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Happy Monday! Anybody want to be White House Chief of Staff? I haven't seen this many "noes" since I was seeking a prom date. Actually, I had dropped out junior and senior prom, but you get the picture.
Thank you for the great feedback on my write-up on the challenges of the CA GOP yesterday. If you didn't read it, I encourage you to and share your thoughts.
I had one sentence that I had edited with the gibberish filter on and did not catch in my final read-through. On the issue of Congresswoman Alexandra Cortez-Ocasio's criticism of the agenda and sponsorship of the Harvard Kennedy School's orientation for new members, I meant to convey that if Ms. Cortez-Ocasio wants to ensure that all interests are represented on every panel, then she should propose that the government pay for it. After all, the "Welcome to Washington" free event is voluntary and not official.
After overseeing conferences over many years, I know that they are expensive and you will never please everyone. I frequently heard from my members in hotel hallways "You know who we really needed on that panel..." Cortez-Ocasio--who while I think is a bright light to Washington and I appreciate the fight she brings from the Bronx--is a media darling right now, making a normal grumble turn into a political issue.
CAGOP: Here are the statements of the three candidates for chair of the California Republican Party, published by Jon Fleischman in his Flash Report.
Former state senator Ray Haynes lends his voice on the situation, and he lands in between the finger-pointing. "We have met the enemy. And, he is us. We are the problem. We lost because we deserve to lose, and until we face that, we will continue to lose."
Is he a candidate?
SD34 (Westminster-Santa Ana): The recount has begun in former state senator Janet Nguyen (R) loss to sworn-in State Senator Tom Umberg (D) today. There has been some misreporting about this being on the taxpayer dime. In California, a candidate-requested recount is only paid for by the taxpayer if the results flip the race. Otherwise, Nguyen is on the hook. If the county registrar suspects a major error, that registrar can conduct a recount at government expense. The request provides an ordering of precincts to be counted and can be canceled at any time. Because we're talking about a 3,089-vote deficit, huge errors would have to be found and the recount likely won't continue through the week.
Here are the results for the Orange County portion of SD34. You can guess where Nguyen will be looking for votes. Nguyen has not asked for any recount of the Los Angeles County (south/east Long Beach, including CSULB) precincts. Umberg won that portion 55-45%, while Nguyen ended up 2 votes ahead in the dominant Orange County portion.
If you want to geek-out and have finished your holiday preparations, you can look at this map and the precinct reports here.
The schedule for the recount, which involves a sampling of precincts, is below. Daily results will be here in detail and if you are really bored today, you can watch streaming video. As of 11:00am, there was no such live video...
NOT OVERLOOKED: Libertarian Jeff Hewitt defeated former assemblymember Russ Bogh (R) in a race for Riverside County Supervisor. While a non-partisan office, it was well known that Hewitt is a Libertarian and Bogh was Republican caucus chair in the Assembly. It's not unheard of for non-Dem, non-Rep candidates to gain election to minor office, but county supervisor is rare, particularly in a county as large as Riverside. The last such candidate to win election to the Legislature was Audie Bock in 1999 in a strange special and that was only for one term.
Meanwhile, make your Bogh-Baugh jokes now. They were both leaders in the Assembly Republican Caucus and both lost races this year in seats that changed parties. Russ Bogh in Riverside County 5 and Scott Baugh in CA48 (Huntington Beach), where eventually Dana Rohrabacher (R) lost to Harley Rouda (D).
Speaking of Riverside County, former assemblymember Eric Linder, who was defeated by Sabrina Cervantes in AD60 in 2016, lost his bid against fellow Coronan to Karen Spiegal for supe district 2. After a closely watched campaign that had Cervantes at 49.8% on Election Night, she ended up winning easily with 54.1% of the vote.
