An unusual start to the legislative session

Today is shaping up to be a pretty unusual day in Sacramento.

Newly elected state lawmakers will be descending on the Capitol to be sworn into office — even though two seats are still up in the air. That’s because, by some measures, California is in the middle of two of its closest legislative races in more than a century: According to figures updated this morning, Democratic incumbent Melissa Hurtado and Republican David Shepard each had 50% of the vote for a state Senate seat looping around east Bakersfield — and Democrat Christy Holstege and Republican Greg Wallis each had 50% of the vote for an Assembly seat straddling Riverside and San Bernardino counties.

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Also unusual: State legislators will be convening a special session focused on Gov. Gavin Newsom’s proposal to pass a “price gouging penalty” on oil companies and increase state oversight of the gasoline market. This marks the first time a governor has proclaimed a special session in six years, according to veteran Sacramento lobbyist Chris Micheli.

Newsom has yet to unveil the actual text of his proposal, and lawmakers aren’t likely to take substantive action on it until they reconvene in January. But the special session could amount to trial by fire for legislators, nearly one-third of whom will be new to Sacramento.

• Jamie Court, president of Consumer Watchdog, an advocacy group that supports capping oil company profits, told the Los Angeles Times: “The fact that the governor put a spotlight on this in a special session means that these are not votes that will be forgotten. This is going to be a career-defining vote for every legislator in the building.”

Although the Newsom administration has taken steps to defang the rhetoric surrounding the proposal — shifting from calling it a “windfall profits tax” to a “price gouging penalty” — the special session will nevertheless put lawmakers, some of whom were elected with the financial support of the oil and gas industry, squarely in the middle of the governor’s escalating battle with oil companies.

Apart from the politics, there are messy market factors to sort through: As California pushes to decarbonize its economy, the price of gas will likely shoot up as the industry seeks to maximize profits ahead of a 2035 ban on the sale of new gas-powered cars, experts told state regulators last week.

The oil industry, meanwhile, is currently gathering signatures to try to qualify a 2024 referendum to overturn a new state law banning new oil and gas wells near homes, schools and hospitals.

It has a model in a coalition of fast food industry groups, which is set to announce today the submission of more than 1 million signatures to repeal a new law establishing a state council to regulate fast food employees’ working conditions and to raise their minimum wage to as much as $22 per hour next year, CalMatters’ Jeanne Kuang reports. The coalition — which has raised more than $20 million to overturn the law — needs 623,000 valid signatures to qualify the referendum for the November 2024 ballot, which would pause the law until voters decide whether to uphold or repeal it.

Already eligible for the November 2024 ballot: an initiative to hike California’s minimum wage to $18 an hour.

Other Stories You Should Know

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1 Inside California’s limited antiviral use

Even as California swims in what Dr. Sara Cody, Santa Clara County’s public health officer, recently described as “a serious respiratory viral soup” of flu, RSV and COVID-19, few patients are taking advantage of COVID treatments and antivirals such as Paxlovid. The prescription drug, which reduces the risk of severe COVID symptoms and hospitalization, is readily available — but some providers have denied treatment to eligible patients due to a “misperception of drug scarcity,” CalMatters’ Ana B. Ibarra reports. This has sparked concern among state public health officials, who note that California’s COVID hospitalizations have more than doubled since Nov. 1 and the test positivity rate is once again in the double digits, hitting 10.8% on Thursday.

• Dr. Rohan Radhakrishna, chief equity officer at the California Department of Public Health: “We have a concerning low rate of outpatient COVID-19 treatments, especially for vulnerable populations” in rural and high-poverty areas. “We want to remind the provider community that therapeutics are in ample supply and that most adults have qualifying conditions,” such as chronic disease, hypertension, obesity, depression or tobacco use.
• Among the ways California is trying to expand access to antivirals: It contracted with Sesame Care to allow uninsured and underinsured patients or those who have difficulty seeing their primary care provider to schedule free virtual appointments.

2 Is EDD ready for a recession?

Is California’s unemployment agency prepared to handle a surge in jobless claims that could come with a possible recession? It depends on whom you ask: Following the “level of testing that the pandemic put us through, we are in such a strong position to weather a typical economic contraction,” Gareth Lacy, communications director for the Employment Development Department, told CalMatters economy reporter Grace Gedye. Others weren’t so sure: Despite EDD’s “major improvements” — including an updated recession plan, expanded multilingual services, customer service tweaks, a streamlined process for proving claim eligibility and an ongoing tech modernization project — “I think we’re not at the point where if a major crisis hit the unemployment system again, the system would be able to function as it should,” said Daniela Urban, executive director of the Center for Workers’ Rights.

Another challenge: California’s massive unemployment debt, which could keep ballooning amid a recession. The state already owes the federal government more than $18 billion, and asked for a $450 million advance authorization this month, according to federal data. Just since the start of the fiscal year in July, California has accrued nearly $49 million in unpaid interest, the database shows.

Speaking of the feds: Californians who receive state “middle class tax refund” payments — which the state is sending out through January — might have to pay federal income tax, the San Francisco Chronicle reports. The state tax board’s website notes the payments aren’t subject to state income tax, but “may be considered federal income.” The Internal Revenue Service has yet to issue guidance on the payments.

3 Black Californians seek to regain taken land

What’s in a home? Among other things, the opportunity to build generational wealth. Due to racist practices such as redlining — the practice of denying mortgages to Black homeowners — and the devaluing of property in minority neighborhoods, Black Californians experienced a “housing wealth gap” of about $223,000 between 1933 and 1977, according to calculations from the state’s reparations task force. If that sum were given to the 2.5 million Black people living in California today, the state could face a tab of $569 billion — a figure that received widespread attention after a recent New York Times article that sparked incredulous reactions from conservative commentators.

CalMatters’ Lil Kalish, who reported on that preliminary calculation in September, is back with a profile on Where Is My Land, a California-based organization that helps Black families regain land seized through eminent domain — when the government takes private property for public use — fraud or other means. One high-profile example: Bruce’s Beach, a Black-owned resort that was seized by Manhattan Beach city officials in 1924 and only returned to the Bruce family last September. “Can you imagine how wealthy that family could have been?” asked Kavon Ward, founder of Where Is My Land.

• George Fatheree, a Los Angeles attorney who represented the Bruce family, told Lil that changes in government policy will be necessary to correct historical real estate discrimination: “It’s a function of decades, if not centuries, of racially discriminatory acts and policies and laws. The idea that the way to address it through one-by-one litigation is somewhat myopic.”

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