View online version https://subscriber.politicopro.com/states/california/newsletters/politico-california-pro/2019/03/05/gut-and- amend-188598 03/05/2019 09:00 AM EDT By KEVIN YAMAMURA ([email protected]; @kyamamura), ANGELA HART ([email protected]; @ahartreports), MACKENZIE MAYS ([email protected]; @mackenziemays), COLBY BERMEL ([email protected]; @ColbyBermel), DEBRA KAHN ([email protected]; @debra_kahn) GUT AND AMEND: Gov. Gavin Newsom wants to gut a health care panel designed by Assembly leaders and former Gov. Jerry Brown and remake it into his own single-payer commission, POLITICO's Angela Hart writes in an exclusive story. The Newsom administration will propose changing the scope, mission and timing of the existing Council on Health Care Delivery Systems, according to a summary obtained by POLITICO, as health care advocates jostle for position in California's single-payer debate. The administration will rename the panel the "Healthy California for All" commission and focus it solely on how California could begin the transition toward single-payer under a future Democratic president, according to the summary, which was provided to POLITICO by Newsom's office. The move is likely to win backing from advocates who feel the current council is moving too slowly on single-payer, including the California Nurses Association. The nurses have ceded primary leadership of the coalition that drove the failed 2017 single-payer effort in Sacramento — Healthy California — amid disputes over political tactics and 2019 legislative strategy. Page 1 of 5 Newsom campaigned in favor of a single-payer plan, but has sought to tamp down expectations since taking office. The summary document outlines his latest strategy. —— The governor's new approach has emerged just days after Assembly Speaker Anthony Rendon made his appointment to the existing commission. Senate President Pro Tem Toni Atkins and Newsom have thus far held off making appointments — and it's unclear if they will now that the governor wants a new panel. More at POLITICO California Pro A NEW ERA FOR POLITICO: We are thrilled to bring you a team of experts covering the Capitol and state agencies with an eye toward the fast-moving policy and political developments you expect from POLITICO Pro. We're now located in our permanent office across from the Capitol at 925 L Street, Suite 150. Our roster: California editor: Kevin Yamamura, [email protected], @kyamamura Health care reporter: Angela Hart, [email protected], @ahartreports Environment and transportation reporter: Debra Kahn, [email protected], @debra_kahn Energy and utilities reporter: Colby Bermel, [email protected], @ColbyBermel Education reporter: Mackenzie Mays, [email protected], @MackenzieMays TRANSPORTATION STRANDED ASSETS: The California High-Speed Rail Authority is pushing back against the Trump administration’s decision to cancel a nearly $1 billion high-speed rail grant, saying terminating the agreement would be “unwarranted, unprecedented and legally indefensible," POLITICO's Tanya Snyder writes. In a letter to Jamie Rennert, director of the Federal Railroad Administration’s Office of Program Delivery, California HSRA CEO Brian Kelly on Monday urged FRA to “reconsider the rash and unlawful action it is contemplating.” “It’s hard to imagine how your agency — or the taxpayers — might benefit from partially constructed assets sitting stranded in the Central Valley of California,” Kelly wrote in his letter to FRA Administrator Ron Batory. The federal agency said it was canceling the grant one week after Newsom announced that he was reducing the scope of the project to just the Central Valley and was, at least for the moment, giving up on extending it to reach the state’s biggest cities. In the letters, Kelly emphasized that Newsom was not abandoning the project but rather Page 2 of 5 committing additional state funds to see the Central Valley segment to completion, putting the project back on a sustainable course. Two weeks ago, FRA notified the California High-Speed Rail Authority of its intent to de- obligate a $929 million federal grant and warned that it was “actively exploring every legal option” to get back $2.5 billion in previously granted federal funds for what it called “this now-defunct project.” BUDGET & TAXES AIR TIME DEFLATED: The California Supreme Court has ruled that the Legislature's 2012 rescission of a program allowing public employees to buy pension service credit was constitutional. The 2013 case, Cal Fire Local 2881 v. California Public Employees' Retirement System, had been closely followed by state leaders and employee unions because of its potential impact on public pension programs in California. Unions argued the so-called "California Rule" has meant the state could not eliminate pension benefits from existing workers without providing comparable compensation in return. In upholding the Legislature's action, the California Supreme Court ruled that its decision did not affect those broader protections for public pensions in