For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE –
- Legislature in Final 3 Weeks; Pleas for Action Escalate
- State Cash Flow Below Forecast in First Month of Fiscal Year
- 2024 Ballot Initiative First Deadline Passes, 26 Measures in Process
- Making it Tougher to Qualify Initiatives – California Lawmakers Join National Trend
- Conservative Freshman Legislator Refuses to “Play Safe”
- “Tattered System With A Troubling History”: Hazardous Waste Sites
Capital News & Notes (CN&N) harvests California policy, legislative and regulatory insights from dozens of media and official sources for the past week. Please feel free to forward this unique client service.
FOR THE WEEK ENDING AUG. 25, 2023
Legislature in Final 3 Weeks; Pleas for Action Escalate
CalMatters e-newsletter
The clock is ticking on the 2023 Legislative session, set to end Sept. 14, so the pleas for action ramped up this week. Several advocacy groups — at the state Capitol and over the internet — rallied around their favored bills, most of which have been placed in the suspense files of the respective Appropriations Committees.
Climate change: Democratic Sens. Scott Wiener of San Francisco and Henry Stern of Calabasas were at the state Capitol promoting their measures that would hold companies more accountable for their effects on the environment: Senate Bill 253 would require companies with $1 billion in annual revenue to disclose greenhouse gas emissions, and SB 261 would require more companies with $500 million in revenue to prepare climate financial risk reports.
Stern: “People just say, ‘Cover your ears, close your eyes, pretend there’s not a hurricane in August, pretend there’s no bomb cyclones, pretend there’s no climate risk and we’ll all be fine.’ That kind of self-blinding is not just going to hurt California’s economy, workers, organized labor everywhere in the state — but across the country.”
Housing and racial equity: Progressive advocacy groups raised awareness at the Capitol for Gonzalez’s paid sick leave measure, as well as two other bills: SB 567, which would strengthen tenant protections (the bill previously had a provision to cap rent increases at 5%, but later dropped it) and SB 50, which would prohibit pretextual police stops for low-level traffic violations to reduce racial profiling and harassment of female drivers.
Paid sick leave: The California Work & Family Coalition, a nonprofit advocacy group for paid leave benefits, joined Democratic Sen. Lena Gonzalez of Long Beach and frontline workers, to drum up support for Gonzalez’s bill that would raise paid sick leave from three days to seven. It would also expand how sick days are accrued and used.
Gonzalez: “Whether you’re a rail worker, caregiver or teacher, you have this opportunity to heal, recover or to take care of a family member…. It’s really vital that we protect our communities by doing this while still maintaining our status as the fourth largest economy. We can only do that when we’re bringing our workforce along.”
State Cash Flow Below Forecast in First Month of Fiscal Year
Dept. of Finance
Monthly economic report from the State Department of Finance:
CASH
Preliminary General Fund agency cash receipts for July, the first month of the 2023-24 fiscal year, were $1.268 billion below the 2023-24 Budget Act forecast of $9.748 billion. July sales tax receipts exclude over $650 million in higher-than-expected receipts that shifted from July to August due to larger-than-anticipated processing delays of end-of-the-month transactions, which more than offset the $453-milion shortfall reflected in the preliminary data.
Personal income withholding contributed $404 million to the overall July shortfall, however this was also due to timing as the July deficit offset strong year-over-year withholding growth of 12.4 percent in June. The remainder of the shortfall is due to lower corporate tax receipts.
The Budget Act monthly cashflow reflects the expected impact of delayed payment and filing deadlines for Californians in most counties to October 16. The delay affects personal and corporate income tax categories other than withholding, however the extent to which variance relative to the forecast is caused by taxpayers’ behavior differing from assumptions is unknown.
Preliminary General Fund agency cash receipts for the 2022-23 fiscal year were $980 million above the 2023-24 Budget Act forecast of $167.627 billion.
■ Personal income tax cash receipts were $466 million below the forecast of $6.734 billion in July. July withholding was $404 million below forecast, offsetting nearly half of the $929 million that withholding was above forecast in fiscal year 2022-23. In May through July, withholding grew 4 percent year-over-year, indicating solid growth despite July’s results which were negatively impacted by timing issues. Personal income tax refunds were $103 million above forecast in July. Estimated payments, final payments, and other payments were cumulatively $31 million above forecast in July.
■ Corporation tax cash receipts were $412 million below the forecast of $884 million in July. July refunds were $232 million higher than projected. July Pass-Through Entity Elective Tax (PTE) payments were $104 million above forecast. Excluding PTE payments, net corporation tax revenues were down $516 million in July.
■ Sales and use tax cash receipts were $453 million below the forecast of $1.826 billion in July. This shortfall is related to the timing of collections as higher-than-expected cash receipts shifted from July to August.
JOBS
California’s unemployment rate remained unchanged at 4.6 percent in July 2023. California civilian unemployment decreased by 4,700 in July. Civilian employment decreased by 17,000, and 21,700 people left the labor force, following an average monthly gain of 12,000 and 29,000, respectively in the first half of 2023.
California added 27,900 nonfarm jobs in July 2023, driven by gains in government (15,000), followed by private education and health services (10,800), leisure and hospitality (10,300), trade, transportation, and utilities (4,500), other services (2,200), manufacturing (1,900), and construction (500). As of July 2023, the leisure and hospitality sector recovered all of the 995,600 jobs lost in March and April 2020. Professional and business services (-11,400), information (-3,800), financial activities (-2,000), and mining and logging (-100) lost jobs in July 2023.
HOUSING
Year-to-date through June 2023, California permitted 109,000 units on a seasonally adjusted annualized (SAAR) basis, up 9.2 percent from May, but down 13.3 percent from June 2022. June 2023 permits consisted of 54,000 single-family units (up 6.9 percent from May, but down 23.3 percent year-over-year) and 55,000 multi-family units (up 11.4 percent from May, but down 0.8 percent year-over-year).
The statewide median price of existing single-family homes decreased to $832,340 in July 2023, down 0.7 percent from June, but up 0.2 percent from July 2022. Sales of existing single-family homes in California fell to 269,180 units (SAAR) in July 2023, down 3 percent from June, and down 9 percent from July 2022.
https://dof.ca.gov/wp-content/uploads/sites/352/2023/08/Finance-Bulletin-August-2023.pdf
2024 Ballot Initiative First Deadline Passes, 26 Measures in Process
CaLMatters e-newsletter
This week marked the deadline to submit a ballot initiative if you want to maximize your chances at success, according to the secretary of state’s recommended timeline. As of Monday, there were 26 in various stages of the process, including:
Four qualified for the 2024 ballot: Two referenda, one challenging a fast food labor law and the other challenging a ban on new oil wells near homes; and two Legislature-passed constitutional amendments, one on public housing and one on same-sex marriage.
Five with enough signatures to be eligible: Voters could decide on measures to fund pandemic prevention by taxing the rich, raise the minimum wage, repeal a law allowing private labor lawsuits, make it harder to raise taxes and enable more local rent control.
Five cleared for circulation: Three constitutional public education guarantees, one push to repeal changes to how inherited property is taxed and one effort to decriminalize ‘shrooms.
Ballot initiative webpage:
https://www.sos.ca.gov/elections/ballot-measures/attorney-general-information
Making it Tougher to Qualify Initiatives – California Lawmakers Join National Trend
CalMatters commentary from Dan Walters
A recent analysis by Ballotpedia, an authoritative source of election data, found that over the past five years there has been a consistent trend of state lawmakers “making it tougher for citizens to propose and approve ballot measures.”
Since 2018, states approved 42 bills or resolutions making it more difficult to qualify and pass ballot measures, with 88% of them happening in Republican-dominated legislatures.
