Newsom

Top executives of California’s two biggest utilities warned they would take action to protect their shareholders if Sacramento lawmakers fail to pass legislation limiting their companies’ liabilities for wildfires sparked by their equipment.

“If the legislature does not act, or if they act and don’t actually solve the problem, then we’re going to have to take action,” said Patti Poppe, chief executive of Pacific Gas & Electric, on a July 23 call with Wall Street analysts.

Poppe did not specify what her company would do, but made it clear any action would protect shareholders’ money. Previously, she told Wall Street analysts that if lawmakers failed to pass legislation to protect the utilities, PG&E would use its cash to buy back the company’s shares, according to a report by the bank Jeffries.

That could raise the company’s stock price and benefit shareholders, while reducing money available for the utility’s California programs.

The comments from Poppe and Pedro Pizarro, chief executive of Edison International, came just before the state Legislature returned from summer break Monday to begin the last four weeks of its session.

Gov. Gavin Newsom and legislators have been working behind closed doors to address the state’s escalating cost of wildfires, including those caused by the utilities, The Times reported last month. The big electric companies have told their investors they are talking to Newsom and lawmakers about a bill package that would protect shareholders from paying for utility-sparked fires.

On Tuesday, government fire officials released their investigation into last year’s devastating Eaton fire, blaming Edison’s century-old transmission line, which the utility kept in place even though it had not carried power since 1971.

Last week, Edison’s Pizarro echoed some of Poppe’s statements. He told Wall Street analysts on a conference call that he too was prepared to make financial changes if the legislature does not pass a comprehensive bill that cuts the utilities’ financial wildfire risk before the legislative session ends Aug. 31.

Any legislation that passes without a protective framework for utilities, Pizarro said, would “influence how we prioritize and deploy future capital.”

Pizarro declined analysts’ requests to say where the company would cut back, other than saying it would continue spending aimed at keeping its grid safe and reliable.

“We’re going to evaluate the totality of the package that comes to us and figure out our response that goes along with it,” Pizarro said.

Pizarro also told analysts that without legislation supporting the utilities, Edison’s credit rating could be downgraded. If that happens, he said, it could raise bills for electric customers since the utility may have to pay a higher interest rate for new borrowings.

“That could be a significant cost impact through the cost of debt that gets passed through to SCE customers if we don’t have a framework in the next four weeks that is credit supportive for our utility,” Pizarro told the analysts.

Newsom and lawmakers are drawing up legislation based on recommendations in an April study that the governor ordered last year.

The final report didn’t focus on utilities’ responsibility for sparking at least seven of the 20 most destructive wildfires in state history. It suggested ways to reduce the cost of wildfire liabilities, including by capping fees of attorneys representing victims and reducing payments to survivors for non-economic damages like pain and suffering.

The report also suggested that utilities should no longer reimburse property insurers for damages of fires sparked by electrical equipment. Insurers say this would increase premiums for homeowners.

Edison is now facing thousands of lawsuits from the victims of the Eaton fire, which roared through Altadena, destroying more than 9,000 homes and other structures and killing 19 people. The lawsuits claim it was negligent for the fire, which Edison denies.

The utility created a program to pay for victims’ damages if they agree to give up their right to sue.

Edison has so far paid more than $1 billion to victims. Experts say the fire’s costs could exceed the $21-billion state wildfire fund that Newsom and lawmakers created in 2019 to protect Edison, PG&E and San Diego Gas & Electric.

If that happens, Edison customers must pay for the rest under legislation that Newsom and lawmakers introduced in the final days of last year’s legislative session.

Because of utility protections in legislation that Newsom and lawmakers passed in 2019 and last year, Edison has said it expects its shareholders to pay little for the Eaton fire. The utility says it believes it will be reimbursed for its damage payments to victims by the state wildfire fund and through customer bills, according to the company’s financial disclosures.

A coalition of wildfire survivors, consumer advocates and other groups wrote a letter to Newsom last month, asking him for legislation that keeps utilities accountable for the fires they cause.

The coalition pointed out that despite billions of dollars in damages from the Eaton fire, Edison’s profits soared last year by more than 200% — from $1.3 billion in 2024 to $4.5 billion.

The company’s board also rewarded Edison executives with higher salaries and bonuses. Pizarro received $16.6 million in cash, stock and other compensation, up 20% from 2024.

“For-profit companies that repeatedly cause catastrophic harm must be held accountable, not protected and enriched,” wrote Joy Chen, executive director of Every Fire Survivors Network, who is leading the coalition, in the letter to Newsom.

The letter warned that without reform of current state laws protecting utilities, disasters like the Eaton fire could happen again.

“Altadena is not the first community to endure this cycle, and it will not be the last,” the letter said.

President Trump touched down in Los Angeles on Tuesday evening and headed directly to his Rancho Palos Verdes golf course to headline a fundraiser for the Republican Party.

Though the visit was for a standard campaign benefit in the run-up to November’s elections, it was not without drama.

While the President was en route to California, authorities announced the arrest of an armed man who had been spotted suspiciously documenting security preparations at the golf course Sunday.

Sheriff’s deputies discovered the man had brought a gun and ammunition to the golf course. On Monday, they uncovered an alarming weapons stash, including an illegally modified AR-style rifle, a .45-caliber pistol and high-capacity magazines, at his Downey residence.

Meanwhile, on Tuesday afternoon, a group of more than two dozen protesters gathered outside the Trump National Golf Club entrance in anticipation of the president’s arrival.

The demonstrators chanted “Impeach Trump”and waved signs with slogans such as “Save our democracy” and “Pretti good time to resist,” referencing ICU nurse Alexander Pretti, who was fatally shot by federal agents in January, as passing cars periodically honked in approval.

“There are so many things that have happened [during the Trump administration] that are so disgusting, and I’m so worried for my children, my grandchildren and future generations,” said Redondo Beach resident Jeanette Boston. “They deserve better.”

A smaller group of around 10 counter-protesters gathered along Palos Verdes Drive wearing MAGA gear and American flag clothing. Several yelled “We love you Trump” as Marine One landed at the golf course carrying Trump just after 5 p.m.

The campaign fundraiser was closed to members of the media. However, a White House spokesperson said Trump would use the event to tout his administration’s achievements and “draw a sharp contrast between his commonsense agenda and the radical policies of Democrats like Gavin Newsom.”

Tuesday marked Trump’s second visit to Los Angeles during his second term in office. He last visited the region in January 2025, when he toured the fire damage in the Pacific Palisades and signed an executive order intended to expedite rebuilding efforts.

Since then, there has been a standoff between California leaders and the Trump administration over federal disaster aid.

California has submitted more than $1.5 billion in Federal Emergency Management Agency reimbursement claims for emergency response and infrastructure repairs stemming from the Eaton and Palisades fires, but only $37 million in funding has been approved thus far, according to the governor’s office.

“Donald Trump is coming to Los Angeles to raise money while wildfire survivors are still waiting for the federal recovery funding he promised 18 months ago,” Tara Gallegos, a spokesperson for the governor, said in a statement. “Californians deserve a President focused on helping families rebuild — not raising money for himself at his golf course.”

Trump, for his part, ignored criticism around the wait for wildfire relief on Tuesday and instead took to social media to promote what he sees as his administration’s economic achievements.

He wrote in a Truth Social post that investments in the U.S. economy and more “factory activity” were evidence of how well the country was doing.

“The Fake News and the Dumocrats are doing everything they can to distract people’s thoughts from these MASSIVE Successes, but it’s getting harder and harder for them to do,” Trump wrote. He added: “This is the GOLDEN AGE OF AMERICA, and we’re just getting started.”

On Wednesday, Trump will head to Las Vegas to deliver a speech at a casino focused on the economic achievements of his administration. While his California visit is focused on replenishing campaign coffers, the Nevada stop is more closely tied to election strategy as the swing state could play a key role in deciding who controls Congress after the November midterms.

WASHINGTON — President Trump will travel to Los Angeles on Tuesday and Las Vegas on Wednesday as part of a two-day West Coast trip aimed at highlighting his administration’s economic record ahead of the midterm elections, a White House official confirmed.

In Los Angeles, Trump is scheduled to attend a Republican National Committee dinner at Trump National Golf Club. The visit comes as the administration seeks to draw attention to his economic policies as time runs out for his administration to ease economic pressures ahead of the November election.

“The president will draw a sharp contrast between his commonsense agenda and the radical policies of Democrats like Gavin Newsom, who keep raising taxes, inviting rampant fraud in taxpayer-funded programs, and protecting illegal immigrant drug dealers, rapists, and murderers,” White House spokesperson Olivia Wales said in a statement Monday.

Trump is expected to “tout his wins for the people of the Golden State despite failed Democrat leadership,” Wales said, citing what she described as the “largest middle-class tax cut ever, the most secure border in American history, and a plummeting crime rate.”

Newsom has not yet publicly commented on Trump’s pit stop in California, but the Democratic governor in recent social media posts has criticized Trump’s handling of the economy.

In one post on X, Newsom pointed out that California is raising the minimum wage to $17.40 an hour next year as a way to attack Trump and the GOP for “defending a $7.25 minimum wage while workers scrape by.”

“Pitiful,” the governor wrote.

In a second post, Newsom amplified a post on X that shows how the prices of items like rice, cotton and wheat have increased since the start of the year.

“Great work, @realdonaldtrump,” he wrote.

Trump’s visit to Los Angeles will be his second since returning to office. He toured Pacific Palisades in January 2025 after the L.A. neighborhood and Altadena were ravaged by wildfires. During the visit, Trump signed an executive order intended to expedite rebuilding efforts.

Since Trump last visited the city, there has been a standoff between California leaders and the Trump administration over federal disaster aid.

In April, Los Angeles Mayor Karen Bass and county Supervisor Kathryn Barger met with Trump in the Oval Office to talk about their request for funding to help with the wildfire recovery efforts, an ask that Trump signaled support for but has yet to formalize.

Following his visit in California, Trump will travel to Nevada, where he will deliver remarks on the economy at Red Rock Casino.

California’s statewide minimum wage is set to rise next year.

Starting on Jan. 1, 2027, the statewide minimum wage will rise to $17.40 an hour, an increase Gov. Gavin Newsom boasted about on Friday.

Newsom — who has been eyeing a 2028 presidential run — said in a statement that California’s fiscal policies helped turn the state into “one of the strongest economies in the world” while the Trump administration and the Republican-led Congress fail to address “everyday cost pressures for working families.” The federal minimum wage has remained at $7.25 per hour since 2009.

“For years, Donald Trump and Republicans have blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations,” Newsom said. “California has chosen a different path — one that rewards work, grows the economy, and puts working families first.”

Not everyone agreed. Republican gubernatorial candidate Steve Hilton took to social media on Friday to decry the minimum wage increase as an “attack on workers” that will “crush small businesses.”

The current minimum wage in California for all employers is $16.90 an hour, though some workers must be paid more to comply with city and county rules and other state laws.

California’s minimum wage automatically increases each year to keep pace with inflation. The current system was established in 2016, when then-Gov. Jerry Brown signed into law a first-in-the-nation plan to gradually boost the state’s hourly minimum wage to $15 an hour, then adjust the wage annually based on inflation starting in 2024.

“This is about economic justice, it’s about people,” Brown said during the bill signing.

The specific amount of the minimum wage increase is tied to inflation — as measured by the federal consumer price index — and capped at 3.5%, according to state law. The state director of finance is responsible for calculating the adjusted minimum wage on or before Aug. 1 each year.

California has the highest minimum wage out of all 50 states, according to the governor’s office. (Only Washington, D.C.’s, minimum wage ranks higher, at $18.40.)

The state in 2024 raised minimum wage for fast-food workers to $20 an hour. The fast-food wage requirement applies to chains with more than 60 locations nationwide.

Researchers have been split on the economic impacts of the pay increase for fast-food workers, which chains like Pizza Hut and Cinnabon have fought. (Earlier this year, a major Carl’s Jr. franchisee cited the $20 fast-food minimum wage when he applied for bankruptcy protection.)

California also has higher minimum wages for healthcare workers at large facilities as a result of a union-backed bill Newsom signed in 2023. Under the legislation, many healthcare workers’ minimum wages in July rose from $24 an hour to $25 an hour.

Some cities in California, including Emeryville and West Hollywood, have opted to impose even higher city minimum wages exceeding $20 per hour.

Most states have minimum wages above the federal minimum. Five Republican-led states — Alabama, Louisiana, Mississippi, South Carolina and Tennessee — do not have an independent state minimum wage and default to the federal minimum.

While a 2019 Pew Research Center poll found that two-thirds of Americans support raising the federal minimum wage to $15 an hour, a deep partisan split over the issue remains.

Paramount Skydance Chairman David Ellison and California Atty. Gen. Rob Bonta are clashing again — this time over when the antitrust trial to determine whether Paramount can complete its nearly $111-billion takeover of Warner Bros. Discovery should begin.

In court documents Friday, Bonta and his coalition of 11 other Democrat attorneys general proposed a two- to three- week trial beginning April 5, 2027.

Ellison’s Paramount pushed back, saying the media company would like to start the courtroom action on Nov. 4.

“Our request for a November trial date is more than sufficient to give both sides the time they need to conduct discovery, gather evidence, and prepare for trial,” Paramount said in a statement that called the state attorneys general request for a springtime trial “nothing more than a stonewalling tactic.”

U.S. District Judge Araceli Martínez-Olguín, who is overseeing the high-profile case, now must pick the date.

For Paramount, the issue is hugely important.

Ellison wants to wrap up the massive Hollywood deal — bringing CNN, HBO and the Warner Bros. film and television studios under Paramount — as soon as possible. Doing so is crucial to holding together Paramount’s coalition of financiers and controlling its rising expenses, primarily legal fees and escalating obligations to Warner shareholders.

Early this year, Paramount agreed to pay Warner investors a so-called ticking fee of $.25 per share per quarter, beginning Oct. 1. The overture was aimed at winning over investors during a bidding war with Netflix. Paramount agreed to pay Warner shareholders at least $31 a share.