California. In a 7-0 decision written by Chief Justice Tani Cantil-Sakauye, the court concluded that unlike other pension benefits, the ability to buy five years of service credit known as "air time" was not a contractual right. The court said the Legislature never intended for "air time" to be a contractual benefit and that it was not deferred compensation in exchange for time worked. As such, the court said the Legislature had the right to provide and eliminate the service credit option as it wished. As part of a larger pension overhaul, state leaders rescinded air time in 2012, considering it an expensive benefit for workers because they could get a guaranteed high rate of return on their money. Ted Toppin, head of an organization representing 1.6 million public employees and retirees, said in a statement that the decision on air time was expected and that the group was thankful it "protects the retirement security" of its members. New Supreme Court Justice Joshua Groban, who worked for former Gov. Jerry Brown when the pension change was signed, did not participate in the decision. He was replaced by Associate Justice Laurie D. Zelon of the 2nd District Court of Appeal. Page 3 of 5 CALIFORNIA V. TRUMP SANCTUARY RULING: A federal judge sided Monday with California and the city and county of San Francisco in the latest dispute over the Trump administration’s crackdown on so-called sanctuary jurisdictions, POLITICO's Ted Hesson reports. In a 31-page order, U.S. District Judge William Orrick found DOJ's decision to add immigration-related conditions to fiscal year 2018 federal law enforcement grants exceeded the authority of the executive branch. The judge’s ruling largely mirrored a decision he issued in October 2018 over similar conditions placed on the previous year’s grant money. As with the earlier ruling, Orrick granted a nationwide injunction, but put it on hold pending an appeal to the U.S. Court of Appeals for the 9th Circuit. President Donald Trump has waged a broad legal war to convince uncooperative states and localities to support federal immigration enforcement. However, federal courts have repeatedly rejected the administration’s attempts to withhold funding. The cities of Chicago, Philadelphia, Seattle, Portland and New York — as well as seven states — have all scored legal victories over the anti-sanctuary policies. EDUCATION KINDER CAUTION: The nonpartisan Legislative Analyst's Office has advised lawmakers against pursuing Gov. Gavin Newsom's proposal to expand full-day kindergarten and urged caution in rolling out other early education programs proposed in the governor's budget, POLITICO's Mackenzie Mays writes. The report issued Monday rejects the governor's proposal to add $750 million to transform part-day kindergarten facilities into full-day programs. Right now, most of the grants would go to districts that already have full-day programs and are not targeted to the actual facilities in need of expansion, according to the LAO. As an incentive for providing full-day kindergarten in the future, the report suggests decreasing the funding that part-day programs get under the Local Control Funding Formula, which is the same as full-day programs. The report also recommends slowing down Newsom's plans for preschool expansion. The budget includes $125 million for 10,000 full-day preschool spots beginning in July, with goals of serving all low-income 4-year-olds by 2022. The report suggests filling only 2,500 Page 4 of 5 full-day spots this year, citing concerns about capacity. The state should hold off on $500 million in onetime funding proposed for the state's child care and preschool system, LAO says. Instead, the state should research the existing system to understand the need, and earmark funding for future expansion. More at POLITICO Pro California HEALTH CARE TITLE X SUIT: California Attorney General Xavier Becerra announced that he's taking the Trump administration to federal court over the new family planning rule that could strip millions of dollars from Planned Parenthood and steer funding toward faith-based clinics that oppose abortion, POLITICO's Victoria Colliver writes. Becerra joined more than two dozen women leaders, including First Partner Jennifer Siebel Newsom, in announcing a lawsuit Monday over the rule, which bans providers who receive funding from the Title X family planning program from referring a woman to an abortion provider, even on request. "Make no mistake: this is a systematic effort by this administration to end access to birth control and safe, legal abortion," Becerra said. California's suit comes as a national coalition of 21 state attorneys general also announced Monday they are filing a separate lawsuit against the Trump administration over the Title X rule, led by Oregon Gov. Kate Brown, Oregon Attorney General Ellen Rosenblum and New York Attorney General Letitia James. The federal rule released Feb. 22 put California in "an untenable situation," according to a draft version of the Attorney General's lawsuit.