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IN THIS ISSUE – “The State Budget process became a political quagmire”
California commentator Dan Walters on the current fiscal debate in the Capitol
- State Budget Debate: More Services, More Stakeholders, Less Money…And the Pie Has Changed
- Newsom Pressures Republican Congress Members for Flood Aid
- Unanimous Assembly Condemns Tennessee Legislature’s Expulsion of 2 Black Members, But Partisan Rancor Flares
- California Confronts Reparations as a Broad Policy Issue – Dodgers & Chavez Ravine Evictions is the Newest
- Atlas of the Biodiversity of California, a Best-Seller from State Fish & Wildlife
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 MAY 19, 2023
State Budget Debate: More Services, More Stakeholders, Less Money…And the Pie Has Changed
CalMatters Commentary from Dan Walters
Drafting state budgets in California was once a fairly straightforward exercise in fiscal politics.
The governor’s budget gnomes could fairly accurately predict how much tax revenue would be generated over the forthcoming fiscal year, particularly since most of it would come from taxes on retail sales, a stable base.
An initial budget was issued in January and it would be revised in May after the April 15 deadline for personal income taxes provided more specificity. Legislative leaders of both parties huddled, sometimes with the governor, and a final budget emerged.
Yes, there were some conflicts. Budgets took two-thirds votes of both legislative houses so the final product needed bipartisan support. Republicans, usually in the minority, would sometimes withhold votes until their demands were met.
Over time, however, the budget process became a political quagmire, in part because the ideological divisions in the Capitol became more pronounced. As Democrats drifted to the left and Republicans to the right, what once was collegial sparring became holy war. But that was not the only factor.
As California’s array of services expanded, so did the number of budget stakeholders seeking larger pieces of the pie or protecting what they had. The field of play became immensely larger after voters passed Proposition 13, the iconic property tax limit, in 1978 and the state became the basic financier of schools and a big factor in local government budgets.
The pie itself changed. The importance of sales taxes in the revenue stream gave way to dominance by personal income taxes, which are inherently less predictable, particularly since most are paid by relatively few taxpayers in upper income tiers.
As Gov. Gavin Newsom’s latest budget proposal, unveiled last week, notes, “California’s progressive tax system, where nearly half of all personal income tax in the state is paid by the top 1% of earners, has contributed to extreme budget volatility over the years.”
That volatility is the chief reason for the budget’s projection of a $31.5 billion deficit just 12 months after Newsom declared that the state had a $97 billion surplus and bragged that “No other state in American history has ever experienced a surplus as large as this.”
Not only have revenues become structurally less predictable, but they also have become subject to changes in national and global economies.
The revised budget’s deficit is projected even without a recession, but were there an even modest downturn – which many economists expect, due to the Federal Reserve System’s sharp hikes in interest rates to battle inflation – the state would take a big hit.
“Based on a moderate recession scenario in fiscal year 2023-24, revenues could decrease by $40 billion in 2023-24 alone, largely driven by losses in personal income tax,” the budget declares. “Revenue declines relative to the May Revision forecast could reach an additional $100 billion through 2026-27.”
Revenue declines of those magnitudes would quickly consume the state’s seemingly hefty “rainy day” reserves.
Budgets no longer require two-thirds legislative votes and Democrats have overwhelming legislative majorities, but that, ironically, is another complicating factor.
Periodic revenue surges, such as last year’s $97 billion paper surplus, whet appetites of Democrats’ allies, such as unions and social welfare and medical care advocates, for additional spending and generate resistance when times get tough.
Newsom’s budget would put the brakes on spending, including clawing back some appropriations from last year. Advocacy groups are leaning on friendly legislators to do whatever is necessary to keep the money flowing, including tax increases and/or tapping into the reserves.
One-party control of the Capitol may change the specifics of fiscal politics, but doesn’t make them any simpler.
Newsom Pressure Republican Congress Members for Flood Aid
Politico
Gov. Gavin Newsom is ramping up his pressure campaign against Republicans as a slow-moving natural disaster hits a conservative-leaning region of California. And the Democrat is using a perennial Republican calling card — water funding — to drive home his message.
