Memorial Day

Fox and Hounds Daily Editors

The editors at Fox and Hounds ask that you enjoy a respectful Memorial Day. We will resume with our regular postings tomorrow.

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No Respite for Business vs. Labor Battles During Pandemic

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The Covid-19 flame of disease, death and economic devastation has only served to bring aspects of the traditional battle between business and labor to a boil. Optimistically, one might think that the call of ‘all in this together’ would have different interests pulling on the same end of the rope in hopes of quick economic recovery. But when it comes to major labor laws like AB 5 and PAGA (Private Attorney General Act), no compromise seems acceptable.

Calls to suspend AB 5 during the crisis, the classification of workers law, so that the unemployed can find some kind of independent work and bring in income have been ignored by the majority party. In fact, Governor Gavin Newsom in his slimmed down budget that cuts items like help for the blind and disabled still set aside more than $20 million to enforce AB 5 during this difficult time for workers and businesses. Many found this particular budget item, in light of the circumstances, distasteful at best.

The enforcement money ramps up pressure on workers who are trying to simply survive. As Senator Jim Nielsen pointed out in a statement, “the Administration is doubling down on the enforcement of an ill-advised and punitive labor law that cuts off income opportunities for those hardest hit by this recession.”

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What Will a Post-Virus Housing World Look Like?

Timothy L. Coyle
Consultant specializing in housing issues

The COVID-19 (Corona virus) pandemic sweeping the globe will go down in history as the single-most compelling incident of our time.  It ranks up there with the devastation – to both property and the human psyche – of World War II.  It’s kept us cooped up in our homes and wrecked the economy.  It’s touched us all.

Indeed, like the planet’s Second World War, the virus has changed and will forever change lives – in California and worldwide.  In one month it’s killed tens of thousands of Americans – more than were lost in the Vietnam War, which took over 15 years to prosecute.  At 2,628, California ranks high in the number of Corona virus deaths but well below the state with the highest death count – as of May 9, New York had the most deaths of any state (the latest report:  26,584).

Unbelievably, those are considered good numbers.  Early in the outbreak death predictions were a lot higher.  At first, the United States alone was, according to the modeling, expected to experience virus-caused deaths in the millions.  But, thanks to the promptness and discipline of the American people those prophesies proved to be excessive and were substantially revised downward.

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More Budget Do’s and Don’ts

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Having served in state government during two difficult budget periods (2003-4 and 2009-10) and on the Volcker-Ravitch State Budget Crisis Task Force in 2012, I have participated in and studied many bad and good state budget practices. Some takeaways:

  1. Maintain Perspective. As Governor Newsom pointed out last week, the state’s expected shortfall this time is smaller as a percentage of the going-in General Fund than the shortfalls of 2003, 2009 and 2011, and LAO predicts an even smaller shortfall.
  2. Some Borrowing Is Ok If Short-Term. As Governor Brown would tell you, one mistake we made in 2004 (with my direct assistance) was to issue an 11-year bond that – as this 2015 press release from Governor Brown’s Department of Finance makes abundantly clear – was too long.
  3. Protect The Vulnerable. Teacher layoffs are bad enough but especially under a California law you should change that discriminates against early-in-career teachers by laying them off first regardless of performance. 
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How a Rural California Town Got Universal Broadband

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

If California is really the global tech capital, why is it so hard for our small towns to get the Internet service they need?

One answer to that question is in Gonzales, a Salinas Valley settlement of 9,000.

While  California’s biggest cities now struggle to provide Internet access for people to work and study from home, Gonzales solved that problem a few months ago. Before the pandemic hit, the town offered broadband service, free of charge, to all its residents. The story behind this rare achievement—Gonzales is the first Central Coast city to do this—offers lessons about power and how communities can beat the odds.

Gonzales’ leadership is not a surprise. The town, surrounded by fields, is a small wonder, with low crime,  innovative health services, extensive supports for children, and   a diverse industrial base that employs local residents. 

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Federal Money for State and Local Governments Could Stop Tax Increases

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Governor Gavin Newsom is hoping for federal funds to avoid about $14 billion in budget cuts. Political tensions over a federal subsidy to state and local governments—some Republicans label it a bailout—have held up Washington assistance to the states, but the odds are some form of federal help eventually will come. The federal funds could thwart efforts by state and local governments to raise taxes, especially on businesses. Raising taxes would quash the economic recovery. 

