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RECENT PODS:

  • California State of Mind (CapRadio): Total Recall: How The CA Political Process Works and Its History; Exploring Silicon Valley’s Role in Pandemic Response (2021-05-14)
  • This Week in California Education (John Fensterwald and Louis Freedberg @ EdSource): Newsom's $2 billion college savings account plan & Chris Edley on his new role (2021-05-14)
  • SacTown Talks (Jarhett Blonien): Assemblymember Miguel Santiago (D-Los Angeles) (2021-05-14)
  • Political Breakdown (Scott Shafer and Marisa Lagos): Assembly Speaker Anthony Rendon on the state budget and executive powers (2021-05-13)
  • Inside Golden State Politics (Bill Boyarsky and Sherry Jeffe): House GOP dumps Liz Cheney, Gavin Newsom proposes billions, and is Eric Garcetti leaving Los Angeles? (2021-05-13)
  • Capitol Weekly Podcast (John Howard and Tim Foster): Lande Ajose, chair of the Governor’s Council for Postsecondary Education (2021-05-09)
  • CAP·impact (McGeorge School of Law): Lobbyist and law professor Chris Micheli with key reminders on legislative drafting in California (2021-05-09)

CLASSIFIEDS BELOW:

  • CCST Expert Briefing: Disaster Resilient California: Mitigating Extreme Heat in a Changing Climate - May 18
  • Congresswoman Doris Matsui seeks a Field Representative experienced in infrastructure policy to join her Sacramento team.
  • Capitol Weekly presents A Conference on Housing Policy - May 26
  • The Breakthrough Institute is seeking a Press Secretary (Berkeley)
  • Join the California Manufacturers & Technology Association Team!
  • McGeorge School of Law, University of the Pacific - MPA/MPP
  • McGeorge School of Law, University of the Pacific - Masters of Science in Law

MONEY MATTERS: Highlights from yesterday's daily reports

  • AD54 (Baldwin Hills-Century City-Westwood): Nurses and Educators for Isaac Bryan for State Assembly 2021 sponsored by labor organizations reports
    • spending $10,300 for television and video ads (cumulative total: $239,050)
    • receiving $20,000 from Service Employees International Union Local 721, CTW, CLC State & Local

RECALL WATCH: I will now cover daily contributions of $5,000+ to candidates seeking to replace Gavin Newsom.

  • Stop the Republican Recall of Governor Newsom reports receiving:
    • $500,000 from Democratic Action Against the Recall of Governor Newsom, Sponsored by Democratic Governors Association
    • $100,000 from California State Retirees PAC Small Contributor Committee
    • $100,000 from Pechanga Band of Luiseno Indians
    • $50,000 from John A. Pritzker (President, Aperture Group; San Francisco)
    • $10,000 from James C. Hormel (Chairman, Equidex; San Francisco)

The Nooner for Saturday, May 15, 2021, presented by SYASL Partners

¡Feliz sabado! I'm looking forward to a quieter day than yesterday. Yes, in the ATCpro version of This Week in Nooner yesterday, I typed "new" instead of "knew." I indeed no the difference. I think everyone is trying to rest up before the hours of budget subcommittees ahead next week, as listed in my TWIN email last night.

BUDGET: Obviously, the focus today continues on the Governor's May Revision.

Here are some budget headlines:

What happened that turned the frown upside down on the budget outlook? One year ago, the budget outlook was doom-and-gloom. The number of deaths from COVID-19 exceeded what was projected, and the IHME model forecasts that deaths will still nearly double. California's unemployment rate is still 8.3% compared to 3.9% of pre-pandemic rate of February 2020.

A few things happened. Work-from-home worked far better than expected for the areas of the workforce where that is possible. Actually, it has been so successful that both the private and public sectors (including California state government) are considering major work-from-home initiatives post-pandemic. This allows a reduction of square footage as well as a reduced number of vehicle miles traveled and on-site parking required.

As indicated by the $1.4 billion increase in projected sales and use tax revenue in 2020-21 ("Current Year"), people continued to buy through the pandemic, and not just toilet paper.

By reducing costs through work from home while maintaining sales, corporations continued to do well through the pandemic, as indicated by the nearly $3.2 billion projected current year increase in corporation taxes. That's largely why the S&P 500 is up 41% from one year ago and hit an all-time high on May 7.

The May Revision increases the forecasted capital gains from $173 billion to $185 billion for 2020, $185 billion to $210 billion in 2021, and $177 billion to $199 billion in 2022. Most of this revenue is taxed at the upper marginal tax rates.

