May 8, 2020 – News & Notes

For Clients & Friends of The Gualco Group, Inc.

IN THIS ISSUE – “Immediate and Severe Impact”




 Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests.  Please feel free to forward.



COVID-19 Infects State Budget; Federal Help Essential

Sacramento Bee

California Gov. Gavin Newsom said he was confident Thursday that the state will work through a state budget deficit now estimated at $54.3 billion. But he said his optimistic outlook is conditioned on one thing: “More federal support.”

The governor said additional federal spending will be critical for California to pull its way out of the recession’s effect on the state’s spending plan.

“It is absolutely incumbent upon our federal partners to recognize, as many do … the magnitude of this moment and how it’s directly related to COVID-19, not mismanagement,” Newsom said.

On Tuesday, President Donald Trump tweeted that “well run States should not be bailing out poorly run States, using CoronaVirus as the excuse! The elimination of Sanctuary Cities, Payroll Taxes, and perhaps Capital Gains Taxes, must be put on the table. Also lawsuit indemnification & business deductions for restaurants…”

Newsom sought to make that case that California had managed its finances well until the coronavirus hit.

The governor pointed out that just 90 days ago, he was projecting a budget surplus of $6 billion.

Newsom said that 4.3 million people have filed for unemployment insurance since March 12, with almost $12 billion worth of unemployment checks sent since March 15.

“Because of this pandemic, because of what it has done, these revenue shortfalls are bigger even than the state of California,” he said. “We need the federal government to recognize this.”

Newsom said he is very grateful for the bipartisan support that California has already received, “but sadly, the enormity of this moment requires even more support.”

State revenue estimates show Newsom’s first detailed look at how his office anticipates the coronavirus outbreak to affect state spending. It’s a stark contrast to January, when his office in a $222 billion budget proposal projected the state would accumulate a $5.6 billion surplus and add to its reserves through July 2021.

Newsom disclosed the memo ahead of releasing his revised budget proposal, which is due May 14. He has been urging the federal government to send more money to states. Without federal assistance, the state must make substantial cuts in its 2020-21 budget, the Democratic governor has said.

Newsom’s Finance Department estimates that the state’s unemployment rate will rise to 18 percent. It was 3.9 percent earlier this year, and its peak in the Great Recession was 12 percent.

The job losses have disproportionately hit low-wage jobs, the department says, widening the gap between the rich and the poor. The department estimates personal income will drop by nearly 9 percent and housing construction permits will drop more than 21 percent.

“California began 2020 with a strong bill of financial health—a strong economy, historic reserves, and a structurally balanced budget,” according to the bulletin. “The rapid onset of the COVID-19 pandemic has had an immediate and severe impact on the global, national, and state economies… The May Revision economic forecast reflects that COVID-19 impacts will continue to cause economic losses in 2020.”

Newsom’s office expects revenue to the state general fund — which supports education, public safety, prisons and many social services —to fall by $41.2 billion below his January budget proposal.

That would put California’s total general refund revenue under $100 billion, which is about what the state collected in its 2012-13 budget year.

Aside from falling tax revenue, Newsom’s office expects the coronavirus to trigger more spending on certain emergency and safety net programs. That spending could top $13 billion, according to the Finance Department.

Newsom described his January budget proposal as an example of what “big-hearted, effective governance looks like.” He had proposed new spending on homelessness, teacher training, an effort to curb prescription drug prices and an expansion of health care for undocumented seniors.

In Newsom’s January budget proposal, California public schools and community colleges were expected to receive $84 billion through a funding formula determined by the 1988 law known as Proposition 98. Newsom’s administration described the number as an “all-time high” in guaranteed funding for California schools.

His office in the new memo projects guaranteed school funding to fall $18.3 billion below the earlier estimate.

California lawmakers by law must pass a state budget by June 15. Newsom extended state tax filing deadlines to July 15 because of the coronavirus outbreak. Several lawmakers have said they might pass a baseline budget by the June deadline and consider amending the spending plan in August when they have a clearer picture of tax revenue.

State Dept. of Finance deficit memo:


“This is Fishy”: Legislature Probes Governor’s Mask Contract


California lawmakers plan to probe why state officials wired half a billion dollars for masks to a medical supply company that had existed for just three days, and want to know what’s changed in the state’s vetting process since the deal collapsed.