Those ticking fees would increase the cost by $650 million every quarter or $7 million a day. For Paramount, finalizing the transaction by year’s end would eliminate such payments in 2027.

Warner shares gained 3.3% Friday to $26.30 — well below the deal price. Paramount stock is down nearly 40% since early January; it ended the trading week at $7.96.

For the states — which have been joined in the antitrust litigation by the Writers Guild of America — setting the trial for next spring would bring advantages.

They would have more time to prepare their case while also gaining leverage over Paramount, should the two sides seek to resolve the issue out of court.

With the clock ticking, Paramount might be more willing to compromise to reach a settlement, including selling some of its hoped-for assets.

“Plaintiff States propose a fast-paced but realistic schedule that moves this case rapidly to trial while ensuring sufficient time for discovery and pretrial preparation,” the states said in the latest court documents. “A shorter timeline would be artificially compressed and risks depriving this Court of a full record on which to decide this $110 billion case.”

Paramount also faces a potential $7-billion payment to Warner Bros. should the merger collapse by next summer. Paramount is the smallest of the major media companies and acquiring Warner Bros. is key to Ellison’s ambitions to build a new Hollywood colossus.

The state attorneys general, including from Colorado, Oregon, New York, New Jersey and Nevada, have argued that the blockbuster merger — the largest in Hollywood in decades — would violate the Clayton Antitrust Act, which has been on the books for more than a century.

If the deal goes forward, just four companies — a post-merger Paramount-Warner, Disney, NBCUniversal and Sony Pictures — would control 86% of movies that are widely released (in more than 3,000 movie theaters), according to the attorneys general lawsuit.

Paramount-Warner Bros. would also own more than 50 cable channels, including CNN, TBS, HGTV, Animal Planet and Comedy Central, in addition to HBO.

The Wall Street Journal reported Friday that Gov. Gavin Newsom was not eager for a trial to take place.

Newsom has not publicly favored either side. Sources have previously told The Times that both sides have been lobbying the governor to win his support.

A Newsom spokesperson declined to discuss the Journal article, saying: “Our office doesn’t comment on anonymous sources or unverified reporting.”

Bonta — not Newsom — is leading the case.

Both hold statewide office; Bonta is running for reelection this year and Newsom is widely expected to run for president in 2028.

Paramount last week agreed to delay its acquisition amid concerns that it was poised to lose an important motion for a preliminary injunction — which would have rattled investors — and scuttled the deal until a trial could be held.

On Friday, Paramount said further delays “harm the many individuals outside this courtroom who will be denied the expanded content offerings and industry stability that a combined Paramount-WBD promises to bring.”

For his part, Bonta has said he was “eager” to move forward to a trial.

“Our challenge to the unlawful Warner Bros./Paramount merger is a clean-cut antitrust challenge through and through: it’s about protecting the vibrancy of an industry, the pockets of consumers, and the quality of films and television programs that take center stage in many of our lives,” Bonta said in a statement. “This challenge deserves careful and thorough review.”

SACRAMENTO — California Gov. Gavin Newsom and his wife, documentary filmmaker Jennifer Siebel Newsom, have earned at least $11 million since he took office, with most of their income coming from wineries, restaurants and other investments, according to tax returns from 2019 through their most recent filings for 2024.

The tax records show the couple has earned between $1.4 million and $3.5 million per year, putting them in the upper echelon of Americans when it comes to annual income.

Newsom allowed reporters on Thursday to view four years of the couple’s jointly filed tax returns after receiving criticism for not disclosing his filings since he last released the information for the tax year 2020.

The release of the tax records comes just weeks after Newsom accused the Department of Justice of launching — at President Trump’s request — a baseless and politically motivated investigation into him and his wife, including her business interests and charity work. The governor said the probes, which federal officials have not confirmed, were a personal vendetta launched because he’s considering a run for president in 2028.

Siebel Newsom leads the Representation Project, a nonprofit that advocates for gender equity through film and education programs, and Girls Club Entertainment, a for-profit production company she owns that holds the copyrights to her documentaries. The nonprofit has faced criticism for accepting donations from companies that lobby the governor, including Pacific Gas & Electric Co. and AT&T.

The tax records released Thursday showed that her salary from the Representation Project was $145,000 to $150,000 annually from 2021 though 2024, similar to prior years. While Girls Club paid her $100,000 in 2021, and $11,700 in 2022, she did not report any income from the production company in the two years that followed.

The governor’s office, in a summary of the tax returns provided to reporters, stated that financial documents contradict “the FALSE right-wing claims that the Newsoms ‘enriched themselves’ through new ventures and nonprofit organizations.”

The memo stated that their income has declined since Newsom became governor. The tax records also show that Girls Club Entertainment has been losing money in recent years.

The governor signed a law during his first year in office to require presidential and gubernatorial candidates to release five years of tax returns to appear on the primary ballot. Democrats passed the law in response to Trump’s refusal to make the information public.

Less than six months later, the California Supreme Court struck down the portion that required presidential candidates to comply with the law. Gubernatorial candidates are still required to disclose their tax filings during election season.

Though tax returns became a flash point in the California vs. Trump political saga, Democrats have for decades demanded that candidates for governor and president release their income tax filings.

Presidential candidates dating back to the Nixon administration routinely shared their filings, with only President Ford and Trump refusing to do so. Former Democratic Gov. Jerry Brown and his Republican opponents also declined to share their tax returns before the 2010 and 2014 California gubernatorial elections.

Newsom released his tax returns during his campaigns for governor in 2018 and 2022, again in 2020 and before he beat a recall election in 2021. California candidates, elected officials, judges and some public employees also file annual economic interest statements.

“In the interest of transparency, he’s now voluntarily making all remaining filed tax returns available — going beyond what the law requires — as part of his longstanding commitment to transparency,” said Izzy Gardon, a spokesperson for the governor, in a statement.

The governor and his wife put their investments in a blind trust when he took office. Their earnings, which have totaled more than $1 million per year since at least 2011, stem from investments in wineries, restaurants, bars, hotels and hospitality management companies based in San Francisco, Napa Valley, and Lake Tahoe, according to economic interest disclosures filed with the state.

The latest batch of tax returns covers 2021 through 2024. Reporters were allowed to view, but not copy, more than 700 pages of tax records at the governor’s office in Sacramento on Thursday. Their 2025 tax returns were not available because, as he has done most years, the governor filed for an extension with the Internal Revenue Service and he doesn’t expect to file until October.

The couple’s reported income was the highest in 2021, when they sold their home in Kentfield, a wealthy enclave in Marin County, for $5.9 million. The Newsoms reported receiving more than $55,000 in rent for leasing out the home that same year, but declared an overall loss for tax purposes of $70,000 due to their mortgage payments, taxes, legal fees and depreciation.

The family previously moved to a mansion in Fair Oaks that they purchased for $3.7 million in 2019 following a brief residence at the Governor’s Mansion in downtown Sacramento.

The family kept the Fair Oaks home and purchased another $9.1-million estate in Marin County in 2024, where they primarily live and their four children attend school. Newsom and his wife also spend time in Fair Oaks while working at the state Capitol.

During those four years, Newsom and Siebel Newsom paid a high of $1,253,187 in federal income taxes in 2021, and a low of $488,821 in 2023. Their state tax income bill ranged from $34,307 to $213,331 during that time. The annual property tax bills hovered between $48,000 and $64,300 over that span.

The governor’s income included his government salary, which ranged from $167,647 in 2021 to $192,087 in 2024.

Newsom also was paid more than $150,000 during that period as an author. In recent years, Newsom has published a book for children with dyslexia and a memoir, “Young Man in a Hurry.”

The tax returns showed the family paid from $154,000 to almost $200,000 each year for household employees from 2021 through 2024. The returns showed that they paid for Social Security coverage, Medicare and the state’s unemployment benefits fund as part of those expenses.

The governor and his family donated more than $200,000 to charity from 2021 to 2024. While most of those donations were in cash, they also gave $4,900 in “Armani Business Wear” to the Oakland nonprofit organization Restorative Justice, and toys, furniture, appliances, books and other goods to Goodwill in Sacramento.

Among their listed expenses in 2021 was $3,542 in storage costs for silver and platinum holdings. Previously, the couple made nearly a half-million dollars trading silver bars in 2011 alone.

An aide involved in an affair with Gavin Newsom more than 20 years ago, when he was mayor of San Francisco, detailed their relationship and her journey to sobriety in an essay published by Vanity Fair on Tuesday.

Although Ruby Rippey, 54, has spoken previously about her relationship with the now-governor, her first-person essay offers the most intimate description yet of the affair. It comes at a time when Newsom is wrapping up his final year as California governor and considering a presidential run in 2028.

Rippey, who had worked as Newsom’s appointments secretary, was married to Alex Tourk, the then-mayor’s close friend, campaign manager and prior deputy chief of staff, when the affair became public in 2007. Tourk resigned after Rippey told him that she had been sleeping with their boss, she writes.

At the time, Newsom was newly divorced from Kimberly Guilfoyle and he apologized in front of a gaggle of reporters who packed his office for a news conference, admitting “everything you’ve heard and read is true.” Later, he said he was seeking treatment for alcohol abuse.

In the essay, Rippey details that the affair with Newsom happened when she was a new mother and when her drinking, which had been a problem before the relationship, spiraled out of control.

Rippey writes that their relationship began in July 2005 after a wedding at a Napa Valley estate and spanned months, with intermittent sexual encounters until she entered rehab in May 2006.

They met at his penthouse in San Francisco’s Russian Hill neighborhood, at a private back room in a bar in North Beach and at the W Hotel in Los Angeles, she writes.

“We meet and we drink. There is sex, but it isn’t the point. The point is proximity — to power, to being chosen, to feeling newly visible — no longer muted by pregnancy, by new motherhood, by the strain of white-knuckling long stretches of sobriety,” she writes. “It isn’t love. It isn’t romance. It’s intoxication.”

Izzy Gardon, a spokesperson for the governor’s office, said on Tuesday that Newsom acknowledged his role and publicly apologized for the affair nearly two decades ago.

“In the time since, he met his wife, started a family and has focused on serving Californians. He addressed this chapter of his life, including in his memoir, and out of respect for everyone involved, does not have anything further to add,” Gardon said.

The affair occurred while Gavin Newsom was mayor of San Francisco.

(San Francisco Chronicle / Hearst Newspapers)

Newsom faced renewed criticism for the affair during the 2018 governor’s race amid a larger reckoning over sexual misconduct in politics, corporate America and Hollywood. But Rippey has said she doesn’t see herself as a victim of a powerful man.

“Yes, I was a subordinate, but I was also a free-thinking, 33-yr old adult married woman & mother. (I also happened to have an unfortunate inclination towards drinking-to-excess & self-destruction.),” she wrote on Facebook at the time.

She still doesn’t place blame on the governor for what happened, but noted in her essay that in the post-#MeToo era she came to realize that her then-boss had a responsibility to “hold the line.”

“That didn’t happen. But I didn’t stumble into the space left open — I saw a possibility and went for it,” she writes. “Both things are true: I am responsible for what I did. Power does not distribute consequences evenly.”

For Newsom, she writes, the affair is merely a “footnote in a longer arc of ascent. For me, it is the fracture that split my life into before and after.”

In his memoir, “Young Man in a Hurry: A Memoir of Discovery,” published this year, Newsom acknowledges the liaison with Rippey, describing it as “the briefest of affairs.”

He also writes that he admitted the betrayal to Tourk, a detail that Rippey takes issue with in her essay. She says she was the one who first broke the devastating news to her husband via email while she was at her parent’s house in Napa and he was home in San Francisco with their young son.

“But resentment is a luxury I can’t afford,” she writes. “Instead, I return to gratitude, not for the affair, not for the pain I caused Alex, but for the totality of what followed. I required something catastrophic to change direction. Something that made the cost of going back — of drinking again — unthinkable.”

After the affair, Rippey and Tourk divorced but continued to co-parent their son, who is now an adult. She’s been sober for 20 years, she writes, remarried and now has a son with her second husband.

“The damage was mine,” she writes at the conclusion of her essay. “But so is the life rebuilt in its wake.”

Times staff writer Taryn Luna contributed to this report.

SACRAMENTO — As the architect of a one-time tax on California billionaires, Dave Regan says he’s pushing the measure to raise $100 billion to protect low-income patients, workers and hospitals from President Trump’s cuts to healthcare.

The behind-the-scenes negotiations with Gov. Gavin Newsom’s office in June to pull the measure off the ballot, however, revealed another possible goal, according to two sources familiar with the talks who requested anonymity to share details of the discussions with The Times.

Regan, the president of SEIU-United Healthcare Workers West, asked for union contracts with two hospitals in San Diego and Fresno and a clinic in Imperial County, among a list of sweeping demands to grow his union, in exchange for rescinding the measure, the sources said.

The union leader denied that he asked for concessions for his union in exchange for removing the billionaire tax from the ballot, calling the allegations “categorically false.”

“We are trying to solve a problem,” Regan said. “The problem is to prevent a catastrophe in California’s healthcare system. We put forward a proposal. Nobody else has offered a solution, and none of what you are referencing happened.”

The talks failed to result in a deal and the measure will appear as Proposition 40 on the November ballot, leaving California voters to decide pivotal tax policy that has roiled the Democratic Party and opponents worry could ultimately reduce revenue for the state budget.

The terms Regan allegedly laid out raise the question of whether he intended for the billionaire tax to go on the ballot, or if it was designed as a leverage play to expand his union, which represents more than 120,000 workers and is among the largest healthcare unions in the nation.

Regan, who has been elected to five consecutive terms as union president since 2011, has a record of launching ballot initiatives at the state and local level to use as leverage for union expansion and to thwart his political opponents.

His foes say that this year he went too far.

“It’s no secret in Sacramento that the ballot initiative has been used this way by UHW as a weapon,” said Francisco Silva, president of the California Primary Care Assn., which represents community clinics. “They’ve been very vocal about it and we think it’s a bigger risk to the safety net than any benefit that it brings.”