In California, Democrats are doing what Republicans are doing in other states – trying to thwart ballot measures that run counter to the ideology of the dominant party.
Measures to make it more difficult to recall officeholders and impose new barriers to collecting signatures on initiative and referendum petitions are kicking around the Capitol, clearly aimed at making it more difficult for business groups to counter legislation that would impose new regulations or costs.
For example, rideshare services such as Uber and Lyft persuaded voters to exempt them from a law converting their contract drivers into payroll employees; the bail bond industry used the referendum to cancel a law outlawing cash bail; fast food restaurants have qualified a referendum to overturn a new law dealing with wages and working conditions; and the oil industry wants voters to erase a new law on siting of oil wells.
The latest effort by Democrats to rewrite ballot measure rules surfaced last week, a constitutional amendment that would make it more difficult – in effect, impossible – to impose new limits on taxation.
Business and anti-tax groups, led by the California Business Roundtable, have qualified a measure for the 2024 ballot that would raise the voting requirements for local tax increases and require voter approval of new state taxes.
Last week, however, Assembly Constitutional Amendment 13 was revised to require any ballot measures seeking to increase voting requirements beyond a simple majority to meet the same supermajority level themselves. It would, in effect, require next year’s business-sponsored tax limit to itself receive a two-thirds vote to be enacted – probably a fatal blow.
Pointedly, ACA 13’s co-author is Assembly Speaker Robert Rivas, indicating it’s a priority for legislative leadership.
The business tax measure wouldn’t be decided by voters until the November ’24 election, but ACA 13 could be placed on the March primary ballot because the Legislature itself controls the election calendar.
It’s exactly what Republicans tried to do in Ohio – something that the president of the United States denounced as a “blatant attempt to weaken voters’ voices.”
A couple of weeks ago, Ohio voters rejected a constitutional amendment, proposed by Republican legislators, that would have raised the vote requirement for passing constitutional amendments from a simple majority to 60%.
It was clearly an effort to undermine a pro-abortion amendment on next year’s ballot. The outcome was somewhat surprising in a state that has been dominated by Republicans in recent years. President Joe Biden hailed the rejection, calling it a “blatant attempt to weaken voters’ voices and further erode the freedom of women to make their own health care decisions.”
Ever since the U.S. Supreme Court reversed itself on abortion rights last year and allowed states to have the last word on the legality of pregnancy terminations, the issue has been fought out state-by-state. Pro-abortion rights groups have sought, with some success, to persuade voters in otherwise conservative states to enshrine abortion rights in their constitutions.
Ohio was another battleground state, and the outcome of this month’s special election increased the likelihood that an abortion rights amendment will pass in 2024.
The skirmishing in Ohio also exemplified a trend around the nation: attempting to change the rules governing ballot measures to affect outcomes.
https://calmatters.org/commentary/2023/08/california-democrats-emulate-ohio-measure/
Conservative Freshman Legislator Refuses to “Play Safe”
Politico California Playbook
A Southern California Republican is harnessing the power of culture wars to propel himself to relevancy.
Bill Essayli, a freshman assemblymember from Corona, has made himself a darling of conservative media this year by latching onto the rapidly growing momentum around the parental rights movement. His efforts at the state level to force schools to out transgender students to their parents have faltered. But his subsequent crusade in local government has led to appearances on Fox and Newsmax, giving him the spotlight in a state where Republicans tend to sulk on the sidelines.
“There’s definitely an element of the party that would like to just ‘play safe’,” Essayli said in an interview.
It’s the kind of attention that has propelled Republicans before him to higher office. But Essayli, a former federal prosecutor and student of recently arrested Trump lawyer John Eastman, said he’s not in it for the notoriety.
“The fact that we’re getting attention, I think, is a byproduct of where the public is on the issue,” he said.
