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BALANCE OF POWER: Note that I don't list district-specific predictions below, but rather use probabilities in toss-ups to make projections. Individual race ratings are on the ATC district pages.
Yesterday, elected, business, education and policy leaders gathered for the first California Policy Summit sponsored by Milken Institute, a nonpartisan, nonprofit think tank funded by investor Michael Milken. It was a thorough day on pressing issues facing the Golden State on issues such as the housing crisis, higher education degree access and completion to meet the workforce needs, workforce gender equity, and the state's business climate.
The event was at the new Kimpton Sawyer Hotel in Downtown Commons development, adjacent to the Golden 1 Center, the relatively new home of the Sacramento Kings. The half-mile between the State Capitol and the summit and the invite-only nature of the event provided a real separation from the politics that will be prevalent through the end of the month, which is the end of the two-year legislative session.
Okay, outgoing state Treasurer John Chiang got some jabs in against the Trump Administration, but that was announced ahead of time in his press release for the event. Even among the politically mixed audience, let's just say that there was little disagreement with the jabs following the President's wildfire tweets this week.
Chiang was the first substantive speaker of the day, which was moderated by longtime GOP political operative, who is now a faculty member at USC and director of the Sacramento Bee's "Influencer Series."
Chiang made a pitch for "Green Bonds," which are state-backed bonds using general obligation bonds, lease-revenue bonds, or revenue bonds. General obligation (G.O.) bonds, backed by the state General Fund, require voter approval, while revenue bonds, backed by a revenue stream or savings that can be used for debt service do not.
To understand the difference, G.O. bond proceeds might be used for a forest rejuvenation if it leads to measurable reduction of the effects of emissions. There's no revenue stream or savings, although it "greens" the state. Revenue bonds could be used for solar on public buildings, with the net reduction in electricity bills beyond the amortized cost of the panel installation and maintenance being the "revenue" stream that services the bond debt. A more straightforward revenue bond example would be paying for the installation of bike share racks up front, with a contractual agreement with the bikeshare company on a revenue share of user rental fees, with the state's share used to service debt.
The advantage of G.O. bonds is that the bond purchasers are less interested in individual projects, but rather the state's General Fund condition. With revenue bonds, bond purchasers likely would want to know the projects to be funded before the bond goes to market and not yield it to a bureacracy based on "qualifications" for a project. Anyway, I hope that is correct and makes sense.
Senate President Pro Tem Toni Atkins (D-San Diego) followed Chiang. Atkins began with comments on poverty and housing, borrowing from her history of growing up poor in Virginia in a home with no running water. Atkins proudly shared highlights of the 2018-19 State Budget, with a particular focus on funding for education, housing and wildfires. As she noted that the Legislature will tackle more than 1,000 bills over the next four weeks, there were noticeable groans in the audience--either from the workload or the content.
Following Atkins were panel discussions on the issues I listed above. Before the panel on housing--one of the best that also described why it is such an intractable problem, former Senate President Pro Tem and current Sacramento mayor Darrell Steinberg talked about what the city is doing on housing and several other issues. As we were the hotel that is part of the Downtown Commons project that includes the Kings arena, he talked about his legislative efforts that smoothed the environmental review process for the project. He also expressed regret that the accelerated timeline for project legal challenges was not broadened across more projects under CEQA.
However, his pride certainly shows as the project takes shape and notes that if the acceleration wasn't provided, the project likely wouldn't be this far along, as (paraphrasing) "billionaires who wanted to move the Kings to Seattle would still have it tied up in court."
There were no elected Republicans as speakers or panelists. The Milken Institute is truly nonpartisan, so I don't know if it was lack of invitations or declined ones.
The issues are on the table and solutions have been offered. The only question is whethere attendees can walk that half-mile to the Capitol and bring them to fruition.
TONIGHT: Former Pro Tem John Burton raises funds for his “Burton Book Fund” which “has raised $1.75 million and provided books to 6,600 college- and community college-enrolled foster youth in California;” two semesters $1000; one semester $500, ticket $250; drinks and appetizers served 5:30 p.m., Main Lobby of the Esquire Building, 1215 K St. Contact: Cathy Murnighan 916-202-5105.
Short program at 6:15 p.m.; co-hosted by: John Garcia, Kaiser Permanente; Donna Lucas, Lucas Public Affairs; Kathy Van Osten, MVM Strategy Group.
List of colleges that participate in the Burton Book Fund.
For more details: www.jbaforyouth, org/burton-book-fund/
Obviously, this is not a new passion for Burton, who always pushed assistance to foster youth in the Capitol. If you can't make the event, you can donate here.
On to the fires . . .
