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LEGISLATIVE DIRECTORY UPDATES
EAR TICKLER: On the Then There's California podcast by the Senate Democratic Caucus with host Brian Green, Senate Legislative Aide Domonique Jones shares an honest & personal conversation with her boss, State Senator Steven Bradford, about the dynamics of Black History Month, 2019.
Happy Humpday! Lots going on in the chilly, normally quiet political/policy month of February. Just keeping up on the President's tweets to look for California hits is a full-time job. When I woke up at 5am, there were six and then there were seven, but he had stayed away from The Golden State. Instead, it was The New York Times, The Washington Post, and Andrew McCabe.
Of course, he just wanted to wait until 6:13 PST so more Californians would be awake to see with their cup of joe:
California now wants to scale back their already failed “fast train” project by substantially shortening the distance so that it no longer goes from L.A. to San Francisco. A different deal and record cost overruns. Send the Federal Government back the Billions of Dollars WASTED!— Donald J. Trump (@realDonaldTrump) February 20, 2019
While he previously just tweeted a demand that California return the $2 billion already received by California from the American Recovery and Reinvestment Act, yesterday actions started to take place after California and 15 other states sued the federal government to block the President's declaration of a national emergency and diversion of congressionally approved funds from other purposes to pay for the border wall construction.
Let's just say that check is not in the mail and the money has been spent on construction.
However, the Federal Railroad Administration notified the California High-Speed Rail Authority that it plans to terminate an approved grant for $928 million more for planning the rest of the route. Kathleen Ronayne reports for the AP:
"The Trump administration said Tuesday that it plans to cancel $929 million awarded to California’s high-speed rail project and wants the state to return an additional $2.5 billion that it has already spent.
The U.S. Department of Transportation announcement follows through on President Donald Trump’s threats to claw back $3.5 billion that the federal government gave to California to build a bullet train between Los Angeles and San Francisco.
The project has faced cost overruns and years of delays. The Trump administration argues that California hasn’t provided required matching dollars and can’t complete work by a 2022 deadline."
There has been a lot of confusion over what Governor Gavin Newsom said in the State of the State and what he envisions over the entire high-speed rail project. Essentially, from what I can tell, he sees funds available to connect Merced to Bakersfield and for regional projects, like electrifying Caltrain, which runs from Gilroy to San Francisco. He still embraces the entire Los Angeles to San Francisco project, but won't commit additional General Fund dollars at this time and is not ready to try to sell the voters on another general obligation bond.
When the project started, the federal component was key and there was an administration that believed in the project. Candidate Trump didn't opine on it to my knowledge and train proponents took a wait and see approach. He obviously likes building "big, beautiful" things, whether it be in the public or private sector.
That said, there is now an openly hostile relationship between California and the Trump Administration as the state has sued the feds in multi-state lawsuits 47 times, often playing the role of lead plaintiff. In his tweets and public appearances in the last couple of weeks he has not just said that he needs the federal money for other purposes but has also turned openly hostile to California's rail project (and seemingly to rail everywhere).
California will likely not have a federal partner in the high-speed rail project under the Trump Administration. Whether there will be future federal funding will depend on the next President, be it in 2021 or 2025.
Meanwhile, proponents of high-speed rail have hopes for Newsom's vision. They think that if the Merced to Bakersfield route is brought online and can show no net operating subsidy (as required by the Prop 1A bond), voters will be willing to approve more bonds for the infrastructure investment. Prop 1A passed narrowly in November 2008 (52.7%), with the affected Central Valley counties supporting it. It failed horribly in rural counties not served, but won healthily in the urban Los Angeles, San Francisco and Santa Clara counties.
I don't know what's in the heads of Gavin and his team, but I'm guessing they are thinking like the rail advocates. Improve the urban rail systems and complete the Merced to Bakersfield segment. Show that the latter works and a coalition to approve more general obligation bonds could be formed, but likely only if there is a willing federal partner.
BUDGET: In the monthly cash report, the Department of Finance does not provide good news. However, it's because projections are all screwed up because of the changes in federal tax law.
Preliminary General Fund agency cash for the first seven months of the fiscal year is $2.346 billion below the 2019-20 Governor’s Budget forecast of $79.36 billion. Revenues for January were $2.791 billion below the 2019-20 Governor’s Budget forecast, due primarily to a shortfall in personal income tax estimated payments. Since the federal tax law changes enacted in December 2017, the pattern of state estimated payments has likely changed, with higher revenues in April expected to partially offset lower revenues in December and January.
