Good morning, California. ‘Tis the season.
“Our government continues to ignore the seriousness and causes of the climate crisis. It is pure evil.”—Patagonia founder Yvon Chouinard, who has announced the outdoor gear company will donate $10 million it saved in federal tax cuts to nonprofit environmentalist groups.
'Tis also the fourth quarter
Financial buildings in Downtown Los Angeles
High-end money managers opened a public campaign Wednesday against a potential 17 percent tax on them in California, moving to pre-empt an overwhelming Democratic legislative majority.
- At issue: The potential return of an unsuccessful bill to raise taxes on venture capitalists, hedge funds and private equity firms, with the proceeds earmarked for schools. Introduced by Democratic Assemblyman Mike Gipson and backed by labor and teachers unions, the legislation died in the Assembly earlier this year.
But after the Nov. 6 election, Democrats hold 60 of 80 seats in the Assembly and 29 of 40 seats in the Senate, more than sufficient to approve new taxes, and labor and teachers unions have powerful lobbies. Hence, a group called the “Coalition to Preserve California Business” has funded a study by USC business school professor Charles Swenson to study Gipson’s earlier bill.
- The findings: The proposed tax would be so high that funds would relocate to low-tax states. Such an exodus could mean the loss of as many as 253,000 direct and indirect financial services industry jobs and $2 billion in state and local taxes, the study warns.
Swenson, in a phone press conference: “The tax is so high that it would be financially infeasible to stay in California.”
The Coalition to Preserve California Business includes Apollo Global Management, Ares Management, Genstar Capital, National Venture Capital Association, Oaktree Capital and many others. The group hired a lobbyist in May and spent $107,000 to kill this year’s iteration.
- Its new goal: To ensure that the legislation is not resurrected.
Gipson: “My door is open, and I encourage these hedge funds and investment professionals to work with me and be collaborative in working towards a solution.”
Child poverty amid California’s plenty
Telfair Elementary School has one of the highest rates of homelessness at LAUSD.
The yawning disparity between the Golden State’s haves and have-nots is increasingly front-of-mind as Gov.-elect Gavin Newsom prepares to take office.
In Southern California this week, Los Angeles Times columnist Steve Lopez and photographer Francine Orr published the results of a three-month report on poverty in the L.A. Unified School District, a remarkable series that truly is worth your time, starting here, and continuing here, here and here.
- L.A. Unified School District Superintendent Austin Beutner responded Wednesday with a letter calling for help from Mayor Eric Garcetti, L.A. City Council President Herb Wesson and the L.A. County Board of Supervisors.
Beutner: “How can we expect our children to excel in the classroom when they are worrying about where they will sleep at night, or where they will get their next meal?”
Beutner’s letter, signed by school board member Kelly Gonez and the principal of Telfair Elementary School, a focus of Lopez and Orr’s work, went on: “While we provide counselors, school supplies and clothing, and other supports at school, these students and their families need housing, counseling, healthcare, job and career training and much more.”
- The letter lists 10 schools that have significant numbers of homeless students. At least 15,000 students are homeless, and 400,000 of the 600,000 in the district are living in poverty.
Meanwhile in Newsom’s Northern California backyard, The San Francisco Chronicle’s Tara Duggan this month presented readers with a months-long investigation into food insecurity into the affluent Bay Area, a problem made exponentially worse as high housing costs strain middle-class paychecks.
- More than one in four San Franciscans has limited or uncertain access to food, Duggan found, as do nearly 900,000 people in the Bay Area overall, from immigrant laborers to retired schoolteachers.
- And a “cruel irony” has arisen from well-meaning policies that have flooded food banks with working poor people.
Chronicle: While their income doesn’t keep up with the cost of living in the expensive region, the relatively high local minimum wage can make them ineligible for . . . food stamps. And even when they do qualify, the benefit only covers a fraction of the cost of each meal.”
The year of opting out
Rather than choose candidates they might have seen as the lesser of two bad Democrats, many Republican voters simply decided not to vote in certain contests in the Nov. 6 election, CALmatters’ Ben Christopher concludes in the third of his reports on voting data.