UTILITIES: With the question of the liability for wildfires that occurred in 2018 pending as one of the most pressing issues for the Legislature to tackle in 2019 pending, CALmatters's Dan Walters asks the third-rail question--is it time to take the investor-owned utilities "off the grid"? No, not from an energy independence standpoint, but a governance and operational one. Walters points out the cost for 750 kWhs in Sacramento's public utility and PG&E and other investor owned utilities.
Let's get ready to rumble!
ALL I WANT FOR CHRISTMAS IS...EVERYTHING! With a governor coming off a campaign with support from many spendthrift interests and large supermajorities in both houses of the Legislature, campaign promises are now turning into legislative proposals. While only a handful of bills have been introduced, the desires are beginning to find their way into legislative language.
With the Legislative Analyst's Office finding that the prior year (2017-18) revenues ending at $1.1 billion above and the current year (2018-19) at $4.2 billion above projections, the kids are hungry to fill their stockings. That's after a combined reserve of $15.9 billion beginning the current fiscal year. So, when the Governor and Legislature are looking at shaping the 2019-20 budget, there is $5.3 billion in one-time money.
Then, there is an additional projected $11.7 billion in "ongoing" revenues in 2019-20 over the enacted 2018-19 budget, with the "moderate" growth projection of the LAO. Why is that such a big number? Well, you have to consider the increased "baseline" of $4.2 billion and then add on the moderate growth in 2019-20, which is really just roughly the same percentage growth as the current year.
So, that's $5.3 billion in one-time and $11.7 billion in ongoing funds for the elves. Of that, $1.7 billion in ongoing funds need to go into the constitutionally required (Prop 57) Budget Stabilization Account due to General Fund Growth, but it is capped at that (10% of GF revenues). Additional amounts can then be put in the "Special Fund for Economic Uncertainties," but that fund already started the current year at $2 billion. We don't know the state's cost of wildfires or the extent of the federal government's aid yet, but much will likely come from that fund. ($200 million was also included in the budget specifically for current year wildfire costs.)
There are about $2.1 billion in General Fund commitments already made, according to the LAO. The Proposition 98 funding requirement for K-12 schools and community colleges is expected to only increase by $2.4 billion (3.1%), with K-12 enrollment decline and inflationary adjustments offsetting the guarantee's increase. A large share of that will be from local property taxes, providing relief to the General Fund. That said, don't think that K-14 interests will be happy with 3.1%, with legislative proposals forthcoming to call for funding California per pupil funding in the top 10 states.
Community colleges, flush with new funds for student success and slower enrollment growth, are also calling for a change for community college students who are eligible for Cal Grants that would cover non-fee costs. They have a fair argument that the program disadvantages students--I made it many times. That has a price tag estimated at $1.5 billion at full implementation, and that is non-98. It is true that there are many students currently eligible for free community college, but are living in their cars. Colleges have opened gym showers during off times to accommodate students and there are active campaigns for student-organized food banks.
Meanwhile, the Governor-elect and Department of Finance are working on the January 10 budget proposal right now. They numbers need to be decided on shortly so the written description ("A Pages") can be composed. Ideally, that's done before Christmas as there is still a lot of work after the holiday with finalizing charts and the print-formatted document. Yes, it still has to be printed.
Something significant has happened since the Legislative Analyst's Office released its required Fiscal Outlook on November 14. The Dow Jones is down nearly 3%. The LAO uses an S&P 500 annual average, derived from a Moody's Analytics "consensus survey." The number used for 2018 is 2,774 and for 2019 is 2,810. This is very important because the greatest volatility in personal income tax revenue (PIT)--by far the largest source of state income--is the PIT tax on capital gains income.
As I type now, the S&P 500 stands at 2,605, or 6% below the 2018 consensus average. That said, an average is exactly that--an average. So, today's data point has to be averaged with all other trading days of the calendar year, which have been as high as 2,923 and as low as 2,582 in April. All things said, the 2,774 consensus may be a bit high but is not completely unreasonable even after the last five trading days (markets were closed on Wednesday).
