Good Friday morning, California.
“We have been in a very long drought. It is my hope that it starts to rain soon,” Sen. Kevin de Leon, a Los Angeles Democrat, told me, praying money will rain on his underfunded campaign against Sen. Dianne Feinstein.
Don’t forget your mother. Mother’s Day is Sunday.
What to do with all those billions
When he releases his revised budget today, Gov. Jerry Brown almost surely will warn about a coming recession.
Gov. Jerry Brown will release his 16th and final revised budget proposal today, and it will be awash in billions in surplus.
In January, when Brown released his initial proposed budget of $180 billion-plus, California’s surplus was estimated at $6.1 billion. Another $3.3 billion in unanticipated tax revenue arrived by the end of March.
But why? Think of the budget as an economic indicator. It’s flush in good times and slips into the red during recessions. California’s unemployment rate is at a 12-year low, so more people are paying taxes, especially the wealthy.
Some context: The top 1 percent income earners account for 46 percent of general fund revenue. The general fund is filled with income, sales and corporate tax revenue, and pays for general services, notably public schools, health care, poverty programs and prisons.
How to spend it: For the next month, legislators and various interest groups will try to persuade Brown to increase funding for their pet projects.
Expect Brown to fully fund public schools and probably spread more money to community colleges. He might offer some money to big city mayors to combat homelessness, though he won’t part with the full $1.5 billion they seek. Brown also will insist that the vast majority of the surplus go into reserves for the recession that will come at some point.
Why so nervous?: The Trump administration seeks to cut federal spending to ease the deficit, following the tax cut he signed in December. Those cuts could fall hard on California. A trade war with China and a significant revision of the North American Free Trade Agreement also would harm California, which relies on exports.
My, you’ve grown: The general fund will be north of $132 billion in the coming fiscal year, which begins on July 1. (The $180 billion total budget includes special taxes like those imposed on cigarettes). In 1975, the first year of Brown’s first term, the general fund was $9.5 billion. That’s less than the coming year’s likely surplus.
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Qatar and an assemblyman
Why was California Assemblyman Rob Bonta in Qatar speaking on a panel about Middle East policy at the invitation of a controversial friend of President Donald Trump’s even more controversial Environmental Protection Agency chief?
Bonta, a Democrat from Oakland, said the people who attended the conference in Doha wanted a California perspective on Trump.
Background: Scott Pruitt, head of the EPA, has been busy unraveling environmental regulations and fending off congressional scrutiny over his costly junkets, at least one of which was arranged by Philadelphia-based consultant Richard Smotkin.
The New York Times: “Mr. Pruitt had allowed another lobbyist friend to play an unusually central role in arranging his agenda during a visit to Morocco in December [2017]. Just months after the trip, the Moroccan government hired the lobbyist, Richard Smotkin, as a $40,000-a-month foreign agent.”
In November 2017, Bonta was invited by Smotkin to join him on a panel in Qatar entitled: “President Trump in the Middle East and the World.” Bonta said he and Smotkin, who was a Comcast executive before becoming an agent for Morocco, met on a trip to Singapore and hit it off.
“He invited me to come to speak about Trump.” Bonta said he ripped Trump as divisive. Smotkin defended him.
It’s legal: On his annual statement of economic interest, Bonta reported that Qatar’s Ministry of Foreign Affairs paid $4,160 for his travel and appearance, plus $324 for meals for his wife. Afterward, Bonta got a laudatory note from an attendee: “There’s still hope for the US and the world!”
P.S. Smotkin has given one donation to a California politician, $500 on March 27 to Attorney General Xavier Becerra, campaign finance reports show. After I asked about it, an aide said Becerra didn’t solicit the donation and had returned it.
How one city helped homeless veterans
Bill Bruick was sleeping behind a Food 4 Less grocery store in Riverside, one of 11,000 veterans living on California streets and 40,000 homeless vets nationally. Riverside decided to do something about it. As part of CALmatters collaborative project about the California Dream, Amita Sharma of KPBS details how Riverside became the one California city to end homelessness among veterans. Bruick, proof of the city’s success, is living in an apartment with his fiancee and helping other vets.
‘Sanctuary’ city sound and fury
CALmatters’ David Gorn delves into the rising emotion over California’s so-called sanctuary laws. California’s policy to shield some undocumented immigrants from deportation has become a state election issue and a national spectacle. The feds are suing the state. So is a city. At the epicenter is a small Orange County city that has passed an ordinance to disobey state law. It’s daring the state to respond.
Will candidates’ housing policy work?
CALmatters’ Matt Levin and the Los Angeles Times’ Liam Dillon focus their latest Gimme Shelter podcast on how gubernatorial candidates would confront California’s housing crisis. But first, Matt stopped by a San Jose house that burned down and sold for nearly $1 million. CALmatters’ Laurel Rosenhall and The Times’ Phil Willon offer their insights into what the governor might do, or not do.
Please reach out with tips, suggestions and insights, dmorain@calmatters.org, 916.201.6281. Thanks for reading and tell a friend. See you Monday.