NOVEMBER ELECTION AND LEGISLATION UPDATE

ELECTION 22

Here is what we learned, or think we learned, from the November election – as it relates to golf, that is. When the subject is golf in California, and that’s the subject of our concern, what happens at the national level has little impact. Most of what affects the game in California happens at the state, regional, and even much more so, the local level.

With most but not all statewide races now decided, all statewide offices remain in firm Democratic control, and both houses of the legislature continue to maintain the 2/3 Democratic control required to pass budgets without Republican votes.

The races we tracked in Los Angeles County to get a sense of where public opinion might be headed revealed to us that with one exception, Council District 11 in the City of Los Angeles, those who affiliated more with the Democratic Socialists of America than with the normative Democratic Party prevailed, continuing a pattern that was set two years ago when Nithya Raman was elected in CD 4 and Eunisses Hernandez defeated incumbent Council Member Gil Cedillo in CD 1 in June without so much as the need of a November runoff. Add that to Orange County’s Board of Supervisors flipping to Democratic control after decades of Republican control, and it’s pretty clear what the public is telling us. And what they’re telling us is that those who generally found resonance in something like AB 1910 are picking up political steam while those urban Democrats who found AB 1910 flawed are losing it. At least that would appear to be the case in Southern California. San Francisco went more the way of LA’s CD 11 in favoring more “moderate” candidates this time around, lending some skepticism to our capacity to form grandiloquent conclusions about political trends.

It behooves us to remember Lincoln’s dictum re public opinion – with it, anything is possible; without it nothing is possible.

And it behooves golf to keep that dictum firmly in mind when considering the following facts about the drought’s effect upon the state’s huge agricultural sector, as recently reported in the Los Angeles Times:

• California’s irrigated farmland shrank by 752,000 acres, or nearly 10%, in 2022 compared with 2019.
• Water deliveries in the Central Valley were cut by nearly 43% in both 2021 and 2022.
• Gross crop revenues fell $1.7 billion, or 4.6%, in 2022. Revenues of the state’s food processing and manufacturing industries declined nearly $3.5 billion, or 7.8%.
• An estimated 12,000 agricultural jobs were lost, representing a 2.8% decline.

Just as golf went to great lengths to avoid all hint of framing the AB 1910 controversy as housing versus golf, the game would be wise to avoid all hint of drawing invidious distinctions between agriculture’s use of water and golf’s use. Yes, golf consumes only 0.73% of the potable water consumed in California, but we grow grass; agriculture grows food. Ninety percent (90%) of the nation’s winter fruit and vegetables are grown in California and Arizona using water drawn from the Colorado River.

The one Assembly race not yet decided is the new 47^th District that covers much of the Coachella Valley. Democrat Christy Holstege, who holds Palm Springs’ 4^th Council District seat, is 52 votes ahead of Republican Greg Wallis, who serves as District Director for outgoing Assembly Member Chad Mayes (I-Yucca Valley). That race won’t be decided until San Bernardino County issues its final tally December 16. The District sits in both Riverside and San Bernardino Counties. Holstege leads among Riverside County voters; Wallis leads among San Bernardino County voters. Both are known to the golf community, and both know the golf community – Holstege because Tahquitz Creek Municipal Golf Course is in her District – Wallis because he is an avid golfer.

The Assembly’s long simmering and somewhat acrimonious Speakership battle between long-serving incumbent Speaker Anthony Rendon (D-Lakewood) and his presumptive successor Robert Rivas (D-Salinas) was settled even before all the votes in the November 8 election were counted. The 2022 Democratic Caucus met and split this proverbial “baby” as follows. Mr. Rendon will continue to serve as Speaker until a state budget is adopted (June 30). Mr. Rivas will ascend to the Speakership July 1. Given that come December there will be 30 new members of the 80-member Assembly, most thought it would be the new Caucus that would settle the matter. And given that the 2^nd part of this arrangement will necessarily require another vote, one cannot be sure what will happen mid-year, albeit it is not likely that either Mr. Rendon, who is in his last term in the Assembly, or another will have the votes to upset the “arrangement.”

What this portends for golf after June 30 is a new set of Committee Chairmanships and a Northern shift of the political fulcrum and given golf’s comfort with many of Rendon’s Chairs and golf’s much greater political engagement in the Southern part of the state, tracking what this may mean for the industry is the California Alliance for Golf’s (CAG) highest priority in the 2023 session. Unless, of course, another bill like AB 1910 pops up, in which case that bill will take center stage.

SACRAMENTO

A couple of items of unfinished business before we head into 2023.

Thanks in part to some dogged work by the GCSAA’s Jeff Jensen, Governor Newsom has vetoed a bill that would have banned all non-agricultural application of neonicotinoids in favor of continuing a Rulemaking process in which the California golf community has a solid chance to make the case for golf’s licensed applicators receiving the same exemption that licensed agricultural applicators were accorded in the vetoed legislation. The California Alliance for Golf (CAG) has resolved to lend its support to GCSAA’s effort in that Rulemaking process in 2023.

CAG and GCSAA will similarly work in unison in 2023 to persuade the California Air Resources Control Board (CARB) to take seriously that part of the enabling legislation regarding the banning of the sale of gas-powered equipment that requires CARB to consider extending sales deadlines for those species of equipment that are not commercially available in machines fit for intended use. That was very much part of AB 1346 (Berman; D-San Mateo) when it was passed in the 2021 session, and very much part of what were some productive conversations between Mr. Berman’s Office and the California golf community.

It turns out that the $97.5 billion surplus that was projected only a few months ago turned out to be no more than $56 billion, which according to the Legislature’s budget advisor Gabe Petek, leaves the state with a $25 billion deficit heading into the 2023-2024 budget cycle. Twenty-five billion is a very manageable number; however, if the state dips into recession, which the Federal Reserve now estimates as a 50-50 proposition in 2023, that number will grow much larger. California’s tax structure is heavily dependent upon the income and capital gains taxes of a very small percentage of the population, which leads to extreme swings in revenue generation, making it difficult for lawmakers to make long-term fiscal projections, let alone commitments. The good news under constrained fiscal circumstances is the much less likelihood of a large subsidy offering like AB 1910. The bad news might involve a resurrection of the whole service tax discussion, although it would likely to take a series of deficit years to resurrect a notion as fraught with political ramifications as a complete redo of the tax code. Then again, Californians just did reject a Proposition (30) that would have raised the top marginal income tax rate from 13.3% to something a little north of 15%. It could be that the body politic is ready to look at other ways of generating revenue than tapping the uber rich. Or not; we’re just speculating here. But that’s why we watch election returns.