In short for those who understandably skipped the last five grafs, the LAO's numbers might be a tad high, nobody knows, and it gives the Governor the rationale to low-ball the personal income tax revenue projections in his January budget proposal. All governor's do, but it is particularly important for Gavin Newsom, given the salivary glands of those with their hands out.
The LAT's George Skelton writes about the challenge Governor Newsom has in taming the ambitions of legislators from his party and stakeholders, while Matier and Ross add the challenge ahead for San Francisco Assemblyman Phil Ting. Ting is the chair of the Assembly Budget Committee, who similarly has to handle expectations. Add Lorena Gonzalez Fletcher (D-San Diego), the influential chair of the Assembly Appropriations Committee and Assembly Speaker Anthony Rendon.
Gonzalez Fletcher will likely be faced with a record amount of proposed in spending, mostly by her fellow Democrats. The week of May 13 will include the Appropriations committee deadlines in both houses to approve bills to go to the floor--the "Suspense File," aka guillotine. Budget decisions aren't made at that point, but it's a careful ballet of moving forward items that have a budget year impact and will likely be in the budget.
The Governor's May Revise comes out that same week, another dancer in the ballet. Approps chairs hate to be the one to say "uh, no" to members of their caucus, and Gonzales Fletcher has 59 others to work with. But she also doesn't want to jam her San Diego neighbor Toni Atkins, the Pro Tem of the State Senate, or expected Senate Approps chair Anthony Portantino (D-La Cañada Flintridge). The Senate will be going through the same exercise
The change in term limits from 6+8 to 12 years is generally accepted as a great change among those inside and outside the Capitol. That said, it makes these fiscal leadership roles much more difficult, as does the "Super Super Majorities" as GOP chair candidate Steve Frank calls it. I have no belief that any of the leaders are in jeopardy, but they have to watch their backs. For that, they need Gavin Newsom to take the heat for legislative restraint.
Newsom has immense political capital. Not only did he win with 61.9% of the vote, but he spent much of the final weeks of the campaign essentially on the stump for Democratic candidates in perceived to be tough races. They almost all won and know that his support brought money and volunteers out to win locally down the stretch. He's also likely sitting on $10 million in campaign funds.
Jerry may be the "No Man," but Gavin will likely begin his term as the "Not Yet Man."
We have birthdays below the jump!
#CAKEDAY: Happy birthday to Primo Castro, Kevin deLeón, Denise Penn, Congressman Mark Takano!
CELEBRATIONS: Happy anniversary to Annie Lam and Assembly Speaker Anthony Rendon!
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North Carolina Democrat Preparing For Special Election In Contested Congressional Race - Politico
The Democrat in a North Carolina congressional race marred by accusations of election fraud said Monday that his team is already preparing for the possibility of a special election that would supersede the allegedly tainted contest held last month.
Pelosi, Schumer to meet with Trump, offer $1.3 billion for border as shutdown looms
The president and some Republicans are insisting on $5 billion for the border wall ahead of a Dec. 21 deadline.
Trump Claims Cohen Hush Money Payment Was 'simple Private Transaction' - Politico
President Donald Trump has a habit of attacking political opponents on Twitter and using the social media network to respond to segments he sees on Fox News. | Lex Edelman/AFP/Getty Images
Diminished Saudi influence on display in Senate debate over Yemen
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Shutdown Looms and Priorities Stack Up as Congress Races Toward Sessionâ
The largest impasse in a must-pass spending package is funding for President TrumpâÂÂs wall, but lawmakers are looking at rolling in an array of other legislation.
U.S. Chamber Backs Mexico-canada Deal, Warns Against Nafta Withdrawal - Politico
The U.S. Chamber of Commerce president and CEO Tom Donohue warned President Donald Trump not to follow through on his threat to withdraw from the existing NAFTA. | Olivier Douliery-Pool/Getty Images
Pelosi, Rebels Discussing Term Limits For Party Leaders - Politico
Minority Leader Nancy Pelosi and a group of House Democratic rebels are discussing a proposal to impose term limits on both party leaders and committee chairs, according to four Democratic sources.
