Newsom plan on gas prices clears first hurdle

From CalMatters Capitol reporter Alexei Koseff:

Gov. Gavin Newsom’s proposal to combat gasoline price spikes appears headed to a long-awaited Assembly floor vote next week after passing out of committee on Thursday.

But the politics of oil industry regulation are never that simple in California. To pass Assembly Bill X2-1, which would require refineries to maintain additional inventory that they can draw from during maintenance periods, Democratic lawmakers will have to ignore the fierce opposition of an important ally: The State Building and Construction Trades Council, an umbrella group for California construction worker unions that represents hundreds of thousands of laborers.

Many of them — steelworkers and boilermakers employed at refineries — crowded Thursday’s hearing to voice concerns that state oversight of maintenance would prioritize economic considerations over their safety, and that the bill would establish minimum inventory requirements that refineries are unable to meet, forcing them to shut down.

Chris Hannan, president of the building trades council, to CalMatters following the committee vote: “Hopefully they don’t move forward with something with this much uncertainty that could jeopardize worker safety and jobs in our state.”

The Assembly is slated to meet Tuesday to consider the bill. But the vocal opposition from organized labor — a powerful force at the state Capitol and an interest group to which the ruling Democrats are far more sympathetic than the oil industry — adds another wrinkle for members. Many of them were already wavering over fears that Newsom’s proposal could instead drive up prices at the pump by restricting supply.

During nearly four hours of testimony and questions at Thursday’s hearing, the risk to workers came up repeatedly. Before calling the vote, Assemblymember Cottie Petrie-Norris, the Irvine Democrat who leads the committee, felt compelled to address Hannan directly.

Petrie-Norris: “I hope that you’ve heard loud and clear that worker safety is paramount to all of us. … Certainly none of us are proposing that we would ever compromise worker safety in order to increase liquidity and drive prices down.”

The bill ultimately passed on a 13-2 vote. Three moderate Democrats on the committee abstained — a persistent pocket of resistance that Newsom may still have to tamp down if he wants to advance his proposal.

Meanwhile, Republican legislators and refineries argue the proposal will make gas more expensive. 

So would Newsom’s proposal work? Experts told CalMatters business reporter Malena Carollo that it could make a difference — kind of. That’s because when a refinery goes down for maintenance, it’s not making the same amount of fuel as it typically does. The remaining fuel becomes more valuable, which temporarily drives up prices. But requiring refineries to have a minimum inventory can ease these spikes.

But the bill is “not a panacea for all the issues in the California gas market,” said one Stanford University economist. Ever since 2015, after a refinery exploded in Torrance, California has had a “mystery surcharge” that makes gas here pricier than the rest of the country. This surcharge can’t be explained by the state’s taxes or environmental fees, and accounts for about 40 cents per gallon, totaling about $60 billion out of Californian’s pockets since 2015.

Learn more about the economics of Newsom’s gas plan in Malena’s story.

When lawmakers wrapped up their regular session on Aug. 31, Gov. Newsom had 991 bills to wade through. By the time he issued his final update Thursday night, he had about 465 more to go before his clock strikes midnight on Monday. 

Thursday, he signed some significant ones: 

Reparations: A package of reparations bills, including a formal apology from the state for perpetuating slavery, reports CalMatters’ Wendy Fry. Newsom, Assembly Speaker Robert Rivas, Senate leader Mike McGuire and state Supreme Court Chief Justice Patricia Guerrero all signed the official apology. In total, Newsom signed five of the 14 bills championed by the California Legislative Black Caucus that seek to address the harms caused by centuries of discrimination faced by Black Californians. But most of the bills, advocates argue, are symbolic. Newsom vetoed two caucus bills, including one to help Black families receive compensation for property seized by the government through “racially motivated” eminent domain. Learn more about the reparations bills in Wendy’s story.

Crime: Four bills strengthening protections for human trafficking victims, including a high-profile bipartisan measure to make soliciting or purchasing a child for sex a felony (which won First Partner Jennifer Siebel Newsom’s support), and another that makes it easier for ER patients to identify themselves, confidentially, as a victim of human trafficking to hospital workers.

But Newsom is also vetoing a sizable number of bills. 

As CalMatters politics intern Jenna Peterson explains, the proportion of bills that Newsom is vetoing so far is nearly 20% — compared to 15% in 2023, 14% in 2022 and 8% in 2021. (Fun fact: According to the state Senate’s research office, Arnold Schwarzenegger holds the record for highest veto percentage as governor, with 35% in 2008.)

Newsom kills bills for a number of reasons: Bad policy (he doesn’t agree, or the language is too broad); legal shaky ground; or simply unnecessary. Learn more about Newsom’s vetoes, including his most frequently cited reason, in Jenna’s story.

Let’s get to some education news:

Cal State reforms: One year ago, a state audit found that California State University was mishandling sexual discrimination and harassment complaints in violation of Title IX federal law. This week, Cal State’s Board of Trustees gave a progress report on the audit’s recommendations, reports Mercy Sosa of CalMatters’ College Journalism Network. Ten of 16 fixes have been completed, and the ones currently underway include internal audits of five campuses each semester, collecting data for an annual report and hiring civil rights attorneys. A new steering committee was also announced, which will bring representatives from the universities to direct employees and students to appropriate resources. Learn more about how the reforms are going in Mercy’s story.

School boards sue: The California School Boards Association is suing the state over Gov. Newsom’s school funding plan, which it says is unconstitutional, writes CalMatters K-12 education reporter Carolyn Jones. The state passed its budget in June and the lawsuit won’t affect money that’s already been allocated to schools. But the association’s president argues that Newsom’s move to plug an $8.8 billion shortfall in school funding by borrowing from the state’s general fund “removes a funding safety net.” Newsom’s office says the accounting move is legal, and saved schools from potential budget cuts. The lawsuit, filed Thursday, comes as voters will decide Proposition 2 in November, which would allow California to borrow $10 billion to repair school facilities. Read more about the lawsuit in Carolyn’s story.

On Sunday, Gov. Newsom announced he vetoed a bill to test in-person voting in jails in three counties. CalMatters Capitol reporter Sameea Kamal and video strategy director Robert Meeks have a video segment on Sameea’s story on the voting barriers inmates face as part of our partnership with PBS SoCal. Watch it here.

SoCalMatters airs at 5:58 p.m. weekdays on PBS SoCal.