September 17, 2021
Weideman Group Weekly
Newsom Defeats Recall
Governor Gavin Newsom decisively defeated the effort to recall him. Within about 30 minutes of the polls closing on Tuesday, the election was called for the Governor. Nearly 10 million votes were cast in the recall election and, per the Secretary of State’s current tally, an overwhelming 63.6% of voters voted to oppose the recall. This win gives Newsom significant momentum leading up to his 2022 gubernatorial reelection, where we do not expect him to draw a serious challenger. Newsom is in a strong position to be Governor for the next five years.
Legislative leaders have doubled down on their criticism of the current recall process, arguing that the signature threshold to trigger a recall is too low and a new governor can be elected in a recall via a small plurality of votes. Elections Committee chairs, Assemblymember Marc Berman and Senator Steve Glazer, will hold informational hearings over the interim to begin a public dialogue on improvements that could be made to California’s recall process. Secretary of State Dr. Shirley Weber has pledged to work with the legislature to get a measure placed on the 2022 ballot that will update the process.
California is the first and only state to move out of the CDC’s list of “high” COVID transmission rates to the “substantial” tier and is currently demonstrating the lowest 7-day case rate in the nation. However, a sobering statistic was released this week stating that 1 out of every 500 Americans has died from COVID-19, with over 670,000 deaths nationwide.
Death and Taxes
House Democrats have a plan to raise corporate taxes to 26.5% as a means to pay for part of their proposed $3.5 trillion spending plan. Along with the corporate tax hike, they are entertaining the idea of raising the top tax bracket for individuals to 39.6%, implementing a 3% surcharge on individuals making more than $5 million, and increasing the capital gains tax to 28.8%. This will represent a nearly $3 trillion tax increase, the largest in decades. The proposals are set to formally be unveiled Monday.
Deja Vu All Over Again
Pacific Gas & Electric was grilled by a federal judge for over two hours regarding their failure to shut off power to a line that may have caused the Dixie Fire. Judge William Alsup is considering imposing more stringent conditions on the utility before the company’s five year probation ends in January. PG&E has acknowledged the possibility that a tree near one of its power lines may have started the Dixie Fire, the state’s second largest fire ever. This activity comes after mega-fires drove PG&E into Chapter 11 bankruptcy in 2019 and led to subsequent agreements to pay $13.5 billion to cover uninsured damages resulting from the 2017 Wine Country fires and the 2018 Camp Fire in Paradise.