“We really need to ensure that there are appropriate controls in place and that we are spending California’s tax dollars efficiently and responsibly,” said Assemblywoman Cottie Petrie-Norris, a Laguna Beach Democrat.

The accountability and administrative review committee she chairs plans to hold a hearing this month to examine the bizarre transaction that CalMatters revealed earlier this week in which California wired $456.9 million on March 26 to Blue Flame Medical LLC – then scrambled to get the money back hours later. The company was incorporated on March 23 by two Republican operatives, Mike Gula and John Thomas, with no track record in the medical supplies field.

Republican lawmakers also are seeking an audit of all the state’s spending on protective masks, including the rescinded payment to Blue Flame and a $1 billion contract the state subsequently reached with a Chinese company called BYD.

“We are concerned about the details of a rushed, half-billion contract to a company only days old and a price-per-mask contract with BYD that could be nearly 40% higher than what is available on the market,” nine GOP lawmakers wrote in a letter to the Legislature’s Democratic leaders today.

“Rather than learning of these issues from the Administration… we are getting delayed and incomplete reports from news stories.”

The state decided to cancel the deal with Blue Flame for 100 million N95 masks after bankers involved in the wire transfer alerted California Treasurer Fiona Ma that they were suspicious of it, Ma told the Sacramento Bee. Ma declined an interview request from CalMatters.

The account she gave The Bee portrays a deal that was about to close until two bankers called her to raise alarms. One bank executive was not comfortable completing the transaction because the Blue Flame Medical account had been opened just the day before, according to The Bee’s report, and another banker involved in the wire transfer thought the transaction might be fraudulent and planned to call the FBI.

“That’s when I called the governor’s office and said, ‘this is fishy,’” Ma told The Bee. “‘We got the money back, but you need to vet these people better and go through the proper protocol.”

Newsom insisted today that his administration has improved its vetting process since the Blue Flame deal fizzled in the initial weeks of California’s coronavirus crisis.

“We were in the Wild, Wild West period in the early part of this pandemic,” he said. “Those dollars were protected and protocols were put into place that are much more strengthened after that specific incident.”

Newsom’s director of Emergency Services said the vetting process now includes a team of experts in health, logistics and foreign commodities as well as federal emergency management and law enforcement officials. But he acknowledged that decision making during an emergency is rushed, and that state officials were deluged with offers from people purporting to have the coveted medical supplies.

“There were thousands and thousands of individuals and organizations reaching out to us that required all of these aspects to be vetted,” Mark Ghilarducci said.

“And through that vetting process we actually were only able to get through a small percentage of legitimate organizations and companies that could provide the commodities we needed.”

Because Newsom declared the pandemic an official emergency, the state has waived many of the normal rules for procuring supplies and services. Vendors can land lucrative contracts with the state without going through the usual bidding process.

One key lawmaker lauded Newsom’s handling of the pandemic and said he trusts the state’s leadership.

“There has been no pattern ever in this administration or these departments of recklessness that would make me want to suggest that there was anything improper,” said Sen. Bill Dodd, a Democrat from Napa, who chairs a committee overseeing disaster response.

It’s still not clear why Newsom administration officials decided to make the deal with Blue Flame in the first place, given how new the firm is to the medical supply business. The state’s Department of General Services, which placed the order with Blue Flame, did not respond to several inquiries from CalMatters over the last week and a half.

“I think it would be very productive both for the Legislature and also for the public at large to understand what happened,” said Assemblywoman Petrie-Norris.

At the upcoming hearing, she said she intends to ask Newsom’s aides: “What we have learned, what controls and protocols are now in place, are there still issues and gaps, and if so how are we working to close them?”


Staying Home Costs Tourism $72 Billion This Year

Orange County Register

California’s tourism industry is on track to lose more than $72 billion in visitor spending this year, nearly half of what it generated in 2019, according to a new report from Tourism Economics.

Tourism Economics, a provider of economic analysis, forecasts and consulting advice, prepared the report for Visit California, the state’s nonprofit tourism and marketing organization.

The study shows the COVID-19 pandemic has erased a record 10 years of growth in visitor spending, state and local tax revenue and jobs created. It will result in 613,000 California jobs lost by the end of May, the report said, more than half the industry’s workforce that had grown at an average rate of 3.2% a year for the last decade, employing 1.2 million Californians in 2019.

