October 18, 2023

State Affairs Update

Legislative Update

Governor Gavin Newsom took his final actions of the 2023 legislative season on October 13, 2023, marking the end of the first year of the two-year 2023-24 legislative cycle. Of the 1,046 bills that reached the Governor’s desk, he signed 890 bills and vetoed 156 bills. His 14.9% veto rate is similar to last year’s 14.5% veto rate.

After five years of budget surpluses, the Governor repeatedly cited fiscal restraint in many of his veto messages. In the past year, California went from having a robust surplus to dealing with a $30 billion budget deficit. Despite the deficit, the state’s Research and Development (R&D) tax credit and Net Operating Loss (NOL) deduction were not in consideration for suspension this year. Most programs were maintained in terms of healthcare expenditures, but the Legislature’s budget analyst, Gabe Petek, has recently reported that the economic slowdown could persist and will be a significant risk for the foreseeable future.

A number of healthcare bills introduced by both houses of the Legislature demonstrates a willingness to stand with patients and a focus on increasing access to life-saving innovations. Two that became law were Senator Monique Limon’s SB 496, which makes biomarker testing more accessible and Assemblymember David Alvarez’s AB 425, adding Pharmacogenomic Testing as a benefit in the Medi-Cal schedule of benefits. Unfortunately, an insulin co-payment price cap bill and a measure to eliminate out-of-pocket costs for medically necessary diagnostic and supplemental breast imaging were vetoed. Many bills will be reconsidered and introduced when the Legislature reconvenes in January.

In polls and surveys, Californians list housing costs and homelessness among the state’s most pressing issues, and California’s leaders touted progress on the housing front, with the Governor signing 56 bills designed to streamline housing construction. Water issues took a back seat this year, but there is talk of a future water bond.

Significant leadership changes shook both houses, Assembly Speaker Robert Rivas was sworn in as the new Speaker mid-year and Senate President pro Tempore Toni Atkins, who is reaching term limits, announced that she will be replaced by Senator Mike McGuire in 2024.