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IN THIS ISSUE – “It Really Is A Bellwether for ‘22”

RECALL

FIRE & WATER

STATE FINANCES & HOUSING

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 service.

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FOR THE WEEK ENDING AUG. 27, 2021

 

National Political Leaders Scrutinize California’s Recall

Sacramento Bee

Top officials from both parties are preparing to parse the results of next month’s unexpectedly competitive recall election for what it means for next year’s midterm election, control of the U.S. Senate, and a Democratic Party that once thought it had a tight grip on the country’s largest state.

Adding to the scrutiny is a growing sense, bolstered by polls, that the Democrats’ and President Joe Biden’s political fortunes have waned in recent months because of a resurgent coronavirus pandemic and the tumultuous exit from Afghanistan. A loss for Newsom in deep blue California would underline the view that a party that won unified control of Washington less than a year ago is already facing a voter-led backlash.

“It’s one of these moments that people outside of California are doing a double take and saying, ‘Wait a second, how are we even having a conversation about a Republican winning in California?’” said Tyler Law, a Democratic strategist.

Law and other strategists caution against over-interpreting the results of the race, pointing out that an odd-year election has a unique mix of factors that make it an imperfect indicator of the national political climate.

But some of them also acknowledge surprise at the race’s razor-thin margins as it enters the home stretch, in what has become one of the country’s biggest political stories this summer. To survive, Newsom needs a majority of voters to oppose the recall, but recent polls show it’s too close to call.

If a majority of voters support the recall, then they will pick one of 46 candidates on the ballot to become governor. Former conservative talk radio host Larry Elder has the most support among them, even as polls show him receiving less than 30% of the vote in the divided field.

A Republican victory in a state where the GOP hasn’t held statewide office in more than a decade would send shockwaves through the country, Newsom advisers say.

“It really is a bellwether for ‘22,” said Sean Clegg, a senior Newsom strategist. “We have a turnout problem. The recall is all about the turnout challenge. And whether we’re successful or unsuccessful has huge national implications.”

It’s part of the reason he’s recruited some of the party’s top leaders to help his campaign, including Vice President Kamala Harris, who will rally for the governor Friday in the Bay Area.

Sen. Elizabeth Warren of Massachusetts, a former presidential candidate, has appeared in a TV ad for Newsom.

Biden is also expected to campaign for Newsom, though the White House has yet to announce details of his trip.

Turnout wasn’t a problem for Democrats during the tenure of former President Donald Trump, whose policy agenda and behavior in office elicited a fierce backlash from rank-and-file liberals that helped ensure he lost re-election last year.

Newsom has tried to use the specter of Trump to motivate the party’s base once again, saying that his replacement would be nothing more than a clone of the former president.

But that argument hasn’t put the race out of reach, giving Washington-based Republicans hope that Trump may no longer be the electoral boogeyman he once was in blue areas where the former president was most unpopular. Moving out of Trump’s shadow is important, they add, for many of the more moderate and suburban voters the party lost ground with while the last president was in office.

“It shows the ability to make their opponents Donald Trump 2.0, and have that be enough to coast to victory, is no longer a sure thing,” said Colin Reed, a longtime Republican strategist.

Reed worked on one of the most memorable special elections in recent history, when Republican Scott Brown in 2010 won a Senate race in Democratic-heavy Massachusetts. The shock victory of a GOP candidate that year offered an early glimpse of the success the Republican Party would have later that year, when they swept to huge victories in the midterm election and took control of the House majority.

But other special elections — or any non-traditional race like a gubernatorial recall — have had much less predictive value. Just last year, Democrats unexpectedly lost a special House race in suburban Los Angeles, less than six months before the general election. Biden still won California by a comfortable margin and managed victories in former Republican strongholds of Arizona and Georgia on his way to winning the presidency.

Even Republicans like Reed say that, although they’re excited about the closeness of the California race, they still aren’t ready to predict a wave of Republican victories next year.

“You can try your hardest to peer into them and extrapolate out some themes that might or might not apply to races down the road,” Reed said. “But special elections are special elections.”

