Treasurer

California’s minimum wage of $15 per hour equates to $28,800 per year. This is far below the “living wage” of $34,337 for a single person. However, California is not monolithic. Having started my public service career on the San Francisco Board of Supervisors, I support giving more decision-making authority to local governments to raise wages, since they better understand the needs of their constituents. For example, 12 localities plus the County of Los Angeles raised their minimum wages on July 1, 2022. I support the law that is expected to raise the minimum wage in California to $15.50 in 2023.

Sadly, state government policies are further widening the income gap between rich and poor. Out-of-control gas prices and taxation schemes disproportionately affect working families who direct a greater share of their disposable income to consumption. The shutdown of government schools short-changed working class communities and exacerbated the education gap. State policies routinely cripple small businesses (the backbone of our economy and the source of employment in disadvantaged communities) by raising taxes, subverting jobs and over-regulating businesses. Rampant government corruption cheats residents, encroaches on their wages, and diminishes quality of life. We need serious education reform, lower taxes for working families and an end to government corruption.

We are not doing enough to address the growing divide. I support a guaranteed yearly basic income model with appropriate guardrails. I also support additional basic income initiatives, such as Stockton’s targeted neighborhood programs begun under then-Mayor Michael Tubbs and the Legislature’s proposals to support pregnant women and those that left foster care. I also backed the expansion and promotion of the Earned Income Tax Credit, as well as the California College Promise Program, which provides free tuition to students who attend a community college.

The top 1% of state income taxpayers pay about 45% of the state’s total personal income taxes. And about 95% of our state’s General Fund is made up of personal income taxes, sales taxes and corporate income taxes so we need high income earners to stay in California. Our sales tax laws should be reviewed in their entirety. Changes could be made to increase uniformity regarding items that are subject to sales taxes. I do not support a shift from sales taxes to a service tax since it would put an undue burden on small businesses and sole proprietors.

The top 1% of income earners in the state of California contribute 50% of California’s personal income tax. Their top marginal tax rate is 13.3%, which for 2022 is the highest in the country. While progressive tax structures based on income level are appropriate, the excessive rates across the board are generating pernicious consequences for our economy. Business owners and high-wage earners, including innovators and job-creators, are fleeing the state at unprecedented levels. The solution is to cut tax rates across the board, and to create a favorable business climate to unleash the full wage and employment potential of the private sector.

I do not support a wealth tax. Our state is highly dependent on high-income earners. We should be encouraging and incentivizing these individuals to stay and invest in California. Nations that have experimented with wealth taxes have largely found that they have failed and have repealed them. According to the Organization for Economic Co-operation and Development, the reasons for failure of the wealth taxes include limited revenue collection, administration and compliance costs, tax avoidance, evasion and the desire to attract more foreign investments. 

Gov. Jerry Brown made needed changes to our pension systems with the California Public Employees' Pension Reform Act, which included provisions in legislation I authored. With its surpluses, the state also has been making extra contributions to our pension systems to pay down unfunded liabilities to save the state money, which I have supported. Strong investment returns over the long term will be key to reducing costs for employers and members. I supported recent changes in new asset allocations that increase investments in private markets such as private equity, real estate and private debt.

I believe the state should divest from companies that operate in turbulent markets (particularly those with unstable government regimes) and those companies that follow less-than-transparent financial reporting. Many Russian companies operate with limited disclosures or unreliable accounting standards, for example. In any case, the decision to divest (or invest) in any sector or geography should be based on return on investment, risk assessment and economic analysis pursuant to the fiduciary responsibility to maximize return for taxpayers and constituents.

Absolutely. I was one of the first elected officials in our state encouraging California’s pension systems to divest from Russian companies.

Investment policies should conform with the fiduciary responsibility to maximize return and minimize risk. Regrettably, the unrealistically achievable discount rate (7.0%-7.5%) used by the pension fund boards (and by fuzzy math politicians) creates perverse incentives for the funds to invest in risky assets. A greater share of investments for CalPERS and CalSTRS is now directed to private equity funds, which do not subscribe to the same standards for financial transparency. Similarly, the funds are also investing in foreign companies, which operate in turbulent markets with unstable governments. Investment policies should focus on maximizing return, demanding financial transparency across the boards and upholding the highest accounting and disclosure standards.

Climate change is real. We have a responsibility to take action today. For three years, I was the only CalSTRS board member to stand with the youth “Earth Guardians” to urge a major change in the climate investment policies of our pension systems. As a result, CalSTRS will soon conduct a new asset liability study incorporating climate change scenarios. I also support integrating Diversity, Equity and Inclusion in our investment portfolios to ensure more diverse leadership and ownership at public and private companies.