California Senate sings the budget blues

In its first formal response to Gov. Gavin Newsom’s $297 billion spending plan, the Legislature offered some pointed feedback on Wednesday: The governor’s fiscal forecasters are being too optimistic and the state needs to prepare for a worsening budgetary outlook.

But Newsom shouldn’t cut climate spending. Or mental health programs. And especially not anything related to housing.

Nobody said balancing a budget during economic lean times would be easy.

Remember: Last week Newsom rolled out his pared down fiscal framework meant to bridge a projected $22.5 billion shortfall with cuts and delays to climate, public health and transit programs, plus a bit of fancy financial footwork. 

Putting in a word for frugality at Wednesday’s Senate Budget and Fiscal Review Committee: The Legislative Analyst’s Office, the nonpartisan number-cruncher that issued its initial review of the governor’s plan last week. 

Legislative Analyst Gabriel Petek urged lawmakers to consider $14 billion in additional cuts and delays to one-time and temporary spending programs.

The senators, most of them Democrats, didn’t take issue with that recommendation. Still, they complained about the cuts that Newsom did include:

• Sen. María Elena Durazo of Los Angeles bemoaned less proposed spending for public transportation, joining Sen. Scott Wiener of San Francisco, who last week vowed that a “big coalition” would push back.
• Sen. Lola Smallwood-Cuevas, also a Democrat from Los Angeles, urged the governor to provide more funding for workforce development to “recession proof” the economy.
• First-term Democratic Sen. Caroline Menjivar of Van Nuys asked Newsom’s deputy budget director Erika Li why the administration wasn’t providing more funding for counties to set up their CARE courts after Los Angeles County announced that it would begin rolling out the new judicial system for those with severe mental illness a year early.

In response, Li said that the administration hoped to backfill some of these cuts with federal money courtesy of last year’s Inflation Reduction Act.

And anyhow, she stressed, this is just the beginning of a months-long haggling session between the branches of government until the final budget is approved in June.

• Li: “The governor’s budget is always the starting point for discussions…We look forward to having more discussions on this — and on all — aspects of the budget.”

One budgetary critique in particular might be on Newsom’s mind today as he accompanies President Joe Biden, FEMA Administrator Deanne Criswell and Sen. Alex Padilla on a disaster tour of the water-logged Santa Cruz Mountains and the Central Coast.

Sen. John Laird, a Salinas Democrat, pointed to the recent devastation along the coast of his district and questioned why the governor’s budget cut spending for coastal protection and planning by 43%.

• Laird: “What do you actually rebuild? What don’t you rebuild? What do you have to consider in stepping back from the ocean? So the major pot that was cut was planning money for local governments to answer these questions.”

Biden’s visit comes a day after the White House made federal disaster assistance available to residents, business owners and governments in Monterey, San Joaquin, San Luis Obispo and Santa Barbara counties. Last week, the administration offered help to Merced, Santa Cruz and Sacramento counties.

End of an era: With California’s COVID state of emergency slated to end on Feb. 28, California is preparing to shutter nearly 100 state-run COVID-19 testing and treatment sites, writes CalMatters health reporter Kristen Hwang. 

That’s in part a consequence of the state’s shrinking budget. But it’s also a response to a decline in demand for testing services. All 92 of the sites scheduled to close are operating at less than 50% capacity, according to the California Department of Public Health.

CalMatters covers the Legislature: With the state Legislature back in session, CalMatters has you covered with guides to keep track of your lawmakers, explore its record diversity, make your voice heard and understand how state government works. We also have Spanish-language versions for the Legislature’s demographics and the state government explainer.  

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1 Wage theft in 2022: “Most in recent history”

From CalMatters California Divide reporter Jeanne Kuang: California workers filed a record number of wage theft claims last year after a dip during the pandemic, and they’re waiting longer than ever to get those claims heard. 

Workers file the claims when they allege their employer failed to comply with the minimum wage, overtime rules, laws mandating meal and rest breaks or other labor policies. Officials in the state’s Labor Commissioner’s office have placed particular emphasis in enforcing these laws in low-wage industries, where workers are often immigrants. 

The number of claims filed by workers seeking back pay last year surged to more than 38,000 as of mid-December, after averaging about 30,000 a year prior to the pandemic. Workers filed about 25,000 claims in 2020 and 19,000 in 2021. Officials estimated last month the total number of claims received in 2022 would surpass 40,000, “the most in recent history.”

It exacerbated a backlog that the Labor Commissioner’s office has for years struggled to address in a timely manner, as CalMatters detailed in a series of articles last year. 

Wait times for a claim to be heard by a state hearing officer climbed to an eye-popping 800 days, according to the Labor Commissioner’s office. That’s nearly seven times the maximum set by state law and nearly a year longer than the average wait time to get a case decided that CalMatters calculated for the past five years.

Back pay can take years to recover, and many workers who win their claims are never paid. One problem, advocates say, is understaffing and vacancies in the Labor Commissioner’s office. 

The Labor Commissioner’s office included new figures in the latest budget request, seeking $12 million in the next fiscal year to hire 43 additional staffers. Lawmakers agreed to add funding and staff in 2020, but the office says it wasn’t enough. The office’s goal is to reduce the wait time to 200 days.

Carlos Torres, assistant chief in the Labor Commissioner’s office who prepared the request, attributed the decline in claims in 2020 and 2021 to the pandemic. He wrote that last year’s increase came after the office launched a way for workers to file claims online in both English and Spanish.

2 Duplex law failing to deliver

It has been called “radical,” “draconian,” “sweeping,” and the end of single-family zoning as we know it.

Now, Senate Bill 9 — which Gov. Newsom signed in the fall of 2021 to allow as many as four units on single-family lots across California — may have earned itself a new nickname: Nothingburger. 

According to a new report by UC Berkeley’s Terner Center for Housing Innovation, the effect of the controversial housing bill has been “limited or nonexistent” — at least so far. 

The report’s authors collected applications to divide up residential lots from 13 cities, including urban giants such as Los Angeles, San Diego and San José as well as the sleepier suburbs of Saratoga and Danville. They counted just 100 applications in all for a total of 282 potential units. Just 28 of those applications for 53 units have been approved so far.

To put that in perspective, Gov. Newsom wants cities across the state to approve an additional 2.5 million homes by 2030. And the Terner Center, itself, had earlier projected that more than 700,000 new homes might be feasible under the new law. 

• David Garcia, Terner Center’s policy director: “Pretty much everywhere you look, Senate Bill 9 activity is very marginal. It is nonexistent in some places.”

This shouldn’t come as a huge surprise. As CalMatters housing reporter Manuela Tobais wrote around the time of the bill’s passage, zoning is only one part of the equation. Construction costs, physical constraints, planning department capacity, local regulations and a limited appetite by most homeowners to carve up their place of residence were always going to make SB 9 an unlikely route out of the state’s housing crisis. 

It also might be too soon to put a fork in the law.

• Terner report: “It is still too early to say that SB 9 is not working…Planners told us that while applications for SB 9 have been low, inquiries to their departments about SB 9 are high.”

3 Out with David, in with Dave

On Wednesday, one Californian finally threw in the towel on his 2022 race while another threw his hat into the ring for 2024.

On his way out: David Shepard.

After two recounts in Senate District 16, the Republican challenger to Democratic Sen. Melissa Hurtado of Bakersfield conceded that “victory is no longer feasible.” The final margin: 13 votes, one of the closest legislative races in California history. 

And thus — at long last — ends California’s 2022 election season.

Entering the fray: State Sen. Dave Min, a Costa Mesa Democrat, announced that he’s running for Congress in 2024.

It’s a quick turnaround for Min, who unseated longtime Republican state Sen. John Moorlach in 2020. But term-limitless congressional seats only become available so often. This one is set to be vacated by Rep. Katie Porter, who’s running for the U.S. Senate. She held her first campaign event Tuesday evening in Rossmoor, an East Bay gated community where residents must be at least 55 years old and a locale that Politico described as “a rich vein of three critical resources: donations, volunteers and high-propensity Democratic voters.”

It’s also in the backyard of Rep. Barbara Lee, an Oakland Democrat who is also reportedly considering a Senate run.

Shortly after Min’s Wednesday announcement, Porter endorsed him.

• Porter: “I endorse my friend Dave Min in his campaign for Congress and have every confidence that his campaign will ensure that California’s 47th Congressional District continues to be represented by a progressive Democrat.”

Porter and Min’s friendship wasn’t always so apparent. The two Harvard-educated law professors battled it out for the Orange County congressional seat in a bruising 2018 primary that included Porter campaign staffers accusing Min of “intimidation,” insinuations that Porter’s political opponents were using her past domestic abuse against her, and attack ads the likes of which are rarely seen in intraparty contests. 

Who loses from Min’s announcement? Former U.S. Rep. Harley Rouda, a Democrat, who announced his run for Porter’s seat last week. 

Who wins? State Sen. Josh Newman of Fullerton. Last year, California’s redistricting commission put Min and Newman, both Democrats, in the same district. Min’s announcement spares Newman the prospect of an incumbent-on-incumbent fight.

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