Democratic National Committee officials also downplayed the election as a bellwether for next year, arguing that the unusual September timing and idiosyncratic rules of a recall race mean it has little in common with federal races.

“This election is about Governor Newsom and his strong track record of delivering for the people of California,” said DNC spokeswoman Brooke Goren.

But the recall race will affect more than perceptions of the 2022 midterm. Newsom advisers point out that if Sen. Dianne Feinstein, who is 88, leaves office during her term with a Republican as governor, the GOP will get to pick the state’s next senator.

With the Senate split 50-50, they add, that could be disastrous for Democrats.

“If we get a Trump Republican governor, we have the oldest longest serving member of the United States Senate, bad events could lead immediately to Mitch McConnell being back in the chair,” Clegg said. “So the stakes are immediate, but they’re also really, really important for next year.”

A spokesman for Feinstein’s office reiterated Tuesday that the senator has said she does not plan to step down from office.

More broadly, a defeat for Newsom would also rob the national Democratic Party of arguably the nation’s most important governorship, Democrats say, at a time when the president’s approval ratings are slipping and the party is struggling to pass a pair of massive spending bills through an evenly divided Congress.

“The stakes are extremely high,” Law said. “This is a state that has led the nation in policy innovation and consumer regulation, environmental regulations. So losing control would be a huge deal.”

Ludovic Blain, executive director of California Donor Table, a group that funds organizing efforts targeting people of color, said Newsom losing “would have huge national impacts,” especially because it would be a blow in the home state of so many top Democrats in Washington, such as House Speaker Nancy Pelosi and Health and Human Services Secretary Xavier Becerra.

“This is one of the leading places in America where we have a relatively functioning multiracial democracy,” Blain said of California. “Gavin losing would put a big anchor around the (Biden) administration’s neck.”

https://www.sacbee.com/news/politics-government/article253720483.html?#storylink=cpy

 

Early Recall Vote “Looks Good for Democrats”

LA Times California Politics e-newsletter

If there’s been one constant in the California recall election, it’s that the political fate of Gov. Gavin Newsom rests on the relative enthusiasm of his fellow Democrats to cast ballots and keep him in office.

Polling from last month suggested there was enough Democratic indifference for Newsom to lose the election — a result that would be an abrupt and historic turn of events for a governor elected less than three years ago by the widest margin in more than a generation.

Now, as election day approaches, we’re getting our first real-time glimpse of voter enthusiasm.

The early numbers look good for Democrats. But Republicans are betting on a late-breaking wave of pro-recall ballots — a wave probably too small to sink Newsom if Democrats turn out in numbers that parallel their true electoral strength but possibly enough to capsize the once-unsinkable governor if his supporters leave their ballots unopened or skip the option of in-person voting.

State elections officials on Thursday released their first snapshot of voter participation in the gubernatorial recall, putting the number of ballots collected across California at almost 2.7 million — roughly 12% of the 22.2 million ballots mailed earlier this month.

While Los Angeles and Orange counties have reported returned ballot counts consistent with the statewide average, the early response has been huge in Bay Area counties that are solidly Democratic. San Francisco reported 23% of its ballots have been returned, Alameda County reported 18% of its ballots are back in the hands of elections officials and Santa Clara County reported almost 17% of ballots have been cast.

Compare that with counties where Republicans hold sway: 11% of ballots returned in Riverside County, less than 10% in San Bernardino County, only 7% in Fresno County and a scant 1.9% of ballots returned in Kern County, according to the state survey.

Those trends align with a tracker of returned ballots designed by Paul Mitchell, a political data analyst whose firm, Political Data Inc., provides information for Democratic candidates and campaigns. Mitchell’s numbers include ballot counts by political party and, as of Thursday, showed 55% of ballots that have been collected were cast by Democrats and 23% were cast by Republicans. Twenty-two percent of the state’s cast ballots came from independent voters or voters registered to other parties.