Rankings in California's Top 20 in history from over the last 12 months:
FERGUSON: The Yosemite-area fire has burned 91,502 acres and is 38% contained. Here is the latest on Yosemite National Park, which remains closed:
"Yosemite Valley, Wawona, Glacier Point, Mariposa Grove, and Hetch Hetchy are closed due to fire. - Yosemite Valley, Wawona, Mariposa Grove, Glacier Point, and Hetch Hetchy are closed. Tioga Road and Big Oak Flat Road west of Crane Flat are open. Big Oak Flat Road east of Crane Flat remains closed. Limited services in Big Oak Flat and Crane Flat areas."
CARR (Shasta/Trinity): Carr continues to grow through largely unpopulated areas toward western Colusa and southwestern Glenn County.
MENDOCINO COMPLEX (Colusa/Lake/Mendocino): Mendo Complex continues to burn although in largely unpopulated areas.
There are more than a dozen active fires across California.
GREAT NEWS AMIDST THE DESTRUCTION: While the initial presidential disaster declaration that provided increased federal assistance to the firefighting and shelter assistance did not include individual assistance, President Trump signed on Saturday Major Disaster Declaration for Shasta County following a request from Governor Brown, which has been the hardest hit in terms of destruction and damage to residences.
This paves the way for the Small Business Association (SBA) to step in and accept applications for low-interest loans to businesses and residences that have suffered destruction or significant damage in Shasta County. Yes, you didn't misread that--the SBA is the conduit for loans to not only businesses but also individuals, and the agency coordinates with FEMA in disasters such as this one. The details of the program are:
Some key points:
The SBA is opening Disaster Recovery Center (with FEMA, the county, etc) and a Business Recovery Center this week in Redding. An exact time and location has not been announced, but is expected this week. Of course, when I get it, I'll tweet it and include it here.
Anyone impacted by the Carr Fire that has questions about applying for SBA’s Disaster Assistance Loan programs, can always call our Customer Service at (800) 659-2955.
FIRES AND CLIMATE CHANGE: For CALmatters, Julie Cart writes that the most significant impact on climate change from the fires is likely to be over the next decade rather than during the active burn as burned trees decay and release carbon into the air. That impact could offset some of the good done by the state's aggressive policies in reaction to climate change.
More stories below . . .
Friend of the Nooner and the best legislative historian Alex Vassar writes that if the results hold:
"Senator Delgado would be the shortest-serving State Senator in more than a century. The last Senator to serve a shorter term was Orrin Z. Hubbell, a Republican who served 15 weeks in 1903 before he died in office.
Senate District 32 in 2018 would be the first time in California history that three Senators have represented a single Senate seat in one calendar year. Tony Mendoza held the seat between January 1st and his resignation on February 22. Vanessa Delgado would hold the seat from August 9 until the end of the current term on November 30. The candidate who wins the General Election in November would assume office on December 3.
With the election of a new Senator in the November General Election, this would be the first time in California history that three Senators have represented a single Senate seat (SD-32) in one calendar year.
At 17 weeks in office before the end of the term, Vanessa Delgado would be the shortest-serving female legislator in state history, replacing Assemblywoman Laura Richardson (who served 39 weeks in 2006-07).
Senator Delgado would be the 157th woman to serve in the California State Legislature, and the 46th to serve in the Senate.
Senator Delgado would be the sixth woman ever elected to the State Senate without ever having served in the Assembly. Senator Delgado joins Senators Leyva and Nguyen to bring the number currently in office to three.
Senator Delgado would be the seventh woman elected to the State Senate in a special election (although women have been elected to the Senate in special elections eight times; Sharon Runner won special elections in 2011 and 2015).
In the past 50 years, only one California state legislator has left office without authoring a single bill that became law. It was Assemblyman Adrian C. Fondse, who served for 35 days in 1980-81, who was the only California state legislator in the modern era who didn't have a single bill chaptered."
It was very low turnout--9.5% as of last night--which would be expected for a special election during August. There's a reason we don't have regular elections in summer months. However, the timing of former senator Tony Mendoza's resignation. State law required the governor to call the special election around this time and only the special primary could be consolidated with a regular election, and that was on June 5.
Running on the November 6 ballot are Democrat Bob Archuleta and Republican Rita Topalian. Regardless of the final results in yesterday's special, Pico Rivera councilman Archuleta is a clear favorite in this Clinton +38.6% district.
DOUBLE-X FACTOR: For KQED, Miranda Leitsinger and Katie Orr have a feature on non-incumbent women running for office in California to look at their motivation for running:
"We posed the question,"Tell Us: Know a Woman Running for Office?, published a survey -- that we shared out broadly across many groups and political affiliations -- and we got nearly 50 responses.
