Good morning, California.
“I wouldn’t be a bit surprised if we’re already in a recession, but it won’t really be noticed for another four or five months.”—Gov. Jerry Brown to the L.A. Times.
Will Newsom be schooled by LAUSD?
Los Angeles teachers have threatened to strike Jan. 10.
A teacher’s strike at California’s largest school district is set to disrupt the lives of 600,000 students and their families—and to test incoming Gov. Gavin Newsom in his very first week.
What happens at Los Angeles Unified School District won’t stay in L.A., writes CALmatters’ Ricardo Cano.
- Jan. 10 will be strike day if the United Teachers of Los Angeles and district can’t reach agreement.
- That’ll be Day 4 of Newsom’s tenure as governor, and the day he is set to release his budget. Lobbying from all sides is already underway.
Cano: “[LAUSD Superintendent Austin] Beutner said he is determined ‘to go to Sacramento to make sure our legislators understand that we’re doing the best we can with the resources that we have and that we need more resources.’”
CEOs of three leading nonprofits in an L.A. Times op-ed: “Sacramento needs to pony up more money for our schools.”
Demetrio Gonzalez, United Teachers of Richmond: “We’re going to send a message … [to] the people in Sacramento and the people who we helped get elected, like Gov. Gavin Newsom, to say we need to invest more in K-12 education.”
Why Richmond matters: It’s the hometown of incoming Superintendent of Public Instruction Tony Thurmond, a Newsom ally.
Newsom is already under pressure to expand early childhood education, raise California’s rank in K-12 spending and deal with rising pension costs, all while public school enrollment is declining, and teachers nationwide are asserting their power.
But then there are the numbers:
- $78.3 billion spent on public schools by California in the current fiscal year out of a $200 billion-plus budget.
- $80,000 a year in average salary for California teachers, according to the Legislative Analyst’s Office.
- No. 44: California’s place in the latest U.S. News rankings for K-12 public schools.
- $1.4 million spent by public school unions in 2018 to elect Newsom. The California Labor Federation led a separate, $5.2 million independent campaign for Newsom.
And recession is looming: California’s budget is especially reliant on capital gains tax revenue, much of which comes from stocks. The stock market just had its worst year since 2008 crash.
FSB Core Strategies: Public Affairs. Ballot Campaigns. Legislative & Regulatory Fights
Speaking of money
LeBron James just moved to LA from Cleveland—ka-ching.
Forty-six percent of California’s taxes are paid by the top 1 percent of the state’s taxpayers—that’s how dependent the Golden State is on its wealthiest inhabitants.
- As an illustration, CALmatters’ Judy Lin did a back-of-the-envelope calculation of the tax consequences of LeBron James’ decision to leave Cleveland and join the Los Angeles Lakers. Think eight digit numbers.
- Lin’s conclusion: “Thanks, LeBron!”
For the slam-dunking details, click here.
Rethinking Brown's housing policy
Redevelopment, ended by Brown, could make a comeback.
Gov. Jerry Brown pushed to kill a controversial and easily abused source of funding for low-income housing early in his tenure, then signed numerous bills to spur more housing construction. But that strategy could soon be reversed.
KQED’s Guy Marzorati reports: “Brown never touted housing policy as a top priority for his administration. Even today, he remains skeptical that wholesale changes to California’s local housing laws are politically feasible, and whether government action can make a difference in the price of homes.”
Facing a $27 billion deficit at the start of his administration, Brown won legislative approval to end redevelopment.
- Redevelopment helped spur affordable housing, but cost the state almost $2 billion a year in subsidies to local government.
- And there were abuses: Cities used the subsidies to generate tax revenue by luring commercial development including auto malls, building golf courses and, infamously, helping to fund a bar near the Capitol that featured women wearing mermaid outfits swimming in a tank.
Confronting today’s housing crisis, Democratic Assemblyman David Chiu of San Francisco has introduced legislation to restore redevelopment, restricting the money for housing and infrastructure.
Chiu: “There will be very aggressive oversight.”
Chiu’s bill doesn’t specify an amount the state would earmark for a revived redevelopment, assuming there are the votes to recreate the program. But the annual cost could be $1 billion.
Brown to NPR: “The relationship between income and housing has been growing unfavorable for decades, and now it’s at its highest peak. So how do you change that, absent a deep recession? That’s a real puzzle. … If you want to come back and talk to me in four years, I assure you we’re going to have the same problem that we have today.”
Homelessness, then and now
Homelessness fell slightly under Brown—or did it?
How much progress has California made against homelessness during Gov. Jerry Brown’s tenure? The annual census by the U.S. Department of Housing and Urban Development shows that over the past eight years, thousands were moved off the streets.
- In 2011, Brown’s first year in office, HUD counted roughly 136,000 homeless people in California.
- In the 2018 census, HUD counted 129,972.
- The head count of homeless families fell to under 21,000, down from almost 27,400 in 2011.
- The number of homeless veterans declined to 10,800 from more than 18,600 in 2011.
But on the night when the 2018 census was taken, the number of people actually living on the streets and not in some sort of shelter was 89,543, more than the 85,300 unsheltered people in 2011.
- Much of California’s $200 billion budget is used to help people on the bottom rungs of society’s ladder. Brown drew on his sense of history a few years ago when a reporter asked him whether he was doing enough to combat poverty. Poverty, he noted, was a scourge when his father took office in 1959.
Brown in 2015: “You realize all these issues may be issues 56 years from now.”
Commentary at CALmatters
Schools Supt. Tony Thurmond & Assemblyman Kevin McCarty: California must institute “Pre-K for All.” It’s fundamental to helping California reclaim its historic tradition of leading the nation in education, especially for its most vulnerable children.
Dan Walters, CALmatters: Jerry Brown has warned repeatedly that California is overdue for a recession that would, his own fiscal advisors say, cut revenues by $60 billion over three years. It appears that a slowdown is already occurring, although whether it will build into a recession is unknown.
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See you tomorrow.