Now, the disclaimer: This is a snapshot and a lot can and probably will change over the next two weeks. Mitchell said Thursday he’s surprised the voting patterns of 2020 are still holding up — Democrats boasting on social media of ballots already cast, Republicans either holding on to their ballots or perhaps deciding to surrender those mailed ballots and vote in person closer to election day.

The analysis from Mitchell’s firm also sorts ballots by the age of voters and uses census data and other resources to track voters by race and ethnicity. A large majority of the returned ballots (71%) came from voters age 50 or older in the private survey. And most of the ballots returned so far are from white voters with just 16% cast by Latinos — something worth watching over the next couple of weeks.

 

Dem Legislators Protect Newsom from Controversial Bills As 2021 Session Nears End

CalMatters

Turns out 2021 is not a good year for Democrats to make California stand out too much for being weird.

With Gov. Gavin Newsom facing a Sept. 14 recall election, fellow Democrats in the Legislature appeared to protect him from having to sign or veto some controversial measures as they culled hundreds of bills Thursday in the biannual ritual known as the suspense file.

The notorious process marks a critical point in the legislative cycle when lawmakers decide which bills will advance to a vote of the full Senate or Assembly — and which they will snuff out for the year, often with no explanation. Killing bills on the suspense file is one way for Democrats who control the Capitol to shield their party from having to make a tough vote — on a proposal that could anger a powerful interest group, frustrate progressive constituents or draw the wrong kind of attention to this deep-blue state.

The recall election that’s under way — voters have already received ballots in the mail and have until Sept. 14 to turn them in —  added a new layer of political intrigue to the suspense file process that’s already steeped in mystery. While Newsom has until Oct. 10 to decide on bills the Legislature approves, killing these bills — which had already passed one chamber — removes them from the campaign entirely.

Here are highlights of what we saw:

Newsom will not have to decide this year whether California should legalize mushrooms, ecstasy and other psychedelic drugs — nor will he have to weigh in on an ethical debate over turning people into garden compost after they die.

Minutes before the suspense file hearing began, the senator who wrote a bill allowing adults to use and share psychedelic drugs announced that he’s shelving it for the year. While the proposal drew support from progressives who want to decriminalize drug use and advocates who cite the therapeutic role of psychedelics in treating some mental health disorders, it was opposed by law enforcement groups as well as Republicans and moderate Democrats.

“We have a realistic chance of passing it next year,” said a statement from Sen. Scott Wiener, a San Francisco Democrat.

Lawmakers also halted a measure to allow Californians to compost their bodies. Though it had bipartisan support and was pitched as an environmental alternative to cremation, which emits pollution, the proposal faced opposition from the Catholic Church.

Bottling the bills up now protects Newsom from having to choose between his progressive base and the potential national perception of: “There goes crazy California.”

Democrats also sidelined two progressive efforts to tackle the influence of money in politics. One measure would have required more disclosure in online ads about who’s funding them, and would have required disclosing the funders behind initiative petitions when voters sign them. The other would have required prosecutors to recuse themselves from investigating a police shooting if they’d received campaign donations from police unions.

Both measures were opposed by public employee labor unions, which are major campaign donors to Democrats. The Service Employees International Union, which testified against the disclosure bill, has poured at least $4 million into Newsom’s anti-recall campaign.

Police unions — which have not donated to Newsom’s anti-recall campaign but donate heavily to legislators’ reelection campaigns — opposed the bill requiring prosecutors to recuse themselves from criminal investigations of officers if they take police unions’ campaign donations. The measure also reflected an ideological schism among district attorneys. Though it was backed by a handful of progressive prosecutors, it was opposed by the statewide association.

Lawmakers helped themselves by avoiding a conflict with police unions — while also helping Newsom steer clear of the fight among prosecutors.

Ongoing crises at the Employment Development Department have become one of the most embarrassing aspects of Newsom’s leadership during the pandemic. While Californians who lost their jobs struggled to get unemployment payments from an agency overwhelmed by technology problems and soaring demand, a criminal ring managed to fraudulently grab billions of dollars in benefits.