- Some 12 million Californians voted in the governor’s race, a traditional match-up between Democrat Gavin Newsom and Republican John Cox, based on current tallies.
- But only 10.6 million voted in the U.S. Senate race between two Democrats, U.S. Sen. Dianne Feinstein and state Sen. Kevin de Leon. And 10 million people cast votes in another Dem-on-Dem race between Lt. Gov.-elect Eleni Kounalakis and Sen. Ed Hernandez.
Christopher: “An analysis of county election data shows that the voters most likely to leave the double-D races for lieutenant governor and U.S. Senate blank on the ballot live in counties where Republicans outnumber registered Democrats.”
FSB Core Strategies: Public Affairs. Ballot Campaigns. Legislative & Regulatory Fights
Democratic Party chair falls hard
California Democratic Party Chairman Eric Bauman
California Democratic Party Chairman Eric Bauman announced Wednesday he would seek treatment for alcohol abuse as The Los Angeles Times reported complaints by 10 party employees about Bauman’s lechery.
- A force in Democratic circles for decades, Bauman became California Democratic Party chair last year after a bruising intra-party battle, and this year led the party to major fundraising gains, supermajorities in both legislative chambers and a sweep of seven targeted GOP-held congressional districts.
Over Thanksgiving weekend, Democratic Party Vice Chairman Daraka Larimore-Hall called for an investigation into Bauman for his “horrific and dehumanizing behavior.” The Times’ Melanie Mason reported allegations that Bauman, who is gay:
- Taunted staff members about their sexual orientation and appearance.
- Engaged in unwanted touching, particularly directed toward male staffers.
- Asked a party official about his sex life with his partner.
- Told a woman staffer she must have been a gay man in her past life because he wanted to sleep with her.
- Asked two young women within earshot of others if they were having an affair.
Bauman’s statement: “In the interest of allowing the CDP’s independent investigation to move forward, I do not wish to respond to any of the specific allegations. However, I will use the time I am on leave to immediately seek medical intervention to address serious, ongoing health issues and to begin treatment for what I now realize is an issue with alcohol.”
A past chairman of the Los Angeles County Democratic Party, Bauman was a high-ranking staffer to Gov. Gray Davis and to Assembly speakers including John A. Pérez, Toni Atkins and Anthony Rendon.
Addendum: As chairman, Bauman had made of point of saying the Democratic Party had a “zero tolerance” policy about sexual harassment.
New Central Valley Congressman T.J. Cox
Democratic Party officials claimed victory—and much credit—Wednesday as Democrat T.J. Cox appeared to have defeated Republican Congressman David Valadao in an upset that means Democrats gained 40 seats in the U.S. House of Representatives in the Nov. 6 election.
- The DCCC, also known as the Democratic Congressional Campaign Committee, helped Cox early in race, and certainly can take credit for victories nationally, as it did in this Washington Post piece.
Closer to the Kings-Kern-Tulare-Fresno county district soon to be occupied by Cox, credit also goes to his own campaign team, and to lesser known groups including Valley Forward and Communities for a New California, along with the California Labor Federation and the Tom Steyer-funded NextGen.
Democratic strategist Katie Merrill: “What’s being lost in how the Democrats won is how all these other groups that are not from D.C. made the difference.”
They focused on getting out the vote, particularly among occasional voters, many of them Latino, and ended up surprising many Democrats who believed Valadao could not be beaten. Clearly, every vote mattered. As of Wednesday night, Cox led by 529 votes.
Commentary at CALmatters
Jim Gonzalez, public policy consultant: Earthquakes, floods, mega-fires, a recession and other unforeseen events can disrupt the best laid plans of any California governor. Potential disasters aside, Gov.-elect Gavin Newsom should hit the ground running. Here are five policy initiatives for him to consider.
Dan Walters, CALmatters: It might be time to explore a new model—some sort of statewide umbrella policy, financed by fees on all property—to cover extraordinary wildfire losses beyond those borne by private property insurance. If this is “the new abnormal” that Brown describes, we cannot deal with its financial consequences normally.
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See you tomorrow.