“It’s a grim story,” Kleinhenz said. “When we look at our experience after 9/11, it took a few years for travel volumes to recover from that. People were hesitant to travel and gather in large meeting spaces.”

In a disruption that is virtually unprecedented, major attractions including Disneyland, Six Flags Magic Mountain and Universal Studios Hollywood are sitting idle amid warm weather that would typically attract thousands of visitors.

Robust numbers last year

The current projections are particularly dismal in light of where the industry was last year. Another report by Dean Runyan Associates shows visitors spent $144.9 billion in 2019, a 3.2 percent increase over 2018.

The number of travel and tourism jobs increased by 13,000 last year to 1.2 million jobs, the report said, and travel-generated tax revenue grew for the 10th straight year, providing $12.2 billion to state and local governments. That represented a 3.4% increase over 2018.

In a posting on its website, Universal Studios Hollywood said it has extended its closure at least through May 31. Tickets bought for park visits during the closure period will be automatically extended for use through Dec. 18, management said.

Those who can’t visit during that time can apply the value of their unused tickets toward a new purchase.

“For now, we must make the health and safety of our guests and team members our top priority,” Universal said, “and we will continue to take guidance from health agencies and government officials.”

Southern California beaches, another major tourism draw, also remain largely barren.

Huntington Beach, Dana Point and various businesses throughout Orange County sought a temporary restraining order in Orange County Superior Court on Friday that would have blocked Gov. Gavin Newsom’s executive order to close their beaches. But Judge Nathan Scott rejected the injunction.

Newsom ordered a blanket closure of all parks and beaches in Orange County after images surfaced of people gathering at the beaches and ignoring social distancing guidelines. But on Monday he announced some retail businesses will be allowed to reopen with modifications as early as Friday.

Laguna Beach and San Clemente city-run beaches have been given the go-ahead to open to the public, with restrictions, based on plans they submitted to the governor’s office over the weekend.

San Clemente’s beaches opened Monday afternoon, May 4, for active use such as surfing or walking, and the pier will reopen on Tuesday, May 5.

Laguna Beach is starting with weekday morning hours for getting exercise. Neither is proposing for beachgoers to lounge around in the sun.

Los Angeles beaches remain closed, but beaches in Ventura County are open.

Caroline Beteta, president and CEO of Visit California, said the pandemic-related numbers are sobering.

“The data show just how vital tourism is to the California economy and why it must be restored when we control and ultimately overcome this deadly outbreak,” Beteta said in a statement.

When that time arrives, Visit California will be encouraging people to travel within the state, shop locally and visit local restaurants, wineries and other attractions, she said.

“California has led the nation in its response to the health crisis, and it will lead the economic comeback,” Beteta said.


Hospitals Seek $1 Billion in Immediate State Aid

CalMatters & Sacramento Bee

When Aimee Paulson, a nurse practitioner, learned in late March she was being temporarily laid off from the private family practice she’d worked at for the last three years, she was disappointed but not surprised. Patient visits in the San Ramon office had gone down by almost 80% as the coronavirus outbreak kept people at home.

She called her patients, many of whom followed her from her previous workplace, and told them she hoped to be back by June.

In the midst of a public health crisis, Paulson and other health care workers are learning they aren’t immune to layoffs, furloughs and pay cuts. It’s an ironic twist to the pandemic: When the health care system seems to need workers the most, it can’t afford to keep them all.

A recent survey of more than 3,200 physicians by the California Medical Association, for example, found that 49% of practices have had to lay off or furlough staff.

Now providers and state lawmakers are searching for ways to keep hospitals, clinics and private practices afloat and its workers employed — or face the prospect of a deeper medical jobs shortage months or years from now.

California hospitals have suffered short-term losses of $10 billion to $14 billion in revenue alone and face long-term financial upheaval as a result of measures taken to prepare for a surge of COVID-19 patients, leaders of the California Hospital Association said Thursday.

CHA President Carmela Coyle said: “We emptied California’s hospitals to make way, canceling surgeries, procedures and more because it was and continues to be the right thing to do, but meeting that moment to address the COVID outbreak has come at a devastating loss and risk for California’s hospitals.”

