In summary

More money coming to fight homelessness. Uber changes rules for drivers in response to new law. Census data show why Californians are leaving state.

Good morning, California.

“Californians have lots of compassion for those among us who are living without shelter. But we also know what compassion isn’t. Compassion isn’t allowing a person suffering a severe psychotic break or from a lethal substance abuse addiction to literally drift towards death on our streets and sidewalks.”—Gov. Gavin Newsom’s statement ahead of the release Friday of his proposed budget. 

  • To be debated in 2020: how far should government go to compel treatment of people who are so mentally ill that they aren’t aware they’re sick.

More money to fight homelessness

Moody Tanksley, 64, tried to keep warm in downtown Sacramento on Wednesday. He said he has been without shelter for a year. (Photo by Dan Morain)

As homelessness has worsened, state spending to combat it has soared. And more is coming, if Gov. Gavin Newsom gets his way in the new budget, CalMatters’ Matt Levin reports.

Let’s recap: 

  • Then-Gov. Jerry Brown directed $500 million to emergency homelessness shelters in 2018.
  • In 2018, voters approved Proposition 1, a $4 billion affordable housing construction bond, and Proposition 2, a $2 billion bond to fund supportive housing for people with mental illness.
  • In 2019, Newsom designated $1 billion for one-time investments to combat homelessness, on top of $1.75 billion to expand California’s affordable housing stock. 
  • In his budget to be unveiled Friday, Newsom will propose another $1.4 billion to provide shelter.

Newsom also is seeking:

  • A comprehensive study to better understand the root causes of homelessness in California.
  • Enforcing existing law requiring that health plans treat psychiatric illness in parity with other types of physical illness.
  • Possible changes to how the $2 billion-plus generated annually from the voter-approved 2004 Mental Health Services Act can be better spent to help homeless mentally ill people.

Bottom line: Housing and homelessness are at the top of Newsom’s agenda, appropriate given growing public frustration with the issue.

Uber pumps the brakes

An Uber drives gives a passenger a ride. (Photo via Wikimedia Commons)

Uber announced Wednesday it will adjust its rules to accommodate California’s new worker-classification law, even as it presses ahead with an initiative that would overturn the law.

Uber emailed 150,000 drivers and millions of passengers in California alerting them of changes “due to new state laws.” 

California riders will get an estimated price range, have the opportunity to ride with favorite drivers, and won’t be eligible for price protections through the company’s rewards program.

  • Uber: “These changes may take some getting used to, but our goal is to keep Uber available to as many qualified drivers as possible, without restricting the number of drivers who can work at a given time.”

The San Francisco Chronicle reports the changes are meant to establish that drivers are running independent businesses.

Uber relies on independent contractors, a category of workers that some employers have exploited and that stands to shrink under the new law and the California Supreme Court decision it’s based on. 

Under Assembly Bill 5, signed into law in 2019, workers are considered employees if the work they are assigned to do is core to the company’s business—say, driving. That makes it harder for companies to categorize workers as independent contractors.

Seeing the law as a threat to their business model, Uber, Lyft, Doordash, Postmates and Instacart have deposited $110 million into campaign accounts for a ballot measure to overturn AB 5.

Why people leave California

Photo via iStock

Common wisdom holds that high taxes drive Californians out of the state. It’s not necessarily so, Kate Cimini of the Salinas Californian reports, as part of CalMatters’ California Divide collaboration.

  • Cimini: U.S. Census Bureau numbers show that the middle and lower classes are leaving California at a higher rate than the wealthy. Many who have left in recent years say they simply couldn’t afford to stay. 

Most people leaving reported an annual income of less than $100,000, and thus would not pay California’s progressive income tax aimed at high earners. There is an influx of people to California making $100,000 and more. They’re the ones who would pay higher income taxes.

To read Cimini’s report, please click here.

A new oil tax, perhaps

A pumpjack south of King City

California senators will consider legislation next week that would impose a new 10% state tax on oil extracted within the state, a move that would raise pump prices that already are second highest in the nation.

An oil severance tax has been proposed many times in the past, and invariably fails. The Senate set a hearing for Wednesday on the bill by Sen. Bob Wiekowski, a Fremont Democrat.

The decision to hear the bill is something of a surprise.

  • Democrats have hesitated to approve new taxes after then-Sen. Josh Newman, an Orange County Democrat, was recalled in 2018 over his vote yo approve a gasoline tax.
  • Sen. Melissa Hurtado, a first-term Democrat from a swing district in oil-rich Kern County, sits on the committee that will hear the bill, and would likely have to vote on the measure.

The State Building and Construction Trades Council of California, which represents oil workers, will oppose the measure, along with oil companies.

Robbie Hunter, head of the trades council, said that if approved, the measure would raise pump prices, make California more reliant on Saudi Arabian oil, and “destroy hundreds of thousands of jobs.”

