Democrats now control both houses with super majorities—60 of 80 Assembly seats (74 percent) and 29 of 40 Senate districts (72 percent). This is generally known as a “veto-proof” majority. This raises the interesting notion that Governor-elect Gavin Newsom may have his work cut out for him in consideration of the nearly 1,000 new laws that are likely to pass in 2019 and how much they may simply reflect the previous administration’s agenda.

After the opening ceremonies of the new legislative session, December 4th, Newsom, spoke to reporters and tried to lower expectations when he gets sworn in early next month, saying he’s focused on the transition from the Brown administration and his first state budget proposal, due in early January.

“I don’t want to underpromise in just purely political terms, but I do want to suggest, this is an enormous task – a transition – just the personnel issues, the budget,” he said. “Trying to get all of that right in a very short period of time is profoundly difficult. So I don’t want people to feel like we’re coming out of the box with too much, because I think they’ll be left wanting.”

During the campaign, Newsom made some big promises to voters, including single-payer health care, universal preschool, more funding for universities and state welfare grants. Every single proposal will come at a cost and probably a tax increase.

There has been a lot of talk around the Capitol that the state is rolling in the dough due to higher returns on Wall Street investments. As this year ends, that bull market on Wall Street is in “correction mode” with stock prices declining in all sectors of the S&P 500 which accounts for nearly two-thirds of all stock value in the U.S. These market fluctuations make for uncertainty in the state budget as high-income individuals contribute more than half of all taxes paid.

While our industry was a significant force in the battle to stop Proposition 6, we are starting from scratch in the new legislative session. While ECA focuses on local government issues, stuff that happens in Sacramento can get in the way, so we’ve got one eye on the Capitol.

By Dave Sorem, P.E. ECA Government Affairs Chairman email: [email protected]