Around The Capitol

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RECENT PODS:

  • KQED's Political Breakdown (Scott Shafer and Marisa Lagos): Lenny Mendonca, Chief Economic and Business Advisor to Governor Gavin Newsom, on the economic impact of the COVID-19 (2020-03-12)
  • Then There's California (Senate Democratic Caucus): Senators Jim Beall (D-San José) and Tom Umberg (D-Anaheim) on the Census (2020-03-12)
  • Look West (Assembly Democratic Caucus): Assembly member Marc Berman (D-Palo Alto) and Secretary of State Alex Padilla on the Census (2020-03-12)
  • KQED's Political Breakdown (Scott Shafer and Marisa Lagos): Politico's Carla Marinucci on primary results and Warren's departure (2020-03-05)
  • Capitol Weekly Podcast (John Howard and Tim Foster): Paul Mitchell on the departure of Elizabeth Warren and what's next in the presidential (2020-03-05)

The Nooner for Saturday, March 14, 2020, presented by SYASL Partners

  • The Capitol Concern
  • Ballot update
  • Coronavirus/COVID-19
  • Cakeday and classifieds

Well, I don't need to go into any long narrative about what is or might happen because you are living it.

There were rumors yesterday that Governor Gavin Newsom would suspend all non-essential operations, but no announcement was made. However, State Senate President Pro Tem Toni Atkins (D-San Diego) announced that all committee hearings next week would be suspended to focus on COVID-19. The cancelations are reflected in the Monday's Daily File posted today.

Assembly Speaker Anthony Rendon (D-Lakewood) is allowing committee chairs to decide whether or not to hold their hearings. Most committee's are still on the Assembly Daily File this morning but that could change with cancelation announcements during Monday's floor session. After all, the Senate announcement was made after most people had gone home yesterday (well members went home Thursday).

The bill hearings are light, except Assembly Education, which has 27 bills. Yes, we can talk about the irony that Assembly Ed plans to hear a bill requiring a school district to provide reduced-price meals to eligible to students free of charge? No offense to Assembly member Luz Rivas (D-North Hollywood), but we all know that AB 1995 is a budget issue and will be parked accordingly in Appropriations, perhaps not until the Senate out of collegiality among Assembly Democrats. (Members regularly introduce bills that will be folded into the budget to gain momentum for a budget request). And, to balance out the partisanship, is there a great urgency to hear Assembly member Megan Dahle's (R-Bieber) AB 2034 to define "frontier school district."

Next week, there are seven budget subcommittee hearings still scheduled in the Assembly. For Nooner newbies, I spent many years primarily focusing on community college fiscal issues before I became President/CEO, and have spent more hours in budget committee hearings than most people should ever have to. In good years, pre-May Revision hearings are about discussions about how to improve upon or change the Governor's January Budget. They are good discussions and often contribute to improvements that the Administration incorporates in the "Revise."

As I wrote on Thursday, the state's budget is facing a huge hit, not only in the fiscal year beginning July 1, but in the last five months of 2019-20 (including this month). Since I wrote that, school closures have accelerated, meaning more employers are facing employee absences. Businesses, other than those selling toilet paper (for whatever reason) and hand sanitizer, are seeing a precipitous drop in business. There's a reason three different movie chains emailed me yesterday about their new "social distancing" policies of reducing the number of tickets sold per show in half, changes to "all-you-can-drink" policies to replace the cup each time, and the like. (Now, that's a legislative hearing that folks may want to expedite. Continue the debate about sugary beverages and add  new cups and plastic straws each time.)

Anaheim CFO Debbie Moreno must be under her desk right now. The city's transient occupancy tax ("TOT") is 15%. That tax is applied to every hotel room night in the city, and is an unrestricted revenue source for the city. It makes 40% of the city's general fund tax revenues, more than twice the 19% received from property tax. Sales tax is 20%. The city has been deficit-spending for the last three fiscal years. Now, tax revenues are only 22% of the city's revenues, but other revenues are being hit as well, such as the Anaheim Convention Center.

Currently, the Disneyland Resort is closed through the end of the month, with the Disney-owned hotels closing completely Monday. The plethora of other hotels around there are likely empty as well. The only other things around--Anaheim Stadium (Angels), Honda Center (Ducks hockey), and Convention Center--are all empty. The large conferences at the Anaheim Hilton and Marriott are almost certainly canceled.

