Good morning, California.

“To be fair, redoing the state’s housing supply goals is not a simple process. But pushing to 2023 is a … while.”—L.A. Times housing reporter Liam Dillon tweeted after Gov. Gavin Newsom offered details of his plan to tie transportation funding to cities’ willingness to build affordable housing.

Newsom looks to fuel affordable housing

Gov. Gavin Newsom spent time with homeless people last month.

Gov. Gavin Newsom is proposing to tie gasoline tax revenue earmarked for cities to their willingness to build affordable housing, an idea that is not sitting well with some in his own party. But cities wouldn’t start losing the money until 2023, which would be the start of his second term.

  • At Gov. Jerry Brown’s urging, lawmakers approved a 12-cent per gallon gasoline tax in 2017, generating $5.2 billion a year primarily for road and bridge repairs. The contentious vote led to the recall of then Sen. Josh Newman, an Orange County Democrat who voted for it, and an unsuccessful initiative to repeal the tax.

Newsom offered details on Monday to the plan he first announced in January to link housing and transportation funding.

New governors often get the benefit of the doubt. But the Sacramento Bee’s Sophia Bollag reports that several Democratic lawmakers criticized the concept of linking gas tax funds to affordable housing.

Democratic Assemblyman Jim Cooper, of Elk Grove, voted for the gas tax measure: “I think the voters do have a certain expectation that those funds be used for what’s promised, and now to change that mid-stream, that’s going to rub a lot of folks wrong.”

Sen. Jim Beall, the San Jose Democrat who carried the 2017 gas tax bill, urged Newsom to drop his idea, and instead get behind Beall’s new legislation giving local government $200 million a year in incentives to jumpstart affordable housing construction.

A surplus of new tax ideas

Gov. Newsom's budget has a surplus of $21.5 billion.

Democratic leaders pointedly cautioned against broad tax increases. Whether their troops and Gov. Gavin Newsom have gotten the memo, though, isn’t clear, CALmatters’ reporter Judy Lin writes.

  • Newsom has embraced a water tax, a phone fee to upgrade the 911 emergency response system, possible higher payroll tax for babies to get six months of paid family leave, and a state individual health mandate to replace the federal penalty repealed by Republicans.

Lin: “Legislators have proposed a soda tax to fight obesity, a tire change tax for stormwater cleanup and a drinking water tax to clean up toxic wells. Also a firearms excise tax, an oil and gas severance tax and a fee on dialysis centers. Also an increase in lead-acid battery fees.”

Serving as the adult in the room is Senate President Pro Tem Toni Atkins, a Democrat from San Diego:

“Many proposals have been put forward by the governor and by individual legislators. All will be appropriately reviewed through our policy and budget process. But one thing is clear, now is not the time for any major broad-based new tax increases on lower- and middle-income families.”

Atkins has a safe district. But as the Senate’s Democratic leader, she’s responsible for protecting Democrats in swing seats. And she remembers seeing former Sen. Josh Newman recalled after voting to raise gasoline taxes.

Recalled senator's taxing message

Recalled state Sen. Josh Newman is running to reclaim his seat in 2020.

Josh Newman, the Orange County Democratic senator who was recalled last June over his 2017 vote to raise the gasoline tax, has a message for legislators contemplating voting for new taxes: tread carefully, especially when it comes to a proposed water tax.

  • An estimated 1 million Californians can’t drink safe water from their taps. As proposed by Gov. Gavin Newsom and others, water users would pay 95 cents a month to ensure all Californians have drinkable tap water.

Newman told me he agrees with the argument made by Carl Demaio, the San Diego radio talk show host who fanned the recall flames and led the failed initiative to repeal the gas tax, and now is going after the water tax.

  • California has a surplus of $21.5 billion, maybe more.

Newman: “If there is money in state coffers, why are they asking for more? If you can’t answer that question, that says a lot. If the state has the funds, the state should fix the problem.”

Newman, who is running to reclaim his seat in 2020, said he still would support a gasoline tax but only if state leaders could persuade voters about the need, and explain to them how the money would be spent.

Newman: “This is an expensive state. … It is really import to remind oneself that the average voter, the average taxpayer, is apprehensive about how the state government spends money.”

New move to abolish 140-year-old board

Controller Betty Yee believes it's time to do away with the Board of Equalization.

Some legislators seem intent on dealing a final death blow to an obscure and sometimes scandal-ridden elected state board that is responsible for handling property tax appeals.

The Board of Equalization was created 140 years ago. Government efficiency advocates have been calling for its abolition for 80 of those years.

  • The five-member board includes four elected members, each of whom receives annual pay of $151,260. The controller is the fifth voting member.
  • The board fended off efforts to kill it, in part because legislators saw it as a soft landing spot.

Gov. Jerry Brown and the Legislature finally stripped the board of all but a small portion of its duties in 2017, and gave most of its authority to the new California Department of Tax and Fee Administration and the Office of Tax Appeals.

Lawmakers acted after an audit and news reports disclosed egregious instances of cronyism and misuse of public funds. 

Assemblyman Adrin Nazarian, a Democrat from Sherman Oaks, has a bill to ask voters to abolish the board. Controller Betty Yee called for its abolition at a legislative hearing last week:

Yee: “The board has changed over time and certainly now with the limited responsibilities or reduced responsibilities, I do believe there is no need for an elected board.”

No other state has an elected tax commission.

Taking politics out of tax appeals

Taxpayers are experiencing more success with tax appeals.

Taxpayers are faring slightly better in appeals under a new Office of Tax Appeals created when lawmakers stripped the state Board of Equalization of most of its power, Bloomberg Tax reports.

Practitioners who argue cases before the new board say the political influence that marred Board of Equalization decisions seems to be gone. Bloomberg’s Laura Mahoney writes:

Results are still too limited to declare success, but practitioners have applauded that they no longer have to curry favor—or make campaign donations—to win their cases. 

Take a number: 883,453

More voters are declining to affiliate themselves with a political party.

The number of no-party preference voters increased by 883,453 between February 2017 and February 2019, and now account for 28.3 percent of the California electorate, Secretary of State Alex Padilla reports.

The biggest loser: The California Republican Party lost 318,000 voters, falling to 23.6 percent of the electorate. The California Democratic Party lost 88,072 voters but has a 43.1 percent share.

Since February 2011, which was the beginning of Jerry Brown’s tenure, there are:

  • 2.138 million more no-party preference voters.
  • 1.042 million more Democratic voters.
  • 597,670 fewer Republican voters.

Commentary at CALmatters

Photo illustration

By Dr. Karen Meckstroth, professor at UCSF Department of Obstetrics, Gynecology and Reproductive Sciences: Despite massive opposition, the Trump administration released coercive and unethical regulations governing Title X. The administration’s anti-abortion agenda has seeped into Title X, a program that doesn’t pay for or provide abortion services. Under these rules, I would not be able to tell patients where they can get an abortion, even if they ask.

Dan Walters, CALmatters: Those who debate abortion are often willing to use law and politics to shut down the other side.

Please email or call me with tips, suggestions and insights, [email protected], 916.201.6281. Thanks for reading, please tell a friend and sign up here.

See you tomorrow.