More than three-quarters of California’s local governments have declined to authorize retail stores to sell cannabis, as permitted by state voters with their 2016 approval of Proposition 64. Opposition has been led by moderate Democrats and conservative Republicans unconvinced that making the drug readily available for recreational use is good for society.

But much of California’s House delegation is supportive of helping the marijuana industry achieve a key goal: access to the banking system. Even with cannabis now legal in some form in 33 states, the great majority of banks and credit unions in the Golden State and elsewhere have declined to do business with marijuana-related businesses because possession and sale of the drug remain illegal under federal law.

Last week, the House passed the Secure and Fair Enforcement Banking Act 321 to 103. Every California Democrat backed the measure and so did four of the state’s seven Republican members: Majority Leader Kevin McCarthy of Bakersfield, Tom McClintock of Elk Grove, Devin Nunes of Tulare and Duncan Hunter of Alpine.

The passage of the bill after past efforts went nowhere was widely credited to a change in focus in lobbying. Leading the push this time was lobbyists for the financial services industry itself – not the cannabis industry. They argued that making a multibillion-dollar industry use cash only created headaches and safety risks for the many legitimate, longstanding businesses that dealt with cannabis companies.

Bankers say other businesses shouldn’t be inconvenienced

American Bankers Association President and CEO Rob Nichols told Politico, “The most compelling arguments have been centered around these secondary relationships. It’s the local plumber, it’s the local electrician, it’s the attorney, it’s the accountant who are doing business with a cannabis grower or dispensary who are then having challenges associated with getting banking products and services.”

The American Financial Services Association focused its lobbying on McCarthy and Speaker Nancy Pelosi, D-San Francisco, also emphasizing the need to stop inconveniencing so many established businesses.

The fate of the SAFE bill in the Senate is unclear. Senate Banking Committee Chairman Mike Crapo, R-Idaho, has said that he will schedule a hearing on the bill, but his aides said that should not be interpreted as support.

California’s Democratic senators, Dianne Feinstein and Kamala Harris, are expected to be supportive. After 35 years as a staunch supporter of the drug war, Feinstein reversed course in spring 2018.

“My state has legalized marijuana for personal use, and as California continues to implement this law, we need to ensure we have strong safety rules to prevent impaired driving and youth access, similar to other public health issues like alcohol,” she told a McClatchy reporter.

Harris has also changed her position. In 2010, while running for California attorney general, she opposed an initiative to legalize recreational marijuana use. 

“Spending two decades in courtrooms, Harris believes that drug selling harms communities,” her aide told Capitol Weekly. “Harris supports the legal use of medicinal marijuana but does not support anything beyond that.”

But her position softened over the years, and last year she signed on as a co-sponsor of a bill by Sen. Cory Booker, D-New Jersey, that would make cannabis legal under federal law.

At a time when many Democrats and Republicans alike believe often-drought-stricken California needs more water storage projects and infrastructure, an $8.9 billion bond measure that earlier this year seemed to be a sure thing now faces a somewhat less certain fate.

The odds of passage are still strong. As a Bay Area News Group analysis noted, state records show that over the last quarter-century, voters have approved 80 percent of bonds put before them – 24 of 30.

But Proposition 3 – which was placed on the ballot after a signature-gathering campaign – is facing unexpectedly vigorous pushback on several fronts.

The strongest objections deal with the fact that unlike water bonds placed on the ballot directly by the Legislature, Proposition 3 funds wouldn’t be divvied up based on a careful evaluation process in which the merits of individual projects are rated and weighted. Instead, the ballot measure amounts to a pay-to-play initiative in which proponents of projects agreed to pay signature gatherers in support of a bond that specifies that a lengthy list of their projects will be funded.

This has led the Sierra Club of California, the League of Women Voters and Assembly Speaker Anthony Rendon to formally oppose Proposition 3.

Measure depicted as favor for rich farm interests

Sierra Club executive Eric Parfrey has written scathingly of the measure as a “bailout for billionaires,” citing provisions that pay for $750 million in repairs to the Madera and Friant-Kern canals that he believes should be paid for by large agribusinesses. Other specified projects involve far smaller sums but also raise eyebrows, such as providing funds for infrastructure that critics say should be the responsibility of the giant Metropolitan Water District of Southern California.