Across the board, Washington politicians want the recovery to happen as soon as possible. That’s not to say that Washington must be careless in how money is doled out to state and local governments. Critics of the subsidies have a point when they claim they don’t want to send money to states whose decisions on financial matters, especially pensions, put undue stress on the budgets’ bottom line.

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The Coronavirus’ Impact on Bills in the California Legislature

Chris Micheli
Chris Micheli is a Principal with the Sacramento governmental relations firm of Aprea & Micheli, Inc.

As you may recall, there were 2,203 bills introduced by the February 21 deadline for the 2020 California Legislative Session. Since that time, there were 20 more bills introduced (committee bills, for example, are not subject to the February deadline), 14 additional bills in the Assembly and 6 additional bills in the Senate. Out of the 2,223 bills introduced so far this year, 682 are Senate Bills and 1,541 are Assembly Bills.

Based upon the policy committee hearings that are scheduled to consider bills in the Assembly and Senate during the month of May, 163 SBs and 398 ABs have been set for consideration. That means a total of 561 bills have been set for hearing out of the total bills introduced this year, which is 25% of the total number of bills that could have been considered by policy committees this year. 24% of the SBs and 26% of the ABs have been set for hearing.

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Here are 6 things the Legislature can do to help California recover from economic devastation

Loren Kaye
President of the California Foundation for Commerce and Education

The COVID-19 pandemic has devastated the California economy, especially public-facing businesses. Entertainment – including motion pictures, television, live shows and theme parks – restaurants, accommodations and retail sectors have been laid waste, evaporating thousands of jobs. 

Few states depend on this sector as does California. Tourism, hospitality and retail also are the very sectors that employ workers on the lower rungs of the economic ladder. The supply and service chains that feed into and out of those industries are likewise on the brink. Like a boulder crashing into a lake, the longer this crisis persists, its waves will widen their reach and affect more industries and throw more Californians out of their jobs.

Gov. Gavin Newsom has focused on the factors necessary to reopen the economy, including increased testing, contact tracing, availability of personal protective equipment and re-engineered workplaces. More recently the governor has begun to loosen some of the initial stay-at-home restrictions.

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The Grand Inquisitor’s Story Comes To California’s Job Devastation

Michael Bernick
Counsel with the international law firm of Duane Morris LLP, a Milken Institute Fellow and former Director of the California Employment Development Department

(Part of a series on the impacts of the coronavirus on employment and the workplace. The previous ones are here.) 

A number of issues arising during the pandemic—issues of faith, certainty, freedom— lead us back to The Brothers Karamazov, Fyodor Dostoevsky’s novel published in 1880. It is not too grandiose to say that at a time when we are told to accept indefinite lockdowns and be satisfied with our Stimulus checks and Unemployment checks, we are challenged by the novel’s story of the Grand Inquisitor. Neither is it too grandiose to suggest that events of the past month here in California bring into the present, the Inquisitor’s challenges on work and the state.

Let’s start with California updates: May 8 saw the reopening of the economy in the Bay Area counties of Napa, Sonoma, and Solano. It was a very limited reopening, mainly for retail stores that could offer curbside service. Yet, small business owners interviewed spoke of how relieved they were to be able to return, even though they expected few customers. An “ethnic clothing” store owner in Sonoma said she would do “whatever it takes to do to reopen”, and a nearby toy store owner described how she had missed her customers. A florist in downtown Napa, a jeweler in Solano, a bike shop owner, all spoke effusively of reopening, even with minimal economic payoff.

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Time to stop the mandates, give business time to recover

John Kabateck
NFIB State Director in California

Proponents of a newly-proposed privacy initiative, the so-called California Privacy Rights Act (CPRA), claim to have enough signatures to qualify for the November ballot. The actual number of qualifying signatures may be close, based on my experience with previous initiatives.  

But as someone who has signed a few ballot initiative arguments, I question whether this initiative should move forward at all. In the face of an unprecedented health and economic crisis, should the sponsors pull back their proposal?  

I can think of three good reasons why the sponsors should wait. 

First, we now have record unemployment, business failure, and state and local budget deficits.  Almost every business I know has been touched in some way by the coronavirus, either because of the impact of “shelter in place” orders or because consumer purchasing patterns have changed dramatically. Many business owners have laid off or furloughed employees while some are still trying to operate bare bones operations. And many smaller companies have been forced to close their doors – hoping and praying that they will be able to reopen in the future.

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