Lawmakers from both parties introduced bills attempting to fix some of the problems. On Thursday, Democrats killed three Republican measures addressing EDD, including one to improve call centers, modernize its technology and assess its safeguards against fraud; another to require the agency cross check applications for unemployment assistance with current state prison rolls; and a third aimed at fraud prevention by prohibiting the department from sending mail containing Social Security numbers.

https://calmatters.org/politics/2021/08/newsom-recall-legislators-protect-governor/?utm_source=CalMatters+Newsletters&utm_campaign=568346e27e-WHATMATTERS&utm_medium=email&utm_term=0_faa7be558d-568346e27e-150181777&mc_cid=568346e27e&mc_eid=2833f18cca

 

Newsom Fund-Raising Is Star-Struck

Hollywood Reporter

Embattled Gov. Gavin Newsom is pulling out all the stops, leaning on supporters in the entertainment industry to help raise money and rally followers to reject the recall effort.

Since he was elected governor in 2018, Newsom — a San Francisco native — has made concerted efforts to spend more time in Southern California and make inroads with the powerful political constituencies in and around Los Angeles that obviously include the entertainment industry (it’s no coincidence that he held his 2018 election night party in downtown L.A. and delivered his annual State of the State address at Dodger Stadium in March). Now, he’s hoping that the local networking will pay off.

One example: Newsom aides have reached out to several prominent celebrities including Snoop Dogg, urging the rapper to tweet to his 19.2 million followers his disapproval of Republican radio talk show host Larry Elder, who has emerged as a leading candidate to replace Newsom in the event that the governor is recalled. Snoop, according to a source, has agreed and is waiting for the right moment — but others aren’t holding their fire.

“Don’t DeSantis our California. Reject the ridiculous recall. Vote No and return your ballot by 9/14,” tweeted singer John Legend, who on Aug. 23 flagged Florida Gov. Ron DeSantis’ lax COVID-19 protocols. Comedian George Lopez, a friend of the governor’s, has also been actively tweeting in opposition to the recall.

Recently, Newsom has been tapping his network of Hollywood megadonors to raise money to both fight the recall and prepare for his reelection in 2022 in the event his governorship survives. In August, consultancy Gonring, Lin, Spahn organized a Zoom event that was hosted by industry notables Jeffrey Katzenberg, Casey Wasserman, Andrew Hauptman and Van Fletcher, among others, which drew a dozen attendees, including Rob and Michelle Reiner, Alan and Cindy Horn, Byron Allen, Janet and Barry Lang, Ann Sarnoff and Matt Walden.  The event raised more than $1 million to fight the recall effort.

Katzenberg, who gave $500,000 to the effort, circulated a letter in August to other potential donors that outlined the stark stakes: “Governor Newsom was first elected in 2018 with 62% of the vote, which was greater than any Democratic candidate for governor in state history. He recently signed into law his California Comeback plan, which will boost California’s recovery by providing immediate relief for families, combat homelessness, improve infrastructure, fight wildfires and make historic investments in education.”

https://www.hollywoodreporter.com/news/politics-news/gavin-newsom-recall-hollywood-democrats-help-1235002709/

 

Former State Senate Democrat Leader Endorses Elder

California Globe

“School choice means the money follows the child rather than the other way around,” Larry Elder, candidate for Governor in the Recall Election of Gov. Gavin Newsom explains in a campaign video. “A quality education is the first step into the middle class,” he explains.

Aligned with Elder on school choice, former California State Senate Leader Gloria Romero just announced her endorsement of Elder.

“Our public schools need big change. I’m Gloria Romero; I was the majority leader of Democrats in the state senate.  I believe in charter schools and and school choice. So does Larry Elder — but not Gavin Newsom. He shut our public schools while he sent his kids to private schools,” Romero says in a new campaign video ad for Elder’s campaign team.

“Yes. I’m a Democrat. But the recall of Newsom is not about political party.  It’s about Newsom. Larry Elder for governor,” Romero says.

