Gov. Gavin Newsom cites budget concerns in veto message

Labor unions were arguably some of the biggest winners of the 2023 legislative session. Building on California's hot labor summer, the unions pushed several longstanding priorities out of the Legislature and onto the Governor's desk. But last week, one closely watched bill hit a roadblock: Gov. Gavin Newsom.

On Saturday, the Governor vetoed SB 799 (Portantino). The bill would have allowed striking workers to draw unemployment benefits after two weeks. The League of California Cities opposed the bill, arguing it would strain local government budgets and the state’s unemployment insurance fund.

According to a report from the U.S. Department of Labor, California owes the federal government $18.6 billion for money borrowed during the COVID-19 pandemic to cover the fund’s budget shortfall. Cal Cities and other local government associations argued SB 799 would further strain the fund and make it harder to provide unemployment insurance during an economic downturn.

It was an argument that resonated with the Governor. He cited the fund’s outdated financing structure, its potential insolvency, and the state’s sizable loan repayments in his veto message.

“Now is not the time to increase costs or incur this sizable debt,” Newsom said.

Two other Cal Cities-opposed labor bills are still sitting on the Governor’s desk. AB 504 (Reyes) would make sympathy striking a human right. AB 1484 (Zbur) would require cities to include temporary employees in the same bargaining unit as permanent employees upon request of the union.

Combined, the two bills could lead to more frequent, prolonged strikes that halt critical public services. During both primary and sympathy strikes, it would be harder for local agencies to utilize temporary employees and backfill positions to maintain essential public services. Temporary employees would be in the same bargaining unit as those on strike and unable to maintain public service during a dispute.