People will be talking about the November 2016 general elections for a very, very long time. The simple explanation is that California zigged while the national government zagged. Somewhere in the deep recesses of your advocates’ minds, we recall a consumer product known as “Zig-Zag”, whose fortunes may also have been improved on the November ballot.

At the macro level, Republicans captured both houses of Congress, while the exact opposite occurred in California. Going into November 8, Democrats held 52 of the 80 seats in the California Assembly, two short of the 2/3 supermajority. In the state Senate, Democrats numbered 26 of the 40 seats, missing a supermajority by only one seat.

Expectations were that capturing a supermajority in the Assembly was more likely than the Senate, as there were more contested races in the lower house. We now know, however, that supermajority status was achieved in both houses: in the Assembly the ratio of Democrats to Republicans is 55-25, while in the Senate Democrats outnumber Republicans by 27-13. At the same time, every statewide constitutional office and both U.S. Senate seats are held by Democrats.

In theory, achieving a 2/3 supermajority permits the majority party to raise taxes, place items on the ballot, and override gubernatorial vetoes without any votes by Republicans. In practice, however, Democrats are unlikely to line up solidly behind such dramatic actions. More likely, the huge numerical imbalance will simply make it harder to defeat Democratic bills opposed by business, or to pass bills with any significant Democratic opposition. For this reason, we should expect to see most business groups gear up to “play defense” in 2017, instead of leading with controversial affirmative proposals.

The real fight on many bills will come down to differences among Democratic legislators, since obviously not all Democrats think alike. In Sacramento the two blocks are commonly described as the “progressives” and the “moderates”, and those differences often are decisive on bills. The truth is that the ratio of progressives and moderates coming out of the November elections (those labels of course are generalizations, as members can be progressive on some issues and moderate on others) really did not change significantly. There are still perhaps 16-20 moderate-leaning Democrats in the Assembly.

But, the California legislative leadership is already positioning our state to be the “anti-Trump” on issues such as immigration, climate change, and perhaps more. The Senate President pro Tem and the Assembly Speaker issued a rare joint press release the morning after the election, indicating that they woke up “strangers in a foreign land”, and promising to uphold “California values”. It has suggested that California will now become to Trump what Texas has been to Obama.

We should expect to see traditional Democratic constituencies, such as labor, the plaintiff’s bar, environmentalists and others, go on the offensive in 2017. It is unclear how this might affect issues relevant to CMA, but we should expect to see very determined attacks on arbitration, particularly in the consumer context, and affirmative bills on affordable housing. In fact, the first day of the new legislative session was Monday December 5, when the houses were officially sworn into office, and both issues were raised in new bills. SB 2 (Atkins) reintroduces the proposal to impose a $75 surcharge on recording real estate documents in order to fund affordable housing, and SB 33 (Dodd) proposes to ban “forced” arbitration in consumer disputes where there is an allegation of fraud.

The November elections also were significant for the passage of Proposition 55, extending the surcharge in high-income tax filers until 2030. While this is not good news for those paying the higher marginal rates, continuation of the surcharge prevents the opening of an $8 billion hole in the state general fund, and should help tamp down the temptation to seek new revenue sources, whether from modifications to Proposition 13, or perhaps sales tax on services.

Just as the elections were, ahem, interesting, so too will be the 2017 legislative year!