Newsom, who has grown increasingly frustrated over the lack of federal action, is casting Republicans as unwilling to fund critical flood protection in the Central Valley, where record snowmelt has already submerged farms and will continue to threaten communities into the summer, while California steps up to front the money.
Now, he’s singling out House Speaker Kevin McCarthy and Rep. David Valadao, who represent the region, in a letter shared with POLITICO that marks an unusual escalation for a governor more used to calling out his foes in speeches and tweets than issuing stern, behind-the-scenes appeals for their cooperation.
At the heart of the squabble is a levee protecting the city of Corcoran and a state prison complex from the slowly-rising Tulare Lake, which had been a dry lakebed for decades until this year’s record snowmelt started flowing down the mountains. Newsom agreed to front $17 million to increase the height of the levee after pressure from local leaders, who also asked federal representatives for help.
“While they called for ‘immediate action,’ House Republicans refused to act on their request, pushing instead for more cuts to local infrastructure projects, and driving the country closer to the brink of default, as you play politics with the American economy,” Newsom wrote to McCarthy and Valadao in the letter dated May 11, which references the partisan standoff between congressional Republicans and the White House over the debt limit.
Valadao spokesperson Faith Mabry pushed back, calling the letter “nothing more than political posturing from the governor on an issue that is completely nonpartisan.”
“Rep. Valadao and our team have been in close communication with the governor’s office and local leaders in the Central Valley since the storms began — for Newsom to play politics on flood response is shameful and incredibly disappointing,” Mabry added.
Since the flooding started, Valadao and other California members of Congress have said they are working on getting additional federal support. Federal disaster agencies may be able to reimburse some or all of the $17 million because of President Joe Biden’s emergency declaration, Newsom officials said last week, but the process could take months or years.
A representative for McCarthy did not immediately respond to a request for comment.
Along with Newsom’s direct appeals to get the lawmakers to work on providing federal funding for Corcoran, there’s an element of political jiu-jitsu: a Democratic governor most closely associated with liberal parts of the state calling out the pair of conservatives from rural California for not adequately focusing on the needs of people in their own backyard.
Specifically, Newsom’s request also turns on its head years of Republican agitation in California and Washington for more water-infrastructure funding, a point the GOP has repeatedly used to paint Democrats as out of step with the region.
The federal government funded repairs to the levee in 1969 and 1983, and Newsom in recent public remarks has said he finds it “absolutely extraordinary, but not surprising, that you have representatives in the Central Valley that opposed federal funding for infrastructure.” The levee continues to cause problems because the ground has sunk as farmers pump groundwater for their crops.
The governor sought to draw a wider contrast between the state of California and the federal government, which are both dealing with budget troubles. Newsom wants to spend an additional $493 million for flood response despite the state’s projected $31.5 billion budget deficit. McCarthy led House Republicans last month in passing a proposal to cut federal spending by $4.8 trillion — some of which would likely target environmental spending — and raise the debt ceiling by $1.5 billion. Biden has pushed back on those sweeping cuts.
Newsom has also noted that part of the budget woes facing both the state and federal government come from a delay in the tax deadline granted to disaster victims including millions of Californians hit by winter storms and flooding.
https://www.politico.com/news/2023/05/17/gavin-newsom-kevin-mccarthy-california-water-money-00097513
Unanimous Assembly Condemns Tennessee Legislature’s Expulsion of 2 Black Members, But Partisan Rancor Flares
Sacramento Bee
Emotions got a little heated on the Assembly floor Monday, as lawmakers debated a resolution to condemn the GOP-controlled Tennessee State House of Representatives for expelling two Black members last month.
The resolution itself, AJR 5, itself passed 60-0.
But prior to the vote Assemblyman Mike Gipson, D-Gardena, who authored the resolution, said that the expulsion of Reps. Justin Jones and Justin Pearson for their role in a gun safety protest was a threat to democracy not just in Tennessee but the entire nation. (Both were quickly reinstated by local officials)
“On April 6. 2023, democracy was violated,” Gipson said, adding that Jones and Pearson “were raped” by the expulsion.