Meanwhile: AAA’s latest survey shows the average price of gasoline in California is the nation’s second highest after Hawaii, and almost $1 above the national average.

Seeking to preserve Proposition 13

Former Senate President Pro Tem Don Perata spoke in support of Proposition 13 at the Capitol on Wednesday. (Photo by Anne Wernikoff for CalMatters)

Business groups and taxpayer advocates are urging Gov. Gavin Newsom to protect California’s Proposition 13 property tax cap approved by voters more than 40 years ago.

The “Fight for Prop. 13” coalition, girding for a fight over a ballot measure that would raise property taxes on businesses, submitted a final batch of petitions to the governor’s office on Wednesday, .

  • Rob Lapsley, of the California Business Roundtable: “Prop. 13 is one of the last protections that we have in the state of California against higher housing, gasoline, milk and daycare costs.”

Fullerton Democratic Assemblywoman Sharon Quirk-Silva, former Senate President Pro Tem Don Perata and Peter Kelly, former chair of the California Democratic Party, participated in the event.

Teachers unions and the Service Employees International Union, as well as Facebook founder Mark Zuckerberg, are backing the measure headed for the November ballot to generate an estimated $12 billion a year.

Expanded family leave, revisited

California paid family leave expansion
Gov. Newsom is expected to return to the issue of expanded family leave.

Gov. Gavin Newsom, aka “Governor Dad,” used his budget proposal last year to pitch the idea that California workers should get more paid time off to care for new babies. 

The budget Newsom signed last summer will expand paid family leave from six weeks to eight weeks, starting this July, giving workers between 60% and 70% of their normal pay while on leave.

But it didn’t address a major criticism of California’s system—that many workers don’t actually use the leave they pay into because they can’t afford to get by on partial salary, or could lose their jobs if they take the time off. 

  • Only half of eligible mothers and a quarter of eligible fathers took paid family leave in 2017, state officials report.

Expect Newsom to push for more changes to paid family leave in the budget he announces Friday.

It will likely include new job protections for workers, something the California Chamber of Commerce has labeled a “job killer” in the past, and has defeated many times before.

Seeking greater school oversight

Piner High School (Photo by Anne Wernikoff for CalMatters.)

California’s 7-year-old school finance overhaul has gotten positive reviews, with one big exception: Following the money has been next to impossible.

That could change under newly introduced legislation, CalMatters’ Ricardo Cano reports.

Remind me: In one of his signature measures, Gov. Jerry Brown in 2013 signed legislation creating the “Local Control Funding Formula” governing K-12 spending. Its goal was to close persisting achievement gaps by giving more money to districts with high concentrations of foster youth, English learners and low-income pupils.

The state auditor reported in November that the formula “has not ensured that funding is benefiting students as intended.”

Democratic Assemblywomen Shirley Weber of San Diego and Sharon Quirk-Silva of Orange County have responded by proposing Assembly Bills 1834 and 1835 to strengthen oversight of how that money gets spent.

To read Cano’s story, please click here.

More fallout from blackouts

Cars drive under a nearly full moon but no street lights in Orinda during a PG&E blackout in October. (Photo by Jose Carlos Fajardo, Bay Area News Group)

Responding to cellphone failures during blackouts in October, Democratic lawmakers announced legislation to force telecommunication companies to have at least 72 hours of back-up power for all cellphone towers in high-risk fire areas. 

The Associated Press’ Adam Beam reports that telecom companies would have to pay for the backup batteries or generators, and could pass costs to their customers.

To avoid a repeat of the 2018 Camp Fire, in which 85 people died, PG&E shut off power to millions of customers during wildfires last year. That, in turn, caused cellphones to stop working.

  • Beam: “Data from the Federal Communications Commission shows 874 cellphone towers were offline during an Oct. 27 power shutoff that affected millions of people.”

Democratic Sens. Mike McGuire of Healdsburg and Steve Glazer of Orinda are carrying the bill to require the backups. Expect telecom companies to fight the measure.

Commentary at CalMatters

Karthick Ramakrishnan and Robert P. Jones, UC Riverside and PRRI: We must stop painting all Asian Americans with a broad brush. Such a brush erases the distinct cultures and experiences of individuals and harms people who don’t meet a tidy image of quiet, hardworking, striving Asian Americans who will pull themselves up by their bootstraps to achieve the American Dream.

Dan Walters, CalMatters: Separating the Capitol’s grain (serious legislation) from the chaff (symbolic fluff) is not always easy. Three new — or at least semi-new — proposals illustrate the need for winnowing.


Please email or call with tips, suggestions and insights,, 916.201.6281. Thanks for reading, please tell a friend and sign up for WhatMatters here.

Follow @danielmorain on Twitter, like CalMatters on Facebook, and follow us @CalMatters.

See you tomorrow.

We want to hear from you

Want to submit a guest commentary or reaction to an article we wrote? You can find our submission guidelines here. Please contact CalMatters with any commentary questions:

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.