Senator Gloria Romero (D-Los Angeles) is the former California Senate Majority Leader, former Senator and Assemblywoman. As chairwoman of the Senate Education Committee, Romero authored and guided to passage a fiercely contested “parent trigger” law which allows a majority of parents in a failing school to vote on a method to restructure the school.

https://californiaglobe.com/section-2/former-ca-democratic-senate-leader-romero-endorses-larry-elder-recall-election/

  

Legislature Postpones Probe of Newsom’s Wildfire Management;

CalFire Removes Forest Clearance Fact Sheet During Media Inquiry

National Public Radio

California lawmakers indefinitely postponed a planned oversight hearing last week that was intended to examine Gov. Gavin Newsom’s administration’s track record on wildfire prevention, as the state continues to burn.

A bipartisan group of lawmakers called for the hearing after an investigation from CapRadio and NPR’s California Newsroom revealed the Newsom administration had nixed a planned $500 million increase in wildfire prevention funding and overstated — by 690% — the number of acres treated through his “priority” wildfire prevention projects.

Democratic lawmakers said they are putting off their oversight efforts until after the wildfire season, in the fall or winter. In an emailed statement, Assemblyman Richard Bloom — who chairs the budget subcommittee that was to conduct the hearing — said he did not anticipate “the number and severity of wildfires that CalFire would be battling” now. The change also puts the hearing after the Sept. 14 election on whether to recall Newsom.

The decision to put off the oversight hearing comes as internal emails obtained through a public records request show Newsom’s handpicked Cal Fire director Thom Porter ordered the removal of a key document from the department’s website on the same day that CapRadio and NPR’s California Newsroom published its investigation.

The document — a “fact sheet” describing Newsom’s priority projects — stated the fire prevention effort would complete work on 90,000 acres of forestland. In reality, Cal Fire completed less than 12,000 acres.

In an email with a link to the fact sheet, a top Cal Fire official, Matthew Reischman, posed a simple question to his superiors: “Chiefs, shall we take down?”

Porter responded: “Yes, it’s old and outdated.”

Newsom, however, emphasized last year that the projects treated 90,000 acres and has continued to boast about them through this year.

In another email obtained by CapRadio and NPR’s California Newsroom, Reischman suggested Cal Fire should remove “probably any others similar as well,” meaning those that made the 90,000 acre claim.

Transparency advocate Aaron Mackey, a senior staff attorney at the Electronic Frontier Foundation, said he was troubled by the document’s removal and said the action underscored the need for the state Legislature to exercise its oversight function.

“Delaying this hearing [shows] that transparency and accountability to the general public is sometimes seen as an afterthought,” he said. Those values, he added, should be viewed as “core to the agency’s mission,” along with wildfire prevention and suppression.

Bloom said he delayed the hearing in part because he wants the “full attention of CalFire leadership” when the Assembly holds its oversight hearing.

“I made the decision to postpone the hearing because Californians do not benefit from pulling CalFire leadership away from their critical mission of protecting lives and homes so that they can present at a government hearing,” he said.

Newsom and Porter declined an interview request. The governor’s office referred the request to Lisa Lien-Mager, spokesperson for the state Natural Resources Agency — which oversees Cal Fire. She said in a written statement that the administration has been “very transparent” about Newsom’s 35 priority projects; however, she acknowledged that the department “briefly took down the two-year-old fact sheet but reposted it a short time later with no changes.”

Lien-Mager also defended Newsom’s wildfire prevention efforts, saying the work completed on the priority projects was part of the governor’s “multi-pronged effort to combat a multi-generational problem,” she wrote. The governor, she said, would continue to work with other stakeholders “to build wildfire resilience in the face of a rapidly changing climate.”

In July, following our investigation, Newsom and lawmakers agreed to restore $500 million for wildfire prevention that had been removed from the state budget. The addition brought the total to nearly $1 billion.

Assemblyman Phil Ting, chair of the full budget committee, declined to comment for this story. Last year, he advocated for greater oversight of the Newsom administration’s COVID-19 spending and response, calling on the governor “to stop spending money in an ad hoc way” without a clear plan. Of late, however, he has backed off.