TOT accounts for 10% of the city's $1.7 billion current year budget. While that doesn't sound like a lot, most of the city's expenses (like other cities) are non-discretionary spending on things like pensions and employee compensation benefits. The Disneyland Resort and Knott's in neighboring Buena Park are currently closed through the end of the month and large conventions are likely canceled for months. The theme parks could easily be closed longer and, even when they open, there will be a lag in hotel bookings (great time for locals) as out-of-town guests are not exactly booking April and May right now. 

Let's assume TOT in Anaheim is down the equivalent of one month's worth of hotel rooms, which would be 8.3%, and that is likely conservative since there will be a long tail before conference bookings pick up and out-of-town visitors plan vacations. That's $14.5 million in the current year and, with four months left in the fiscal year could easily be 2-3 times that.

Add to it a huge drop off of sales tax revenue from all the closed venues and empty hotels. That's a $90 million revenue source, which will likely come up $10 million short or more just from the resort and venue expenditures. I'm not even factoring in falling automobile sales and an expected drop off of sales of big ticket items as consumers pull back as they fear what's ahead.

In addition to Anaheim, Buena Park, Orange, and other area cities are likely to feel a significant financial impact. (We've all tried to find a decent room around Anaheim only to find a convention has sucked up all the rooms and ended up in other cities.)

Okay, Scott, you're on one of those tangents. We are talking about the California Legislature. What does Anaheim have to do with it and why are you picking on them?

Anaheim is just a good example of what is playing out across the state. San Francisco has warned about the impact as their large conventions were canceled, large employers moved to work-at-home arrangements drying up restaurant sales, and Warriors games were canceled. Santa Clara County -- one of the nation's three biggest hot spots -- and its cities will be hard hit not unlike Anaheim as the San José Convention Center is essentially shuttered and large tech-oriented events elsewhere such as at Apple's in-house theatre are canceled. These drive pricey hotel rooms in Silicon Valley.

We have a fiscal crisis emerging at the state and local levels. As a longtime community college advocate who still has it in my heart, I'd love to see the Legislature talking about student equity, whether the new online community college is successful, and how the new funding formula is working out. I'm sure that those with agencies before the budget committees would love to talk about what more should be spent.

The Capitol is closed to the public this weekend and guided tours have been suspended until further notice. While there have been calls to close the building to the general public (or entirely), neither of those steps have been taken yet. Don't worry, Bacteria Bear continues to maintain its social distance from you germy humans. 

Most advocates -- professional and lay -- I have talked to believe the Capitol should be shut completely for now. Many media folks believe the same. Some have been vocal in social media. Others are fearful about speaking out. Obviously, media folks can't really speak out. It's not exactly an industry with job security these days and there is no such thing as tenure, even in those with collective bargaining agreements--there's always a way.

...okay, let's take a deep breath, take a bathroom break if needed, as we have much more on this item and people are already stewing...

Okay, during the break, I inventoried my toilet paper and I'm in good shape. Oddly, I ordered a case before going to Mexico because I was down to one roll. I bought another from the corner market across the street but, shall we say, it's a bit rough. When ordering the year's supply, I had no idea that a scarcity was forthcoming.

Back to our story. Many legislative staff are stewing. Reportedly, they are currently being told they may not work from home and must take sick time. As a former employer, I get the Legislature's stance as there is a slippery slope of picking-and-choosing who can work from home and who can't. You're setting yourself up for an employment discrimination lawsuit, and we know the Legislature is a petri dish for those. Okay, yes, everything is seemingly a petri dish these days.

We also have basically all of the local school districts closed for at least the next two weeks. This affects staff, advocates, and media.

Seemingly, the only people happy about keeping the Capitol open are legislators, who are paid $201 per day as long as they have a session, as perfunctory as it may be, once every four days. That's $1,407 per week or $5,628 per month -- and that's tax free. (I wrote about this on Thursday.) That's on top of a salary of $9,573 per month for most members. Many staff and others already get pissed when the Legislature will take a holiday on a Friday when the state holiday is on Monday, meaning that child care arrangements are needed for members' convenience.

That's pretty insulting to a staff member who makes less than what a legislator receives in per month in per diem, and the staff have to pay taxes on their compensation. To add insult to injury, many of these staff have supported their members on labor rights issues and are expected to toe the line.

Basically, what most legislators take weekly for costs of living in Sacramento is equal to rent of a decent place to rent in Sacramento. I'm in a good place -- not some fancy building but no roaches -- and my rent is $1,530. I'm sure you could find four legislative staff who could rent four decent apartments for what each legislator receives per month for "housing." A room at the Citizen Hotel for a month is less than per diem for a month. 

