Budgeting by Trump

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)

Remember a long, long time ago—all the way back to February—when our state and its leaders were committed to resisting President Trump at all costs.

Three months later, Gov. Gavin Newsom, our resistor-in-chief, is proposing to put Trump in charge of the California budget.

These are strange times, and this strategy may be good politics. Newsom’s May revise budget is structured around a series of trigger cuts. If the federal government passes enough subsidies for state and local governments, those cuts don’t get made. But if Trump and his Republican enablers balk, then the trigger cuts—which includes huge hits to public schools, universities, health and employee pay—go into effect.

The political goal is to make Trump—not California’s governor or legislature—own the worst cuts. And there may be justice in that—since Trump’s decision would trigger the cuts. But the strategy is not exactly an expression of California’s sovereignty as a nation state.

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California’s Request For Federal Funds

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

About Governor Newsom’s request for $14 billion of additional federal support–

Even when added to the $8 billion already provided to California by the CARES Act, the total ($22 billion) would be less than half the $48 billion proposed for California under the HEROES Act passed by the US House of Representatives last week. But, absent reform, a large share of every federal dollar provided to California under any formula would be diverted to retirement costs. Accordingly, regardless of the amount the federal government provides, we will encourage Congress to help California help itself to billions more of the state’s own money with which to avoid cuts to services. 

California spends orders-of-magnitude more on retirement costs than do the other members of the Western States Pact. E.g, California spends $5 billion per year on “OPEB” (“Other Post Employment Benefits”), a subsidy for retired employees on which Oregon and Colorado spend $10 million and $30 million. Translated for population differences, California’s OPEB spending per resident is 60x and 24x that of Oregon and Colorado:

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Separating Good Bailouts From Bad Bailouts

Edward Ring
Edward Ring is a co-founder and senior fellow at the California Policy Center

The pandemic shutdown is about to enter its third month, and economic repercussions have just begun. Too much has been shut down for too long. In California, the initial reopen is not going to include huge business sectors – theaters, concerts, conventions, sports, travel, hotels – and other sectors such as restaurants and retail establishments are going to be at half-capacity. Business revenue and profits have crashed, with proportional hits to tax receipts. The cascading economic damage is likely to far outlast the spread of the virus.

The federal response so far has been the COVID-19 CARES Act Relief Bill, which allocates $1.8 trillion in emergency spending to stimulate the shut down economy. This dwarfs the $831 stimulus package passed in 2009, and is equal to more than half of 2019 federal revenue which was $3.5 trillion. In terms of spending, it represents a 40 percent increase to the 2019 federal spending of $4.4 trillion. Using these numbers, a reasonable estimate of the federal deficit in 2020 would be $2.7 trillion, before any additional relief bills are passed, which is likely.

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Q&A with Jim Newton, Author of: Jerry Brown, Man of Tomorrow

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

One might fairly think of Jerry Brown as the keystone that holds together the arc of California history that bridged the 20th and 21st centuries. From his first governorship beginning in 1975 through his last of four terms ending in 2019, Brown has been part of and/or witnessed California’s glorious moments, dark declines and various episodes of newsworthy events that could only be associated with the Golden State. 

Jim Newton, a biographer; former Los Angeles Times reporter, columnist and editor; and current UCLA lecturer and founder of UCLA’s Blueprint Magazine has written a history of California from the 1960s through the 2010s that is built around the life of Jerry Brown. The book is tilted, Man of Tomorrow, The Restless Life of Jerry Brown

Newton delves into Brown’s background and his many experiences to discover what fashioned Brown’s reasoning that lead to the decisions he made while serving California. 

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Creating an investment strategy for economic recovery

Micah Weinberg and Fred Silva
Micah Weinberg is CEO of California Forward, a nonprofit organization that leads a movement to improve government performance and create inclusive, sustainable growth for all. Fred Silva serves as Director of Public Policy for California Forward.

The May budget revision unveiled by Governor Newsom last week was prudent and showed the flexibility in the state’s budgeting process to quickly adapt to changing conditions. What remains largely missing from the fiscal agenda, though, is urgent stimulus to the California economy that invigorates job creation while rectifying the significant racial and geographic inequities that existed before the crisis.

Why during the longest recovery period in American history did so many fare so poorly? 

Wages provide a clue. Almost 60% of the new jobs created in the last decade paid less than $18.00 per hour. While some workers moved into higher incomes during the recovery, the majority lost ground.

The pandemic magnified these inequities displacing those primarily in lower paying sectors. Now is the opportunity to reverse this vicious economic cycle by making major investments that will create tens of thousands of good jobs while creating infrastructure and housing that will improve our quality of life and bring down the cost of living for everyone. 