In the last week and a half alone, his committee has postponed at least three oversight hearings, including one examining the beleaguered Employment Development Department, the agency responsible for the state’s fraud-ridden unemployment insurance system.

Republican lawmakers decried the hearing’s cancellation and said the rapid spread of wildfires across California made it more necessary than ever.

“Why would the Newsom Administration or the Governor himself not want to participate in an open and public discussion on the current status of wildfire prevention operations?” Assemblyman Vince Fong, the Vice Chairman of the Budget Committee, said in a press release. ”The public demands answers to countless questions.”

In a subsequent text sent to CapRadio and NPR’s California Newsroom, Fong called Cal Fire’s removal of the fact sheet “extremely troubling” and lamented that the Legislature’s oversight function has “completely stalled.”

Porter’s direction to remove the document came just as the first major fires of the season sparked. Over 1.5 million acres have burned in the Golden State so far this year, putting it on track to be perhaps the worst fire seasons on record. On the heels of last year’s fire season — which burned a historic 4.3 million acres — fire scientists and state lawmakers have amplified calls for the state and federal government to ramp up their fire mitigation work through forest thinning and prescribed burns.

Experts say accurately reporting vegetation management goals and accomplishments — like the ones laid out in the removed fact sheet — is key to making progress towards California’s massive backlog of overgrown forests.

“It’s important to know, otherwise you’ll get inaccurate data, which leads to inaccurate predictions on vulnerability,” said John Battles, a professor of forest ecology at UC Berkeley. “So it’s pretty crucial.”

Battles noted that, in the course of his research, Cal Fire has been transparent with him about its vegetation management data — including any shortcomings in its system.

The same day CapRadio and NPR’s California Newsroom published its investigation into Newsom’s misrepresentations on fire prevention, Daniel Berlant, a Cal Fire assistant deputy director, flagged the fact sheet for Cal Fire leadership. The story had gone viral on publication, generating immediate reaction from the media and Newsom’s Republican rivals who slammed the governor on social media.

“Soooo…your (sic) probably tired of this issue,” Berlant wrote to Reischman in an email, obtained through a public records act request. “But we should probably remove this document from our website. Right on Page 3 we state that we will be treating 90k acres.”

The email included a link to the fact sheet. Reischman then forwarded the email to Porter and inquired whether the document should be taken down.

The fact sheet, which had been online since March 2019, gave a summary overview of the 35 priority fire prevention projects Newsom ordered Cal Fire to complete. The projects have been a pillar of Newsom’s wildfire mitigation strategy, and included forest thinning, fuel breaks and prescribed burns to protect some of California’s most vulnerable communities. It was one of several documents CapRadio and NPR’s California Newsroom relied on in its investigation, including others from the governor’s office.

After Porter ordered the document taken down, Reischman quickly passed along the directive to Berlant. He suggested scrubbing other traces of the document.

“Yes we should remove, can you ask comms, or who should I ask? Probably any others similar as well,” he wrote.

Berlant got right back to him.

“Happy to help…I hadn’t seen the document till today after it was brought to my attention,” he wrote. “I’ll ask them to take it down. Ugh!”

But less than 24 hours later, Cal Fire changed course.

On Twitter, a CapRadio reporter pointed out that the document  — the same one linked to in the investigative report — had disappeared from Cal Fire’s website.

Rather than let the link go dead, CapRadio and NPR’s California Newsroom reposted a downloaded version of the document onto the internet. The tweet caught the attention of Republican lawmakers.