From the May Revision summary (p. 220):

The highest-income Californians continue to pay a very large share of the state’s personal income tax. For the 2018 tax year, the top one percent of income earners paid over 46 percent of personal income taxes. This percentage has been greater than 40 percent for 14 of the last 15 years.  

Obviously, employment in the service industry was dire as most individuals could not work from home. Restaurants worked with skeleton crews for delivery and take out, and hotels also operated with minimal staff. However, in California's progressive tax system, these employees pay a small portion of total personal income tax.

Driven by higher revenues in the "Big 3" *personal income, corporation, and sales and use taxes), here is how the state's General Fund prospects have changed since January. This does not include the $27 billion in one-time federal funds under the American Rescue Plan.

Click the images to see in full size.

General Fund revenue 2020-21 General Fund revenue 2021-22

Proposition 98 funding for schools and community colleges continues to be in "Test 1," which means that K-14 schools are guaranteed at least 38% of the state General Fund, plus their share of local property taxes. Because of the significantly improved General Fund revenue forecasts in the current year, Prop. 98 is estimated to increase by $10 billion. In 2021-22 ("Budget Year"), the guarantee increases by $7.9 billion.

May Revision Proposition 98

Much of the $10 billion in new one-time current year revenue has already been appropriated, most notably the $6.6 billion in AB 86 to encourage K-12 schools to return to in-person instruction. Additionally, since California hit the State Appropriations Limit ("SAL" or "Gann Limit") in the current year, $8 billion is owed to K-14 schools, which will begin to be paid in 2022-23.

Here is the long-term outlook in the "Big 3" revenues.

May Revision Long-Term Forecast

While allocating a lot of new spending as outlined in the articles linked above, the May Revision also proposes to restore reserves dipped into for the current year budget. Most of this is required under Proposition 2 because of the unanticipated increase in state revenues. Note that 2019-20 and 2020-21 are as adopted. In the end because of wildfires and the pandemic, the operating reserve for 2019-20 ended the year at -$1.9 billion.

State Reserve Accounts

numbers in millions 2019-20
(enacted)
2020-21
(enacted)
2021-22 (proposed)
Budget Stabilization Account
("Rainy Day"/Prop 2)
$16,116 $8,310 $15,900
Public School System Stabilization Account (Prop. 98) $377 $0 $4,600
Operating Reserve
(Special Fund for Economic Uncertainties)
$1,411 $2,616 $3,400
Safety Net Reserve $900 $450 $450
Total $18,804 $11,376 $24,350

There will be a lot more on the issues in the far-reaching budget proposal as the budget subcommittees dive into the May Revision in the upcoming days.

DO YOU RECALL?

  • Cox: On Governor Newsom's May Revision, businessman John Cox states "Politicians have lost touch with reality when they celebrate record spending proposals and Gavin Newsom is the poster-child for out-of-touch politicians ...The budget today is the largest in state history and spends $40 BILLION more than the one he proposed just five months ago! We should be slashing taxes and making California more affordable and not ballooning the size of our government."

REDISTRICTING: Here is this week's Redistricting Report from Paul Mitchell.

COVID-19, cakedays, and classifieds after the jump...

COVID-19: California reported 59 deaths yesterday for a total of 62,292 since the pandemic began.

-data dive: California's 7-day positivity rate is currently 1.1%, far below the 7.1% peak amid mass testing on December 30.

-vaccines:

  • vaccine doses administered in California: 33,745,248
  • vaccine doses delivered to California: 42,879,780  
  • Californians fully vaccinated: 14,5,110,057 (47.5% of 16+)
  • Californians partially vaccinated: 4,931,344 (15.5% of 16+)
  • Californians 16+ without at least one vaccine shot: 37%

-variants: From the California Department of Public Health:

  • "UK strain": B.1.1.7 variants are associated with approximately 50% increased transmission, and likely with increased disease severity and risk of death. Appears to have minimal impact on the effectiveness of treatments with antibodies.
  • "South Africa strain" B.1.351 variants are associated with approximately 50% increased transmission. May have moderately decreased response to antibody treatments.
  • "Brazil strain": P.1 variants may have moderately decreased response to some antibody treatments.
  • "West Coast strain"": B.1.427 and B.1.429 are associated with approximately 20% increased transmission. There is significantly reduced efficacy of some antibody treatments.

