

ARTFUL ADVICE: A woman on a flight from Washington to San Francisco in 2015 found herself sitting next to a surprise companion: the late Sen. Feinstein. She reflected on how the late senator imparted sage wisdom, fashion pointers and even gave the woman one of her floral drawings. (San Francisco Chronicle)

WEDDING WATCH — KCRA political reporter Ashley Zavala married Adam Epstein, chief meteorologist at Fox40, on Saturday. The couple exchanged vows in Sacramento. Zavala tweeted, “Scoop: Important documents signed 10.14.2023.” Pic here

BIRTHDAYS — Ben Clark … Matthew Korpman … Marina Weiss …

(was Sunday): Haim Saban … Lionel Levine … Jose Villalvazo of Sen. Alex Padilla’s (D-Calif.) office … Alexis Krieg of the Omidyar Network … Jack Newman ... Alain Cohen …

(was Saturday): Microsoft’s Dave Leichtman ... Shula Marks … Art Shamsky … CalMatters’ Alexei Koseff

(was Friday): Dana Walden ... Sacha Baron Cohen

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