“Looks like @GavinNewsom is trying to cover his [tracks],” tweeted Assemblyman Devon Mathis.

https://www.capradio.org/articles/2021/08/24/as-lawmakers-indefinitely-postpone-wildfire-oversight-hearing-internal-emails-reveal-cal-fire-chief-ordered-key-document-pulled-from-the-internet/

 

Drought Impact on Water & Ag

UC Davis Watershed Sciences Institute Director Jay Lund, summary of testimony to Assembly Agriculture Committee:

https://agri.assembly.ca.gov/sites/agri.assembly.ca.gov/files/2021%20Drought%20and%20Agriculture%20in%20California%20LUND%2020%20August%202021%20%28003%29.pdf

 

State Revenues Exceed Forecast, But Jobless Rate Exceeds US

Dept. of Finance

Revenue: Preliminary General Fund agency cash receipts for July, the first month of the 2021-22 fiscal year, were $1.542 billion above the 2021-22 Budget Act forecast of $8.383 billion. Preliminary General Fund agency cash receipts for the entire 2020-21 fiscal year were $4.783 billion above the 2021-22 Budget Act forecast of $201.775 billion, or 2.4 percent above forecast.

  • Personal income tax cash receipts to the General Fund for July were $1.219 billion above the month’s forecast of $6.144 billion. Withholding receipts were $1.02 billion above the forecast of $5.748 billion. Other cash receipts were $382 million above the forecast of $895 million. Refunds issued in July were $161 million above the expected $390 million. Proposition 63 requires that 1.76 percent of total monthly personal income tax collections be transferred to the Mental Health Services Fund (MHSF). The amount transferred to the MHSF in July was $22 million higher than the forecast of $110 million.
  • Sales and use tax cash receipts for July were $42 million above the month’s forecast of $1.236 billion. July is the first month of the 2021-22 fiscal year and includes a portion of the final payment for calendar year second quarter taxable sales, which was due August 2.
  • Corporation tax cash receipts for July were $375 million above the forecast of $603 million. Estimated payments were $220 million above the forecast of $440 million, and other payments were $121 million above the $246 million forecast. Total refunds for the month were $34 million lower than the forecast of $83 million.

Unemployment: The U.S. unemployment rate fell 0.5 percentage point to 5.4 percent in July 2021, with civilian employment increasing by over 1 mlllion, while the California unemployment rate remained unchanged at June’s revised rate of 7.6 percent
in July 2021. Civilian employment increased by 56,000 in July 2021 with 50,000 more people entering the labor force and    6,000 fewer unemployed. After adding 114,400 nonfarm jobs in July 2021, California has now recovered 58.3 percent of the 2.7 million jobs lost in March and April 2020. Nine sectors added jobs: leisure and hospitality (56,600), government (35,900), educational and health services (10,400), other services (6,400), information (4,600), professional and business services (4,000), construction (1,100), trade, transportation, and utilities (1,000), and mining and logging (300). Manufacturing (-4,500) and financial activities (-1,400) lost jobs.

Building & Real Estate: California permitted 114,000 housing units (53,000 multi-family units and 61,000 single-family units) in June 2021. This was up 0.8 percent from 113,000 units in May 2021 and up 25.1 percent from the 91,000 units permitted in June 2020. In the first half of 2021, California permitted 124,000 units on average, compared to 97,000 units in the same period in 2020 and 105,000 units in the same period in 2019.

The statewide median price of existing single-family homes decreased to $811,170 in July 2021, the fourth consecutive month above $800,000 and the first month-over-month decrease since February 2021. This was down 1 percent from June but up 21.7 percent from July 2020. Sales of existing single-family homes in California totaled 428,980 units in July 2021, down 1.6 percent from June 2021 and down 2 percent from July 2020, the first year-over-year decline since the decrease of 12.8 percent in June 2020.

https://www.dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2021/August_2021.pdf

 

California’s FY21-22 Spending Plan: Handy Summary of $260 Billion Revenue & Expenditures

Legislative Analyst

Each year, the Legislative Analytis publishes the California Spending Plan to summarize the annual state budget. This publication provides an overview of the 2021-22 Budget Act, then highlights major features of the budget approved by the Legislature and signed by the Governor. In the coming weeks, the office will publish more detailed posts on major spending decisions. In addition, we will update this overview once the Legislature recesses.

https://lao.ca.gov/Publications/Report/4448?utm_source=laowww&utm_medium=email&utm_campaign=4448

 

Who Holds the Hammer to Build Affordable Housing?