The hospital association sent a letter to Gov. Gavin Newsom on Wednesday, asking for $1 billion in financial assistance out of the state’s current fiscal budget, said Coyle, who was joined on a conference call by CHA board members Diane Hansen of Escondido-based Palomar Health and Scott Reiner of Roseville-based Adventist Health.

They also are hoping that in the 2020-2021 budget, Newsom will seek a disaster waiver from the federal government that would secure matching funds that would go to hospitals, said CHA spokesperson Jan Emerson-Shea. They hope the state will pledge $3.1 billion to secure an equal amount from the U.S. Centers for Medicare and Medicaid Services.

Hospital association leaders are kicking off a conversation with the governor on this topic Thursday afternoon. So far, California’s hospitals have received roughly $3 billion under the federal stimulus package known as the CARES Act.

Statewide, Coyle said, hospitals prepared for the surge starting in mid-March by canceling elective procedures, even though, their leaders knew that this would result in devastating financial losses. They did so anyway, she said, because they were answering the call from county and state leaders to increase capacity for patients sickened by the coronavirus, the pathogen that causes COVID-19.

Around the world, the virus had killed thousands of people and had overwhelmed hospitals by the time preparations began in earnest in the United States.

“These are unprecedented times,” Coyle said. “None of us has been through anything like this in terms of this virus, our health, the death toll, the isolation, the economic downturn and all the rest, but it is these unprecedented times that call for unprecedented actions. “

In late April, Gov. Gavin Newsom allowed hospitals to resume some elective surgeries, which is the bread and butter for many facilities. But some hospitals, especially smaller ones or those in rural areas, are already in a deep hole.

Meanwhile, clinics and doctors’ offices continue to struggle with a drop in revenue as patients are advised to avoid non-emergency in-person visits.

This week, the Legislature’s Latino Caucus sent a letter to the Newsom administration also warning that many of the state’s health centers will not be able to remain open much longer “without significant financial support from the state.”

Laying off and furloughing staff is a “recipe for disaster,” said Stephanie Roberson with the California Nurses Association. Last month, for instance, about 150 registered nurses in San Jose and San Diego were temporarily laid off because of department closures and the cancellation of elective procedures, Roberson said.

Her organization has been protesting these layoffs. On Thursday, another union, SEIU-United Healthcare Workers West, will be protesting a 20% pay cut at Stanford Health Care.

“It is a weird dichotomy,” said Joanne Spetz, associate director of research at the Healthforce Center at the University of California, San Francisco. The labor challenge for health systems, she said, is that not all positions transfer smoothly into surge preparedness. A nurse in a primary care office or one who specializes in orthopedic care, for example, perhaps wouldn’t be the best fit to care for a coronavirus patient on a ventilator, she explained.

“So you have furloughs happening in community health centers and in certain departments of hospitals, while at the same time there is concern about a surge and we’re hearing these calls for things like a health corps,” she said.

In late March, Gov. Gavin Newsom announced the California’s Health Corps, whose members would tend to coronavirus patients in alternate care facilities. But that surge in anticipated volume hasn’t occurred and these facilities across the state remain mostly empty. Out of the approximately 94,000 people who have applied to the state’s backup medical reserve, 551 have been accepted into the program.

Of these Health Corps members, 233 are on call to staff the Sleep Train Arena, the former Sacramento Kings playing venue which was prepped for up to 400 patients with mild or moderate cases of COVID-19. As of Tuesday, only five patients were being treated there. Workers are taking turns as needed, according to the state’s Department of Health and Human Services. The rest are being used to staff nursing homes that need temporary or emergency support.

Democratic Assemblyman Jim Wood of Healdsburg said it makes more sense to look at laid off workers first for Health Corps jobs, rather than hire people who need to be retrained and recredentialed. “My rationale is they’re going to go on unemployment, and then we turn around and pay someone else,” Wood said.

The California Department of Health and Human Services confirmed that currently laid off workers are not prioritized for these jobs. Hiring is based on need and geography, according to the agency.

Paulson, the nurse practitioner, applied to the state’s Health Corps and was recently offered a position at a clinic in Berkeley.  She didn’t take it. On Wednesday, she returned to the San Ramon practice after her employer qualified for a Paycheck Protection Program loan. She’ll be working partial hours until patient visits pick up again, she said.

