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The Nooner for Wednesday, July 15, 2020, presented by SYASL Partners
GENERAL ELECTION DATA POINTS
¡Buenos dias mis amigos! Tomorrow at 12:15, the Sacramento Press Club will host a conversation with Rep. Karen Bass (D-Los Angeles), chair of the Congressional Black Caucus and who reportedly holds a veepstakes ticket. The groundbreaking former Assembly Speaker will be interviewed by George Skelton & Seema Metha of the Los Angeles Times and Joe Garofoli of the San Francisco Chronicle.
The Facebook Live event is sponsored by Southern California Edison and, in lieu of normal luncheon event fees, folks are encouraged to donate to the Sac Press Club's scholarship fund for aspiring journalism students.
THE BUDGET: For CalMatters, Dan Walters looks at the borrowing included in this year's state budget:
Whatever its other virtues may be, the budget is far from “balanced,” at least as most folks outside the Capitol would define it.
The 2020-21 budget spends far more — at least $20 billion more — than projected revenues, even including billions of dollars from the state’s emergency reserve.
The gap is closed, at least on paper, by running up the state’s credit card with debt of one kind or another, the most spectacular example being how it treats the budget’s largest single expenditure, state aid to school districts for the education of about 6 million kids.
It authorizes those districts to spend more or less what they would spend if the state wasn’t being battered by the COVID-19 pandemic, if its economy wasn’t in recession, and if the state’s revenues aren’t in a nosedive.
BLACK EXODUS: Lauren Hepler reports for CalMatters on the movement of California's black population from high-cost coastal areas not only out of state but also to inland counties, which has both cultural and political implications.
...Black renters have been disproportionately forced out of cities as costs and evictions climbed; the Black population has plunged 45% in Compton, 43% in San Francisco and 40% in Oakland. While a version of this geographic scramble is playing out for working and middle-class people of all races, the distinct obstacles that Black residents encounter in new communities raise the question: How far do you have to go today to find opportunity — and are some things ever really possible to leave behind?
“Part of what we’re seeing is the kind of anti-Black racism that has followed Black folks wherever they go,” said Willow Lung-Amam, an associate professor of urban planning at the University of Maryland. “You still face the same kind of structural barriers.”
In adopted hometowns, Black Californians face newer, subtler forms of segregation. Old regimes of legal housing and job discrimination have given way to predatory loans, shifting patterns of disinvestment and flare ups of racism or violence in areas that once promised a level playing field, reports from UC Berkeley, UCLA and social services groups have found.
This redistribution of the Black population both in and out of the state will be an even bigger challenge for the Citizens Redistricting Commission than it faced in 2011 with significant pressure to maintain predominantly-Black districts to maintain representation while also dealing with demographic data that has changed significantly in ten years.
FOREIGN STUDENTS: With lawsuits filed by higher education institutions across the country, the Trump Administration backed off its threat to deport international college students from the United States if their school was going to be all online this fall, reports EdSource. California's three public segments had filed suit, although the first one scheduled for a hearing on a temporary restraining order was filed by Harvard and MIT in the federal District of Massachusetts. The judge in the case announced that the parties to the case had come to an agreement that the DHS/ICE would withdraw the rule rather than proceed to a hearing.
SANDY EGGO, BALLOT MEASURES, AND NOVEMBER OUTLOOK: David Garrick reports in the SDUT that the San Diego City Council voted to place a $900 million housing bond on the November ballot. If voiced it here before, while I regularly vote for bonds and taxes, I'm very concerned about prospects for passage in November. While the city is certainly different than the county at large, Proposition 13, the education bond, failed in San Diego County 45.9% to 54.1% in March. That was before the pandemic hit. Garrick writes:
The proposal would raise taxes on San Diego property owners to pay for roughly 7,500 subsidized apartments, 2,800 units for the formerly homeless and 4,700 units for veterans, senior citizens, the disabled and low-income families.
In addition to the local money it would raise, the measure would help San Diego secure a greater share of state and federal money devoted to homelessness and affordable housing, because it would make the city eligible for matching funds.