Known as a stubborn negotiator and a brash personality, Regan has filed multiple ballot initiatives against the healthcare industry.

His opponents say his strategy centers on launching initiatives that would hurt employers, which forces them to come to the table to negotiate. Regan’s union then requests union contracts or other concessions that could pave the way for a collective bargaining agreement. If employers resist, the initiative advances to the ballot. Voters consistently reject his measures, but companies still spend millions of dollars campaigning against them.

Over the years, Regan has proposed multiple measures that would have limited charges and executive salaries at hospitals and dropped the initiatives after landing temporary deals with the California Hospital Assn. that could help his union’s organizing efforts.

This year, UHW agreed to call off an initiative to again cap compensation for hospital leaders, and the hospital association rescinded its dueling proposal to require the union to seek approval from its members to spend more than $1 million on a statewide ballot measure campaign.

Regan led and lost measures against the dialysis industry in 2018, 2020 and 2022 as he struggled to force dialysis companies to recognize his union and negotiate a contract.

Silva accused Regan of using the same playbook in negotiations around another measure on the November ballot, Proposition 44, which would restrict spending at nonprofit community health clinics.

Regan drafted Proposition 44 to require that community clinics spend 90% of revenue on patient services, which he said ensures that money is aligned with the mission of the health centers. But Silva said the measure dramatically reduces funding for other essential services in the community care model, such as community outreach, education, overhead costs, technology and medical equipment investments, and programs that bring people living on the streets into the healthcare system.

About 70% of the patients community clinics serve are insured through Medi-Cal, and the rest are either on Medicare or uninsured, with a small portion on private insurance, Silva said. The measure would result in layoffs and clinics being forced to close, and ultimately reduce access to care for low-income Californians, he said.

“One of the things that stands out that really highlights the abuse of the ballot initiative process in this instance is that the substance of what’s on the ballot has nothing to do with what he wants to negotiate with us,” Silva said. “The request was to guarantee 25,000 workers, or else.”

Regan also denied that he asked the clinics to support his unionization efforts in exchange for dropping Proposition 44.

“We wanted to construct a relationship with the clinic association that prioritized appropriate funding of the community clinics in California, including restoring the healthcare cuts that were introduced by the ‘One Big [Beautiful] Bill,’” Regan said. “It was a strategic relationship where we’re working in a mutually cooperative way to properly fund the healthcare system to respect workers, and they were not interested in that.”

Regan’s opponents say his strategy runs afoul of the purpose of direct democracy and pushes the bounds of legality.

During negotiations on the billionaire tax, essentially put the onus on Newsom to force unrelated private hospitals and clinics to unionize their employees, the sources said.

Despite a desire to call off the tax measure, Newsom’s office couldn’t provide guarantees to satisfy Regan’s demands, according to those sources.

California legislators changed state law in 2014 to provide more flexibility around initiative negotiations and to allow proponents to pull measures off the ballot after they gather enough signatures and qualify for the election, said Mary-Beth Moylan, an associate professor of law at McGeorge School of Law.

State law also prohibits a proponent of an initiative from bargaining for money or a thing of value in exchange for abandoning their measure, which hasn’t been tested in court, she said.

“I think the intention behind the law allowing the ballot measures to be negotiated off was that the negotiation would be for the Legislature to do the thing that you’re bringing about in the measure,” Moylan said. “It is not to use it as leverage for obtaining something else.”

Regan’s wealth measure retroactively applies a one-time 5% tax on the net worth of billionaires who were residing in California as of Jan. 1, 2026.

He and advocates of his proposal cast it as a solution to the healthcare cuts from the Trump administration. It comes as the progressive message on wealth inequality has gained support in California and beyond.

“What’s remarkable about the situation is that everyone — the governor, the Legislature, the healthcare industry — everyone agrees that the ‘One Big Beautiful’ bill is going to result in 3.5 million people losing healthcare coverage, 150,000 frontline healthcare workers losing their jobs, community clinics and hospitals closing, and all of us who buy or receive our healthcare through job-based insurance are spending more on premiums, deductibles, and copays because the legislation defunded healthcare and in return gave yet another round of huge tax cuts to the wealthiest Americans,” Regan said. “That’s why we have put Proposition 40 forward.”

Newsom contends that Regan’s solution won’t work.

Instead of paying more California taxes, billionaires would simply pick up and move to another state with a lower tax rate before the start of the year, the governor warned. The state budget is dependent on income taxes the rich pay on stock market and similar profits.

A report from the Hoover Institution at Stanford University estimated that the tax would generate only $40 billion, not the $100 billion proponents claim, largely because of an expected exodus of billionaires. Overall, the tax would result in an estimated loss for the state of $24.7 billion, with the permanent decline in future income tax revenue due to billionaire migration eclipsing any gains from the one-time levy, according to the report.

Regan rejected the findings of the report and cast doubt on the amount of taxes that billionaires actually pay in California.

Newsom sought to negotiate with Regan to remove the billionaire tax from the ballot before the beginning of the year. At the time, Regan said he wanted an extra $20 billion for healthcare in 2027-28, which is beyond Newsom’s time in office and not something the outgoing governor could promise, according to two sources familiar with the negotiations.

Regan said he never asked for $20 billion in funding for healthcare to remove the billionaire tax from the ballot. He said he was open to hearing alternative solutions that never came.

“But did we ever make a proposal, or did we ever receive a proposal for something different?” Regan said. “The answer is no.”

In the spring, Newsom began working to form a coalition against the initiative that includes Planned Parenthood, doctors and firefighters while billionaires launched a series of counterproposals.

In an unusual split within labor, major unions such as the California Teachers Assn. and the State Building and Construction Trades Council oppose the measure. Teamsters California and AFSCME California joined Regan. The SEIU California State Council and California Federation of Labor Unions have yet to take positions.

Under California law, proponents had until June 25 to rescind measures that earned enough signatures to qualify for the ballot. Negotiations picked up again to remove the measure from the ballot shortly before the deadline. Two sources said Regan’s demands changed and allegedly had nothing to do with raising money to offset federal healthcare cuts.

Sources said Regan said he wanted union contracts with two private hospitals and a health clinic, an organizing neutrality agreement with healthcare clinics statewide, recognition of his union from dialysis clinics and for billionaires to remove measures they launched in response to his tax.

Newsom’s office said they couldn’t force private companies to do anything. The governor’s aides offered an alternative plan to dedicate around $7 billion over several years to healthcare funding in California, which didn’t move Regan.

“There were no negotiations,” Regan said about the billionaire tax.

Days before the deadline to pull the wealth tax measure from the ballot, UHW announced an offer to reduce the billionaire tax from 5% to 2% of net worth that the union said Newsom rejected. Sources said the compromise was first offered in a press release and did not reflect any serious negotiation.

Regan set a goal to add 25,000 new members by this year and has so far added around 8,000, according to the union’s website.

In exchange for removing the billionaire tax from the ballot, sources said one of Regan’s demands was for Newsom’s office to get involved with battles for union contracts at hospitals in Fresno and San Diego and a clinic in the Imperial Valley.

The union is tied up in labor disputes over recent attempts to unionize facilities in two of those places — Rady Children’s Hospital in San Diego and Innercare, a community clinic in El Centro.

The dialysis industry became a ballot target for Regan three election cycles in a row as he attempted to unionize its workers.

The battle is on pause after dialysis companies agreed to not oppose a $25 minimum wage increase for healthcare workers and UHW agreed to not target the industry in legislation or ballot measures through the end of this year, but the fight turned DaVita and Fresenius Medical Care into major political donors in state campaigns.

California’s billionaire class is also increasing its presence in state politics.

Billionaires pushed two measures on the November ballot that seek to neutralize the billionaire tax and block new taxes on personal property and assets and require audits of new programs funded with special taxes.

The billionaire tax has also become a national rallying cry for the political left, drawing the high-profile support of U.S. Sen. Bernie Sanders (I-Vt.) and others who are fed up with wealth inequality. Opponents of Proposition 40 have questioned whether any of the solutions Regan proposed would have been enough for him to remove the measure from the ballot and avoid the wrath of progressives who backed the tax.

Sacramento political observers say the unintended consequences of Regan’s tax measure are already reshaping California politics.

“When he did the billionaire tax, all these people who never engaged in politics finally woke up,” said Jim DeBoo, a Democratic consultant and former chief of staff to Newsom. “And they aren’t going away.”

The measure is causing a rift within the SEIU California State Council, an umbrella organization that represents more than 700,000 workers from all SEIU unions including UHW.

The billionaire tax only benefits healthcare. SEIU, which also represents workers in the public sector, nursing homes, child care and other service industries, has become a target of California’s wealthiest new political players despite most of its union members gaining nothing from the measure.

Billionaires and their companies, including Ripple co-founder Chris Larsen, venture capitalist Tim Draper, Google and Meta have spent nearly $30 million on a successful campaign to oppose SEIU-backed progressive candidates or boost moderate Democrats in legislative races. The same donors spent only $50,000 on independent expenditures in legislative races in the entire 2024 election cycle.

Shaudi Fulp, a political strategist working with Larsen and Draper, said a new governor and lawmakers present an opportunity to build fresh governing coalitions around issues that matter most to Californians.

“California is entering a unique moment of transition,” Fulp said.

The billionaires’ strategy is whittling away at SEIU’s influence in the state Legislature, where the state council has historically used its endorsements and army of volunteers to boost progressive candidates aligned with their cause. Moderates backed by billionaires beat nearly every SEIU-endorsed candidate in more than a dozen races in the June primary, with record spending knocking union candidates out of the top two in places such as Bakersfield and Orange County.

The SEIU California State Council declined to comment for this story.

The battle over the billionaire tax is also expected to become the most expensive ballot measure campaign of the election cycle, if not ever. The opposition is poised to exponentially outspend UHW.

“Look, the only thing that stands down a bully is when you punch him in the face,” said Brandon Castillo, a political consultant who has represented healthcare providers against UHW on more than a dozen initiatives. “You can’t sit back and continue to take punches or nothing will change.”

Staff writer Nicole Nixon contributed to this report.

A group claiming to represent California fire survivors began sending mailers and paying for social media ads this spring, calling on lawmakers to take action to reduce the rising cost of wildfires.

“Contact your legislator and tell them we need to fix our wildfire problem to make California more affordable,” said a mailer sent this month by the group called Wildfire Victims First.

“Stand with wildfire victims,” the group’s website states, urging people to join its cause.

The group was created with money from California’s three biggest for-profit electric utilities — Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric — which government investigators found ignited at least six of the state’s 20 most destructive wildfires.

The corporate campaign has angered wildfire survivors, including some of the thousands of families in Altadena who lost their homes in last year’s Eaton fire. The blaze, which killed 19 people, remains under investigation. Edison has said its century-old transmission line is the likely cause.

The utility-funded group is lobbying in Sacramento for proposals in a study that Gov. Gavin Newsom ordered to guide lawmakers in writing wildfire-related bills. The study largely ignored utilities’ responsibility for igniting fires.

Among its dozens of proposals is limiting amounts victims can get for pain and suffering, capping fees for attorneys representing survivors and requiring property insurers to bear more of the cost of utility-sparked fires.

”Each proposal would shift more of the cost of catastrophic fires away from the corporations responsible and onto survivors, policyholders, taxpayers, and the public,” wrote Joy Chen of Every Fire Survivor’s Network in a letter to Newsom this week.

Chen wrote that the industry-funded Wildfire Victims First campaign “created the appearance that wildfire survivors supported” the findings of the study. “We do not.”

The 15-page letter was signed by other organizations including Public Citizen, Consumer Watchdog and the National Day Laborer Organizing Network.

The coalition is urging Newsom and lawmakers to do more to hold utilities accountable for the fires they ignite, so they don’t happen again.

“The Eaton fire devastated Altadena, home to one of California’s most historic Black communities,” said Brandon Lamar, president of NAACP Pasadena, who signed the letter. “Now as survivors fight to rebuild, they should not be asked to bear the cost of protecting the corporations whose failures devastated their community.”

Edison told its shareholders in its annual report that it believes it acted as a “reasonable” utility operator before the fire. If state regulators agree it acted reasonably, Edison will be reimbursed for payments it makes to victims by a $21-billion wildfire fund, which Newsom created through legislation in 2019.

And if Eaton fire damages exceed the $21-billion fund, Edison’s customers will pay the rest through their electric rates under fine print embedded in last year’s Senate Bill 254 — amendments that Newsom and lawmakers added so late that the legislative session had to be extended.

State Sen. Sasha Renee Perez, a Democrat who represents Altadena, said she opposed any bill that would limit payments to victims for pain and suffering.

“I can’t think of a more offensive thing to propose when I have friends who lost family members in the fire,” she said.

Anthony Martinez, a spokesperson for Newsom, said the governor and lawmakers were talking about new legislation because the study “concluded that the current system is unsustainable and not working for fire survivors, utility customers or insurance policyholders.”

“It’s essential that we work to address the complex and interconnected challenges Californians face from the increasing risk of catastrophic wildfire,” Martinez said.

He didn’t disclose what specific measures the governor supports.

Nathan Click, who directs the corporate Wildfire Victims First campaign, said that the group launched after the study found that “payouts to financial middlemen — like trial attorneys, hedge funds and insurance companies — are often paid out before wildfire victims receive a single dollar.”

“Shockingly, trial attorneys can take up to 40% of wildfire victims’ settlement awards,” he said.

Click said the group was advocating for legislation that reduces wildfire risk, expands access to affordable property insurance and ensures quick compensation to victims.

The utility-paid campaign has been joined by electrical worker unions, a powerful force in Sacramento, as well as the California Building Industry Assn. and dozens of other groups.

The Eaton fire was the second most destructive wildfire in state history.

Pedro Pizarro, Edison International’s chief executive, said last year that a leading theory of the fire’s cause was that an idle transmission line in Eaton Canyon was briefly reenergized through a process called induction, sparking the fire. Induction happens when the magnetic field of a nearby live wire causes power to jump to inactive equipment.

Edison kept the idle transmission line in place despite not using it for 50 years. The state’s utilities had known about the risks of leaving unused equipment in place. In 2019, the Kincade fire in Sonoma County, which destroyed hundreds of homes, was ignited by an idle transmission line owned by PG&E.

Despite the billions of dollars in damages caused by the Eaton fire, Edison’s profits soared last year by more than 200% — from $1.3 billion in 2024 to $4.5 billion.

The company also paid its top executives more. Pizarro received $16.6 million in cash, stock and other compensation, up 20% from 2024.

“If the financial rewards for repeated catastrophic failure are record profits, record executive compensation, and record shareholder dividends,” Chen wrote in the letter to Newsom, “then catastrophic failure is exactly what this system will keep producing.”

In the latest salvo in the war between the Trump administration and California, Health and Human Services Secretary Robert F. Kennedy jr. said Tuesday that his agency withheld $867.5 million in Medicaid payments to the state over concerns about fraud.

Kennedy also said his agency defered $199 million in Medicaid payments to Minnesota over similar concerns.

“If Gov. Gavin Newsom or Gov. Tim Walz wants this funding released, all they have to do is provide basic documentation showing that these services are legitimate and not fraudulent,” Kennedy said at a news conference.

Just under half of the funds withheld from California were in connection with in-home health services.

Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services, said California’s spending on in-home health services went up by more than double the national average over the last two fiscal years.

“That doesn’t make sense,” he said.

About a quarter of the funds withheld involved care provided to individuals with “unsatisfactory immigration status,” whose eligibility to be in the country and receive these services is in question, which Oz characterized as an “ongoing massive problem for California.”

The announcement by Kennedy and Oz on Tuesday comes two months after Vice President JD Vance announced that the administration would be deferring $1.3 billion in Medicaid payments over fraud concerns, largely connected to hospice services and in-home healthcare.

Newsom’s office, in a social media post, called the announcement a “recycled political stunt.”

“California isn’t being targeted because Trump has evidence of fraud,” the post said. “We are being targeted for political reasons — and because Dr. Oz doesn’t understand that we are *SAVING* taxpayers money by keeping seniors and people with disabilities out of far more expensive nursing homes!”

Newsom’s office also said that the state stands “ready to collaborate” with the Centers for Medicare and Medicaid Services “in good faith efforts to combat fraud.”

The office of California Atty. Gen. Rob Bonta said it is reviewing the deferral of payments and allegations of fraud.

“We have not hesitated to challenge unlawful actions by the Trump administration, and we will continue to act whenever Californians’ rights or access to critical services are threatened,” Bonta’s office said.

Despite Newsom’s claims that the accusations are political, the California state auditor has repeatedly flagged Medi-Cal eligibility discrepancies that have exposed the state to billions of dollars in questionable payments.

California Department of Healthcare Services spokesperson Anthony Cava noted, however, that a 2020 state audit of in-home care found “no program integrity concerns” and encouraged expansion of the program to reduce spending on institutional care.

Cava also pointed out that the federal government had previously approved California’s approach to in-home care.

Newsom and Oz have clashed before.

Newsom filed a civil rights complaint in January against Oz, after Oz posted a video to social media from Van Nuys in which he accused the “Russian Armenian mafia” of being a leading driver of $3.5 billion in fraud in hospice and home-care services.

Newsom said that Oz’s claims were “baseless and racist.”

The announcement by Kennedy and Oz on Tuesday is the latest effort by the Trump administration to crack down on suspected Medicaid fraud in numerous states across the country.

SACRAMENTO — California has spent millions of dollars to combat sex trafficking, and yet it can still be found in every city and town, hiding in plain sight.

Whether it’s online, on places such as Figueroa Street in L.A. or Stockton Boulevard in Sacramento, or even in the hotel rooms where our World Cup guests stayed, there are thousands of women and girls being sexually exploited in California right now, despite all that money and all the resources it has purchased.

“The reality is that few threats to a woman’s safety are as brutal or as overlooked as sex trafficking,” First Partner Jennifer Siebel Newsom said Monday, sitting with her husband, the governor, in a tiny second-floor dance studio built for survivors of trafficking.

Siebel Newsom was there to watch Newsom sign an executive order that was driven by her work as an advocate for survivors of trafficking. On its surface, the order may not sound like much and isn’t likely to make the news. It calls for most of the major state agencies to come up with a plan within 60 days to work together to curb trafficking and help survivors.

Hardly an earth-shattering demand. But believe it or not, one of the biggest barriers that our state faces, in this great age of technology and always-on connection, is that there is little collaboration between the folks fighting traffickers.

Yes, we have about 35 task forces statewide working on this issue and sometimes they run joint operations. But more often, those fighting trafficking live in their own silos, doing their own work, and often failing or refusing to share even scant details with other jurisdictions.

The same holds true for the many organizations that work with survivors, most of which have come on the scene only in the last few decades as sex trafficking morphed from a crime in which children were viewed as complicit to one in which we understand that they are victims.

Those organizations often do great work, but they too often do it alone. A survivor — or a girl being trafficked and looking for escape — has no easy way to find someone to help her. It’s largely luck, the right outreach person in the right place at the right time, or a cop who has taken the time and care to know what the resources are.

“We are so fragmented,” Sharmin Bock told the governor. She’s a former prosecutor in Alameda County who tried the first sex trafficking case in the U.S. Now, she’s advising the first partner on how California can do a better job fighting the predators — traffickers and buyers alike — who daily trade cash for the use of a human body, willing or not.

Bock points out that while those fighting against trafficking lack collaboration, the opposite is true of the criminals. Up and down the state, they are organized. A trafficker might pick up his victim in one city, only to transport her to another city to meet buyers. Victims are moved often, and even sold or traded to other traffickers.

Once a victim crosses a jurisdictional line, everything that happened on the other side of it too often gets lost in the nowhere land of bureaucracy and red tape. A move from Los Angeles to Riverside, and the girl might as well be in Taiwan, as Bock puts it.

“We need to stop asking whose case is this, and rather ask how do we solve this case together? How do we solve the problem together?” Bock said. “Collaboration recovers children sooner, links investigation, dismantles trafficking organizations and holds traffickers accountable. A trafficker should never escape accountability because critical information was sitting in another agency’s database.”

So while Newsom’s demand for a 60-day plan might not sound like much, it goes to the heart of what ails the system.

“Traffickers collaborate every day,” Bock said. “Traffickers have built networks to exploit children. We must build stronger networks to protect them.”

Newsom drew a parallel to the plague of retail theft that captivated the state not long ago, and which the state has successfully combated. Though careful to draw the obvious line that stealing a tube of toothpaste is a far cry from sexually exploiting a child, he pointed out similarities — online platforms that turned a blind eye, a lack of coordination between agencies, criminals that knew how to exploit not just victims, but systems.

Now he’s looking for that kind of “momentum,” to solve this most stubborn of abuses.

“For the last few years, I thought I could buy my way out of this,” Newsom said with a shocking bit of honesty, pointing to all that budget money that has been invested. But, he said, he’s clear now that it’s not a money problem. It’s a people problem.

“How is that possible? “ the governor wondered. The executive order, he said, is about saying “enough of just good intentions … we’re not delivering fundamental results.”

A report at the end of 60 days isn’t results. But it’s an acknowledgment that California needs to do better, and a road map to get there.

That’s crucial. Like Siebel Newsom and the governor, I’ve got two teenage daughters and I know just how vulnerable girls are, in the best of circumstances.

With all our resources and good intentions, California can’t continue to let predators win simply because they’re more organized.

More than three dozen California legislators are calling for Gov. Gavin Newsom to exempt the state’s film and TV production incentive program from a recently approved cap on corporate tax credits, warning that without action it will be “significantly kneecapped.”

Though the state’s budget has already been approved, the legislators say a solution must be devised before the end of the year so that production companies do not lose the “full value of tax credits they earned in exchange for creating middle-class entertainment industry jobs,” according to a letter dated Friday and addressed to Newsom, State Senate President Pro Tempore Monique Limón and Assembly Speaker Robert Rivas.

“Tax credits earned for creating jobs in motion picture and television production are not the same as tax credits provided for research and development,” the letter states. The legislation “creates short-term budget savings by reneging on commitments made to the entertainment industry and the working families who depend upon it for their livelihoods.”

The letter comes shortly after Newsom signed his final state budget as California’s governor, a $351.7-billion spending plan that includes new limitations on corporate tax credits.

The budget includes a provision that restricts the maximum tax credit companies can claim in a given year to $5 million or 50% of a company’s tax state tax liability, whichever is greater.

Hollywood industry representatives had warned the governor’s office that the new restrictions could affect the state’s production incentive program, which was just bolstered last year to an annual cap of $750 million.

The film and TV industry in Southern California has struggled to rebound from the effects of the pandemic, the dual writers’ and actors’ strikes in 2023 and the exodus of production to other states and countries.

Members who voted for the budget bill had believed there was a carve-out for the film and TV tax credit program, said Assemblyman Rick Chavez Zbur (D-Los Angeles), chair of the Assembly Democratic Caucus.

“I don’t think that anyone understood what this cap was, what it did and that it effectively kneecapped and reverses the progress that we made last year,” Zbur, who co-authored last year’s bill, said in an interview. “We need to have people understand that these changes, which I think people believed were minor, are really significant and will result in significant job loss if we don’t fix them.”

The new changes to the state’s film and TV tax credit program, which included expanded eligibility for additional shows and films, came after intense lobbying from studios and industry workers, who argued that more funding was necessary to lure production back from other states and countries.

Last week, the California Film Commission said the expanded tax credit program was set to deliver $6.6 billion in direct production spending in-state and more than 34,000 cast and crew jobs across the 170 total film and TV shows that received production incentives this year.

Reporting from Sacramento — California Gov. Gavin Newsom on Monday pardoned seven former felons, including two Cambodian refugees the Trump administration wants to deport, in his first acts of clemency since the Democrat took office in January.

Newsom adopted a policy of his predecessor, former Gov. Jerry Brown, to use his state constitutional authority to issue pardons to shield immigrants targeted by federal immigration officials.

The pardons are an unmistakable rebuke to President Trump, whose fiery anti-immigrant rhetoric and demands for a giant wall along the U.S.-Mexico border have been central to the escalating political feud between Newsom and the White House.

Newsom took another shot at Trump just hours before announcing the pardons while speaking to members of the Asian Pacific Islander American Public Affairs Assn., a national nonprofit, nonpartisan advocacy organization based in Sacramento. Newsom compared Trump to the anti-immigrant “demagogues” in San Francisco who championed the federal Chinese Exclusion Act of 1882 — the nation’s first immigration ban on a specific group of people.

“I’m constantly trying to understand the moment we’re living in, the xenophobia, the nativism that marks the populism of this moment,” Newsom said. “Any of us who are students of history know that it’s not without precedent. It’s not novel. It’s hardly new. It’s very familiar.”

Trump restricts asylum further but faces legal and financial limits »

One of the Cambodian refugees pardoned by Newsom, Hay Hov of Oakland, was taken into custody by Immigration and Customs Enforcement officials in March. He has since been released.

Hov, a naturalized citizen who arrived in the United States in 1985 as a legal refugee when he was 6, was convicted of solicitation to commit murder and participation in a criminal street gang in 2001, when he was 21, according to the Newsom administration.

The other refugee, Kang Hen of San Francisco, like Hov, fled to the Bay Area with his family to escape the Cambodian genocide in the 1980s. Hen was convicted of grand theft in 1994 when he was 18. Hen, who has a 4-year-old son and a partner with kidney and heart problems, was taken into custody by ICE in April.

Both Hov and Hen are being processed for deportation to Cambodia. The pardons do not automatically end a deportation effort but remove the underlying criminal offense that triggered the federal removal actions.

The pardons come as the federal government continues a crackdown on the Cambodian community that began in 2017 when Trump forced Cambodia to agree to take back more deportees. Many of the Cambodians facing deportation were refugees from the brutal Khmer Rouge regime that killed thousands, and came to the United States legally as children. They have few memories or ties to the country. But because they committed crimes, even if convicted decades ago, they can be deported.

In the 2016 fiscal year, ICE reported removing 74 Cambodians. In 2017, 29 Cambodians were removed. In 2018, that number has jumped to 110 thus far.

ICE reported that, as of March 26, there were 1,784 non-detained Cambodians nationals in the United States with a final order of removal. Of those, 1,294 had criminal records.

All seven of the people Newsom pardoned on Monday had completed their prison sentences.

“By granting these pardons to people who are transforming their lives, the Governor is seeking to remove barriers to employment and public service, restore civic rights and responsibilities and prevent unjust collateral consequences of conviction,” the governor’s office said in a statement released Monday afternoon.

The other five people pardoned committed offenses that varied from selling or possessing drugs to forgery.

Brown granted a historic 1,332 pardons and 283 commutations during his last two terms as governor. However, the California Supreme Court rejected 10 grants of clemency issued by Brown, the first time the high court has blocked a pardon or commutation in more than 50 years.

The court did not issue an explanation for the action. Under the California Constitution, the governor cannot grant a pardon or commute a sentence of anyone convicted of two separate felonies without the approval of the state Supreme Court.

None of the people whom Newsom pardoned on Monday had multiple felonies, according to a governor’s office spokesperson.

phil.willon@latimes.com

Twitter: @philwillon

Jennifer Siebel Newsom was frustrated.

She was standing behind her husband, California Gov. Gavin Newsom, at a February press conference to celebrate a new bill that would give Planned Parenthood emergency funds. A throng of women’s advocates, including herself, had spoken about how the law would help women access healthcare. But now reporters were asking a barrage of off-topic questions, from the California High Speed Rail to the 2028 Olympics.

She paced, she swayed, she laughed with displeasure. Finally, she stepped closer to her husband and gently nudged him aside. She found it “incredulous,” she said, that they had assembled all these allies only for the reporters to ask about other issues.

“This happens over and over and over and over again,” she said as Newsom smiled awkwardly. “You wonder why we have such a horrific war on women in this country and that these guys are getting away with it. Because you don’t seem to care. So I just offer that with love.”