We heard from women from across California -- from Corona to Orange, Hayward to Folsom, Rocklin to Morro Bay. Their ranks include black, Latina and Afghan-American women, lesbians, single moms, working moms, retirees and professionals. They range in age from 18 to 62."
RUSH HOUR: Dan Walters writes for CALmatters that the big issues of utility liability limits for wildfires caused/spread by transmission lines and whether California's electric grid should be part of a regional one will likely not get the attention they should as lawmakers focus on getting their bills through the process by August 31. Walters takes us back to the disasterous electricity deregulation in 1996 and the costly pension enhancements for state employees in 1999.
On utility liability limits, the "Up from the Ashes" coalition including fire victims, consumer groups, and local fire officials held an event on the north steps of the Capitol this morning to urge legislators to reject the governor's proposal. The event, which included co-chair of the coalition and my friend Patrick McCallum was followed by lobbying inside the building by victims and others. McCallum, a longtime lobbyist and his wife Sonoma State President Judy Sakaki lost their home and nearly their lives last October in Santa Rosa during the Tubbs Fire.
Meanwhile, utility companies are pushing back with the support of the governor by describing how much they have spent for wildfire prevention, reports Guy Kover for the Press-Democrat.
CORO: Speaking of Patrick McCallum, a Coro alumnus, the highly regarded nine-month institute has announced its Fall 2018 class of full-time fellows. Congratulations!
EMPLOYEE v. INDIE: The lobbying campaign by tech companies and others to get the Legislature to respond to the April 30 ruling by the California Supreme Court that likely would move many of the "independent contractors" working for Lyft, Uber, Instacart, and many package and delivery companies that deliver for Amazon and others has moved into high gear. I wrote about the Dynamex opinion yesterday, and I heard from many of you on both sides of the issue.
As always, I love responses and I learn from them. I will respond to you, AW and others. I have just been swamped the last 24.
Last night, in my short Uber ride (I would have walked, but the smoke and my lungs are not on the best of terms) back from the Milken event, the driver and I ended up talking about Dynamex. In addition to the letter I wrote about yesterday, Uber sent out an alert to drivers explaining the issue with a call to action to sign a "petition" through the driver app to call on the Legislature to act to limit the narrowing of the test as to who is can be an independent contractor rather than employee.
At the end of my ride, the driver asked if I had a few minutes to continue to explain the issue to her, which I did. She also wanted to know more about why labor felt so strongly on the issue and she had heard about the decision in Janus that limits the ability of unions to collect "fair-share" fees for the cost of representation of non-members.
My driver said that she loves the status and flexibility of driving for Lyft and Uber. She has a full-time job, but is using Uber driving to pay down her son's student loans. She has a full-time job with full benefits and is just looking for the cash that driving provides and wants to remain independent, drive as her other obligations allow, and not held to mandates of Uber to drive at certain times if classified as an "employee." I've heard that from other drivers.
As the unanimous court writes in Dynamex, the case is about whether a someone working for/with a company should be a classified an employee for the purposes of wage orders adopted under California law by the Industrial Welfare Commission. These include such items as minimum wage, maximum hours, and meal and rest breaks. I wrote about the new test for classifying employees yesterday.
The Dynamex case, which on its face could have serious repercussions across industries, is one of those "bad facts make bad law" situations that were oft-cited in law school. Dynamex is a nationwide package and document delivery service that pays its independent contractors based on either a percentage of the delivery fee or a flat fee per package. Drivers set their own schedules, but must inform Dynamex the days they intend to work. They must buy their own Nextel (is that still a thing?) phone to interact with the company. Dynamex dispatchers send the jobs calls to the individual drivers, who have no guarantee of the number of calls they will get. Drivers must wear a Dynamex shirt and name badge that they have to buy using their own funds.
For those familiar with Lyft, Uber, Instacart and others, you likely can see some differentiation. As my driver pointed out as we talked for about 20 minutes, she could just turn off the app and Uber couldn't require her to take a call or face a penalty, as Dynamex had for "independent contractors."
However, the new ABC test would likely require the classification of drivers to be employees and could break the business model.
The issue was a class action case brought by a single plaintiff who worked for Dynamex for "a total of 15 days." The case was filed three months later by Charles Lee and similarly situated unnamed Dynamex drivers. The trial court denied class action status, which was reversed by the court of appeal. The California Supreme Court not only defined the new standard for worker classification but also upheld the class action status.
I don't know the facts about who approached whom, but this sounds like class action abuse in which a law firm seeks out someone to create a case. This happens all the time. Many of you have likely gotten postcards about a class action case that the plaintiff wins and you receive a coupon for a purchase of the product that was flawed that started the case in the first place, while the lawyers and the named plaintiff(s) make bank.
Class action lawsuits were very important in the civil rights era in particular, when standing up as plaintiffs could literally be deadly.
