California Legislation Update - Mike Belote

Summary

In this California legislative update, Michael Belot discusses the state's legislative process, budget challenges, and housing policy debates. He highlights the state's revenue issues, including temporary tax measures affecting large taxpayers, and the ongoing struggle between state housing mandates and local control. Belot also previews the upcoming November elections and the potential impact of various tax-related initiatives on state and local governance.

Takeaways

• 🗓️ The legislative process is moving quickly with only six and a half weeks left of activity for the 2023-2024 legislative year in California.
• 🏛️ The state budget is a significant issue, with a large deficit requiring both spending cuts and new revenue sources.
• 💼 Business and legislative leaders have reached a deal on the Private Attorney General Act (PAGA), which is expected to improve California's business climate.
• 🏢 There is a major struggle between state and local control, particularly in the area of housing policy, with cities considering becoming charter cities to retain more control.
• 🏫 Public education and higher education funding are key issues that the state budget must address.
• 🏦 The state is considering temporary measures to address the budget deficit, such as pausing net operating loss carryovers and limiting R&D tax credits for large tech and biotech companies.
• 🏦 The state's economy is doing well, but there is still a multi-year deficit projection, suggesting potential structural problems with the budget.
• 🏛️ The legislature is working on 'Budget bills Jr' to make the hard decisions needed to balance the budget by the fiscal year's start on July 1.
• 🗳️ The November general election will not change the deeply blue political landscape of California, but it will feature a variety of significant ballot initiatives.
• 🗳️ Three separate initiatives on taxation are on the November ballot, which could have substantial impacts on local and state government and the architectural profession.
• ✍️ The governor will have until the end of September to sign or veto the bills passed during the legislative session.

Q & A

Who is the speaker in the video script?

The speaker is Michael Belot, the immediate past president of California Advocates.

What is the primary purpose of the video script?

The primary purpose is to provide an update on the California legislative process and discuss various issues related to it, including budget, housing, and taxation.

What is the significance of June 18th in the context of the legislative process mentioned in the script?

June 18th is a critical point in the legislative process where deals come together or fall apart, and it is when the legislature is 'putting for dough,' meaning making important decisions.

How much time is left of legislative activity in the 2023-2024 legislative year as of June 18th?

As of June 18th, there are only six and a half weeks left of legislative activity in the 2023-2024 legislative year.

What is the deadline for the state budget to be enacted?

The state budget must be enacted by June 15th, after which legislators forfeit their pay if it is not passed.

What is the fiscal year start date according to the script?

The fiscal year starts on July 1st.

What is the current economic situation in California as described in the script?

Despite a strong economy with capital gains being reported, stock markets at an all-time high, and low unemployment, California is still in a deficit position.

What is the ongoing struggle between the state and cities regarding housing policy?

The struggle is about who gets to decide housing policy, with the state wanting to drive housing creation and cities wanting to retain local control.

What is the significance of Charter cities in the context of state housing policy?

Charter cities are considering becoming Charter cities to avoid state housing policy laws, leading to a debate on local control versus state policy.

What are the three separate initiatives on taxation that are mentioned in the script?

The initiatives include lowering the vote threshold for local tax and bonded indebtedness, raising all tax thresholds to 2/3 and subjecting legislative tax increases to popular vote, and a creative proposal that any proposal to raise a vote threshold for taxes must pass by the threshold it proposes.

What is the expected outcome of the initiatives on taxation if they are approved?

The initiatives could have a substantial impact on local and state government, potentially leading to more infrastructure spending, changes in tax thresholds, and the need for legislative tax increases to be subject to popular vote.

What is the deadline for the legislature to act on the Private Attorney General Act (PAGA) reform to avoid it appearing on the ballot?

The legislature must act on the PAGA reform by June 27th for the proponents to take their initiative off the ballot.

What is the speaker's opinion on the PAGA reform deal?

The speaker believes that the PAGA reform is a major change in California law and will allow California to claim that its business climate has taken a step for the better.