POLICY WATCH – July 2025
In This Issue
Major Rollback of CEQA -Supported by NBLC
Job Losses Due to AI- A report by Beacon Economics
NBLC Active Advocacy and Huge Wins for Transportation in the North Bay
SMART Quality of Life Study
Upcoming Events
Members in the New
Even in the slower pace of summer, major policy shifts continue to ripple through the North Bay and across California. From groundbreaking wins in regional transportation to NBLC’s support for long-overdue CEQA reform, this season is proving pivotal for shaping the future of our communities. At the same time, new research from Beacon Economics is raising urgent questions about the impact of artificial intelligence on jobs—a growing concern for employers and workers alike.
Here's a look at a few key developments we're watching this month.
Best Regards,
Joanne
CEQA- From Green Icon to Housing Villain: The Fall of California’s Landmark Environmental Law:
“More than half a century ago, when Republicans were still running the state, Reagan brought CEQA (pronounced “see-kwa”) into the world as a shield against unintended consequences: a project that befouled waterways or drove species toward extinction. But the law’s reach expanded through a series of court rulings until it applied to developments of all kinds, becoming a handy tool for almost anyone to challenge a proposed project by demanding more analysis and remediation”, writes Jeremy B. White, Politico.
He continues, “CEQA has long been a bogeyman for Republicans and developers, a symbol of regulatory excess and government dysfunction — and an expensive one at that. But antipathy steadily grew on the left as home prices squeezed urban progressives and forced middle- and working-class families into two-hour commutes or out of the state entirely. The cost of a mid-priced dwelling in California has nearly doubled over the last decade, to around $800,000, more than twice the national average.
The ultimate tipping point arrived last November, when California voters showed their disillusionment with the stewards of the status quo by ousting down-ballot Democrats and delivering President Donald Trump’s across-the-board gains compared to four years earlier. As Trump toured Los Angeles wildfire damage in January, he assailed red tape for stalling rebuilding, and Newsom waived environmental rules to speed the area’s recovery.
This summer, Newsom and like-minded legislators did what was unthinkable just a few years ago: They scaled the law back dramatically, exempting most urban housing developments, along with day cares, manufacturing hubs and clinics. In doing so, they overcame a once-inviolable alliance of construction unions, environmentalists and homeowners that for decades had fought the smallest changes by casting the law as a vital protection aligned with Democrats’ core values on climate and labor.
“If we can’t address this issue, we’re going to lose trust, and that’s just the truth,” Newsom conceded to news reporters last month, going out of his way to thank the leaders of the ascendant Abundance movement focused on boosting production and rejecting a scarcity mindset.”
CEQA still lives. It will still generate reviews and lawsuits, and Newsom said he would never have supported a bill “to eliminate the core tenets” of the law. But his decisive support for paring it back says something essential about the long arc of California politics: where the state has been and where its leaders hope to take it now.
When CEQA began to stall urgently needed housing, public trust eroded—forcing Democrats and Gov. Newsom in June to support major rollbacks via AB 130 and SB 131, which were supported by NBLC. The lesson, reported by Politico: “Even core progressive policies must evolve when they start undermining fundamental public needs.”
Read the full story on Politico here.
California Loses Jobs in Latest Numbers. Tariffs Causing Uncertainty, But These Losses Are About AI:
According to a recent economic report from Beacon Economics, “California’s nonfarm payroll jobs declined in the latest numbers, a consequence not likely related to trade tariffs but to the creeping encroachment of AI. Total nonfarm employment in the state fell to a seasonally adjusted 18,011,100 in June, a loss of 6,100 positions over the month.
“Although the nation’s tariff chaos is certainly creating broad uncertainty, these losses aren’t about tariffs,” said Christopher Thornberg, Founding Partner of Beacon Economics. “The declines were in Manufacturing, Information, and Professional Services and centered in the Bay Area, meaning they are a reflection of the ongoing contraction in the tech space, which in turn, is being driven by AI.”
California’s labor market continues to be supported by locally serving industries such as Health Care, Government, and Education. However, tariffs are causing uncertainty, particularly in industries reliant on inputs from abroad such as Manufacturing.
In the latest data, May’s jobs gains were also revised down to a 11,700 increase, 6,000 fewer jobs than the preliminary estimate of 17,700.
Employment growth in California continues to trail the nation. Since February 2020 (the start of the pandemic), total nonfarm employment in the state has grown 2.0% compared to a 4.9% increase nationally. From June 2024 to June 2025, California increased its payrolls by just 0.6%, trailing a 1.11% increase nationally over the same period.
The state’s unemployment rate increased to 5.4% in June, up 0.1 percentage-points over the previous month. At 5.4%, California’s unemployment rate remains among the highest in the nation, behind only Washington D.C..
California’s labor supply saw decent growth in June, expanding by 33,400 workers. Since February 2020, the state’s labor force has grown by just 212,700 workers, a 1.1% increase. Given the lagged timing of the monthly employment numbers, we will need to wait until next month to assess whether the recent and ongoing ICE raids are having an impact on California’s labor force numbers. Notably, the Los Angeles metro area managed to still gain jobs in June despite increased ICE activity.