Here are the variants of concern in California. Remember that this is just from 48,770 samples of the 3.6+ million cases in California.

Known Variants of Concern in California
As of May 12, 2021

Variant  Number of Cases Caused by Variant 
B.1.1.7   5,750
B.1.351    72
P.1  670
B.1.427   6,421
B.1.429  11,961

You can view a US map by strain prevalence on the CDC site. Note that, like the numbers above, this map is case numbers of a sample, and not a case rate. Obviously, California will have higher counts, but that doesn't translate into a higher case rate of the variant.

-tiers for fears: As a reminder, any county must remain at a tier for three weeks before progressing to a less-restrictive tier, even if the metrics continue to improve. The most recent changes are bolded and italicized.

Here's where the counties stand after Tuesday's changes, which are bolded and italicized.

  • No county in the Purple (widespread) Tier.
  • 11 counties in the Red (substantial) Tier (11.2% of Californians): Del Norte, Inyo, Merced, Nevada, Placer, Sacramento, San Joaquin, Shasta, Solano, Stanislaus, Tehama, and Yuba.
  • 38 counties in Orange (moderate) Tier (58.7% of Californians): Alameda, Amador, Butte, Calaveras, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Imperial, Kern, Kings, Lake, Madera, Marin, Mariposa, Modoc, Monterey, Napa, Orange, Plumas, Riverside, San Benito, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Santa Clara, Santa Cruz, Siskiyou, Sonoma, Sutter, Tulare, Tuolumne, Ventura, and Yolo.
  • 9 counties in Yellow (minimal) Tier (30.1% of Californians): Alpine, Lassen, Los Angeles, Mendocino, Mono, San Francisco, San Mateo, Sierra, and Trinity.

Sacramento County is at a tier-adjusted case rate of 7.3/100k, meaning that it continues to be unlikely the county will have further reopenings before the June 15 anticipated lifting of tier-based restrictions. The case rate needs to be below 6/100k to progress to the orange tier. Placer County is at 6.4/100k.

If case rates hold, Amador (1.1), (Orange (1.8), Santa Clara (1.6), Santa Cruz (1.5), Tuolumne (1.9) could all advance to yellow next week.

Statewide tiers map

-prison staff: For CalMatters, Byrhonda Lyons writes that, while a majority of prison staff are not getting the free vaccines provided on the job site, Governor Newsom yesterday said yesterday that he doesn't intend to require them to do so.

“We have no further announcement to make as it relates to whether or not we’re going to mandate those vaccines,” Newsom said when asked whether his administration would require guards to be vaccinated as a condition of employment.  

As CalMatters reported this week, most California correctional officers have refused to be vaccinated. In a recent class-action lawsuit in U.S. District Court in Oakland, attorneys for prisoners filed a statement asking the state to make vaccinations mandatory for prison employees.

Other legal experts have said the state has that option. “California courts have long recognized the state’s authority to mandate vaccination, wrote Berkeley Law lecturer Stephen Duvernay in a recent analysis. The University of California and Cal State systems are mandating COVID vaccines for their employees and students before they return in the fall.

As I've written about a couple of times recently, the reluctance to obtain vaccinations in the high-spread environment may be why several counties, including Sacramento, remain in the red tier. While inmates are excluded from the county case rate calculation, staff are not and they may also be contributing to community spread.

cakedays and classifieds after the jump...

Probolsky Research

CAKEDAY: Happy birthday to Ashley McPartlan, Darrel Ng, Marjan Philhour, and former Assembly member Christy Smith!

 

Classifieds

Add your classified now both in The Nooner and online for $50/week or $150/month by emailing scottlay@gmail.com, with a headline, a summary of up to 200 words, and what you'd like the end date to be. You can attach a PDF or provide a link for a bigger job description/info to apply. [Other advertising options]


CCST Expert Briefing: Disaster Resilient California: Mitigating Extreme Heat in a Changing Climate

Join the California Council on Science and Technology (CCST) in partnership with the Office of Assemblymember Luz Rivas on Tuesday, May 18th from 2:30-3:30pm for our latest Virtual CCST Expert Briefing: Mitigating Extreme Heat in a Changing Climate. A panel of experts from Lawrence Berkeley National Laboratory, NASA JPL, and UCLA will discuss how extreme heat impacts California’s diverse populations and effective mitigation strategies. Moderated by Kate Gordon, Director of the Governor’s Office of Planning and Research. RSVP

Congresswoman Doris Matsui seeks a Field Representative experienced in infrastructure policy to join her Sacramento team.