All of a sudden, Siebel Newsom herself was the news. One of Sacramento’s top female journalists, Ashley Zavala, shot back on X that reporters were just doing their jobs and the way they were treated “was not normal.” Right-wing media blasted out headlines from “Gavin Newsom’s wife scolds reporters” to “Gavin Newsom’s wife slams reporters for ‘horrific war on women’ in extraordinary rant.”

The scene underscores Siebel Newsom’s predicament as her husband positions himself as Trump’s chief antagonist and prepares for a possible 2028 White House run.

Jennifer Siebel Newsom with California Surgeon General Diana Ramos.

(Gary Coronado / Los Angeles Times)

She came to Sacramento with a mission to speak up for women, calling herself “first partner” to signal she would carry on the theme of her work as a documentary filmmaker and nonprofit leader: dismantling gender norms. But as her husband raises his national profile with a podcast, a memoir and daily trolling of President Trump, she finds herself under mounting scrutiny.

In June, Newsom accused Trump of weaponizing the Department of Justice to launch a politically motivated attack on his spouse after federal agents knocked on the doors of the Newsoms’ friends and former employees, asking about Siebel Newsom’s taxes and nonprofit businesses.

“To get me, he’s coming after my wife,” Newsom said.

A federal source said the investigation began not with Trump, but after federal officials spoke to whistleblowers in Sacramento. Whatever the origin or merits of the probe, Siebel Newsom has long faced questions about her finances — specifically her nonprofits’ partial reliance on donations from companies that lobby the governor, a strategy that does not violate California law but raises concerns about the influence of large corporations in Sacramento.

Her decision to use the title “first partner” and her work “deconstructing” gender are also attracting criticism from the right in the post-#MeToo era as many Americans chafe against what they perceive as radical attempts to undermine traditional values and policing of what they say and do.

California Gov. Gavin Newsom looks on at his wife, Jennifer Siebel Newsom.

(Mario Tama / Getty Images)

To Siebel Newsom, the critiques of her work and the federal probe are part of a broader hounding of women who enter the public sphere. When federal agents targeted her associates, she was promoting “Miss Representation: Rise Up,” her new film examining the role technology plays in fueling what she describes as “the rising backlash against women’s progress.”

“We are seeing young women hold themselves back from wanting to pursue careers … not just political leadership, and it’s extremely disturbing,” Siebel Newsom told CNN in June. “It is a backlash, a backslide, and it is happening at an unprecedented scale, where ultimately we are silencing women’s voices.”

She disagreed with those who say scrutiny is the price of admission for being in public life. “Women and girls deserve to be protected,” she said. “Anyone aspiring to a public service career deserves to be safe. It should be fundamental.”

Untangling legitimate political criticism from deeply ingrained gender bias is not easy. Women in the public eye are frequently held to a different standard than men. But some political experts question whether a woman who refuses to stand on the sidelines — raising her voice on radioactive culture war issues and benefiting in part from her marital status to fund her nonprofits — can reasonably expect to be excluded from the rough and tumble of her husband’s political life.

Jessica Levinson, a Loyola Marymount University law professor and political commentator, said Siebel Newsom had been subjected to heightened public scrutiny for years. “That I think is likely fair,” she said, “in the sense that she has said that she’s very much a partner of the governor, and she has used this platform to advocate for causes that she cares about.”

Still, Levinson said, Siebel Newsom’s availing herself of the public forum did not mean she had violated the law.

“Does the fact that she has created and run nonprofits that receive behested contributions from Gov. Newsom put her and her actions in a different spotlight?” she said. “Absolutely, but that doesn’t mean that she’s doing anything nefarious. It just means that their life and their finances and their jobs are a little bit more complicated than other first families.”

Raised in an affluent suburb in Marin County, Siebel Newsom, 52, grew up in privilege. Her father was an investment manager and prominent GOP donor, her mother a co-founder of the Bay Area Discovery Museum.

After studying Latin American studies at Stanford and volunteering in Ecuador and Africa, she returned to Stanford to earn an MBA. Then she moved to L.A. to try to break into Hollywood. She got small parts in “Mad Men” and “Rent,” but has said she “was typecast as a trophy wife and kind of put into this box.”

That sparked her interest in getting behind the camera.

Around the time she married Newsom in 2008 and got pregnant with her first child, she began work on “Miss Representation,” her debut 2011 film that examines how mainstream culture limits female potential and power by focusing on youth, beauty and sexuality.

When Newsom was elected governor, she announced she would eschew the traditional title of “first lady.”

The “first partner” title, she has said, is not just gender inclusive and gender expansive. “It disrupts some of the male-coded language we associate with leadership, versus a ‘lady’ who sits on the sidelines.”

Jennifer Siebel Newsom.

(Christina House / Los Angeles Times)

Over the last 15 years, Siebel Newsom has worked on a series of documentaries and founded nonprofits focused on gender equity, the Representation Project and California Partners Project.

“She walks the walk,” said Amy Ziering, a documentary filmmaker whose films Siebel Newsom helped produce. She did not take the role lightly, Ziering said, noting she watched cuts and took notes, made introductions and brought people to screenings. The fact that Siebel Newsom kept pressing women’s issues as her husband became governor, Ziering said, reflected her integrity.

“She’s not diminishing her beliefs, her values, her principles or any other kind of long-term goals” Ziering said. “She shows up, ‘This is what I believe,’ and maybe it’s not politically efficacious to believe this right now, or to say ‘I believe it’ … but she does.”

In 2022, Siebel Newsom took on another public role, testifying in Harvey Weinstein’s sexual assault trial.

“She did not have to do that, she could have been Jane Doe,” Ziering said. “That’s about showing up for other women and for all sexual assault survivors.”

Cristina Garcia, a former assemblywoman who represented southeast L.A. and worked with Siebel Newsom on women’s legislation, said she thought Siebel Newsom would be a target no matter what.

“But I think she sees the power that she has, and it’s like, why should she just sit in the background?” Garcia said. “Why shouldn’t she use her power to uplift women and children … these things she’s been really passionate about?”

In Sacramento and across liberal California, Siebel Newsom’s ideas on women and gender are relatively mainstream.

But as the 2028 election looms, conservatives have dredged up old clips, highlighting Siebel Newsom’s comments about parenting and deconstructing gender roles to portray her as “radical” and “woke.”

In one video, Siebel Newsom said that when she reads to her children she changes the protagonist’s gender from “he” to “she” to show women matter and can center a story.

In another, she raised concerns about boys being exposed to “alt-right socialization online that we know is very, very dangerous.” She and her husband, she noted, were alarmed to find their son had encountered misogynist influencer Andrew Tate while watching sports online.

Some conservatives have noted, with glee, that Siebel Newsom could be a liability for her husband as he seeks national office.

“Jennifer Siebel Newsom is the very avatar of Democrat Woman,” a New York Post columnist wrote. “Haughty, hectoring and pleased with herself, she is single-handedly wrecking her hen-pecked husband Gavin’s lofty political ambitions.”

But former state Sen. Hannah-Beth Jackson (D-Oxnard) pushed back on the idea that Siebel Newsom was some kind of strident activist or woke scold. After working with Siebel Newsom on equal pay and bringing more women onto corporate boards, she said Siebel Newsom was adept at working with corporations to find common ground and recognize what businesses need to be successful.

The scrutiny of Siebel Newsom comes as her husband tries to stake out a more centrist stance on some issues.

Last year, Newsom inspired the ire of some Democrats by launching a podcast in which he chatted with right-wing figures, such as Turning Point USA founder Charlie Kirk and Trump’s former chief strategist Steve Bannon. On its debut episode, Newsom distanced himself from his party’s left flank, calling the dismantling of police departments “lunacy.” Allowing transgender athletes to participate in women’s sports, he said, was “deeply unfair.”

Asked why, Newsom told The Times his party had become out of touch with ordinary Americans. “They think we’re elite,” he said. “We talk down to people. We talk past people. They think we just think we’re smarter than other people, that we’re so judgmental and full of ourselves.”

On this point, it’s not clear whether the Newsoms are in sync.

For all her talk of women as allies, Siebel Newsom portrays conservative women who criticize other women as dupes manipulated by MAGA leaders.

“What’s interesting is that the far right really is using women to go after other women,” she said in June on the “Hysteria” podcast. “So I find it very intentional on their part that they have essentially sent the women out to humiliate, demean, ridicule, mock, silence another women. But that’s just the patriarchy, right? … And that’s what we have to fight.”

Still, she has voiced doubt about whether she would continue to go by “first partner” if her husband were elected president.

Asked in 2023, Siebel Newsom said she didn’t know if Americans were ready for a “first partner.”

“Sadly,” she said, “I don’t know if they are.”

But even as conservatives mock Siebel Newsom’s patrician “girl power” message and activist jargon, she shows few signs of backing down.

As she has taken “Miss Representation: Rise Up” to film festivals in New York and Washington, D.C., she has upped her call for more Big Tech regulation.

An advisor from the first partner’s office said Siebel Newsom had been an advocate for women and girls before she met Newsom. That was unlikely to change, they said, as she faced growing right-wing scrutiny or a federal investigation.

“There’s no strategy change here,” they said.

Gov. Gavin Newsom has signed off on a 100% state tax on money any Californians receive from Trump’s $1.8-billion “anti-weaponization” fund for his political allies.

Newsom unveiled his proposal in May, after Trump’s Justice Department said it would create a fund to compensate Trump’s allies who claim they have “suffered weaponization and lawfare” under Biden’s Justice Department.

The settlement fund was criticized by politicians on both sides of the aisle, including Sen. Mitch McConnell (R-Ky.), who described it as a “slush fund to pay people who assault cops.”

The fund remains in legal limbo. Earlier this month, a federal judge in Virginia extended a court-ordered block on the plan, which critics warned could be used to pay pardoned Jan. 6 rioters.

Fast-tracked into law as part of Senate Bill 122, Newsom’s plan imposes “a tax on any settlement fund payment from the federal Anti-Weaponization Fund, or any subsequent fund, settlement, or agreement, as provided, at a rate of 100%,” according to the bill text. The tax applies to all tax years between 2026 and 2030.

Newsom signed the bill Tuesday. In a statement, his office said the tax is meant to ensure that, should Trump’s fund proceed, California recipients won’t “receive favorable state treatment on those payments.”

“We believe democracy is worth defending, the rule of law matters, and public dollars should support victims—not those who attacked the very institutions that protect our freedoms,” Newsom said in the statement.

University of Southern California law professor Ariel Jurow Kleiman, an expert on tax law and policy, said that while Newsom’s tax is a “novel legal strategy,” she believes there is “no categorical legal restriction” preventing California from implementing it.

States have a “wide degree of discretion” to design their tax systems — including how they define income — so long as they do not violate their constitutions, Jurow Kleiman said.

If a California resident wanted to challenge the tax in court, they would need to show they were harmed by it to have standing to sue, according to Jurow Kleiman. That would mean receiving a payment from Trump’s settlement fund and then paying the 100% California tax. Unless the settlement fund is established and distributes payments, that scenario is unlikely.

While there have been proposals to levy a 100% tax on income above certain thresholds — Sen. Bernie Sanders (I-Vt.) in 2023 said he supports a 100% tax on income exceeding $1 billion — Jurow Kleiman said she is not aware of any governments that have adopted such a policy.

Kara Swisher is everywhere.

She’s filling in for Joy Behar on ABC’s “The View.” Appearing alongside Meryl Streep in “The Devil Wears Prada 2.” Starring in a CNN documentary. Preparing a national tour. And churning out four podcasts most weeks featuring long-form interviews and commentary.

It’s a ubiquity born of more than three decades chronicling the technology industry with a professed indifference to power that vaulted her into a rare echelon of journalism celebrity.

She harnessed that reputation to persuade rivals Steve Jobs and Bill Gates to appear onstage together and make Mark Zuckerberg so uncomfortable under questioning that he broke out into a sweat. She had Elon Musk’s cellphone number — the two aren’t currently speaking — and often texts tech and business leaders.

She’s betting the influence that made her a Silicon Valley force will translate into politics as podcasts supplant traditional media as a destination for candidates seeking attention.

During President Donald Trump’s second Republican term, potential Democratic presidential candidates ranging from California Gov. Gavin Newsom and former Vice President Kamala Harris to onetime Transportation Secretary Pete Buttigieg and former White House chief of staff Rahm Emanuel have appeared on Swisher’s shows. She expects that roster to grow.

“We get called by all the presidential candidates,” the 63-year-old Swisher said in an interview at her home in a leafy corner of Washington, where her trademark high self-regard was on display. “We’re going to get to all of them.”

Swisher is hardly the only podcaster talking politics. Conservatives like Megyn Kelly and Tucker Carlson and some liberals like the former Barack Obama aides who host “Pod Save America” have larger audiences. They’re all dwarfed by Joe Rogan.

But Swisher, who has evolved from a traditional print journalist to business owner and podcast host, has few rivals who can match her technology expertise and connect those observations to the broader political debate.

“When I first went on her podcast when I just got into Congress in 2017, she was very well respected in tech circles,” said Rep. Ro Khanna, the California Democrat whose district includes Silicon Valley. “But now she’s emerged as a larger cultural force, especially at a time where there’s such anger at the tech billionaires and tech arrogance.”

Interviews that produce revealing moments

When she’s not on the road, Swisher typically records from a basement studio in the Washington home she shares with her wife and children and a cat named Lovely. The conversations on her interview podcast “On with Kara Swisher” are often referenced later on “Pivot,” which she co-hosts with entrepreneur Scott Galloway.

They frequently produce revealing moments, as when Newsom filled in for Galloway on “Pivot.” Swisher derided him for being too easy on Steve Bannon when the longtime Trump aide appeared on Newsom’s own podcast.

“You had an opportunity to engage,” Swisher pressed. “Why not engage?”

Swisher pushed Buttigieg on why he took so long to say President Joe Biden, a fellow Democrat, shouldn’t have sought reelection. Buttigieg said he wasn’t consulted.