The bond measure would cost property owners $19 per year for every $100,000 of assessed value. The average homeowner with a $600,000 property would pay $115 more per year.
But property owners would pay significantly less in the early years of the bond because fewer bonds will have been sold, creating less debt to be paid off.
Adding to the complication of the pandemic and overall economic situation is the campaign against Proposition 15, the proposal to treat most commercial and industrial property at market rate instead of the current Prop. 13 (1978) caps. Of course, there will be also be a significant campaign in favor of Prop. 15. While we won't know the actual numbers until around July 31, significant amounts have been already raised on both sides and there is far more on the sidelines.
KQED's Scott Shafer reports that the support campaign for Prop. 15 is out with a new report that 10% of the state's property owners will pay 92% of the taxes, the oppose side will talk about increased gas prices and companies moving out of state.
What we do know is that there will be a barrage of television ads and mail on both sides of the state measure. That will create voter confusion. It's possible that voters reject the state measure and support local measures or vice versa. Or, at a time of great economic angst, voters could reject everything.
Even though Joe Biden will prevail strongly in California (Clinton was +31.8 in 2016) and will capture the state's 55 electoral votes, that doesn't mean it will be an economically liberal electorate. In that election, the state education bond Prop. 51 won 55.2%-44.8%, a far less margin than the presidential vote. In November 2016, the California unemployment rate was 5.1%.
In May, unemployment in California was 16.3%, although even the federal Bureau of Labor Statistics acknowledges that there is a classification error because of furloughed employees, that the BLS believes understates the national number by 3%. The same factor would play out in the California data as it is derived from the federal data. Maybe all furloughed employees will be back in November, maybe not. Regardless, the state unemployment rate will not be 5.1% like in 2016 this November.
All that said, a better election to look at than 2016 may be 2008. In November, Barack Obama won with a margin of +14.1%. The state unemployment rate in November 2008 was 8.1% -- 3 points higher than 2016 but likely lower than in November 2018.
In November 2008, high-speed rail bonds (Prop 1A) passed +5.4%, children's hospital bond (Prop. 3) passed +10.6%, the alternative energy vehicles and renewable energy bonds (Prop. 10) failed -19%, and the veterans' bond (Prop. 12) passed +27.2%. Of course, state bond measures aren't a direct tax, so they aren't necessarily analogous to local bonds. At the same time, they don't necessarily have as direct of a measurable local impact.
Anyway, it's a great uncertainty and I know that a lot of needs will be on the November ballot, but this is unlike any election than we have seen in our voting lifetimes. It's impossible to predict how the voters will feel in 111 days, or in 80 days when voters in most counties will receive a ballot in their mailboxes.
LA-LA LAND DA: For the LAT, Priya Krishkumar maps out where Los Angeles District Attorney Jackie Lacey is vulnerable in the November runoff against former San Francisco DA George Gascón.
SACTOWN: In the BizJourn, Emily Hamman reports that the Unified Wine and Grape Symposium has announced that it will be virtual in 2021, instead of the scheduled January confab at CalExpo. (subscription only)
“Unified Wine and Grape is the largest convention that we have in Sacramento,” said Mike Testa, CEO of Visit Sacramento, the city's convention and visitors bureau.
He said that the 2021 event was projected to sell 7,656 hotel room nights and bring in $105,000 in local sales tax and $854,000 in transient occupancy taxes, and support 6,873 jobs. The total economic impact was projected to be around $15 million.
This is in addition to the Sacramento Convention Center being closed until sometime in 2021 for renovation and expansion and a Legislature that is not expect to regular activity like lobby days and "normal" hearings in 2020.
Even if everything is reopened in 2021 (unlikely), the impact particularly on local governments will be huge as convention planning is happening now and after doing virtual (or canceling) this year, a restoration to "normal" next year is not going to happen.
FPPC REPORTS: I had a brain-fingers disconnect typo yesterday (quickly corrected online). Of course, the FPPC state campaign finance report deadline for the semi-annual period ending June 30 is July 31. Thanks Kirk Pessner of Miller & Olson for catching that!
cakeday, farewell, and classifieds after the jump...
CAKEDAY: Happy birthday to Chris Werthe!