Newsom’s learning curve, breaks for low-wage workers, and another city’s homeless spike

Good morning, California.

“It’s just generally a very good business climate, in both Franklin and in the state of Tennessee.”—Jeremy Barnes of Mitsubishi Motors of North America, telling the Orange County Register why the company is leaving the Orange County city of Cypress after three decades. Incentives, Barnes said, include Tennessee’s lack of income tax, lower cost of living, good schools and a mild climate that rivals Southern California.

Newsom's learning curve

Gov. Gavin Newsom

State budget negotiations began as a love fest, but that didn’t last long. How did rookie Gov. Gavin Newsom’s experience compare with Jerry Brown’s?

CALmatters’ Laurel Rosenhall delves into Newsom’s evolving relationship with lawmakers as he prepares to sign his first budget.

  • His learning curve has been apparent, not only compared with his predecessor but compared with the Legislature, where changes in term limits have left Newsom to negotiate with more experienced leaders than Brown faced.
  • Legislators pushed back against Newsom proposals, including ones tying transportation funding for cities to their pace of housing development.

Budget-related housing legislation will be the focus of debate in the Assembly today, as Newsom faces a deadline to sign the $215 billion budget for 2019-20 into law.

To read Rosenhall’s full report, please click here.  

Spending big for a break for the little guy

A volunteer helps low-wage earners in Kern County claim tax credits.

Gov. Gavin Newsom more than doubled the size of a four-year-old state program that puts cash back in the wallets of the working poor. 

CALmatters’ Jackie Botts, who focuses on poverty, explains why California’s Earned Income Tax Credit is considered such an effective anti-poverty tool.

The expansion, the largest to date, is part of the 2019-20 budget to take effect July 1. It will:

  • Extend the credit to 3 million Californians, up from 2 million. 
  • Give workers with young children a boost of $1,000, to target the six in 10 households with young children who struggle each month to meet basic needs.
  • Expand the credit to workers who earn up to $30,000 annually, so people working full time at minimum wage won’t lose the credit when their hourly pay rises to $15 by 2022.

The cost of the program, which piggybacks a larger federal tax credit, will grow to $1 billion, up from $400 million.

  • As many as a million eligible Californians didn’t claim it last year, mostly workers who are not used to filing because they don’t earn enough income to owe taxes.
  • In the final budget negotiations, undocumented immigrants who file taxes with Individual Taxpayer Identification Numbers were cut from the expansion.

To read Botts’ full report, please click here.

Canada, California join in climate fight

Canada will join California in encouraging the adoption of electric vehicles.

California has enlisted an ally in its fight against the Trump administration’s rollback of auto-efficiency rules—Canada.

The two like-minded governments announced they will work together to combat climate change and encourage adoption of electric vehicles.

  • CALmatters environment reporter Julie Cart sees the announcement as part symbolic: Canada and California already collaborate on environmental initiatives, and the province of Quebec participates in the state’s cap-and-trade auctions.
  • Cart also notes that our northern neighbor may join in California’s battle to prevent the Trump administration from loosening emissions standards that the California Air Resources Board helped craft during the Obama presidency.

Canada long has set tailpipe-emissions standards to match the United States. But the Canadian government began reviewing its commitment to following Uncle Sam’s lead, after the Trump administration announced its intention to roll back Obama administration standards.

Canada has a goal of having all light-duty vehicles sold be zero-emissions by 2040. As part of the new state budget, California set aside money to study such a step.

  • Canada might not be able to dictate auto-emission standards on its own. But Canada, California and other blue states that have joined California’s fight against the rollback account for about half the North American market.

The five-year agreement signed by air board chairwoman Mary Nichols and Canada’s minister of environment and climate change, Catherine McKenna, is not legally binding. But it includes pledges to share information and meet annually.

Tough day for payday lenders

The Californians for Safe Affordable Credit campaign targets high-cost loans.

Legislation to cap the interest rates that lenders can charge cash-strapped borrowers cleared what likely will be its toughest legislative hurdle Wednesday.

  • Remind me: CALmatters’ Ben Christopher has reported that non-bank lenders made $1 billion a year in small-dollar loans in California, and charge interest rates of more than 100%.

Democratic Assemblywoman Monique Limón of Santa Barbara is pushing legislation to bar lenders from charging rates over roughly 40% on loans of between $2,500 and $10,000.

The Assembly approved the bill last month, with support from Speaker Anthony Rendon, consumer advocates, some lenders and a dancing shark mascot.

  • Lenders are targeting their lobbying at Democrats from moderate districts.
  • Their pitch: high-cost loans may look bad but are better than the rates offered by loan sharks or going without money.

The Senate Banking and Financial Institutions Committee has been a graveyard for loan-regulation bills. But the bill passed without a vote to spare. 

Limón is not declaring victory: “I had three bills die last year related to banking.”

Gov. Gavin Newsom vows to sign legislation restricting payday lending.

Ethnic studies put off

A bill that would have made ethnic studies a CSU grad requirement has stalled.

The California State University System won’t require ethnic studies as a graduation requirement for the time being.

Legislation by Assemblywoman Shirley Weber, a San Diego Democrat who worked 40 years in the CSU system as an educator, sought to require that the system add a three-unit course requirement for undergraduate students by 2020.

  • Some students and the California Faculty Association, a labor organization, supported it. 
  • A CSU-commissioned report had recommended that ethnic studies be added as a graduation requirement, though the Board of Trustees has not adopted the recommendation.
  • The CSU system, its campuses and the California State University Academic Senate opposed it. 

Loren Blanchard, the executive vice chancellor for Academic and Student Affairs: “We strongly support ethnic studies courses and programs in the CSU. However, this bill would represent an unprecedented, legislatively dictated curricular requirement.”

Weber said she was not impressed with assurances that the CSU would consider the matter, saying:

“If I believed in the Easter Bunny, I would believe in that.”

 The bill failed in the Senate Education Committee on Wednesday but could be reconsidered later.

The committee did approve Riverside Democratic Assemblyman Jose Medina’s legislation to create a statewide ethnic studies requirement in California high schools beginning in 2024.

Take a number: 5,570

A homeless man asleep in Sacramento's Capitol Park

Sacramento County announced a sharp rise in homelessness in 2019 to 5,570. It is the latest major locale to report a spike, joining San Francisco, Los Angeles and others.

Sacramento’s homeless number has jumped 52% since 2017, although authorities say the 2019 count was more accurate and believe the actual increase was 19%.

Some findings in the point-in-time count taken in January, as reported by the Sacramento Bee:

  • 93 percent were from Sacramento or are long-term residents.
  • 30 percent of people sleeping outdoors were over 50, and 20 percent were 55 or older.
  • 372 families with kids were homeless, including 688 children counted.
  • 12 percent were veterans.

Commentary at CALmatters

Lenny Mendonca, High-Speed Rail Authority: The high-speed rail’s building block approach starting in the Central Valley makes sense. To hear some say that this project is something that is not important to California is insulting. Ensuring that we are all connected is essential to the California Dream. It always has been, and it always will be.

Dan Walters, CALmatters: One of the most significant of the many conflicts between California and President Donald Trump is over auto fuel economy standards.

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.

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