“Sure, but you have eyes,” Swisher responded.

In an interview, Newsom said Swisher calls him out.

“She’ll send me missives unsolicited,” he said. “She’s usually right, and it drives me crazy.”

Even Sen. Thom Tillis of North Carolina, a rare Republican to go on her show, said it was a worthwhile experience despite being pressed on whether his willingness to speak out against the Trump White House emerged only after he opted against reelection.

“If you’re a politician, you should be able to walk up anywhere and hold your own,” Tillis said, adding, “You may end up having an opportunity, like in my experience, to give a completely different perspective.”

‘Pivot’ was initially focused on tech and business

Shaping the political conversation wasn’t the objective when “Pivot” launched in 2018. Galloway, who hosts his own “Prof G” and “Raging Moderates” podcasts, recalled the idea for “Pivot” was to focus on the intersection of technology and business.

“Show me a big business or tech story, and I’m going to show you a political overlay,” Galloway said.

The expansion converges with a sense of urgency among Democrats to be more aggressive on digital platforms, where audiences are increasingly concentrated.

“The single most important quality that every candidate needs to have is the ability to talk and the ability to talk anywhere,” said Teddy Goff, the co-founder of Precision Strategies and the digital director for Obama’s 2012 presidential campaign.

Democrats are still stung by Rogan’s nearly three-hour Trump interview in the final weeks of the 2024 campaign. Rogan who doesn’t consider himself a journalist, has said Harris’ campaign didn’t agree to his terms. Harris has described being spurned by Rogan.

The podcasts add up to influence and financial success.

Galloway said “Pivot,” which is effectively a joint venture between himself, Swisher and Vox Media, will be a $15 million to $20 million business this year, with a staff of just five.

“Podcasts are the NBA,” Galloway said. “There’s a small amount of people making a lot of money.”

A goal to be popular ‘among the entire populace’

While Swisher largely hosts Democrats, she hopes to soon bring on additional Republicans and said she texted Steve Hilton’s wife, a former Google executive, in hopes of booking him shortly after he advanced in California’s governor’s race.

“What we’re going for is to be popular among the entire populace,” she said. “So that people who don’t feel they want to be in a constant state of anger, whether it’s on the left or the right, can have a place to go.”

But her barbed comments about Trump and other Republicans could complicate that goal. Swisher describes her work as “reported analysis.”

“We don’t shy away from our faults,” Swisher said. “We don’t shy away from our biases. You know, we don’t shy away from things that most people try to.”

Sloan writes for the Associated Press.

SACRAMENTO — Gov. Gavin Newsom on Monday signed his final state budget as governor, a $351.7-billion spending plan that seeks to uplift the poorest Californians through a tax system reliant on the stock market gains of the wealthy.

In a video message, Newsom extolled free school meals, universal transitional kindergarten, 130,000 subsidized childcare slots and other accomplishments in his tenure at the state Capitol, a period in state history marked by a dramatic expansion of state government and over $100 billion in increased spending.

“Over the past eight years, we built great things for the people of California — some of the boldest actions any government in this country has taken in a generation,” Newsom said. “And we did this without breaking the bank. We did this by design.”

The agreement ends weeks of lobbying by outside interests and negotiations among lawmakers and the governor at the state Capitol about how to handle a surge of income tax collected on stock market gains related to artificial intelligence.

Economists have warned that the revenue bump is potentially temporary and analysts say the growth in state spending could leave California in a challenging position if the economy declines.

Assemblymember David Tangipa (R-Fresno) agreed with Democrats that the budget is “compassionate.”

“My fear is that it’s not too much of a competent budget, and the budget continues a pattern that Californians know all too well: Spend now, justify it later, and hope somebody else pays the bill,” he said during a floor debate Monday.

Here’s what you need to know about the spending plan, which takes effect July 1.

Who decides the state budget?

The simplest answer is: Democrats. California voters have elected Democrats to represent 30 of the 40 seats in the Senate and 60 seats of the 80 seats in the Assembly. The budget was passed through a majority vote in each house of the Legislature and signed by Gov. Gavin Newsom, also a Democrat.

A more complex answer is that the budget is a product of dozens of legislative hearings, millions of dollars spent on lobbying by outside interests, talks among lawmakers and the governor and ultimately subject to the same political dynamics that rule the Democratic party.

Senate President Pro Tem Monique Limón (D-Goleta) and Assembly Speaker Robert Rivas (D-Hollister), in consultation with the chairs of the budget committees, represent their Democratic caucuses and reach a final agreement on the details of the spending plan with Newsom. In reality, staff members for the three parties handle most, if not all, of the back of forth negotiations to get there.

Union leaders seeking better pay, working conditions, benefits for workers and opportunities to expand their ranks are often brought in to consult or hammer out thorny deals as business groups try to fight off more regulations, taxes and costs, and support policies that increase their financial performance.

Democrats are spending more than ever before. How is that possible?

The Legislative Analyst’s Office, the nonpartisan fiscal advisor for lawmakers, recently examined the increase in state spending since 2019-20, Newsom’s first full year in office.

Between the budget approved that year and the spending proposal Newsom unveiled in January, spending from the state’s main operating fund had grown by over $100 billion, or 70%. That was largely by a 60% increase in revenue during that time. California typically operates with a spending deficit because Democrats spend more money than the state brings in.

The LAO found that the increase in spending stemmed from the growing cost of sustaining programs and services that were already in place when Newsom took office. About 30% of the remaining spending growth was categorized as new, either by newly created programs or the expansion of existing services.

Among the report’s conclusions: California could not afford the programs that predated Newsom and the ones he and the Legislature adopted.

To balance the budget over the last few years, Newsom and lawmakers have dipped into the state’s reserves at a time when California is experiencing strong revenue growth, which the LAO has cautioned against. Democrats have also increased taxes on businesses, paid for programs out of other funds and suspended reserve deposits among other solutions.

This year, the state budget places $6.4 billion in higher than expected revenue into a temporary holding account to knock down a deficit and balance the budget through 2027-28.

Democrats are pursuing a change to the state constitution on the November ballot that would allow them to set aside more money in years of good revenue growth to prevent cuts in future downturns.

Where is the money going?

Education and Medi-Cal are the two largest costs for the state.

Medi-Cal is the state’s version of subsidized health insurance for low-income Californians and provides medical, dental and vision care for an estimated 14.5 million people, or about one-third of the state population.

The federal government pays for more than half of the cost of the program. California is expected to spend about $50 billion from the general fund next year out of a total estimated at more than $220 billion in costs shared between the state and federal government, according to the LAO. State taxes and fees on providers also help fund Medi-Cal.

Overall, Medi-Cal costs more than any other state program and takes up about 40% of total spending, including federal funds the state receives, according to the LAO.

Spending on Medi-Cal has more than doubled over the last 10 years, which the LAO attributes to an increase in costs per enrollee, more enrollees and a greater share of seniors seeking care, among other factors.

Under Newsom, California has expanded Medi-Cal, including offering coverage to include all immigrants regardless of their immigration status, which the governor said has dropped the state’s uninsured rate down to 5.9%

The cost of Medi-Cal has grown beyond what Democrats expected and resulted in Newsom suggesting spending cuts.

The final budget agreement rejects a call by Newsom to lower the asset limit to $2,000 now and instead lowers it to $21,000 in 2027-28 to be eligible for Medi-Cal. The Legislature also delayed the governor’s proposal to reduce dental coverage and shift asylum seekers and other immigrants to restricted scope Medi-Cal, according to Jason Sisney, the lead budget advisor for the Assembly who posts about the budget on Substack.

The budget includes Newsom’s proposal to shift enrollees with unsatisfactory immigration status, a term that includes undocumented immigrants and others, from managed care to fee-for-service to save costs.

Under Proposition 98, approved by voters in 1988, California has a minimum funding guarantee for schools and community colleges and dedicates roughly 40% of general fund revenue to education.

Sisney said the budget increases the Local Control Funding Formula by $2.2 billion and provides historic general fund per pupil spending of $21,148. Support for special education also grew by $1.8 billion.

The California Community Schools Partnership Program received a $1-billion boost and Democrats directed $2.8 million in additional funding to the program that provides free meals for school children.

The budget also establishes 22,770 new slots for free or reduced childcare, which Newsom had proposed decreasing.

SACRAMENTO — Gov. Gavin Newsom reached an agreement Friday with legislative leaders on a $351.7-billion state budget in his final year as governor, a spending plan that uses a tax windfall to avoid major cuts and lessen California’s chronic deficit in the years ahead.

The deal provides nearly $2 billion in state revenue next year through tax hikes on corporations, new levies on software sales and a revamped tax on managed healthcare organizations. Lawmakers and the governor continue major investments in education, healthcare and agreed to increase spending on subsidized childcare and affordable housing.

“We want to leave the next governor not only a balanced budget, but a budget that is substantially structurally sound, and we’re going to accomplish that,” Newsom said in an interview Friday. “We were very cautious in terms of new spending,”

The agreement ends weeks of lobbying by outside interests and negotiations among lawmakers and the governor at the state Capitol about how to handle a surge of income tax collected on stock market gains related to artificial intelligence.

Early forecasts last June projected a $12.6-billion deficit in 2026-27, according to the California Department of Finance. Updated predictions now suggest the state will end the year with a surplus of $4.5 billion.

Democrats, following Newsom’s lead, are tucking away $6.4 billion for future years, which allows the governor to knock down a deficit previously projected through 2027-28 and assuage criticism about his spending habits.

But economists say the fix and revenue increase is likely only temporary.

Spending in California has generally exceeded revenue growth during Newsom’s tenure in the governor’s office, creating a chronic shortfall. Despite the extra funding, the budget continues a trend of relying on reserves, shifting funds, borrowing and suspending debt payments to balance state spending.

The Legislative Analyst’s Office, the nonpartisan fiscal advisor for lawmakers, has warned of a roughly $10-billion gap between the amount of money the state brings in and spends, which could grow dramatically worse if the stock market turns downward. The LAO has said the existence of any operating deficit during a revenue boom is a red flag and that the state is “ill-prepared” for even a modest decline.

Christopher Thornberg, an economist and founder of the consulting firm Beacon Economics, said it’s business as usual in Sacramento.

“They love increasing spending. But it seems politically impossible to go the other way,” Thornberg said. “We’ve seen this play out over and over again.”

Lawmakers and the governor offered a different take and asserted that their decision to put the $6.4 billion into a short-term reserve, called the Projected Surplus Temporary Holding Account, and ask voters to allow them to store more money in the rainy day fund are examples of prudent budgeting.

“You see us save more and you see try to address the immediate needs of our community, but also the structural budget that potentially awaits us,” said Senate President Pro Tem Monique Limón (D-Goleta) in an interview. “We are forecasting a moment where we will need to address these issues and we want to start now to think about the future as well.”

Under a progressive tax structure, the state budget is dependent on income taxes paid by the ultra-rich on earnings largely from capital gains. The set up leaves California vulnerable to the unpredictable nature of the stock market, dramatic swings in revenue and, in recent years, reliant on poor projections.

Negotiations at the state Capitol included an agreement on a constitutional amendment that seeks to offset the revenue highs and lows.

If approved by voters on the statewide ballot in November, the amendment would raise a cap on mandatory deposits into the rainy day fund from 10% to 20% of general fund revenue. The measure would also allow lawmakers to exempt money they put into the rainy day fund and the temporary holding account from state spending limits.

Under an existing state appropriations restraint, also known as the Gann Limit, lawmakers cannot spend more than an amount determined by a formula that takes annual tax proceeds, changes to the population and cost of living into consideration. Tax revenue above the limit must be divided between schools and refunds to taxpayers.

With few exceptions, the limit applies to most appropriations of tax revenue, including when lawmakers put money away in the rainy day fund and other reserves.

Newsom said the change will leave the state in a much better position to weather the volatility. Though calls for tax reform remain in California, the governor said being able to place more money into the reserves could ultimately solve the state’s budget challenges.

“The one thing missing is the one thing that I think we finally landed, which is the change in the reserves,” Newsom said. “It changes the political dynamic, where now you’re not exchanging general fund priorities.”

Republicans criticized the proposed constitutional amendment, which passed in a budget trailer bill this week, for failing to require that excess revenue pays down the state’s $22 billion in unemployment insurance debt.

State Sen. Tony Strickland (R-Huntington Beach) called it a missed opportunity.

“It does not require debt payment to go to the UI debt,” Strickland said. “It facilitates more spending, exempting reserve deposits from the state spending limit.”

As part of the negotiations, lawmakers agreed to delay some healthcare cuts that would have required monthly premiums for immigrants and eliminated dental care. The deal adopts a Medi-Cal asset test of $21,000 on July 1, 2027, instead of a $2,000.

The budget agreement includes a provision requiring California’s next governor to develop options to reduce taxpayer subsidies for corporations whose employees receive state-sponsored healthcare through Medi-Cal instead of the company’s health plan. The plan is aimed at raising revenue to offset federal cuts that are expected to leave millions of Californians without access to healthcare.

The California Department of Finance said state reserves are expected to total $28.8 billion under the 2026-27 budget.

Gov. Gavin Newsom signed a law Thursday to crack down on inflated profits stemming from car crash lawsuits, blessing a hard-fought compromise between Uber and the state’s trial attorneys that averts a November showdown between two of California’s most powerful and moneyed lobbying forces.

The deal, the fruit of months of negotiations, takes aim at the lucrative way doctors can charge for procedures on patients referred to them by personal injury lawyers.

If a law firm has a client who was hurt in a car accident, the lawyer will often send them to a doctor who will perform surgery on a “lien” basis, meaning the doctor will be paid from money that comes from a lawsuit settlement rather than through insurance.

Uber contends this arrangement has created an incentive for doctors and attorneys to collude to dramatically inflate medical bills. The more expensive the bill, they say, the bigger the resulting payout.

The law, SB 623, caps how much these doctors can charge when their patient is involved in a lawsuit against a ride-share company, which are frequent targets of litigation due to their top-of-the-line insurance policies. The new law will also require Uber to ramp up background checks of its drivers.