Obviously, that is a huge number. If you don't pay attention to the state budget, lucky you. Essentially, this $2.346 billion shortfall is in the "current year," 2018-19. That would be a shortfall in the "one-time" funds, much of which are proposed to be deposited in the state's reserves in the Governor's January Proposed Budget. However, to the extent there is a shortfall of projections in the current year, that lowers the baseline for the "budget year," 2019-20. That reduction in "ongoing funds" would be equal to a like amount as well as the anticipated growth on that base.
Basically, everyone on the spending side of the state budget is hoping the Easter Bunny brings one helluva basket in April. Easter is on April 21 this year, which is around when we should have a good idea of how revenues are trending in the biggest personal income tax month of the year.
In short: concern yes, panic no.
DOWN WITH GOP? For Politico, Carla Marinucci looks at the divide between the California Republican Party establishment and activists ahead of this weekend's state organizing convention where the top agenda item is electing a new chair.
"A battle over the state party chairmanship offers two competing visions for the future. One embraces President Donald Trump; the other focuses on the nuts and bolts of party building and organizing.
The two approaches aren’t complementary. Trump, who lost California by 30 percentage points in 2016, is highly unpopular there: Nearly two-thirds of California's voters disapprove of his performance as president.
“What it really comes down to is whether a party’s first obligation is to motivate its base — or to reach out beyond that base,’’ said Dan Schnur, a former GOP strategist and adviser to Sen. John McCain who is a professor at the University of Southern California’s Annenberg School for Communication and Journalism and is now an independent. “We’ll see what they decide.”
I'll be around the GOP convention this weekend, but I don't anticipate being there Sunday for the vote on party chair. I'll stick to my routine of writing, farmers market, and Buddhist Church of Sacramento. Healthier than watching the fight and results in person rather than on Twitter.
OAKTOWN: While I don't often include op-ed opinions in this space, this piece by Senator John Moorlach (R-Irvine) about the Oakland teachers strike scheduled for tomorrow is worth a read. I am not saying I agree with it, but I don't want people to ignore Oakland with "strike" fatigue after January's work action in Los Angeles. The parties in the 510 are further apart in negotiations than they were in Los Angeles, and Sacramento Unified could be next.
Oakland Unified School District (OUSD) provided an offer late yesterday and the parties are likely to meet today. The Oakland Education Association wants 12% and the district is offering 7%, with 3% beginning 01/01/19, 2% effective 01/01/20, 1% effective 01/01/21, and 1% effective midnight 06/30/21. Additionally, there would be a one-time 1.5% bonus for the 2017-18 academic year.
As we've discussed before about salary schedules, timing is as big of an issue in education employment as actual percentages. Employees move steps (years of service) and columns (educational achievement) on July 1 of each year. Here is OUSD's current salary schedule.
So, looking at the latest proposal from OUSD yesterday, you can understand why "1% effective midnight June 30, 2021" is included in the proposal.
COLA WARS, 2019 STYLE: This morning, Senator Bill Monning, Assemblymembers Richard Bloom (D-Santa Monica), Rob Bonta (D-Alameda), David Chiu (D-San Francisco), and Buffy Wicks (D-Oakland) are held a presser to announce a package of bills on sugar-sweetened beverages.
Here are the components:
2020 and #CAKEDAY after the jump...
THE GRANITE STATE: Yesterday I wrote about the silly temper tantrum that some in New Hampshire are having over Kamala Harris not camping out there the last two years. In January, Joel Fox wrote that Harris would be well-advised to blow the state off.
CALIFORNIA SCHEMIN': Today, Fox writes that Southern California could be key for the Democratic nomination. Twenty-two other states hold their primaries and caucuses while Californians are a-votin' and a-countin'. Check back with us close to April 4 and we'll let you know how the Democratic delegates from The Golden State are roughly allocated.
What the hell will CNN's John King do with his magic wall during the weeks of California vote-counting?
CONGRATULATIONS: Party hats for Elise and Assemblymember Ian Calderon, who are the new proud parents of little miss Hartley James!
DEPT OF CORRECTIONS: SB 126 (Leyva and O'Donnell), the charter school transparency and accountability bill is not an urgency bill and will thus only require a simple majority of both houses. I really thought I saw it keyed as urgency in the Daily File published Friday, but anyway...
The bill, which Governor Newsom has asked the Legislature to pass, was approved yesterday on a 7-0 vote in Senate Education Committee. As I expected, charter advocates did not "oppose" the bill, but rather expressed "concerns."
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