Proponents say this criticism ignores the big-picture value of having improved water infrastructure, especially in the Central Valley.

“Everything we eat comes out of there,” said Jerry Meral, the former deputy director of the state Department of Water Resources, who has led the push for the ballot measure. “We just can’t let it go. You might also say, why should the state pay for urban water conservation? Why should the people who don’t have kids pay for schools? An agricultural water supply means we have a food supply. You have to invest in the state,” he told the Bay Area News Group.

Nevertheless, a Sacramento Bee editorial opposed Proposition 3 on the grounds that there isn’t strong evidence that it would pay for “the projects that California needs most right now, or that they couldn’t get the money elsewhere.”

But Proposition 3 also has heavyweights in its corner. The state Chamber of Commerce, labor groups and farming coalitions back the project, as does Sen. Dianne Feinstein. Some environmental groups have also endorsed the measure, most notably the Nature Conservancy.

However, Gov. Jerry Brown and Lt. Gov. Gavin Newsom, the strong favorite to succeed Brown, have kept quiet.

Brown’s silence has surprised some veteran observers. He has long opposed the sorts of state borrowing that many governors found unobjectionable, and as a result California now spends considerably less on bond service as a percentage of its general fund budget than it did under Gov. Arnold Schwarzenegger.

Voters have approved $31 billion in bonds since 2000

Yet this doesn’t mean the state has skimped on bonds. The Legislative Analyst’s Office reports the state has approved about $31 billion in general obligation bonds for water and environmental projects since 2000, with nearly a third of the bonds as yet unspent. In 2014, voters approved a $7.5 billion water bond, and just in the June primary, another water bond – this one for $4.1 billion – was backed by voters.

Brown has been joined in skepticism about new state borrowing by those who question why the state would use bonds paid off over 30- or 40-year spans in an era in which the Legislature and Brown have been able to salt away more than $15 billion in state reserve funds because of swelling revenues.

The total cost of repaying Proposition 3 has been estimated at about $17.2 billion, slightly less than twice as much as the face value of the bond measure.

As of the last campaign reporting deadline, Yes on Proposition 3 reported $4.7 million in contributions, mostly from farming groups. No on Proposition 3 reported no donations.

California Senate President Pro Tem Kevin de León’s decision to challenge the 2018 re-election bid of U.S. Sen. Dianne Feinstein, a fellow Democrat, for not being sufficiently liberal in the Trump era is beginning to look more serious.

A poll released last week by the Institute of Governmental Studies at UC Berkeley found Feinstein leading de León 41 percent to 27 percent among likely voters. The remaining 32 percent of respondents said they would not support either candidate or were undecided. A Los Angeles Times/USC poll released in early November had shown Feinstein crushing de León, 58 percent to 31 percent.

After the UC Berkeley poll was released, Feinstein reversed her position on whether to support a continuing resolution funding the federal government that ended up being approved by Congress over the weekend. Her initial support for the measure triggered scathing criticism from some Democrats because the resolution did not address the fate of the nearly 800,000 young men and women who enjoyed some legal protections under the Deferred Action for Childhood Arrivals, or DACA, program created by President Barack Obama’s 2012 executive order. President Donald Trump ordered the cancellation of the program in September, effective in March, giving Congress a six-month window in which to make DACA part of U.S. law.

De León was the harshest critic of all, telling Feinstein “don’t came back to California” without doing much more to help DACA beneficiaries, known colloquially as “Dreamers.”

Feinstein’s flip-flop was covered in depth by the Washington Post, which concluded the 84-year-old and 25-year Senate veteran “is facing the most credible primary challenge of any Democrat up for re-election next year.”

The Post report included an interview with Daily Kos founder Markos Moulitsas, the Berkeley progressive activist with a large following in California and nationally.

“By dragging her feet and reinforcing the notion that she was either indifferent or outright hostile to the plight of the Dreamers, Feinstein just gave de León a much-needed opening,” Moulitsas told the Post. “It just reminded core Democrats that we can’t count on Feinstein to do the right thing without having to pressure her to do so. In California, we should be able to count on our senators to automatically do the right thing.”