CalMatters

Anaheim, San Diego and Oakland are all hoping to give their sports arenas a boost by giving the surrounding real estate a makeover. In high-gloss renderings, developers promise walkable, transit-friendly cityscapes featuring housing, hotels, shops and restaurants with plenty of inviting green space. To borrow from “Field of Dreams,” if you build it they will come. And these cities are wagering the improvements will be enough to get professional sports teams to stay.

There’s just one problem on the road to revitalization: In the eyes of the state, these projects haven’t included enough affordable housing.

Anaheim and San Diego have been cited by California’s Department of Housing and Community Development for failing to comply with an affordable housing law as part of their multimillion-dollar stadium and arena plans. A third investigation into the Oakland Coliseum redevelopment project, which was triggered by a lawsuit, could result in a $25.5 million penalty against the taxpayers of Alameda County.

Housing advocates point to sports arenas as proof that market forces won’t deliver enough housing where at least 1.8 million units are needed by 2025. They contend the public is being shortchanged on affordable units in these deals. For parcels that have an opportunity to create housing, the projects should include at least 25% affordable housing. Even if negotiations fail, there’s still a minimum requirement for 15% affordable housing for projects. Local leaders, including former San Diego Mayor Kevin Faulconer who is running for governor in the recall election, said it was the state that changed development rules in the middle of the game.

What happens next could give the state an advantage over local governments in California’s long-standing fight over land use decisions amid the state’s housing crisis.

For the first time, California is tracking publicly owned land that could be developed into more affordable housing and the state’s Department of Housing and Community Development is flexing its new enforcement authority. Supporters hope the change creates better local government accountability but the agency has yet to issue any fines and cities could resist.

“It’s become clear that there are literally thousands of acres of land being made available up and down the state that potentially could be used for affordable housing,” said Jeff Levin, policy director at East Bay Housing Organizations, one of the groups that pushed for state changes after the city of Oakland failed to prioritize affordable housing.

So far, the responses from local governments have ranged from compliance to defiance:

The Surplus Land Act was passed 52 years ago and has been amended more than a dozen times since. With each amendment, the law became more specific in how local agencies are to dispose of surplus land—public properties that the agency wants to sell or lease. But the only way to enforce it was by taking local governments to court.

It wasn’t until San Francisco Democrat Assemblymember Phil Ting penned a bill in 2019 that the state won enforcement powers. For the first time, the Department of Housing and Community Development could track all public land deals and levy fines of as much as 30% of the real estate deal.

Housing advocates say it’s still too early to declare the law a success, but having these three high-profile cases in the first year should encourage local agencies to carefully consider how they move forward on public land.

“It’s also shifting the mindset of the public,” said Laura Nunn, policy director for the San Diego Housing Federation. “Public land, and the public good that it delivers, can and should include affordable housing.”

Sports arenas are just the latest front in California’s push for more housing. Even before the pandemic exacerbated the state’s affordability crisis, Gov. Gavin Newsom and state lawmakers struggled to increase housing production.

Just a few years ago, local governments and neighborhood preservationists defeated SB 50, which would have forced cities to allow mid-rise apartment buildings around public transit. This year, the Senate’s leader has a bill allowing more duplexes in residential neighborhoods but it faces opposition from homeowners and local governments.

And as much as the state can build housing for people experiencing homelessness, Newsom’s top housing adviser has said the private market needs to build more to ease the housing shortage.

But some say that may take more state oversight.

“There’s no way out of the housing crisis that simply involves the private market handling the situation for us,” said San Diego City Councilmember Sean Elo-Rivera. “The public is going to have to be much more involved.”

https://calmatters.org/california-divide/2021/08/surplus-land-act-california-affordable-housing-sports-arena/?utm_source=CalMatters+Newsletters&utm_campaign=8dbc5556a7-WHATMATTERS&utm_medium=email&utm_term=0_faa7be558d-8dbc5556a7-150181777&mc_cid=8dbc5556a7&mc_eid=2833f18cca