“We’re going to have a much safer state both for medical patients and passengers in Ubers,” said Nicholas Rowley, a prominent Texas attorney who helped bankroll the fight and took a leading role in the negotiations.

The law only applies to cases that involve ride-share accidents that take place after Jan. 1, 2027.

“This legislation puts meaningful guardrails in place to better protect accident victims, increase transparency and accountability in the medical lien system and strengthen safety,” said Ramona Prieto, Uber’s head of public policy for the Western U.S., in a statement.

For months, Uber and lawyers from across the state poured tens of millions into dueling ballot measures that threatened to devastate the profits of whichever side lost.

Uber fired the first shot with a ballot measure that sought to cap how much attorneys can earn in lawsuits involving auto accidents. The company argued attorneys were swindling their own clients, inflating medical bills of car crash victims to increase the value of the settlement and then pocketing a hefty chunk of the payouts.

The state’s trial attorneys countered that the fee cap would make small or difficult cases a money-losing endeavor and block scores of accident victims from the courts. They shot back with their own ballot measure that would increase legal liability for ride-share companies if a passenger or driver is sexually assaulted while on a ride, seizing on investigative reporting that highlighted assaults in Ubers.

“They were waiting for us to blink and we didn’t,” said Douglas Saeltzer, the head of the Consumer Attorneys of California, the lawyer trade group that pushed for the measure against Uber. “Their starting place, I don’t believe, was in the interest of protecting victims — it was in the interest of protecting Uber.”

With the passage of Thursday’s law, both sides have agreed to pull their respective measures from the November ballot, halting campaigns that had both parties amassing tens of millions in funding and blanketing the airwaves with ads.

“Now we can stop seeing all the commercials,” said Assemblymember Blanca Pancheo (D-Downey) at a Tuesday hearing.

The law, put forward by Assemblymember Diane Papan (D-San Mateo) and Sen. Thomas Umberg (D-Santa Ana), also caps the amount that can be earned by third-party investors who buy out a doctor’s lien in a personal injury case. These companies will purchase a doctor’s stake in the case at a reduced rate, then pocket a share of the payout if the case settles.

“Private equity and hedge funds buy them at a steep discount, then turn around and collect the full inflated amount,” Saeltzer said at a Tuesday hearing on the bill. “That’s money flowing to Wall Street investors, not patients.”

The law will require annual background checks for ride-share drivers and expand the list of offenses that disqualify someone from the job.

In addition to the ballot battle, has Uber sued two of LA’s most well-known personal injury firms — the Law Offices of Jacob Emrani and Downtown L.A. Law Group — accusing them of inflating medical bills and forcing clients to undergo needless and expensive surgeries to inflate the value of the claim. The firms asked the judge to dismiss the case Wednesday, arguing Uber had failed to prove fraud. Both firms have vehemently denied wrongdoing.

The lawsuit, filed last year, has put the plaintiff lawyers in the unusual position of playing defense. Listening in the audience at Wednesday’s hearings were the partners of Downtown L.A. Law Group and Jacob Emrani.

“Let’s be clear about what this Uber case really is,” said John Hueston, outside counsel for Emrani. “It’s brought by a $150 billion dollar company … to intimidate the plaintiff’s bar, exhaust its resources and chill the suits that hold Uber accountable.”

Michael Huston, one of the lawyers who represents Uber, countered that the case is “not an attack on the plaintiff’s bar.”

“We have brought suit against the two in this state … that are engaged in naked fraud,” he said.

Proponents of a tax on California billionaires vowed on Thursday to move forward with their November ballot measure despite mounting opposition from many of the state’s most powerful political forces.

A labor union spent $31 million gathering signatures to qualify the measure for the ballot in an effort to offset federal healthcare funding cuts that will affect millions of California’s most vulnerable residents. A representative for the campaign supporting the ballot measure pushed back at opposition to the effort as self-entitled wealthy Californians and entrenched Sacramento interests.

“While a few morally bankrupt billionaires and their buddies in Sacramento want to see California’s hospitals close, and tax breaks for billionaires protected — I assure you, the vast majority of voters do not,” said Debru Carthan, a spokesperson for the Billionaire Tax Now Coalition, which is funded by the Service Employees International Union-United Healthcare Workers West, the sponsor of the proposal.

The California secretary of state is expected to officially certify the measure for the Nov. 3 ballot on Thursday evening.

Carthan said their effort has support in public opinion polls, and from lawmakers, unions, community organizations and volunteers across the state, “something the billionaires and their buddies will never have.”

However, a coalition of healthcare, education, public safety, housing, business and labor leaders opposed to the proposal warned that it would make the state’s notoriously unstable budget even more unpredictable.

“The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile,” the leaders of the California Medical Assn., the California Primary Care Assn. and the California School Boards Assn. said in a statement. “That’s why so many leaders – both Democrats and Republicans – are joining us and saying NO. We look forward to ensuring voters have the facts, know the stakes, and resoundingly reject this reckless experiment in November.”

Supporters of the one-time proposed 5% tax on the assets of the state’s wealthiest residents pitched the effort as a stop-gap measure to offset devastating federal healthcare funding cuts passed by the GOP-led Congress and signed by President Trump nearly one year ago. The federal legislation is expected to result in $100 billion in cuts that would affect California’s most vulnerable residents.

The proposed tax, which would be retroactive to billionaires who lived in the state as of Jan. 1, drew predictable opposition from the wealthy, notably Silicon Valley tech leaders.

But it notably divided liberals. While Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Fremont) supported the proposal, Gov. Gavin Newsom was among the Democrats who opposed it because of fears about the potential impact on the state’s volatile budget.

Despite being the fourth largest economy in the world — the home of Hollywood and Silicon Valley — California’s budget is extremely dependent on the state’s most prosperous residents.

Newsom and others who generally support increasing taxes on the wealthiest Americans also argued that the proposed billionaire tax in California was poorly crafted and that any such levies ought to be enacted nationally, because varying state policies would be ineffective.

Opponents also argued that the political priority in the 2026 midterm election should be squarely focused on efforts to make sure Democrats regain control of Congress to serve as a counter balance during the final two years of Trump’s presidency.

“It’s disappointing. This is a critical election where we need to concentrate on flipping the house and undoing the damage that was done” by Trump’s legislation that led to the healthcare funding cuts, said Jodi Hicks, chief executive and president of Planned Parenthood Affiliates of California. The wealth tax “is short term and doesn’t address what is the long-term problem. And I’m not even sure the policy is a viable solution. It’s so critical to be sending the right message — holding Congress accountable and how we need to find long-term solutions to make sure Californians have access to healthcare.”

Rob Lapsley, co-chair of Californians Against Tax Increases and president of the California Business Roundtable, argued that the proposed wealth tax would ultimately affect every Californian.

“Strip away the spin, and this measure forces every California taxpayer, not just billionaires, to file a sworn declaration of their net worth with the Franchise Tax Board under penalty of perjury,” Lapsley said in a statement. “And it hands the Legislature the power to extend the wealth tax to all Californians and every kind of property, including home equity, retirement savings without ever returning to the voters – effectively gutting” voter-approved caps on property tax increases.

Supporters of the tax submitted nearly 1.6 million signatures in April to qualify the proposal for the ballot, roughly double the number required. However, support for the effort has grown increasingly shaky. Newsom’s team created a broad coalition of opponents, including healthcare and education activists, that undercut the foundational argument for the tax.

The union that crafted the proposal responded last week by proposing a legislative alternative that would create a 2% tax on billionaire’s assets. It was flatly refused by the Newsom administration. No deal was reached by the Thursday evening deadline for the union to withdraw the proposal from the November ballot.

Two efforts that were crafted to sink the proposed billionaire tax — dubbed as poison pills — also qualified for the Nov. 3 ballot, according to the California Secretary of State’s office. One would bar new state taxes on personal property, while the other prohibits any new taxes being exempted from existing state spending rules and to be regularly audited. If the billionaire tax proposal is approved by voters but either of the other proposals receives more votes, the tax measure would be voided.

The proposed billionaire tax would apply to more than 200 Californians, some of whom proactively left the state or moved their companies out of California because of the proposal.

The prospect of the wealthy fleeing the state is among the reasons that prominent Democrats such as Newsom opposed it, given California’s budget being so reliant on the state’s most prosperous residents.

Sergey Brin, a co-founder of Google, is among the billionaires who have reportedly moved out of California because of the tax proposal. He donated at least $82 million to an organization that is funding efforts to invalidate the proposed billionaire tax.

Ballot measure proponents had a Thursday evening deadline to withdraw their proposals.

Other policy proposals that will appear on the Nov. 3 ballot include:

• Requiring government-issued voter identification to cast ballots in elections.
• Reforming the California Environmental Quality Act, once a third-rail in Democratic politics that has become increasingly scrutinized in the rebuilding in the aftermath of the Palisades and Eaton wildfire.
• Creating a $11.3-billion affordable housing bond.

Two notable proposals were pulled off the ballot after negotiations between the California Hospital Assn. and labor unions:

• An effort to limit healthcare executives’ compensation.
• A union proposal by the same union backing the billionaire tax that would have required many healthcare clinics to spend 90% of their revenue to serve low-income and underserved residents.

Reporting from Sacramento — Gov.-elect Gavin Newsom on Thursday announced he will place his ownership interest in the collection of wineries, hotels, restaurants and other investments that made him a millionaire into a blind trust, a step he said “goes beyond anything required by law.”

Since his election in November, Newsom has been weighing how to handle his array of assets in the hospitality business, collectively known as the PlumpJack Group, a multimillion-dollar business enterprise that grew from a wine shop he opened in San Francisco in 1992. Those holdings have the potential to create ethical conflicts between Newsom’s job as California’s chief executive and his business interests.

“Governor-elect Gavin Newsom is announcing today that he will be the first governor in the history of California to release his tax returns every year, just as he has done as a candidate,” Newsom’s spokesman Nathan Click said in a statement. “Newsom will also disclose his personal and business holdings each year on his statement of economic interest and separate himself from the PlumpJack Group wine and hospitality businesses that he has built.’’

Bob Stern, coauthor of California’s 1974 Political Reform Act that dictates the state’s conflict-of-interest laws, praised Newsom’s decision.

“That’s as much as anybody could ask him to do, except for selling all the properties, which I wouldn’t recommend him doing,” Stern said Thursday.

Stern added, however, that placing those assets in a blind trust does not remove the potential that Newsom could face a possible conflict of interest as governor. Under the law, Newsom is required to disclose all assets in the blind trust until those assets are sold, Stern said.

Newsom is in the process of transferring title to and control of the businesses into the blind trust, Click said. Newsom selected family friend Shyla Hendrickson, an attorney and certified public accountant with more than two decades of experience in the investment management business, as trustee, he said.

Under the terms of the blind trust, Hendrickson will have total authority over the assets, Click said, including the power to sell off Newsom’s business ownership without consulting him. She also is barred from discussing those decisions with Newsom.

Picking a family friend to serve as trustee is allowable under state law, Stern said, adding that the fact that Newsom’s sister, Hilary Newsom Callan, serves as president of the PlumpJack Group is “not a problem” under the law.

State law does not require Newsom to divest from PlumpJack Group or release the names of his business associates. And Newsom can legally sign bills or take executive action beneficial to his companies if those decisions affect all Californians or a significant segment of the population in the same way they affect him.

Newsom has yet to announce any details about the financial interests of his wife, documentary filmmaker Jennifer Siebel Newsom, whose foundation could also raise questions for the incoming governor.

Siebel Newsom’s foundation, the Representation Project, which helps fund her documentaries along with education programs and community outreach “to challenge limiting gender stereotypes and shift norms,” has in the past received financial support from Pacific Gas & Electric Co. and AT&T. PG&E and its foundation reported donating $100,000 to the Representation Project in 2017, $85,000 in 2016 and $10,000 in 2015, according to federal tax records and a list of PG&E’s charitable donations on the utility’s website.

As president of the foundation, Siebel Newsom received a salary of $150,000 in 2016, according to the most recent publicly available disclosures filed with the Internal Revenue Service. The foundation also reported paying Girls Club Entertainment, Siebel Newsom’s production company, $150,000 that same year. Newsom’s spokesman said the board of directors of the Representation Project is in the process of determining her future role with the foundation.

In 2018, PG&E also donated $58,400 to Gavin Newsom’s gubernatorial campaign and $150,000 to Citizens Supporting Gavin Newsom for Governor 2018, an independent expenditure committee that backed his candidacy.

Next year, the California Legislature is likely to consider a bill to provide financial relief for any utility whose equipment was involved in a wildfire in 2018. PG&E could face billions in potential liability costs for the deadly Camp fire near Chico, which killed at least 86 people and destroyed thousands of homes.

If approved by lawmakers, the bill would land on Newsom’s desk.

This isn’t the first time Newsom has had to address the intersection of his political and business lives. After he was elected mayor of San Francisco in 2003, Newsom sold his interests in the PlumpJack Group businesses in San Francisco to his longtime friend and business partner, oil heir Gordon Getty, for $1.7 million, according to a financial disclosure filed with the city. But Newsom held on to his investments outside the city limits, including in Napa Valley wineries and a hotel and gift shop at the Squaw Valley ski resort near Lake Tahoe.

“The mayor chose to take this unprecedented action because he feels it is in the best interest of San Francisco for its chief executive not to own businesses that operate in the city,” Newsom’s then-press secretary, Peter Ragone, told the San Francisco Chronicle in April 2004.

As governor, Newsom could face an array of potential ethical dilemmas as long as his assets in the PlumpJack Group remain in the trust.

For example, a corporation could conceivably try to curry favor with the new governor by renting out a bank of rooms at the PlumpJack Squaw Valley Inn or by throwing lavish parties at the Forgery bar in San Francisco, both among Newsom’s holdings. In those scenarios, the spending would likely not have to be disclosed.

Newsom has held campaign events at his restaurants and other businesses for years. His gubernatorial campaign spent more than $83,000 at his businesses from 2015 through election day, campaign finance records show.