Is Steyer the real beneficiary of Democrats’ coolness to incumbent?

But two other recent analyses in California newspapers question the idea that de León has made significant gains.

A piece by the Bay Area News Group’s Casey Tolan reacting to the IGS poll suggested its biggest winner “might be somebody whose name wasn’t even part of the survey: Tom Steyer, the Democratic mega-donor behind a high-profile President Trump impeachment campaign who has been considering jumping into the race for months.”

Sonoma State political science professor David McCuan told Tolan that “the high number of undecided voters and Feinstein’s anemic numbers could be a big motivator for Steyer and other candidates. … She should be farther ahead. Someone outside of politics has to be encouraged to at least test the waters.”

But syndicated columnist Tom Elias noted the potential for Feinstein to be saved by the state’s “jungle primary” reform, in which the top two finishers in the primary advance to the general election regardless of party. Feinstein could lose more than half of Democrats next November and still coast to victory on the strength of Republican and independent voters who don’t want a Bernie Sanders-style progressive representing California in the U.S. Senate.

Whatever happens in coming months, Feinstein seems unlikely to have as easy a time getting re-elected as she did in 2012. That year, she defeated Republican Elizabeth Emken 62.5 percent to 37.5 percent, drawing 3.1 million more votes than her GOP foe.

Overall, 44.3 percent of registered voters believe California is on the right track, and 55.7 percent believe it’s on the wrong track. The poll also shows that criticism of the recent gas tax hike may resonate at the ballot box. Of registered voters surveyed, only 45.8 percent would keep the gas tax, while 54.2 percent want it canceled.

Here are a few other insights from the poll:

Newsom strong favorite for governor

Democratic Lieutenant Governor Gavin Newsom currently has a commanding lead in the race to replace Gov. Jerry Brown, with 31.1 percent of voters backing him. Former Democratic mayor of Los Angeles Antonio Villaraigosa is in second with 20.7 percent of the vote, and Assemblyman Travis Allen leads the Republican field with 15 percent. Rounding out the top five is Democratic Treasurer John Chiang with 12 percent and Republican businessman John Cox with 11.4 percent.

However, despite the majority of registered voters believing the state is on the wrong track, a slim majority of 50.4 percent would like their next governor to continue Brown’s policies, with 49.6 percent wanting a change.

Feinstein re-election likely

In a two-way race between Democratic Senator Dianne Feinstein and Democratic State Senate President pro Tem Kevin de Leon, 58.2 percent would support the incumbent senator while 31.4 percent would support de Leon. In a three-way race between Feinstein, de Leon and progressive businessman Tom Steyer, the figures are, respectively, 49.7 percent, 24 percent and 17.2 percent.

Californians at odds with Trump

Only 22.3 percent of the state approves of the job President Trump is doing, with 66.2 disapproving. In comparison, Gov. Brown has a net approval of 44.6 percent, with 34.9 disapproving. When it comes to his administration, the president fairs a bit better: 25.8 percent agree with some or all of his policies and 61.2 percent disagree with some or all of them.

Consequently, when asked if their member of Congress should work with the president whenever possible, only 46.7 percent said yes, with the remainder wanting their representatives to never cooperate.

Immigration has broad support

When asked about those who come to America without a visa or overstay one, 64.4 percent believe they strengthen the economy, while 39.6 percent believe they take jobs from citizens. Only 35.9 percent believes this population increases crime, while an overwhelming majority – 64.1 percent – believe these people help revitalize cities. Just 20.5 percent believe they come for a handout, while 79.5 percent believe they want to work.

Finally, when it comes to policy, 60.1 percent of registered voters do not want California to cooperate with the president’s immigration policies while 39.9 percent want the state to cooperate.

“We have a lot of work left to do to build a stronger city, state and nation and I know I can best build on our progress here in L.A.,” he wrote. “I am passionate about my city and my family; both are here in Los Angeles.”

The announcement came as little surprise, as few believed Garcetti would enter the crowded field that includes Lt. Gov. Gavin Newsom who has already built a robust campaign war chest and enters the race as the frontrunner. Garcetti’s decision is likely welcome news for former L.A. mayor Antonio Villaraigosa, as the two would have been competing for not only votes in the heavily Latino Southern California region – but donors as well.