Comey: Democrats 'have To Win' The White House Back From Trump - Politico
The former FBI director has come under fire from Trump again in recent days both before and after Comey testified behind closed doors on Capitol Hill last week. Trump has denigrated the former FBI chief for what he says were lies to Congress about possible obstruction in the Russia probe and of leaking classified information to the media through an associate.
Power Up: Now hiring: Chief of staff for president resistant to a chief of staff
the numbers @
President Trump is mulling options.
Elizabeth Warren forges a 2020 machine
The Massachusetts senatorâÂÂs aides have been quietly shopping for presidential campaign headquarters space in the Boston area.
On Politics: The Race to Avert a Shutdown
The deepest impasse between President Trump and congressional leaders is over his demand for a border wall, which Democrats have refused to accept.
Biden hits Sanders' home turf as he tests 2020 waters
HOLLY OTTERBEIN @
The former vice president decried 'naked nationalism' during a sold-out event to promote his book.
The Trailer: What we learned from all the 2018 results: The winners, losers, flippers, voters and spenders
Kevin Williamson @
In this edition: The 2018 election is (finally) over, Democrats keep shrinking their caucus map, Democrats look forward to a North Carolina special, and a Comey-Gowdy exchange.
Bloomberg: Democrats are looking for a â
During an appearance on âÂÂThe View,âÂÂ the former New York mayor âÂÂ and possible 2020 presidential candidate âÂÂ said the party wants a pragmatic leader.
Alleged Russian agent Maria Butina poised to plead guilty in case involving suspected Kremlin attempts to influence NRA
Butina was accused of working to push the KremlinâÂÂs agenda by forming bonds with National Rifle Association officials and other conservative leaders and making outreach to 2016 presidential candidates.
Nick Ayers, Aide to Pence, Declines Offer to Be Trumpâ
The decision leaves it unclear who will take the top West Wing job as President Trump confronts the fight of his political life, with Democrats newly empowered and the special counsel moving closer to him.
Rand Paul says he has concerns about William Barr, Trumpâ
In an interview on NBCâÂÂs âÂÂMeet the Press,âÂÂ the senator said BarrâÂÂs views on executive power and domestic surveillance are âÂÂvery troubling.âÂÂ Other Senate Republicans predicted BarrâÂÂs confirmation will proceed smoothly.
Russians interacted with at least 14 Trump associates during the campaign and transition
Some offered to help his campaign and his real estate business. Some offered dirt on his Democratic opponent. Repeatedly, Russian nationals suggested Trump should hold a sit-down with Putin.
U.S. Sanction 3 Senior North Korean Offi CIA ls - Politico
The United States is sanctioning three senior North Korean leaders, including the regime's "Number Two" official, for state-sponsored censorship activities and alleged human rights violations and abuses, the Treasury Department announced Monday.
POLITICO Playbook PM: Meadows: Being W.H. chief of staff would be an 'honor'
And the Supreme Court declines to hear a Planned Parenthood defunding case.
Alleged Russian Agent Butina Appears To Have Reached Plea Deal - Politico
MATTHEW CHOI @
Alleged Russian spy Mariia Butina was arrested by the FBI in July for allegedly operating as a Russian agent without notifying U.S. authorities. | AP Photo/File
Kevin Madden On Whether The Media Is To Blame For Trump Ascendance - Politico
Supreme Court Turns Away Planned Parenthood Defunding Case - Politico
The cases now before the Supreme Court, filed earlier this year, ask whether patients can sue states for excluding Planned Parenthood from state Medicaid funding. | Zach Gibson/Getty Images
The Technology 202: Google hearing will be a test of lawmakers' tech knowledge
It's not just Sundar Pichai in the hot seat.
The Health 202: The Trump administration removed a training guide for Latino outreach from an ACA website
The change was made a little more than a month before open enrollment began.