Newsom’s infrastructure package a main sticking point in budget negotiations, Speaker says

The California Legislature’s deadline to pass a budget bill is looming, but top lawmakers are still negotiating with Governor Gavin Newsom over several key issues. 

In an exclusive interview with CapRadio, outgoing Assembly Speaker Anthony Rendon said one of the biggest sticking points in budget negotiations is Newsom’s proposal to streamline infrastructure permitting. 

“That’s the big point of negotiation right now between the Legislature as a whole and the governor,” Rendon said. 

Newsom unveiled the permitting reform package in late May, pitching it as a way for California to build large-scale infrastructure projects including roads, dams, and solar farms more quickly. 

The governor has asked lawmakers to approve the sweeping package of 10 bills through the state budget process, citing an urgency to capitalize on potentially billions in new infrastructure funding from the federal government becoming available soon. 

But some lawmakers are reluctant to approve major legislation on a shortened timeline and outside the traditional process of votes in policy committees. 

“Generally, I think it’s best when things go through our legislative process,” Rendon said, though he indicated he may be supportive of an exception for Newsom’s plan. 

“I certainly understand the need to do things quickly. And certainly, situations arise where it does make sense to do it via trailer bills,” he said.

Trailer bills are policies and appropriations related to the state budget but often passed after the statutory June 30 deadline for the governor to sign a budget.

Some rank-and-file members have heartburn over voting on broad changes to environmental law and judicial review through the budget rather than the Legislature’s policy committees. 

“With something of this magnitude, we really shouldn’t be using the trailer bill process,” Democratic Assembly member Dawn Addis, who represents much of California’s Central Coast, said during a hearing last week. “This is really not the process to do this.” 

The Newsom administration has argued the speedier budget process would allow the state to be ready to apply for federal funding as soon as possible. 

“At a time when California is facing a $32 billion deficit, we cannot afford to pass up the opportunity to take advantage of billions in federal funding to accelerate infrastructure projects and create jobs,” Newsom spokesperson Alex Stack said in a statement. 

Stack called the streamlining package “critical to this year’s budget and negotiations” and said the administration “looks forward to reaching an agreement with the Legislature that protects vital programs and maintains budget resiliency.”

According to Rendon, other sticking points between lawmakers and the governor include funding for the state’s beleaguered public transportation systems, and whether to use money from the rainy day fund to help fill an expected $31.5 billion budget deficit.

The outgoing Speaker said they’re “getting there” on transit, noting some money from a previous budget year may be made available to struggling systems. 

On the rainy day fund, Rendon said he originally “wanted to dip into the rainy day fund” to help fill the deficit, but is curious what state revenues will look like after the tax deadline, which was delayed to mid-October after severe winter storms and flooding. 

“Maybe the governor’s right. Maybe we don’t have to” use budget reserves, he said. 

Rendon will be the second-longest serving Speaker in state history when he hands the gavel over to Assembly member Robert Rivas, a Democrat from Hollister, on July 1. 

Both legislative chambers are expected to pass a placeholder budget, which represents an agreement between the Senate and Assembly, on Thursday to meet their June 15 deadline. Lawmakers forfeit their pay if they don’t pass a budget bill by that date.