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Economic recovery is an opportunity for the climate

Julian Canete and Matt Cate
Julian Canete is the president and CEO of the California Hispanic Chambers of Commerce and Matt Cate is the Executive Director of the Alliance for Climate Resistant California.

The world is changing around us.

While the current COVID-19 crisis can easily stoke fear and anxiety, it also offers a window into what we can accomplish when we work together.

We have come together to move mountains to mitigate this pandemic like never before. While we are not out of the woods yet, the unity and commitment to addressing COVID-19 displayed by Californians will be essential in tackling a separate crisis that has been unfolding for decades – climate change.  

Instances of collaboration and togetherness are all around us. Neighbors are helping at-risk community members accomplish essential errands like grocery shopping. Counties and cities are accelerating their programs to house their homeless populations. And states are collaborating on best practices and regional approaches to fight the disease.

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The Doddering Deifiers of Density-Part 2

John Mirisch
Councilmember and former three term mayor of Beverly Hills

FYI, I am agnostic when it comes to urban density.  I look upon it as a lifestyle choice, one of many; my opposition to Wiener and his acolytes’ bills is rooted in their utter lack of tolerance: the attempts to force density upon communities; the attempts to create one-size-fits-all urban schemes that treat us all like widgets (or serfs); and the zealotry in their war on single-family homes, which themselves represent a personal lifestyle choice and in many cases the expression of the American dream.

In calling for the end of single-family homes, the young Yimby authors of the article cited above claim that “by 2025, over three quarters of households [down from “85%” in an earlier version of the article] will not have kids and the most common household will be individuals living alone.”  If that’s true, maybe it’s time to stop talking about “multifamily housing.”  Maybe in this time of New Urban Solipsism we should be talking about “multi-solo housing.”

And just how will this multi-solo housing help us avoid overcrowding?

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All Mail Voting Works – for Republicans

Tony Quinn
Political Analyst

For all the Republican howling of late about mail balloting, we have now had our first two all mail ballot elections in California, and guess what, Republicans won both: a State Senate seat in Riverside County and a congressional district in Los Angeles and Ventura Counties that Democrats had won in 2018.

Republicans from President Trump and strategist Karl Rove on down were certain Democrats would somehow steal the congressional election.  But in a district carried by seven points by Hillary Clinton in 2016, and nine points by the Democrats in 2018, Republican Mike Garcia won by 10 points on Tuesday.

The dog didn’t bark, the bee didn’t sting, the fat lady didn’t sing.  So what happened?

Well, first, candidates and issues do matter.  There had to be a special election in this Antelope Valley Simi Valley district because the first term Democratic Congresswoman Katie Hill got herself embroiled in a rather torrid sex scandal and had to resign.  The Democratic establishment anointed one term Assemblywoman Christy Smith for the seat, but in the March primary she ran poorly, showing that the voters were less than enthralled with the party’s choice, and perhaps turned off by the conduct of former Democratic Congresswoman Hill.

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May Revise Proposes Major Revenue Raisers

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

On May 14, Governor Newsom submitted his May Budget Revision (i.e., the “May Revise” to his January 10 budget proposal). As part of the May Revise, the Governor offered a series of “revenue solutions,” which amount to billions of dollars of increased tax payments primarily made by business taxpayers. 

The May Revise explains, “As part of the balanced approach to managing the budget deficit, the May Revision includes two significant temporary changes to tax law, two measures to reduce the sales tax gap, and maintains three tax measures included in the Governor’s Budget.” It further provides that “These tax measures as a whole are intended to raise revenue, stimulate economic growth, and help those in need.”

The Governor’s May Revise maintains the following four tax reduction measures that he proposed in January: 

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The Doddering Deifiers of Density—Part 1

John Mirisch
Councilmember and former three term mayor of Beverly Hills

It probably shouldn’t be a surprise to anyone who has ever observed the cult that Yimbys and other assorted density fetishists would react reflexively any time the word “density” is mentioned in connection with the Covid-19 pandemic.

Clearly, they are concerned that concerns about the potential impacts of density could cloud their agenda, which is aimed at limiting our collective array of housing choices, dictating that we should all live in multifamily housing and effectively eradicating single-family homes.

The fact that human beings themselves are the vectors responsible for the Covid-19 pandemic simply doesn’t dovetail with the “density is destiny” dogma.

Not only did Joel Kotkin’s op-ed on Covid-19 and density unleash a torrent of Yimby ridicule, invective and ad hominem attacks (ranging from calling Kotkin a “cretin” to a whole lot worse), it seemed to create new horizons in smug sarcasm.

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