Others may not be as fortunate. Assemblyman Wood said he believes the pandemic is “going to be a breaking point for some offices and clinics.” He said he is concerned about the loss of primary care doctors, especially in rural districts like his that already struggle to attract and retain them.

“This will hasten the retirement of some folks, or the closing of practices,” he said.



Highway Projects Losing $370 Million as Gas Tax Drops

Sacramento Bee

California’s stay-at-home order could mean a loss of $370 million in funds that help pay for highway construction and maintenance as well as aid for transit, a new study from UC Davis’ Road Ecology Center reported Friday.

Researchers found that vehicle miles driven have plunged more than 75 percent in the state since the coronavirus outbreak shut down much of California in mid-March.

The state’s fuel tax revenue dropped from $61 million in early March to $15 million in the second week of April.

If Gov. Gavin Newsom’s stay at home order, which he announced March 19, stays in place for eight weeks, the researchers estimated a $370 million shortfall, or $46 million a week.

In 2017-18, state gasoline tax revenue was $6.4 billion. In 2019-20 and 2020-21, it was estimated to be $7.2 billion and $7.5 billion, respectively. The tax is one of several sources of revenue for the transportation program.

The California State Transportation Agency expects updated figures later this month.

The financial part of this we know is going to be a heavy hit,” Caltrans Director Toks Omishakin told the California Transportation Commission this week. “Our revenue is based on fuel consumption and will be affected.”

Combined with other fees state motorists pay, including a 47.3 cents a gallon gasoline tax and an 18.4 cents a gallon federal gasoline tax, California had the highest motor fuel taxes in the country,as of January 1, according to the American Petroleum Institute.

The motorfuel taxes help pay for the program enacted in Senate Bill 1 in 2017, which aimed to raise$5.4 billion annually for the state’s highway, bridge and transit systems, as well as on local streets and roads and multi-modal congestion relief corridors.

There could be some relief coming from Washington. The American Association of State Highway and Transportation Officials. is pushing a nationwide $49.95 billion relief plan that would be included in the next economic aid package. So far, though, there’s been no serious movement on putting together that package.


Transit Agencies Suffering from COVID-19


California’s public transit agencies deliver a vital service every day, and especially during times of emergency – providing critical mobility options for millions of frontline health care, public safety, grocery and restaurant workers fulfilling essential roles during the COVID-19 pandemic.

But public transit faces an existential crisis over the coming months: a “double whammy” that could result in catastrophic revenue losses threatening the viability and availability of transit services in the near- and long-term.

First, as Californians responsibly shelter in place, transit ridership and fare revenues have plummeted by more than 90% at many agencies. According to a survey by the California Transit Association, BART saw more than a 94% reduction in ridership and $8.9 million in losses recently. Similarly, LA Metro’s ridership is down by 75% and is losing up to $5.75 million weekly in fare revenue. San Diego’s MTS weekly ridership is down by 75% with a nearly $1.4 million hit to revenues. CalTrain ridership is down 95%, costing $2 million in revenues per week, while Sacramento Regional Transit is down 80% and has lost more than $3 million over the same time period.

Collectively, California’s transit agencies will face approximately $2 billion in lost fare revenue and new operational expenses alone due to the COVID-19 pandemic.

In addition to these fare revenue losses and cost increases, we know a second wave will come crashing down on local transit agencies in the coming months.  State and local sales tax revenues will plummet with a slowing economy, undercutting a key source of transit funding. Transit agencies in California rely more on sales tax funding for their core, non-fare-based revenue than do most agencies across the country.

Public transportation agencies are already suspending or dramatically curtailing much of their service, deferring payments to contractors, and/or furloughing employees – limiting mobility options for essential workers and disrupting services during this crisis. These disruptions could become permanent without state action.

Fortunately, the federal relief package provides much needed immediate funding for local transit agencies that will help mitigate the worst and most immediate impacts of COVID-19. The stimulus package includes more than $25 billion in funding to transit agencies throughout the U.S. California agencies are expected to receive approximately $3.75 billion.

But these funds will only stop the immediate bleeding over the coming few months. They will likely not stabilize transit or cover the anticipated losses beyond this summer. By fall, the predicted recession will cut into public transit’s sales tax funding base, which the new federal stimulus funding will likely not cover.