Assemblyman Corey Jackson, D-Moreno Valley, recounted past offenses committed by Tennessee state lawmakers that did not rise to the level of expulsion, including child molestation, urinating on office chairs and illegally prescribing drugs to family members and mistresses.
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When Assembly Republican Leader James Gallagher, R-Yuba City, rose to speak, he began by denouncing his party members for expelling Jones and Pearson. But then he added that the “lecturing” he was hearing from other assemblymembers about democracy “falls a little flat.”
Much as Jones and Pearson are in the minority party in Tennessee,
Republicans comprise a super-minority in the California Legislature. Gallagher accused his Democratic colleagues of using their political power to suppress their speech, denying hearings on GOP legislation on subjects ranging from wildfire prevention to bills to fentanyl trafficking.
“Don’t get up here and preach to me about democracy and talk about other states. The message about Rep. Jones is not just about Tennessee. It’s for you!” Gallagher said forcefully.
The Assembly Republican leader said that he was “about ready to get a megaphone and come onto the floor” for his bills, a reference to the actions that led to Pearson and Jones being expelled, but conceded “that’s not really my style.”
“The bottom line is, if we want to ensure democracy, we better do it right here at home,” Gallagher said. “Do a little soul-searching first before you make this into a day of the panderer.”
NY Times
The story of the displacement is not new, but the call for reparations has recently been bolstered by land-back movements that have gained momentum across California.
Last year, the Los Angeles County Board of Supervisors transferred ownership of Bruce’s Beach, a property in Manhattan Beach that had been taken by eminent domain, back to the descendants of the Black couple who formerly owned it. California is currently considering reparations for Black residents statewide. San Francisco is considering $5 million cash payments to close the city’s racial wealth gap.
And now a Latinx organization representing three neighborhoods evicted by the City of Los Angeles in the 1950s to make way for what ultimately became the Dodgers’ Chavez Ravine ballpark seeks reparations.
“We know we’re going uphill,” said Vincent Montalvo, whose grandparents were born and raised in Palo Verde, one of the lost Chavez Ravine communities. Montalvo helped start Buried Under the Blue, a nonprofit organization that seeks to raise awareness about the residents of Palo Verde and the other two lost neighborhoods, La Loma and Bishop.
Montalvo added, “But we also know this: There’s a time right now in politics, both up and down the state, about reparations.”
Montalvo’s grandfather and grandmother were born and raised in Palo Verde. Even though Montalvo’s father didn’t know that before going to that game in the ’80s, Montalvo’s grandfather resented that they visited the ballpark that had replaced his neighborhood.
“We never went back,” Montalvo said.
The story of this displacement has been well documented in books, news articles and videos. But in recent years, descendants of marginalized communities in California have had success seeking reparations for land that was taken from them, in the form of money or the return of land. Spurred by that momentum, the descendants of the three Los Angeles communities see a chance to seek their own justice. The land on which Dodger Stadium was built, they say, should be returned to them.
FULL STORY:
https://www.nytimes.com/2023/05/07/sports/baseball/baseball-dodgers-reparations.html
Atlas of the Biodiversity of California, a Best-Seller from State Fish & Wildlife
CDFW is proud to present the second edition of the Atlas of the Biodiversity of California, featuring new and updated maps that reflect changes to our understanding of the natural world and the impacts humans are having upon it.
This book is a collection of maps, stunning photographs, and artistic illustrations — all depicting the state’s rich diversity of plant and animal species. It includes over 100 nature photographs, 50 full-color maps, and 12 wildlife illustrations by Dugald Stermer, a well-known author and artist.
Featuring articles by dozens of experts from the Department of Fish and Wildlife and beyond, the Atlas covers an array of topics, such as the state’s remarkable geography, how we measure biodiversity, and examples of the complexity and uniqueness of many of California’s treasured wildlife habitats. The book explores profound and interesting concepts regarding California’s biodiversity, including current threats, restoration strategies, and species and ecosystem protection.
From college students to outdoor enthusiasts, environmental planners to policy makers, the Atlas of the Biodiversity of California, Second Edition, will appeal to anyone with an interest in California’s biological resources.