Job Data end of June 2025:
In the Bay Area, Santa Rosa saw the largest jump, with payrolls growing by 400 during the month, 0.2% increase. On the other hand, payrolls declined in San Jose (-3,300 or -0.3%), the East Bay (-2,900 or -0.2%), San Francisco (MD) (-700 or -0.1%), Vallejo (-200 or -0.1%), and San Rafael (MD) (-100 or -0.1%). Payrolls were unchanged in Napa. Over the past 12 months, Napa (3.5%) has seen the fastest job growth in the region, followed by Santa Rosa (0.8%), San Rafael (MD) (-0.1%), San Jose (-0.3%), Vallejo (-0.6%), San Francisco (MD) (-0.6%) and the East Bay (-0.7%).
To read the San Francisco Regional Overview click here.
To break it down by Industry Sectors click here.
NBLC Work Plan Priority- State Route 37
Policy Area-Transportation/Economic Resiliency- Progress this month!! NBLC traveled to Sacramento on Tuesday, July 8th to show support for AB 697 during the Senate Natural Resources Committee Hearing. Bill author, Assemblymember Lori Wilson was joined by Solano County Transportation Authority and Stephanie Moulton-Peters, Marin County Supervisor and Vice Chair, MTC. After much meaningful discussion, the bill was approved 6-0 and referred to the Appropriations Committee. That hearing will take place on August 8th. Absent this legislation, the near-term SR-37 project will delay the long-term benefits of habitat restoration envisioned in the project, it will take substantially longer to complete, will not result in a longer-term solution being built any earlier, and will continue the unacceptable and inequitable conditions that commuters of Solano County who work in Marin and Sonoma counties now endure.
Another WIN! NBLC exercised active advocacy by sending a letter in support of Metropolitan Transportation Commission (MTC) and California Department of Transportation (Caltrans) to receive $73 million from the Trade Corridor Enhancement Program (TCEP) grants to complete funding for the State Route (SR) 37 Sears Point to Mare Island Improvement Project (Project), Phase 2 that crosses Sonoma, Napa, and Solano Counties. Those funds were granted last week to keep the project moving forward. The first project phase, Tolay Creek Bridge Replacement & SR 121 intersection improvement, are fully funded. The second project phase, Eastbound improvements and Strip Marsh East are now fully funded due to the $73M. We cannot afford to wait another generation to make these critical improvements. The near-term project is essential—not just for protecting the ecological health of the marsh, but for safeguarding the tens of thousands of commuters who rely on this corridor each day. The recent tragedy in Texas is a stark reminder that delaying actions can have devastating consequences.
SMART Quality of Life Study:
On Wednesday, July 16th, SMART Board members received a presentation from staff on the Key Concepts from the Quality of Life Study. In 2024, the SMART District initiated the Quality of Life and Economic Impact Assessment to evaluate the benefits of the rail system for the Sonoma and Marin Counties.
This study examined the role of SMART’s rail and pathway construction and operation in driving outcomes for key quality of life indicators including mobility, economics, land use, environment, public health, safety, access to opportunity and equity. SMART staff began outreach in the fall of 2024 with numerous subject matters experts, community members, regional and local stakeholders and riders. NBLC had the honor of serving on the study’s Technical Advisory Committee (TAC). The role of the TAC was to provide input that will directly inform how the analysis of the study is designed. The committee helped define what aspects of quality of life and economic impact would be evaluated—such as traffic congestion, greenhouse gas emissions, job access, housing near transit, and business development. The SMART Quality of Life & Economic Impact Study is currently still under development. Next steps are to garner feedback on the report and finalize the study.
Upcoming Events:
Save the Date: Thursday, October 16th, 8:30am-10:00am, via zoom: State of the North Bay Economic Conference.
Members in the News
Brett Martinez Named Best Business Community Leader in NorthBay Biz Magazine's 2025 Best of the North Bay Readers' Poll
We're proud to celebrate President and CEO, Brett Martinez, for being named Best Business Community Leader in NorthBay biz magazine's 2025 Best of the North Bay Readers' Poll!
Canine Companions Celebrates 50 Years!
Congratulations on all of the success you have hard improving and changing people’s lives!
BioMarin Announces Completion of Acquisition of Inozyme
BioMarin Pharmaceutical Inc. (Nasdaq: BMRN) said today that it completed the previously announced agreement to acquire Inozyme Pharma, Inc. (Nasdaq: INZY) for $4.00 per share in an all-cash transaction worth approximately $270 million.
Canal Alliance Supports Marin Offering Funding for Immigrant Protection Efforts
“I commend the Marin County Board of Supervisors for this bold and timely $500,000 investment to safeguard immigrant communities,” said Omar Carrera, executive director Canal Alliance.”
Sutter Health Names Kevin Manemann as Chief Operating Officer
Sutter Health announced that Kevin Manemann has been named chief operating officer, joining the not-for-profit integrated health system’s executive leadership team to advance operational performance, enhance system integration and support growth in the delivery of high-quality, compassionate care to patients and communities across Northern California and the Central Coast.