Taxes, the coal fight comes to California, voting, and student debt

Good morning, California.

“We need 5,000 beds now. We need another 5,000 beds next month, and another 5,000 the next month. Not apartments. Beds. That’s the level of emergency we have on our hands.”—Estela Lopez, of the Los Angeles Downtown Industrial Business Improvement District, assessing the city’s latest housing proposal, as reported by the L.A. Times.

A fight over Newsom's tax bill

The auto industry is fighting Gov. Gavin Newsom's tax proposal.

Automakers are making a last-minute effort to derail Gov. Gavin Newsom’s proposal to partially conform state tax law with aspects of President Donald Trump’s 2017 tax overhaul.

  • The package sought by Newsom includes $1.4 billion in tax increases to fund a major expansion of the earned income tax credit, a break for low-income workers, especially ones with young children.
  • One aspect of Newsom’s plan would eliminate a $120 million-a-year tax break that is valuable for automakers that lease cars, the Sacramento Bee’s Adam Ashton reports. The bill faces an Assembly vote today.

In a letter to legislators, automakers point out that the increased lease costs would be passed along to consumers, and they cite environmental concerns.

  • As many as 90% of zero-emission vehicles are leased.
  • That’s especially relevant in California, which seeks to have 5 million electric vehicles on the road by 2030.
  • Assemblyman Phil Ting, a San Francisco Democrat, pushed to add $3 million to this year’s budget to require that the California Air Resources Board study how to transition to carbon-neutral transportation.

What matters: Newsom has plenty of leverage. Governors have the power to veto any bill, and blue pencil any earmark sought by legislators.

Voters risk being uncounted

Independent voters face a hurdle in voting in the 2020 presidential primary.

One of the fastest-growing groups of California voters is at risk of being left out of the state’s highly anticipated 2020 presidential primary, CALmatters’ Ben Christopher reports.

Under California election law, voters without a registered political party can vote in the Democratic presidential primary—but only if they ask for the right ballot first.

  • For people who vote by mail, that request takes a remarkably analogue form: a postcard, signed and sent to the county registrar of voters.
  • Not surprisingly, many politically independent voters have been caught unaware in the past, unable to vote in the state’s presidential primary.

Assembly Bill 681 by San Diego Democratic Assemblywoman Lorena Gonzalez would require county election officials to give this group of voters three advance warnings.

Chad Peace with the Independent Voter Project said the state should go further, giving voters without a party affiliation the right to vote for any primary candidate, regardless of party.

“You have the conflict between what is a party’s right to determine their nominee, on the one hand, and what is a voter’s right to participate in an important stage of the election process.”

California to fight coal

Gov. Gavin Newsom spoke out against the Trump administration.

Gov. Gavin Newsom quickly denounced the Trump administration’s rollback on Thursday of an Obama administration effort to reduce the nation’s dependence on coal-fired electricity.

  • Trump’s rule would give existing coal-fired power plants a reprieve and allow for construction of new coal plants, even though that would increase soot and greenhouse gas emissions.

California long ago ended procurement of coal for use in power generation. But Newsom declared:

“California and a coalition of states will initiate a legal challenge against the Trump administration’s continued attempts to prop up the coal industry by ignoring sensible efforts to use cleaner, healthier and more efficient energy sources.”

California officials are contemplating joining with Western states in a regional electricity grid, a concept that doesn’t sit well with organized labor and some environmentalists.

  • States such as Utah that would be part of the regional grid rely on coal and could increase their dependence if the Trump rule prevails against certain court challenges.
  • That could fuel opponents’ arguments that joining a Western regional grid would run counter to California’s clean energy goals.

Lobbyist Scott Wetch, who represents electrical workers: “If we regionalize, we would be forced to take coal.”

P.S.: The Sierra Club counts 50 coal plants that have shut since Trump’s election, suggesting other fuels are far more affordable.

Student debt

Assemblyman Mark Stone, left, and activist Tom Steyer

Legislators took a step Wednesday toward easing burdens on students facing crushing student loan debt.

Assemblyman Mark Stone, a Santa Cruz Democrat, is carrying legislation that would institute Obama-era restrictions that have been scrapped under President Donald Trump.

  • 4 million Californians hold $140 billion in debt. That’s the second-biggest debt load after home mortgages.

Stone’s “Student Borrower Bill of Rights” bill would extend to student borrowers the same protections given to people with mortgages and credit cards. It would limit past-due fees and create a state advocate to review complaints.

Opponents include bankers, the Student Loan Servicing Alliance and others who contend the legislation would raise costs by opening the way for more suits.

  • Tom Steyer, the liberal billionaire activist from San Francisco, made clear the significance of the measure by testifying before the Senate Banking Committee, which approved the measure.
  • Noting that some students will be paying off loans for 30 years, Steyer said: “This isn’t a partisan, Democrat-Republican issue.”

Another backer: Realtors, who see that student debt hampers the ability of college graduates to buy homes.

Homeless students

The state budget provides for two years of tuition-free community college.

Democrats who control the Legislature approved a budget last week that would provide two years of tuition-free community college.

On Wednesday, a representative for California Community College Chancellor Eloy Ortiz Oakley raised concerns about funding for homeless students.

  • Democratic Assemblyman Marc Berman of Palo Alto is carrying legislation that would require the campuses to provide overnight access to their parking facilities by homeless students.
  • Berman cited a report by the Chancellor’s Office that found 19% had experienced homelessness.

Berman: “The students are doing this tonight. This bill doesn’t create students sleeping in their car. This bill tries to provide a safer place for them to do what they’re already doing.”

The Chancellor’s Office has not taken a stand on the bill, community college legislative analyst Justin Salenik testified:

“If the Legislature wishes for something like this to happen, there should be funding to allow us to fulfill this sort of mandate and also—maybe more importantly—to get more financial aid resources into our students’ hands.”

The Senate Education Committee approved the bill, sending it to its next hearing.

Take a number: 42

Immigrants create 42% of new businesses in the state.

Immigrants take big risks coming to California. When they get here, many decide to take another risk: launching their own company.

  • California consistently ranks as one of the state’s most reliant on immigrants for new business creation, KPCC’S David Wager reports for the California Dream Project, a collaboration between public radio and CALmatters.
  • About 25% of new companies nationally are founded by immigrants.

In California, immigrants create 42% of new businesses, according to Harvard Business School Professor Bill Kerr. 

To read his report, please click here.

Commentary at CALmatters

John Mirisch, Beverly Hills mayor: Scores of housing bills circulate in Sacramento, one worse than the next. Collectively, they threaten to destroy our unique and dynamic communities to various degrees, many in the service of Wall Street and other special interest groups. Wall Street is notorious for not caring about the path of destruction it leaves in its wake in search of ever-greater profits.

Dan Walters, CALmatters: The recent state Democratic Party convention was dominated by the party’s left-wing activists, but the broader array of Democratic voters doesn’t lean as far to the port.

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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