Also, the mayor polled relatively poorly last spring in early surveying of the race.

Furthermore, rumors that Garcetti is setting the groundwork for a White House run have swirled for months – rumors fueled by his recent trips to places like New Hampshire and Wisconsin. He is also scheduled to visit the early primary state of South Carolina later this year.

While the mayor has been largely mum on possible aspirations to seek the 2020 Democratic nomination, the 46-year-old Garcetti has stressed a need for new blood and fresh energy in a party still reeling from a crushing defeat last November.

“I have a job I love,” Garcetti said at the Democratic National Committee’s annual meeting in Nevada earlier this month.

A jump to the White House would be unprecedented, however, as no politician has ever gone from city hall to Pennsylvania Avenue without other stops in between.

Garcetti finds himself in a unique position within the Democratic Party nationally. While he backed Hillary Clinton and is aligned with the establishment roots of the party, he has also unabashedly backed progressive measures like single-payer health care – policy proposals longtime Democratic figures like Sen. Dianne Feinstein have been hesitant to embrace.

At the same time, he’s taken a less aggressive tone in speaking out against President Trump’s agenda in Washington, largely avoiding the more hyperbolic rhetoric from other California leaders like Senate President Pro Tem Kevin de León, House Minority Leader Nancy Pelosi, and Rep. Brad Sherman, D-Calif.

For example, in his second inaugural address in July, Garcetti didn’t mention President Trump by name, and instead struck a more unifying and pragmatic tone.

While those words sufficed after he was overwhelmingly elected as mayor, if he decides to run, Garcetti may be required to pivot towards appealing to an audience eager to hear a tougher anti-Trump message – especially coming from a state that has positioned itself at the center of the so-called “resistance” against the GOP agenda.

“I think all the rules are off,” Garcetti told a Wisconsin TV station this summer. “No African American could be president until one was. No reality star could be president until one is.”

In the announcement, de León said that as the state Senate leader, he moved to propel “progressive California values in important policy efforts like immigration, women’s rights, quality education, civil rights, job creation and fighting climate change.”           

“We now stand at the front lines of a historic struggle for the very soul of America, against a president without one,” de León added. “Every day, his administration wages war on our people and our progress. He disregards our voices. Demonizes our diversity. Attacks our civil rights, our clean air, our health access and our public safety. We can lead the fight against his administration, but only if we jump into the arena together.”

The 50-year-old Democrat has long been rumored to be eyeing the seat, as he’s termed out of the state Senate next year. And while few expected him to launch a bid unless Feinstein, 84, decided to retire, calls have been intensifying for a challenge from the left, as Feinstein’s image as a moderate Democrat willing to reach across the aisle is now viewed by many progressives as falling short of the strategy needed to defeat the Trump agenda.

For example, the California senator faced fire this summer after making comments about the president that were seen as too tepid by an audience eager to hear fierce rhetoric on how to defeat Republicans in Washington.

“Look, this man is going to be president most likely for the rest of this term,” the senator said at San Francisco’s Commonwealth Club. “I just hope he has the ability to learn and to change and if he does he can be a good president. And that’s my hope.”

After the backlash, she walked back the remarks.

Feinstein’s perceived strengths – bipartisanship, civility and Washington experience – are now seen as weaknesses in a state that has positioned itself at the center of the so-called “resistance” against President Trump.

The contrast between the two is striking. De León, raised by an immigrant mother in Los Angeles is looking to climb the political ladder. He’s the first Latino to be Senate president pro tem in over a century and has embraced the role of being against all things Trump.

“Do I support impeaching Donald Trump? Well. Let me see. The answer is yes,” he told The New York Times.

Meanwhile, Feinstein is a fixture of the establishment with her roots in the Bay Area. She’s also one of the wealthiest members of Congress, and has found herself aligned with the GOP on issues like national security and privacy.

“On the big issues of our time, she’s been on the wrong side of history,” said progressive Rep. Ro Khanna ,D-Fremont, last week on SiriusXM’s “The Dean Obeidallah Show,” referencing Feinstein’s image as a “war hawk” for her vote for the Iraq war and support for the Patriot Act.