Essayli’s policy proposals have been derided by Democrats and LGBTQ+ advocacy groups, who say it’s part of a troubling trend happening around the nation that threatens the safety of vulnerable children.
In the past, Republicans might have shied away from this kind of playbook, said Jonathan Zachreson, a parents’ rights activist and recently elected member of the Roseville City School District board. But the pandemic showed that lawmakers can not only get involved in polarizing issues — but capitalize on them.
It’s similar to Rep. Kevin Kiley, who, while in the Assembly, seized on parental frustration during the pandemic and built his reputation on criticizing Gov. Gavin Newsom, mask mandates and school closures.
“[The pandemic] shifted the dynamic,” Zachreson said. “Where you realize you actually could be successful by standing up and taking a stance on some of these more controversial, hot button issues.”
There are Republicans in more moderate districts who feel these ideological fights distract from more important issues like public safety. But Essayli is far from alone in his caucus. Many fellow Republicans, including Minority Leader James Gallagher, back his efforts on parental rights.
And if there’s one thing that’s undeniable about Essayli, it’s that he’s managed to exert influence in a state where Republicans have so few avenues to prominence.
“We’re shut out of any solution discussions,” said Republican Assemblymember Megan Dahle. “So, he’s just found a pathway on his own to go around that.”
“Tattered System With A Troubling History”: Hazardous Waste Sites
CalMatters
California produces millions of tons of hazardous waste every year – toxic detritus that can leach into groundwater or blow into the air. It’s waste that can explode, spark fires, eat through metal containers, destroy ecosystems and sicken people. It’s dangerous material that we have come to rely on and ignore – the flammable liquids used to cleanse metal parts before painting, the lead and acid in old car batteries, even the shampoos that can kill fish.
It all needs to go somewhere.
But over the past four decades, California’s facilities to manage hazardous waste have dwindled. What’s left is a tattered system of older sites with a troubling history of safety violations and polluted soil and groundwater, a CalMatters investigation has found. Many are operating on expired permits. And most are located in communities of color, often ones with high rates of poverty, despite environmental justice laws meant to ensure that the most disadvantaged don’t also face the greatest pollution exposure.
“It’s difficult to permit a new toxic facility. There’s going to be a lot of resistance to building a new one,” said Bill Magavern, the Coalition for Clean Air’s policy director, who advised on a state report in 2013 that examined California’s hazardous waste permitting process. “So the path of least resistance is keeping some of the old ones going.”
This conflict is playing out in Santa Fe Springs, a city of about 19,000 people in Los Angeles County that houses one of the state’s biggest hazardous waste treatment and recycling facilities, called Phibro-Tech.
Last year, state regulators issued a draft of a new five-year permit for the company, which has been running on an expired one since 1996. Community activists and environmental groups are opposed.
Phibro-Tech is one of only 72 permitted destinations for hazardous waste in a state that had more than 400 in the early 1980s. Shipping records show it handles as much as 23,000 tons of hazardous waste a year from some of the biggest West Coast companies, including tech giants Intel and TTM Technologies.
But Phibro-Tech is also a company with a lengthy record of violating laws meant to protect workers, the environment and its neighbors in a low-income Latino community, according to hundreds of pages of inspection reports CalMatters obtained through government databases and public records requests.
The company’s representatives, in meetings with CalMatters, defended Phibro-Tech’s record. They want the state to approve a new operating document and blamed many of their regulatory violations on what they deem to be an ambiguous and outdated permit. The company has entered into agreements to fix problems found during inspections, and has addressed issues on site.
They said residents are in no danger from operations and that contamination on site was from other companies – the legacy of a century of industrial operations there and nearby.
And they touted Phibro-Tech’s role in recycling waste that would otherwise be dumped and lead to environmental damage from mining. (Every 55 pounds of copper the company is able to recover from the waste that electronics manufacturers send them is 10,000 pounds of earth that doesn’t need to be excavated in the hunt for precious metals, they said.)
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