In 2014, the California Democratic Party held a fundraiser at Newsom’s CADE Estate Winery in Napa Valley, paying the business $4,229. Just after Newsom was elected mayor of San Francisco in 2003, two Bay Area labor groups spent more than $1,000 at PlumpJack Wines, Newsom’s wine store.

Newsom has vowed to issue an executive order prohibiting state executive branch agencies from doing business with PlumpJack entities. He will also divest from all common stock that he owns in publicly traded companies. According to his latest financial disclosure, Newsom held stock in Intel Corp. and Merck & Co. worth $4,000 to $20,000 in total.

Napa Valley wineries have brought in hundreds of thousands of dollars in income for Newsom annually, according to financial disclosure records and business filings with the secretary of state’s office. Three wineries in the PlumpJack Group founded by Newsom and Getty generated nearly $800,000 in just one year for Newsom, according to his 2015 federal tax returns. Newsom and Getty — who are connected through Getty’s friendship with Newsom’s late father, who once managed Getty’s family trust — share multiple business interests.

Under state law, Newsom will not have to declare a conflict of interest when making a decision — whether to sign legislation or approve an administrative action — unless it “explicitly” affects one of his companies or investments, according to state Fair Political Practices Commission regulations.

For example, Sen. Scott Wiener (D-San Francisco) is sponsoring a bill that would allow bars in San Francisco, Los Angeles and seven other cities to serve alcohol until 4 a.m. The legislation passed this year but was vetoed by Gov. Jerry Brown. If the bill passes again in the new legislative session, Newsom’s restaurants and bars would benefit financially if he signs it. But he still would be able to so without declaring a conflict of interest because the rules would apply to all restaurants and bars in those cities, not just his.

“He’s certainly allowed to sign bills dealing with wineries or dealing with restaurants,” Stern said.

In this 2004 photo, then-San Francisco Mayor Gavin Newsom, left, Gordon Getty and then-Oakland Mayor Jerry Brown enjoy a pre-dinner glass of wine during an event at Newsom’s PlumpJack Winery in Oakville.

(Eric Risberg / Associated Press)

Although Newsom might be one of the wealthiest governors ever to serve in California, the issues posed by his assets aren’t new to the office, Stern said.

Former Gov. Arnold Schwarzenegger sold off stock and many other investments, placing the proceeds in a blind trust, although he had also disclosed investments outside the trust, including his Hollywood entertainment firm, Oak Productions.

While in office, Schwarzenegger was criticized for accepting a consulting job for a publisher of health and bodybuilding magazines — Muscle & Fitness and Flex — because a significant portion of the publications’ revenue came from advertising by makers of nutritional supplements. Schwarzenegger vetoed a bill that would have created a list of banned substances for interscholastic sports and barred supplement manufacturers from sponsoring school events.

Rob Stutzman, a GOP strategist and former communications director for Schwarzenegger, said it was difficult to wall off some of Schwarzenegger’s business interests because they were tied to the “personal brand” of the Hollywood action star and former champion bodybuilder.

The best option in those cases is asking full disclosure from public officials, he said.

“I don’t think [Schwarzenegger’s situation] is unique. I think it’s just a matter of scrutiny and watching it,” Stutzman said.

“In Newsom’s case, if he can’t sell PlumpJack or other things he owns, he’s not going to be blind,” said retired attorney Colleen McAndrews, a former member of the state Fair Political Practices Commission who advised Schwarzenegger on setting up a blind trust when be became governor.

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Local government politicians are most affected by the state’s conflict-of-interest law because cities and counties approve regulations, permits, land use restrictions and other items that could affect a single business or part of town. It would be rare to see a conflict arise under state law for the governor, however, because most of the action taken by the state’s chief executive affects all Californians equally, McAndrews said.

“You don’t have to recuse if a decision affects the public the same way it affects you,” she said.

Rick Scott, the wealthiest governor in Florida history who in November was elected to the U.S. Senate, came under intense scrutiny after he placed his assets in a blind trust. Multiple Florida news outlets reported that Scott’s blind trust made identical investments in a separate, private account for his wife, raising questions about just how “blind” the governor was to the trust.

GateHouse newspapers reported this year that the couple’s financial holdings in the pharmaceutical company Gilead Sciences, which makes drugs to combat hepatitis C, had grown substantially. Florida’s Medicaid program has spent millions on those drugs, the report found.

Jamie Court, president of the nonprofit Consumer Watchdog, said that regardless of what the incoming governor decides to do regarding his assets, Newsom should provide full disclosure of all his financial interests.

“I think the governor has to be very open about his business relations, even beyond what the law calls for,” Court said. “If he hides anything, believe me, we will find out later and it won’t be good.”

Times staff writer Maloy Moore contributed to this report.

phil.willon@latimes.com

Twitter: @philwillon

WASHINGTON — Jennifer Siebel Newsom has spent more than a decade cultivating an identity distinct from her husband, Gov. Gavin Newsom, as an active documentary filmmaker and gender equity activist with her own organizations, staff and salary.

The 51-year-old calls herself California’s “first partner,” a title she coined herself to signal an equal footing with the governor and gender inclusivity.

Her independent streak has generated her a steady income. She earns money from a set of organizations she founded or controls. They include the Representation Project, a nonprofit that advocates for gender equity through film and education programs; Girls Club Entertainment, a for-profit production company she owns that holds the copyrights to her documentaries; and the California Partners Project, a second nonprofit that works closely with her government office and receives donations solicited by the governor.

Since its creation in 2020, the California Partners Project has received nearly $5.1 million from so-called “behested payments,” raising alarms over the years about the influence large companies have amassed in Sacramento.

California law allows officials to solicit donations to specific charitable or governmental causes when the payments are reported within 30 days. The public donation system, however, came under scrutiny in 2020 when payments made at Newsom’s behest — to a variety of organizations, not just the California Partners Project — ballooned to an unprecedented $226 million to help fund the response to the COVID-19 pandemic.

With no limit on how much money can be donated by organizations or individuals at the behest of the governor, millions of dollars flowed in to prop up public services during the pandemic and fund Newsom’s favored programs, including an effort to address homelessness and a public safety campaign promoting the importance of wearing masks. The top donor of Newsom-behested payments in 2020 was tech giant Facebook, which gave $27 million for gift cards that went to front-line healthcare workers and for public health ads.

“It’s not illegal, but it certainly pushes the bounds of campaign finance law, and the first couple has been doing this for some time,” said David McCuan, a political science professor at Sonoma State University. “In this battle between Newsom and [President] Trump this makes their [the first couple’s] actions, these payments and the operation of the nonprofits a rich target for scrutiny.”

The Newsoms’ financial arrangements are now the subject of renewed scrutiny. The governor has accused the Trump administration — specifically, the FBI and the Internal Revenue Service — of questioning their friends and former employees about him and his wife. The governor said the probes are politically motivated, a personal vendetta because he’s considering a run for president in 2028.

Newsom said he and his wife have nothing to hide, and promised to release all of his recent tax returns — though he has not announced when.

In turn, the governor has demanded that the Department of Justice release all records pertaining to the probe.

“The American people deserve to know who ordered this abuse of power and how far it goes,” the governor wrote on social media last week.

“These are dark days in our nation’s history when the leader of the free world spews animus openly and without shame — aiming to silence and destroy not only his political opponents, but their friends, colleagues, and families,” Siebel Newsom said in a statement to The Times. ”My husband and I will continue to push back on this vindictive attack — and I certainly will not let this distract me from the important work ahead to protect the health, wealth, and safety of women and children and give California kids the best start in life. Together, we can set an example of strong leadership that protects people rather than preys on them.”

To better understand the finances, here is a breakdown of how Siebel Newsom’s company and nonprofits are working.

The Representation Project

Alongside the release of her first documentary, “Miss Representation,” in 2011, Siebel Newsom created her nonprofit, which originally shared the same name as her film. The organization licenses her films and reimburses costs to her production company.

The nonprofit earns some revenue from licensing the first partner’s documentaries for use in classrooms, college campuses and workplaces. Licensing for film screenings at schools starts at $49, while corporate licensing for her films starts at $995; purchase of screening rights also comes with curricula to facilitate discussions.

The Representation Project has earned more than $5.2 million in revenue from film screenings, licensing and speaking fees since 2011, according to a review of its tax filings.

The Representation Project is not required to disclose its donors but has received at least $2.6 million since 2014 from various charitable foundations that disclosed the gifts in their own tax filings. Several corporations that have had business before the state have donated to Siebel Newsom’s nonprofit, including Pacific Gas & Electric Co., AT&T and Kaiser Permanente.

Its past donors also include entrepreneur and progressive donor Susie Thompkins Buell, who is credited as a producer on several of Siebel Newsom’s documentaries, as well as the Marin Community Foundation and Onward Together, the political action organization founded by Hillary Clinton.

Four months after Newsom took office in 2019, the state Department of Education recommended that high schools screen two of his wife’s films, “Miss Representation” and “The Mask You Live In,” a move that has garnered criticism from conservative media outlets. The state said the films “can help facilitate a discussion about the impact of mass media and gender socialization on self-image and relationships with others.”

Though it does not specify where its films have been licensed, the nonprofit boasts in annual impact reports that its films and curricula have “reached over 2 million students” and “are being used in over 5,000 schools in fifty U.S. states.”

Since founding the Representation Project in 2011, Siebel Newsom has received more than $1.9 million in compensation from the nonprofit organization, according to a review of federal tax records. Her separately owned film production company, Girls Club Entertainment, has collected about $2.2 million in independent contracts from the nonprofit, records show.

Combined, the two streams of money total about $4.1 million flowing from the charity to Siebel Newsom personally or to entities she controls over the span of a little over a decade.

Her current annual salary is $161,250 for a 40-hour workweek, records show. Siebel Newsom earns income from both her production company and her nonprofit, according to state financial disclosures.

Jeff Tenenbaum, a nonprofit attorney with 30 years of experience advising nonprofit, tax-exempt organizations, declined to comment on Siebel Newsom’s specific case. But generally, he explained the legal framework that would apply to an arrangement like the one described in the filings.

Under federal tax-exempt organization law, he said, the “private benefit doctrine” governs whether a nonprofit’s overall activities unduly benefit any single individual — including through indirect payments to entities they own. The tax law asks whether too much benefit flows to one person or entity.

This is separate and distinct from the “private inurement” doctrine, which prohibits nonprofits from paying greater-than-fair market value compensation to insiders, including founders, and which requires that such compensation arrangements be approved by individuals with no conflicts of interest.

“Theoretically, a situation like this could raise some private benefit concerns,” Tenenbaum said, when the structure of the arrangement was described to him.

The doctrine does not prohibit all private benefit, he said, only what the federal tax code calls “impermissible” private benefit.

“There has to be too much benefit compared to the benefit to the public,” he said. Whether that threshold is crossed here, he said, would require a fuller review of the organization’s finances, contracts, and other considerations, including copyright ownership issues relating to the films produced.

Girls Club Entertainment

An actress and documentary filmmaker, Siebel Newsom founded her production company to develop independent films with a focus on combating gender stereotypes and empowering girls and women. She serves as the company’s chief creative officer.

She has written, produced and directed five films exploring themes of inequality and traditional gender roles. Siebel Newsom is best known for her 2011 documentary “Miss Representation,” which focused on the few and narrow representations of girls and women in American media.

Tax records show that the production company owns the rights to “Miss Representation” and has licensed the film to the Representation Project for a minimum of seven years for the purpose of distributing and screening the film in public. Costs associated with film production — including the writer, director and producer fees — have been reimbursed by the Representation Project, tax filings show.

Her latest documentary, “Miss Representation: Rise Up,” examines “the rising backlash against women’s progress and the hostile landscape of technology designed to harass and, ultimately, silence women.” The film premiered this month at the Tribeca Film Festival.

California Partners Project

In 2020, Siebel Newsom founded the California Partners Project, a nonprofit focused on improving gender equity in the workplace and the safety and well-being of children in online spaces. She does not collect compensation from the nonprofit or serve on its board.

It hosts an annual “gender equity summit” and provides resources for parents on issues such as social media safety and child mental health.

In the fall of 2024, Siebel Newsom and the California Partners Project hosted representatives from TikTok, Meta, Pinterest and other social media platforms for an event about children’s online safety. A day before the panel, state Atty. Gen. Rob Bonta took a more forceful tack to go after the tech industry by joining with 13 other states in a lawsuit against TikTok that accused the platform of exploiting young app users with its addictive features.

In September of 2024, the governor signed a bill to prohibit internet services and applications from providing “addictive feeds,” defined as media curated based on information gathered on or provided by the user, to minors without parental consent.

The California Partners Project also does not publicly disclose its donors in its tax filings, but much of the nonprofit’s funding appears to come from behested payments. Siebel Newsom does not receive a salary from the organization.

Since its founding, the Newsoms have steered more than $5 million to the nonprofit via behested payments, according to a review of the disclosures. While many donations to the California Partners Project come from charitable foundations, it also received hundreds of thousands from companies including Silicon Valley Bank, Pinterest and the charitable arm of Blue Shield of California.

Its biggest funder is the Federated Indians of Graton Rancheria, a Sonoma County tribe that operates a casino in Rohnert Park and spends heavily in state and federal elections. The tribe has given $2.3 million to the nonprofit since 2022. In June 2023, Newsom appointed tribal Chairman Greg Sarris to the University of California Board of Regents. Newsom has also supported efforts by the tribe to block a smaller tribe from building a casino in nearby Vallejo.

Blue Shield, which has reported giving $100,000 to Siebel Newsom’s nonprofit, also has a cozy relationship with her husband. The nonprofit health insurer was an early donor to Newsom’s 2018 campaign for governor and later received a $15-million no-bid contract to distribute COVID vaccines. State regulators in 2024 also signed off on the nonprofit’s request to restructure and establish a new parent corporation out of state, a move that raised alarm among healthcare advocates.

The California Partners Project did not respond to questions about its donors and spending.