Padilla’s Affordability Package to Rebuild Middle Class Opportunity and Save Ratepayers Billions Advances in State Senate

SACRAMENTO – Last week, several critical committees voted to approve Senate Bills 330 and 638. Authored by Senator Steve Padilla (D-San Diego), the transformative measures reimagine how electrical transmission lines are financed and approved in California (SB 330) as well as create the California Middle Class Pipeline Project, tasked with eliminating traditional barriers to career technical education and workforce development programs (SB 638). The two bills are critical pieces of Senator Padilla’s efforts to address the affordability and underemployment crisis the state faces.

As prices reach record highs, issues of affordability are at the forefront of the minds of California families. In recent polling, 70% of Californians believe their children will be worse off financially than their parents when they reach adulthood. Similarly, 60% believe the American Dream is harder to achieve in California than anywhere else in the country. Simply put, millions of Californians believe opportunities are passing them and their families by.

“Rising costs and stagnant wages from dead end jobs prevent hardworking Californians from achieving the economic mobility that was promised to them,” said Senator Padilla. “Opportunity is the root of the California Dream and we need to restore those opportunities for California to be successful.”

As part of that focus, Senator Padilla is advancing legislation aimed at addressing costs ratepayers face as the state works to replace its aging energy infrastructure.

California needs a significant amount of new transmission infrastructure by 2045. The California Independent System Operator estimates this new transmission infrastructure will cost $45.8 - $63.2 billion. Accelerating the siting and permitting of these projects is vital to lowering energy rates and creating greater grid reliability. This will require California to simultaneously accelerate planning, siting, permitting, and construction of a modern electrical grid, while carefully managing its costs. However, if these projects are developed with the current financing models for transmission infrastructure, which has some of the highest borrowing costs for public infrastructure, these projects will cost hundreds of billions of dollars over an estimated 40-year lifetime.

Recent research shows the potential for substantial ratepayer savings of up to $3 billion per year if this new infrastructure is financed and developed through alternative models, such as public-private partnerships. By leveraging low-cost public debt, improved tax efficiency, increased competition, and efficient private operations, California can develop the necessary infrastructure at savings of 50% or more. These savings would pass onto ratepayers in the form of lower energy bills and energy rates.

To help pass those savings onto Californians, Senator Padilla introduced Senate Bill 330, which would authorize the Governor to establish pilot projects to develop, finance, and operate electrical transmission infrastructure. The use of low-cost public debt and alternative institutional models to build critical transmission infrastructure means we will be able to modernize our outdated grid while delivering cost savings to California ratepayers.

However, energy rates are only one part of the affordability challenges Californians face.

The income gap between the wealthiest families and working class communities is widening in California and across the nation. According to a study by the Public Policy Institute of California (PPIC), families at the top of the income distribution—the 90th percentile—earned 11 times more than families at the 10th percentile ($336,000 vs. $30,000, respectively). These widening disparities in income are attributed to many factors, but education level remains a key factor in an individuals earning power in the California economy. Similar studies suggest by 2030, one out of every three jobs in California will require some college but less than a bachelor’s degree and about 40% of jobs in California will require at least a bachelor’s degree. PPIC found men with less education struggled to find stable careers in economic sectors constantly changing due to evolving technologies. One of the barrier for workers with lower educational attainment are existing barriers to technical education and apprenticeships that limit economic opportunities.

Career technical education (CTE) plays a critical role in connecting those without higher education degrees to high quality jobs paying living wages, but too often there are barriers preventing the communities that need these programs the most from accessing them. Senator Padilla introduced SB 638 to completely reimagine the state’s approach to career technical education. A piece of the California State Senate’s Affordability Package, Senate Bill 638 would create grant opportunities in high-unemployment and low-income regions of the state, providing local educational agencies with funding to expand and develop programs that will provide Californians with the skills they need to access high quality employment.

In addition to his legislative efforts to address the root causes of the state’s affordability crisis, last month Senator Padilla, joined by several Senate colleagues, issued a letter (attached) to California Attorney General Rob Bonta, requesting the California Department of Justice investigate alleged profiteering and price fixing by major egg distributors in the midst of a dangerous avian flu outbreak.

While accepting millions in taxpayer subsidies, Mississippi-based Cal-Maine, the nation’s largest egg distributor, reported $509 million in quarterly profits. This represents more than triple the amount the company made in the same period just a year ago, and over eight times its profits at the beginning of the avian flu outbreak in early 2022. During that same period, egg prices rose to $6.23, the highest ever. In the past, these price increases were blamed on egg production slowing after flu outbreaks, however, in 2023, Cal-Maine did not experience any avian flu outbreaks in its flocks –yet in the same year, the company sold a dozen eggs at close to triple the price as it did in 2021.

In the letter, Senator Padilla said, “we cannot allow corporations to pad their bottom line with our tax dollars while the average American pinches pennies.”

SB 330 passed the Senate Energy Committee 13-3 and the Senate Environmental Quality Committee 6-2. SB 638 passed the Senate Education Committee with bipartisan support by a vote of 7-0. Both measures now move to the Senate Appropriations Committee.

To learn more about SB 330, click here.

To learn more about SB 638, click here.

To learn more about Senator Padilla’s letter to Attorney General Rob Bonta, click here.

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Steve Padilla represents the 18th Senate District, which includes the communities of Chula Vista, the Coachella Valley, Imperial Beach, the Imperial Valley, National City, and San Diego. Prior to his election to the Senate in 2022, Senator Padilla was the first person of color ever elected to city office in Chula Vista, the first Latino Mayor, and the first openly LGBT person to serve or be elected to city office. Website of Senator Steve Padilla: https://sd18.senate.ca.gov/