Meanwhile, all but one California member of Congress (Tom McClintock (R-Elk Grove)) voted last night for the "Families First Coronavirus Response Act" in a 363-40 vote. In that bill, employees are entitled to paid leave if required to stay home "to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed for the child care provider of such son or daughter is unavailable, due to a public health emergency." (p. 31, lines 7-12)

I don't know the complete scope of the paid leave provisions of H.R. 6201 yet. Under the Paid Sick Leave provision, legislative and elected-appointed exempt employees are explicitly included, but the new Public Health Emergency Leave provisions use the existing Paid Family and Medical Leave definition. The language came out to members of Congress after 12am EDT last night and wasn't online when I went to bed at 10, which explains some of the "no" votes on the bill. I was up at 4am but I still can't figure it out. If you're not familiar with federal bills and the USC, it is worlds' different from California, which is comparatively simple.

This is why so many legislative staff are pissed. Their kids are home on Monday and they don't know whether they are entitled to paid leave to care for them or not. The Kings said they were paying employees while the arena is shut, but legislative parents went home last night uncertain of whether or not they could stay home to care for their kids. If they are up on this Saturday morning looking at H.R. 6201, they probably still don't know. I couldn't definitively answer.

Meanwhile, legislative employees, advocates, and media want to follow CDC and CDPH guidelines. Yes, the Legislature can skirt around it by canceling hearings and in-person meetings. But, why haul everyone in every day to go through the motions? Each office could have a rotation of "phone duty" for each day the Legislature is gone and otherwise shut the building. This would avoid casual exposure among staff and visitors.

Staff and the community are asking why we don't practice what we preach on both labor laws and public health. Sure, there may not be a grouping of 250 people in one room in the Capitol, but busloads may still unload and come in. The Los Angeles County and other libraries and many museums are closing, which are akin to the Capitol. Sure, they may not be "essential functions," but are there any such ahead next week at the Capitol? In the past during long budget impasses, leaders stayed in town and members were told to be available within 24 hours for any necessary action. The 72-hour requirement under Article IV, Section 8(b)(2) of the California Constitution may be waived if the governor states in writing that an emergency necessitates such action, but 24 hours should suffice.

I may sound down on the Legislature and legislators. I am not. I love Senate President Pro Tem Toni Atkins and Speaker Anthony Rendon. I'm friends with many legislators, some of whom were paid Nooner subscribers long before they were legislators and continue to be out of their own pocket. In order to hold on to leadership roles, legislative leaders have to follow the will of the majority of their caucuses. If a majority wanted to shut it down and follow what many (most?) in the Capitol community want, they would do so. Apparently, at this time, either the image of "working hard for the California people" or per diem keeps them in session.

To be clear, I believe in per diem when the Legislature is in session. I don't want only millionaires in public office. But, when a large economic gulf is created between legislators, legislative staff, advocates, and media, it develops hostility and hurts the legislative function. Nobody cares in normal times, but when people are fighting over toilet paper, I think you can say that these are not normal times. Beyond the issues of child care, lots of legislative employees are concerned about their spouses' or partners' employment security or that of friends or family. Many of us have parents and grandparents that we fear getting a call about. The angst is understandably high.

I'm just putting in words what I'm hearing in talking to a variety of different people in and outside the building that are thoroughly frustrated.

Back to Anaheim and the forthcoming local government fiscal crisis, which will hit the state as well although we won't know how deeply until the end of April. Oh wait, the federal tax deadline is likely to be pushed back a couple of months for Americans who are affected (directly or indirectly) by COVID-19, and the state will follow suit pursuant to Governor Newsom's executive order

If the Legislature is going to drag staff and the Capitol community into the building, the current public health crisis and the state and local fiscal challenges ahead should be the only topic on the table. Show the public that the focus is only there. Otherwise, most of the hearings in the Assembly next week will sound silly to any Californian who tunes in. Fantastical budget wishes in the revised outlook and many legislative ideas that will never come to fruition, particularly in the new budget reality.

There is almost nothing on the Daily Files and, while I know their importance to constituencies, I know my dad and sister (from very different political perspectives) would be totally pissed if they turned on floor sessions to hear the Legislature convening to approve resolutions. They are instead focusing on business survival and serious health issues in the family.

I guess we can say "thank goodness CalChannel is gone." That way nobody stumbles on a floor session or Assembly committee hearing on topics unrelated to the crisis. I mean, we might have to wait to memorialize California Fitness Week until 2021, as we've already canceled recess for most California kids and health experts are recommending that folks avoid gyms (there's a great outdoor one at 9th and P when it stops raining). Oh, and did I mention that the week listed in the bipartisan resolution was for February 17 to February 21, 2020? It's not unusual to pass resolutions recognizing weeks or days after the fact, but these are not usual times.