“We’re taking on the establishment, there is no doubt,” de León said. “But I’ve taken on the establishment all my life. … Now is the time for change and I look forward to having this debate of ideas, of vision for the state.”

While the announcement is grabbing early headlines, de León faces an uphill fight. Feinstein has the backing of the Democratic Senatorial Campaign Committee, major party leaders like U.S. Sen. Kamala Harris, D-Calif., and enjoys almost universal name recognition. Furthermore, she has a robust fundraising apparatus, enjoying a strong donor base across the state – something that de León lacks.

Bill Carrick, an adviser to Feinstein, had harsh words for the challenger, describing his campaign to the Los Angeles Times as “wasting money and energy on what will turn out to be a rather difficult campaign for Sen. de León. … He’s a termed-out politician looking for a gig.”

Meanwhile, the race is also bringing more focus onto the state’s jungle primary system, with it being possible that de León and Feinstein face off in the primary and the general, leaving out a Republican voice in the overwhelmingly liberal state.

“This challenge makes the point of why the top two primary is bad for California,” conservative author and commentator James Lacy told CalWatchDog. “De Leon and Feinstein are likely to face off against each other twice, once in June and again in Nov., and in the meantime a reasonable Republican viewpoint will be lost in the noise.”

But still, Republicans are welcoming the intra-party conflict, seeing the race as one that can push the party even further to the left and divert resources away from congressional races in the state.

“Senator Feinstein’s rough start to her re-election campaign is every indication of what California Democrats can expect in 2018,” RNC spokesperson Christiana Purves said in a statement. “Democrats across the state should be prepared to embrace the calls of far-left progressives who support a failed single-payer healthcare system and a $52 billion gas tax increase, or brace themselves for well-funded primary challengers,”

The primary fight comes at a time of soul-searching for Democrats nationally. Reflecting on the failures of 2016, many left-wing activists see a need to push back against the old guard, in hopes that a new crop of talent could re-energize the base and lead to more victories in 2018 and 2020.

“We won’t defeat Trump and his Republican Party with corporate Democrats pushing Republican-lite policies and weak leadership,” argued Charles Chamberlain, executive director of Democracy for America. “We win when candidates offer a progressive vision for America and fight to make it happen.”

For example, Bay Area Congressman Ro Khanna, D-Calif., reportedly asked Rep. Barbara Lee, D-Calif., and former Clinton labor secretary Robert Reich to run against the incumbent, believing the party needs someone further to the left to occupy the seat.

“There are other voices in our state who are far more in touch with the values,” Khanna told Politico.

While Feinstein has been a fixture of California politics for decades, her softer tone toward President Trump and stances on issues like national security and encryption have caused her to lose favor with some in her party.
“She was totally out of touch when the whole debate happened on encryption,’’ Khanna added, according to Politico, referencing the dialogue that took place in the aftermath of the San Bernardino terror attack. “She didn’t even understand some of those issues.”

Furthermore, she faced jeers from a town hall crowd this summer after suggesting that President Trump could become a “good president” if he would “learn” and “change.”

“Look, this man is going to be president most likely for the rest of this term,” the senator said at San Francisco’s Commonwealth Club in August. “I just hope he has the ability to learn and to change and if he does he can be a good president. And that’s my hope.”

Following backlash, she was forced to clarify her remarks.

At 84, she is the oldest senator in the upper chamber and the top Democrat on the Senate Judiciary Committee.
As some reporters noted, the announcement is seen as bad news for L.A. Mayor Eric Garcetti and Senate President Pro Tem Kevin de León, who were viewed as likely candidates if Feinstein decided to retire. De León in particular is thought to have been eyeing the seat, as he’s termed out of the state Senate next year.

The talks about a primary challenger come as Democrats nationally have been looking to revamp their image with fresh faces and “new blood” after Hillary Clinton’s defeat last November.

“Her policies are completely out of touch with California Democrats, and we think she’d be more at home in a Republican primary,” Corbin Trent of the Justice Democrats told Vox, expressing support for a primary challenger.

With California positioning itself as the center of the so-called “Resistance” against the Trump agenda in Washington, the stage could be set for a challenge to Feinstein from the left. But with support from top Democrats in the state like U.S. Sen. Kamala Harris, along with a robust campaign infrastructure and strong name recognition, any effort to take her on will present a steep challenge.