On behalf of our nearly 200 members, the California Transit Association will continue to monitor and report on the real-life impact of the crisis. As part of this effort, we will assess the extent to which new federal funding has slowed the demise of local transit services and the anticipated needs of agencies going forward when sales tax funding declines. Then, we will continue to work with Gov. Gavin Newsom and his administration and legislative leaders to determine if further state relief is needed.

It will likely become imperative that the state support local transit agencies further as part of the anticipated August budget revise – providing new funds to keep the doors open and the trains and buses running through the hard times to come.

We understand there are serious and competing needs for limited state resources. Sustainable and available public transit is absolutely vital in this time of crisis, and also critical to helping our economy get back on track when life resumes to normal by getting millions to work, school, shopping, medical appointments and other obligations. Prior to the current public health crisis, California’s public transit agencies provided more than 1 billion trips per year.

Local agency leaders are committed to partnering with the governor and state elected leaders.  Without action, public transit as we know it may never be the same.


Newsom Lands on the Democrat National A-List


California Gov. Gavin Newsom landed this week on the “A-list” of presidential campaign surrogates for fellow Democrat Joe Biden — and Donald Trump.

Newsom is being touted as the star attraction for a $100,000-a-ticket virtual fundraiser this Friday for Biden. That high-dollar event comes just as the Trump campaign has released a new online campaign ad that features a recent clip of Newsom saying “promise made, promise kept” about Trump delivering coronavirus test materials — echoing the tag line from the Republican’s reelection campaign.

Newsom hasn’t yet formally endorsed Biden and recently sidestepped questions from reporters on that front. But the fundraiser suggests that Biden’s team is relying on Newsom, who heads the nation’s most populous state and a Democratic ATM, to be a front-and-center endorser in the 2020 election.

Dan Newman, a political spokesperson for Newsom, said the event is a joint fundraiser with the Democratic National Committee, which allows for a more expensive fundraising ticket beyond the limit for presidential campaigns. He acknowledged that the event is unusual, especially coming before a formal endorsement, but with the pandemic, “Nothing has happened in the way it has happened in the past.”

“The Democratic governor of the largest state will strongly support the Democratic nominee,” he said. But until now, “The governor has been intensely focused on the crisis, and thought it was difficult — or even counterproductive — to be involved in politics.”

The Friday “virtual fundraiser” event, which also features former Obama campaign guru David Plouffe, gives Newsom the opportunity to not only publicly show his support of Biden, but also “show he’s a good Democrat,’’ said veteran California political analyst David McCuan of Sonoma State University. “The way to show your bona fides in the party is that you’ve got to be a rainmaker — and $100,000 is a lot of rain. That’s a pretty heavy downpour.”

But “writ large, it’s an indication of Newsom’s role as a national Democratic leader,’’ said McCuan. “It’s [New York Gov. Andrew] Cuomo on one coast and Newsom on the other coast,’’ he said.

The California governor’s “bromance” with Trump is an unexpected coronavirus development — after the two engaged in months of verbal warfare over everything from auto emissions to homelessness and California wildfires.

But since the Covid-19 pandemic, the president has repeatedly lavished praise on Newsom for his handling of the crisis in California. Newsom, in turn, has resisted any temptation to jab at Trump — instead thanking him profusely for providing medical equipment, ventilators and even the Navy hospital ship Mercy to the port of Los Angeles for extra bed capacity.

In one of the latest Trump ads, Newsom has a star role praising the president for his response to the Covid-19 crisis. “Every time I’ve called the president, he’s gotten on the line,” Newsom says, adding that “he sent everything that I could have hoped for … every single thing he said, they followed through on … conversation, commitment.” Cuomo also appears in the newest ad.

Regarding Newsom’s appearance in the Trump spots, Newman said the governor has believed that “we can’t do that traditional thing where we retreat to partisan corners.” But he acknowledged that for the Democratic governor to appear in a Trump ad. “We are in interesting times, certainly not normal.”

Kurt Bardella, a former Republican strategist who is now a Democrat and a MSNBC analyst, said the star role underscores how Newsom “is the first California governor we’ve had in almost a decade who has a potential political future that extends beyond the governor’s mansion.”

But, he added: “Ultimately, how Gov. Newsom continues to handle the coronavirus pandemic and what value he can bring to the Biden campaign will determine how ready he is to assume a permanent place in the national political landscape.”


