v 31.37 | The Year That Was In California
Welcome to Happening in California, a brief look at political news, insights, and analysis of the world’s fifth-largest economy.
As my wife and I recently drove our youngest daughter off to her freshman year of college, I reflected on the milestones that led to this journey. It’s with hindsight that we can distill the key moments that shape the future.
And as we look back on this past year here in California, there are a few pivotal events that I think will prove to be the year’s most consequential for the future of the Golden State.
Here is a brief look back at our year here in California …
Cheers,
Tom Ross | President and CEO | Swing Strategies
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The Big Picture: These four stories in 2023 had the greatest impact on California and in many ways will reverberate for years to come...
In stark contrast to the parched narrative of 2022 where much was written about the worst drought in 1,200 years, 2023 saw record-breaking snowfall, up to 70 feet in parts of the Sierras, that helped fill California’s near-empty lakes and reservoirs to capacity.
This not only ended the water shortage emergency declared by water districts across the state that resulted in severe water restrictions on 40 million Californians, but it was a reprieve for the nation’s breadbasket. California announced a 100% water allocation for the State Water Project, a milestone not achieved since 2006, that ensured that farmers would not have to fallow 750,000 acres of farmland.
Unfortunately, less than a year later, the State Water Project is projecting an allocation of just 10% for farmers and communities in 2024 — putting the state’s agricultural sector at risk for economic hardship yet again.
This past year reminds us that while just one winter can be enough to end a megadrought, it will require more water storage to consistently keep water flowing to California farms and communities.
The passing of Senator Dianne Feinstein marked the end of an era defined by both resilience and bipartisan leadership. Senator Feinstein, who herself survived an assassination attempt, demonstrated unwavering courage and resolve following the murder of San Francisco Mayor George Moscone and Supervisor Harvey Milk.
From President of the Board of Supervisors and Mayor of San Francisco to California’s first woman U.S. Senator, Dianne Feinstein left an indelible mark on the state that will be missed.
Not since 1835, when future President James K. Polk was elected Speaker of the House, had the Speaker heralded from the same state as their predecessor.
When Kevin McCarthy was elected Speaker of the House on the 15th ballot, it not only made history, but assured that California would continue to reap the benefits as the home state of the Speaker.
Yet, while McCarthy’s speakership was short lived to the detriment of California, his impact on the GOP’s state and national political leadership and infrastructure will be long lasting.
Much has been written about McCarthy’s fundraising prowess, but equally consequential has been his leadership in changing the face of the GOP — helping recruit and elect a historic number of Republican women, minority, and veteran candidates to Congress. And even lesser known, McCarthy helped build an enduring political apparatus nationally and at the state level in California that has and will continue to help the GOP win in targeted districts.
From housing and health care to gas and groceries, California’s sky-high cost of living is driven by the policies created in Sacramento. We’ve talked about the impact of high taxes, but this year saw three new laws that will end up raising the cost of living even higher in California.
Fast Food Industry Minimum Wage Law: California fast food employees are now guaranteed $20 per hour — the highest base salary in the industry. The law not only raises the minimum wage, but creates the Fast Food Council with members appointed by the Governor and Legislature that have the power to annually raise the minimum wage.
Healthcare Worker Minimum Wage Law: California lawmakers passed a nation-leading $25 minimum wage for health care workers that will affect 450,000 employees. The law will cost the state $4 billion in the first year alone. The impact on private healthcare providers could top $8 billion a year — putting massive strain on hospitals, especially in rural communities, and adding to the already high cost of health care for consumers.
California Climate Disclosure Law: Governor Newsom signed into law the nation’s first climate disclosure mandate, which will require approximately 5,300 businesses to institute costly reporting requirements. The law gives CARB (the California Air Resources Board), one of the nation's most powerful regulatory bodies, even more power. Ultimately, the costs of the new disclosure law will trickle down to consumers and lead to higher prices in California.
The Bottom Line: 2023 was an eventful year for California. Stay tuned as events in 2024 are beginning to take shape — such as California’s looming $68 billion and growing budget deficit.
As always, give us a ring or shoot us an email if you’d like to chat about what’s happening in California.