Central California residents, long hoping for federal water reform, have begun to see some movement from Washington. 

Rep. David Valadao, R-Calif., has rolled out language designed to “build on last year’s legislation that was loved by farmers and loathed by environmentalists,” as McClatchy reported. “The bill scales back an ambitious San Joaquin River restoration program, speeds completion of California dam feasibility studies and locks in certain water deliveries to Sacramento Valley irrigation districts, among other things. Parts of the bill would not have been accepted by the Obama administration, but the Trump team is different.”

The reasons range from district work, to disdain for Trump, to responding to Twitter polls. In all, more than 50 House Democrats are planning on skipping the event.

Minority Leader Nancy Pelosi will attend, however, out of a sense of “responsibility” and to honor the “peaceful transition of power.” The two remaining undecided Californians are: Senator Dianne Feinstein and Rep. Xavier Becerra of Los Angeles. Feinstein had a pacemaker installed last week, while Becerra is going through the confirmation process to become California’s next attorney general.

While critics are already panning the boycotts, attending the inauguration is not a requirement; skipping it in protest is uncommon but not unprecedented. Around 80 Democrats skipped the ceremony for Richard Nixon in 1973 to protest a military strike in North Vietnam. 

The only real requirement surrounding the inauguration is the oath of office being administered; everything else is a matter of “custom and tradition.” But that in itself creates a problem for Trump, said John J. Pitney, Jr., a Roy P. Crocker professor of politics at Claremont McKenna College. 

“Here is Trump’s problem. He proclaims that he is a disrupter and takes pride in flouting customs and traditions. … Accordingly, he and his defenders cannot turn around and fault the other side for flouting customs and traditions,” Pitney said. “If he wants a disruptive tenure, he’s going to get it, and he won’t like all of the results.”

Bullet train report prompts renewed criticism, investigations

Good morning. The bullet train faces renewed scrutiny after a report surfaced suggesting massive cost overruns. 

According to the Los Angeles Times, a “confidential estimate by federal regulators that the cost of California’s bullet train project could jump significantly has prompted critics of the $64-billion Los Angeles-to-San Francisco rail effort to call for new investigations and proponents to disclaim reports that project costs are growing.”

“State officials have accused The Times of mischaracterizing its findings. In a letter to members of the Legislature, the California High-Speed Rail Authority accused The Times of incorrectly using internal deliberations to suggest cost overruns and delays that are not borne out by facts.”

“But critics of the project said the federal analysis validates their concerns that the state will be saddled with multibillion-dollar unbudgeted costs for the foreseeable future.”

CalWatchdog has more. 

In other news:

• Trump: “California’s expectations for Donald Trump’s presidency are in the cellar, with little more than a third of voters believing it will be a success, a new Hoover Institution Golden State Poll shows. But a plurality of voters holds more positive than negative views about some of Trump’s more controversial positions, including his call to restrict immigrants from certain countries, end sanctuary cities and to deport undocumented immigrants.” Politico has more. 

• ACA repeal: PolitiFact CA checks the accuracy of Senate President Pro Tempore Kevin de Leon’s claim that an ACA repeal could cost the state 200,000 jobs. Here’s a hint: You can’t measure the impact without knowing what the replacement is. In fact, CalWatchdog wrote something similar recently.

• Musical chairs: “As top California Democrats plot their future career moves, a critical piece of information is missing: Will Sen. Dianne Feinstein seek re-election? Speculation about the 83-year-old senator’s plans took on new urgency this year, as ambitious statewide politicians decide whether to run for governor with Gov. Jerry Brown termed out. News that Feinstein was fitted with a pacemaker last week reignited the parlor game, with California political circles discussing anew what the procedure might mean for the veteran lawmaker as she evaluates her options.” The Los Angeles Times has more. 

• 2018: “Peter Thiel, the Silicon Valley billionaire and outspoken Donald Trump supporter, is considering a 2018 bid for California governor, according to three Republicans familiar with his thinking.” Politico has more. 

Legislature:

• Assembly in at 1 p.m., Senate in a 2 p.m. 

Gov. Brown:

• No public events announced. 

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