Republican Legislator Pursues Bond Honesty


About three-fourths of the Legislature’s 120 seats are occupied by Democrats, which renders the Capitol’s relatively tiny band of Republicans pretty much irrelevant.

However, one Republican, Jay Obernolte of Big Bear Lake, has carved out an effective role in bolstering transparency in and accountability for countless billions of dollars in tax and bond measures that local governments either place on the ballot or issue themselves.

Several years ago, Obernolte won passage of a measure, Assembly Bill 195, that requires the ballot summaries of tax and bond proposals to include estimates of how much they would increase taxes.

Local officials intensely dislike the measure because the summaries are limited to 75 words and they prefer to use those words to extol the wonderful things the new taxes and bond funds would finance.

Almost immediately, local government lobbyists began agitating to repeal it. Last year, Sen. Scott Wiener, a San Francisco Democrat, wrote Senate Bill 268, which would have allowed local officials to shift the required tax information from ballot summaries into the voter pamphlet or another separate statement, where it would get much less attention.

SB 268 cleared both legislative houses easily, but Gov. Gavin Newsom, to his credit, vetoed it. “This bill makes modifications to ballot label requirements and notification requirements to voters for a local measure that imposes or increases a tax with more than one rate or authorizes the issuance of bonds,” Newsom said. “I am concerned that this bill as crafted will reduce transparency for local tax and bond measures.”

Score one for Obernolte.

This year, the dogged Republican is hoping to rack up another win for accountability with Assembly Bill 2155, which would overturn a rather bizarre state 2019 Supreme Court decision on the validity of local bond issues.

On the day after Christmas, by a 6-1 margin, the court decreed that the validity of municipal bond issues may be challenged only by those directly involved in the transactions, thus freezing out civic watchdogs and other outsiders.

It earned the six majority justices a scathing rebuke from Chief Justice Tani Cantil-Sakauye.

The case involved bonds that the City of San Diego issued in 2015 to refinance bonds that had been issued for the construction of Petco Park, home of the San Diego Padres baseball team.

The refinancing bonds were approved by San Diego’s city council and its Public Facilities Financing Authority. Afterward, a local civic organization, San Diegans for Open Government, sued the city and the financing authority. The group contended that the bonds violated Government Code Section 1092, which deals with conflicts of interest, because one member of the financing team had an “interest in one or more contracts for the sale of the 2015 bonds.”

The conflict hinged on the legal meaning of Section 1092’s authorization for “any party” to challenge the transaction.

The Supreme Court took the narrow approach, declaring that “any party” is restricted to just those directly involved. However, Cantil-Sakauye excoriated the ruling.

“I do not believe the Legislature created a scheme that counts on the foxes to guard the henhouse and leaves taxpayers helpless to halt even the most egregiously conflicted government bond issuances,” she wrote. “The likely result under the majority’s rule is that no one will bring a challenge to avoid a government contract afflicted with a conflict of interest.”

The decision and Cantil-Sakauye’s dissent left it to the Legislature and Newsom to bolster the right of the public to challenge the validity of such bond issues and Obernolte’s new bill provides that opportunity.


Californians Move Inland

Sacramento Bee

Pasadena. Elk Grove has passed Rancho Cucamonga. And Sacramento is the second fastest-growing major city in the state.

New population figures released  by the state Department of Finance show Californians are continuing to move inland, fleeing the coast for the Central Valley, and reinforcing population booms in greater Sacramento and other parts of the Central Valley.

All told, the four-county metro Sacramento region gained about 26,000 residents during the year, reaching 2,374,008. That was a 1.1 percent growth rate — or more than five times the state average.

The state’s total population grew just 0.2 percent last year, reaching an estimated 39,782,870 on New Year’s Day, the department said. The slow growth rate is in line with the modest growth the state has experienced since the Great Recession.

The growth wasn’t uniform. Los Angeles County lost 0.3 percent of its population, marking its second straight year of population loss. The Bay Area grew but at a modest pace: San Francisco, for instance, added barely 6,000 people. San Jose added fewer than 2,000 people.

The city of Sacramento added just 5,700 people, but its 1.1 percent growth rate was second fastest among the ten largest cities in the state, behind Bakersfield.

By | 2020-05-08T13:40:00-07:00 May 8th, 2020|Air Quality|