General duties include, but are not limited to, the following: Representing the Congresswoman at public events in the community, creating and organizing events that advance her legislative agenda, advocating before federal agencies on behalf of constituents who have sought assistance, collaborating with local organizations seeking federal grants, and meeting with constituent groups and organizations.

The ideal candidate will be a motivated, hardworking, highly dependable, and an organized professional who possesses strong communication skills and the ability to work well under pressure. The ideal candidate will have demonstrated experience in infrastructure and transportation policy.

The position requires a driver’s license, a bachelor’s degree, and the ability and willingness to work evenings and weekends.

The candidate would be joining a motivated and cohesive team that is 100% committed to improving the lives of people living in Sacramento and West Sacramento.

Salary will be commensurate with experience. Interested candidates should send a cover letter, resume, and writing sample to Glenda Corcoran:

ca06jobs@gmail.com

Capitol Weekly presents A Conference on Housing Policy

Join us for an informative update on California’s Housing Crisis. For years, the Golden State has had the highest home prices in the US, one of the lowest rates of home-ownership, and the most people living on the streets – now, the COVID-19 pandemic has made the situation even worse. Three panels of experts, insiders and elected officials will discuss the status of the state’s Housing Crisis and the policy solutions being proposed to help solve it.

This event will be hosted on ZOOM from 9AM – 1:45PM, Wednesday, May 26. There is no cost to attend, but registration is required. Attend one panel, or the whole day!

CAPITOL SEMINARS’ INVALUABLE LOBBYING 101 COURSE OFFERED VIA ZOOM

Taught by 46-year Capitol veteran Ray LeBov. Provides comprehensive coverage of California’s Legislative process, along with touch points and best practices you need to know for effective Legislative advocacy. Send your new lobbyists, support staff, legislative committee members, executives who hire and manage lobbyists. Capitol Seminars is the No.1 training resource for nonprofits and private sector organizations, lobbying firms, trade associations, state and local government entities. Next Zoom session is Tuesday, May 25th, 8:30am-1:30pm. Seats are limited. Reservations: (916) 837-0208. Further information: www.capitolseminars.net

Join the California Manufacturers & Technology Association Team!

Are you a legislative advocate? Know someone passionate about improving policies for manufacturers? Do they have 4+ years of government affairs experience with emphasis on legislative, regulatory and/or commercial environment? CMTA’s exciting and fast-paced State Government Relations team is searching for a Policy Director. Subject-matter expertise in energy, environment and/or workforce issues preferred. Apply here! cmta.net/job_post.php

The Breakthrough Institute is seeking a Press Secretary (Berkeley)

Are you a savvy communications professional with ecomodernist ideals? Are you an effective communicator and strong writer with a passion for solving humanity’s biggest challenges? The Breakthrough Institute, a Berkeley-based research center, is looking for a new Press Secretary to expand our reach in the media and build connections with journalists, reporters, and newsroom editors. The Press Secretary will develop, implement, and assist in guiding media and digital strategies rooted in climate, energy, food, and agriculture with an ecomodernist emphasis. Please visit our website for a detailed job description and application instructions.

The position is in Berkeley, although remote until later in 2021.

The McGeorge School of Law, University of the Pacific

In addition to a well-respected JD, the McGeorge School of Law, University of the Pacific, offers the Master of Public Administration (MPA) and the Master of Public Policy (MPP) degrees. Both full-time students and those earning a professional degree while working succeed in the program. Our focus on the interconnections of law, policy, management, and leadership provides unique competencies for your success. Students gain a foundation in statutory interpretation and skills in public policy making and implementation. Learn at a beautiful campus three miles from the State Capitol:
go.mcgeorge.edu/publicpolicy

McGeorge School of Law, University of the Pacific

Built on the foundation of nationally ranked and world class programs, McGeorge School of Law offers an online master (MSL) degree for individuals seeking in depth knowledge of law and policy, but who do not require a traditional law degree. Our MSL’s two concentrations in Government Law & Policy and in Water & Environmental Law offer students the flexibility to work while they learn and still engage in a highly interactive master’s program. To learn more and to sign up for our monthly webinars, please visit our website, Online.McGeorge.edu, or contact us at graduatelaw@pacific.edu.

Political Data Inc.
For 30 Years PDI has been California’s premier data vendor. Now, you can get live online trainings on the newest PDI software every week: