In summary

Senator looks to remake California’s tax structure as businesses gear up for fight. Jerry Brown launches new climate iniative. Mentally ill inmates die in San Diego.

Good morning, California.

“I don’t know what the hell happened to this country that we have a president that we do today on this issue.  Because it’s a damn shame. It really is. I’m not a little embarrassed about it. I’m absolutely humiliated by what’s going on.”—Gov. Gavin Newsom, speaking at the opening of Climate Week in New York.

Businesses gear up for a tax fight

Income taxes are 70 percent of California's general-fund revenue. Image via Flickr
Photo illustration

The California Chamber of Commerce is teaming up with the California Taxpayers Association on a project to head off any talk of expanding sales tax to services. The two are spearheading a new coalition called the California Tax and Budget Research Project.

The goal: Dispel the notion that broadening the sales tax will help reduce California’s budget volatility.

  • Chamber President Allan Zaremberg:  “Once you strip away this pretense, you see that a new services tax is just another tax that will simply make services more unaffordable for all Californians.”

Joining the project are industries that would be targeted by an expanded sales tax: the National Federation of Independent Business of California, accountants, Realtors, contractors, architects, engineers, attorneys, finance and entertainment.

Sen. Robert Hertzberg, a force behind the service tax, said the plan he is envisioning is very different from what Zaremberg is challenging. (See below).

  • Hertzberg: “They’re fighting World War I. We’ve moved on. It is yesterday’s news.”

Here’s where tax debate is headed

Sen. Robert M. Hertzberg, 2019

Californians could avoid some costs imposed by President Donald Trump’s 2017 tax overhaul and avert a property tax hike on commercial property proposed in an initiative headed for the 2020 ballot.

So says Sen. Bob Hertzberg, the Los Angeles Democrat, who is taking a leading role in the Legislature in the effort to remake California’s tax structure.

Then: Initially, Hertzberg had been contemplating a tax of as much as 5% on services. 

Now: He has pared it back to 2% and would levy it on business-to-business transactions done in California. Any increase would have to be put to a statewide vote.

  • Hertzberg: “We’ve evolved.”

A benefit: The cost of such a tax could be deducted for federal tax purposes, helping to ease costs imposed on Californians by the Trump tax overhaul, which removed many deductions previously used in this state.

Hertzberg believes the concept as now envisioned would generate more money than the so-called split roll initiative headed for the November 2020 ballot. A split role initiative would alter the 1978 initiative, Proposition 13, by levying higher property taxes on businesses than on residential property owners. 

Public employee unions and others are pushing the split role initiative as a way of funding schools and other government functions.

What’s next: Hertzberg intends to unveil details in the coming weeks. Part of it could go on the November 2020 ballot as an initiative that would compete with the split role initiative.

Jerry Brown’s new climate drive

Former Gov. Jerry Brown with his dog, Colusa, near Williams, 2018

Gov. Jerry Brown used the occasion of the United Nations Climate Action Summit on Monday to formally announce his climate initiative: a joint policy institute with China at UC Berkeley.

To read my report, please click here.

Gov. Gavin Newsom traveled to New York and was making various appearances there, as reported by The L.A. Times.

  • Newsom:  “I’m very proud to be a new governor, replacing now, following Gov. Jerry Brown, who demonstrably has been leading in international efforts.”

Protesters dogged Newsom, demanding he ban fracking and oil drilling in California. Protesters made the same demand when Brown was governor.

President Trump unexpectedly dropped into the General Assembly hall with Vice President Mike Pence in the late morning but did not address the summit.

Meanwhile: High wind, low humidity and tinder dry brush adds up to fire weather from one end of the state to the other.

  • Scott McLean, of CalFire: “Fall started early this morning. So that means we’re going to have significant winds that will be blowing in the north state as well as the south state with the Santa Anas.”

Pacific Gas & Electric was considering cutting power to three Sierra foothill counties to avoid a conflagration. Wildfires, perhaps driven by climate change, caused deaths and property losses that forced PG&E into bankruptcy.

Jail deaths in San Diego

Prisoner hands on jail bars
San Diego jails have the highest mortality rate in the state.

A third of San Diego County jail inmates are mentally ill, and those inmates account for half of jail deaths, many of them suicides, The San Diego Union-Tribune reports.

  • San Diego County jails have the highest mortality rate in the state. 

George Gallegos, 55, was one who died. As detailed by The U-T, he had come to the jail after being a patient at Metropolitan State Hospital in Norwalk three months earlier.

In jail he lost 50 pounds, a fourth of his body weight, and was “not under medical care or on a medication regimen,” the report of his death said. 

A jailer checked on Gallegos only because his pants were slightly pulled down, revealing feces-soiled underwear. The cause of death was pneumonia and dehydration.

A Public Policy Institute of California report in 2014 cited the need for more beds to house mentally ill inmates.

In the past decade, California has spent more than $2 billion to construct new county jail beds, including a 1,270-bed facility for women in San Diego County. 

With a few exceptions, the money was not used to add beds for inmates suffering from mental illness.

Earlier this month, legislation stalled that would have permitted the state to spend money on county jail inmates that is generated by a voter-approved 2004 initiative to care for mentally ill people. That 2004 measure generates more than $2 billion a year. None of it can be used in the criminal justice system

  • Sen. Tom Umberg, an Orange County Democrat who is carrying the bill to loosen that restriction: “I am determined to have a vote on the bill in January.”

Taking aim at giant swamp rats

A nutria, aka swamp rat

Congressman Josh Harder, Democrat from Turlock, is seeking $7 million in federal aid to help eradicate invasive rodents known as nutrias, aka swamp rats.

A nutria can:

  • Grow to 20 pounds.
  • Produce 200 offspring a year.
  • Gnaw through Delta levies, potentially disrupting the California water system.

The South American natives were introduced to the United States for their fur.

Meanwhile: Gov. Gavin Newsom is mulling legislation that would ban fur sales in California.

Commentary at CalMatters

Gary E. Mead, former associate director of the U.S. Marshal Service: If private prisons are not meeting the needs of the state, steps should be taken to address those needs. But a ban on much-needed private prisons is not the answer, at least not if Gov. Newsom’s goal is to improve the conditions for state inmates, and the treatment of immigrants in custody.

Dan Walters, CalMatters: A bill on Gov. Gavin Newsom’s desk would make it more difficult to qualify measures for the ballot, a long-sought goal of Democrats and their allies.

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Dan Morain joined CalMatters in March 2018. He is the former editorial page editor of The Sacramento Bee. Morain also spent 27 years at The Los Angeles Times, and has covered the Capitol since 1992.

Judy serves as hub editor of the California Divide project, a five-newsroom collaboration covering economic inequality. Prior to editing, she reported on state finance, workforce and economic issues. Her...