The ability to pursue a class action should be preserved, although closely examined, as do professional standards of conduct of lawyers. As you know, I love the law and have a generally liberal take on ensuring access to legal remedies for plaintiffs, but if Mr. Lee was sought out to become a short-term contractor with Dynamex to become the face of a class action, that is wrong. Remedies need to be about helping the plaintiffs and not about enriching lawyers.
It's one thing to advertise on the back of a phone book or promise a free bible if you call 444-4444 (for those who have seen the annoying and repetitive commercials Sacramento for personal injury attorney Moseley Collins); it's another to recruit plaintiffs, particularly if they agree to essentially go undercover as an agent to become a plaintiff. Again, I don't know the facts of the lone named plaintiff here--"a total of 15 days sounds suspicious," but that strategy by a law firm would not be a first.
The issue is now in the legislative arena. I have seen comments in various fora suggesting that the Supreme Court of California's opinion should be appealed. However, the decision written by Chief Justice Tani-Cantil Sakauye (Go Sac City Colege, UCD and King Hall!) is based on California statutory and administrative law, so it is terminal at the state's highest court. There is no appeal. While there is no immediate action required by entities other than Dynamex, the decision guides future courts that hear such cases.
This is a tough issue for the Democrats. Most, if not all, Republicans would vote to change the Labor Code statute and associated wage orders. Democrats are stuck between their traditional strong support from labor and the "gig economy" tech companies and its contractors. Dynamex is an old business model that is very different than the gig economy that customers have become accustomed to. Labor wants to fight like hell to maintain the win in an otherwise heartbreaking year because of the Janus decision.
Labor is strong with elected officials, but so may be drivers once mobilized. And, obviously, the coalition of tech companies and their investors are highly influential and have deep pockets to enlist the most influential lobbyists in town to work the buildingin the sessions waning days.
This could be one of the top tier issues in the 2 days we have left in session. "Coincidentally," Uber has offered 50% off rates for the last few days as legislators return to town and pressure on the issue hits the Capitol.
THE NUMBERS GAME: On Fox&Hounds, Joe Mathews writes that the 2020 Census may be "garbage," with the citizenship status question and other changes being made by the Trump Administration and could hurt California and its residents in many ways.
Article I, Section 2 provides "Representatives and direct taxes shall be apportioned among the several states which may be included within this union, according to their respective numbers, which shall be determined by adding to the whole number of free persons, including those bound to service for a term of years, and excluding Indians not taxed, three fifths of all other Persons."
Okay, we haven't amended the stupid clauses, but for the purposes of apportionment of House seats, it has been all persons and everybody is "free" since Reconstruction.
Beyond apportionment, the Census is used throughout the federal government for statistics such as mortality rates and apportionment of funds in many programs. The Census was never meant to be about citizens/noncitizens or voters/non-voters. It was created to ensure that the "People" were represented, regardless of who they were, where they came from, or whether they vote. The individuals elected to House seats are done so only by registered voters, but those who cast ballots and do so for the representative, serve all residents.
There are many concerns about the citizenship question and the impact on the validity of the count. A big concern is that the citizenship question will be a chilling factor preventing citizens and noncitizens (including lawful permanent residents) from completing the questionnaire. There are plenty of citizen children who live with undocumented or green card parents in California. All members in the house are constitutionally eligible to be counted in the Census for the purpose of apportionment of House seats. However, even a citizen child living with family members of mixed immigration status may not return the questionnaire with the citizenship question on it, for fear of the ICE po-po knocking on their door.
The data from the Census are not meant to be shared with law enforcement, but can we agree that there's not much confidence in the community about that these days.
It's within the administrative discretion of the Administration to ask what it would like to ask on the Census, as there are no real statutory limits controlling it.
A significant undercount could lead to loss of congressional seats as a whole, and many congressional and legislative seats could have dramatically different lines, even if the actual population hasn't changed dramatically over the decade. While this is seen as a likely win for the struggling Republican Party in California, it's also completely unpredictable under the Citizens Redistricting Commission. And, of course, nearly all districts would likely see less money from federal social programs. This would also affect the distribution of state funds under a variety of programs that use the Census and the more frequent American Community Survey.
We are two years out from the count and in three years, things may change dramatically in California.
LET THERE BE (MY SLIGHT): On my item yesterday on new appointments to the University of California Board of Regents, I missed two as I didn't scroll down in the governor's press release. Also appointed were friend of The Nooner attorney Rich Lieb. I worked with Lieb when he was president of the Board of Governors of the California Community Colleges. Also appointed was attorney Cecilia Estolano, also a past president of the Board of Governors of the California Community Colleges.
#CAKEDAY: Happy birthday to Kara Davis, Chris Lehman, and Christopher Pickard!
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