All of this applies to district offices as well. There are no community events. Many of these have kids that will be out of school as well and have no reason to be sitting in an office with little to do when much of California is at home.

This is a time for folks to be with kids and family. If the federal law does not apply, sick time will be exhausted quickly and, oh yeah, many Capitol and district office folks were just forced to take "vacation" to work on campaigns and are expected to save the rest for November. Another "benefit" of the "honor" of working for the Legislature (and several organizations with close ties thereto).

Meanwhile, even if H.R. 6201 applies to legislative employees, the employer can require that the first 14 days be unpaid leave. So, if you used that vacation time for campaigns and are low on sick time, you're out of luck. (p. 33, lines 18-20)

We just upended the gig economy and there are good arguments on both sides. Bills are pending to force on private employers good benefits that have been collectively bargained by others. Meanwhile, the survival of small businesses are literally on the bubble. I've talked to a few the last couple of days in the neighborhood around the . Meanwhile, legislative staff are often stuck with benefits and protections that are worse than those they are advocating for.

In the old days, there was the fabled Willie Brown interaction with an employee complaining about the long hours. "If you have a problem with that, there's a line of people outside the door who would gladly take your job and work harder than you."

Aren't we better than that?

Can we practice what we preach?

ballot and COVID-19 updates after the jump...

BALLOT STATUS:

  • Ballots counted: 8,944,149 (+4.6% of 2016's 8,548,301)
  • Unprocessed ballots:
    • Vote-by-mail: 780,298
    • Provisional: 295,866
    • Conditional (late) voter registration: 150,580
    • Other (i.e. damaged ballots): 59.217
    • Total unprocessed: 1,285,951

Take the unprocessed ballots with a grain of salt. Twenty-six counties that continue to submit ballot count updates haven't updated their unprocessed ballots since election night. For example, Los Angeles's reported unprocessed is double the current number of unprocessed ballots. Why I display this after the first report is a damn good question.

CORONAVIRUS/COVID-19:

  • California confirmed cases: 319 (+68 from yesterday), with 6 deaths (+2 from yesterday). Confirmed cases in 27 counties (+1 from yesterday). [h/t SFChron]
  • Schools: Late yesterday, Governor Newsom signed an executive order ensuring that schools continue to be paid while closed under certain conditions. According to the release, schools must:
    • Continue delivering high-quality educational opportunities to students through other options, distance learning and independent study;
    • Safely provide school meals through the Summer Food Service Program and Seamless Summer Option, consistent with the requirements of the California Department of Education and U.S. Department of Agriculture;
    • To the extent practicable, arrange for supervision for students during ordinary school hours
    • Continue to pay employees.
  • Riverside County: In perhaps the broadest order affecting education, the Riverside County public health officer issued an order closing all preK-12 schools, including charters, and all public and private higher education institutions through at least April 3. 
  • Arenas: Major league teams are stepping up on behalf of their hourly arena employees.
    • Sacramento Kings: Pledged to pay hourly employees as if arena events occurred. 
    • Golden State Warriors: Owners, players, and coaches have pooled $1 million to "assist" affected workers
    • San Jose Sharks: Pledged to pay hourly employees as if games occurred. 
    • Los Angeles Lakers, Clippers, and Kings, and AEG are working on a plan to pay Staples Center Employees while games are suspended.
  • Apple: The computer and consumer electronics giant has temporarily closed its retail stores outside of China worldwide until the end of the month. Oh great, right when the bottom one-fourth of my MacBook screen started flashing like a strobe light at the temporarily closed Park Ultra Lounge across from Capitol Park and probably needs to be replaced. Frankly, I'm saving up money for the repair because, well the damn thing is one month out of warranty. China stores were closed during the peak of the virus in that country but have since reopened. 
  • Campuses: I've given up tracking the college and university instructional changes, because what I thought would be around 20 has exploded.

cakeday and classifieds after the jump...

Probolsky Research

 

If you've made it this far, I'm sorry to be so negative today. I'm actually in a good mood. I'm finally sleeping again (10-4!) and, despite the dreary weather, I'm rested and quite happy. I just have heard from lots of concerned and angry folks, and that's understandable. People asked me to voice their frustrations.

The uncertainty is great. We should neither be paralyzed with fear nor bury our heads in the sand.

California amd America has been through worse and we'll get through this. We're still one of the greatest countries on Earth and one of the best states therein.

CAKEDAY: Happy birthday to Jenny Dudikoff, Max Espinoza, Jordan Gurnett, Erin Hannigan, Chris Micheli, Jan Owen, and David Urhausen!

 

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