Remember the Golden State stimulus checks? Well, more might be landing in your bank account in the near future.
That’s because California is — once again — overflowing with money, and will likely have a $31 billion budget surplus next year, according to a Wednesday report from the independent Legislative Analyst’s Office. And because the state is forbidden from spending more tax dollars per Californian than it did in 1978, once adjusted for inflation, it only has a few options for handling most of the cash windfall: slashing taxes; issuing tax rebates; funneling it to schools and community colleges; or earmarking it for certain purposes, such as infrastructure.
While touring the backlogged Los Angeles and Long Beach ports on Wednesday, Gov. Gavin Newsom said he plans to “substantially increase our one-time investments in infrastructure” in the budget proposal he’ll send to state lawmakers in January. He also suggested that another round — or two — of stimulus checks could be on the way.
- Newsom: “How we framed that historic surplus last year, similarly, we will frame our approach this year.”
Newsom and state lawmakers agreed on a record-breaking $262.6 billion spending plan for the fiscal year that began July 1, which included $12 billion in stimulus payments and unprecedented investments in education, homelessness and the environment. On Wednesday, Newsom unveiled the first 18 projects that will receive funding from the $6 billion broadband package.
Much of the extra revenue came from one-time funding sources, which helps explain why many California schools are still facing yawning budget deficits. However, the Legislative Analyst’s Office predicts that California can afford to increase its annual expenses by $3 billion to $8 billion through the 2025-26 fiscal year — a prospect that didn’t appear to sit well with Republicans.
- Assembly Republican Leader Marie Waldron: “There’s something wrong when the state is flush with extra cash — $750 for every man, woman and child — while ordinary people have to choose between putting food on the table and filling their gas tank.”
According to the Legislative Analyst’s Office, there are several main reasons why California is swimming in money even though a whopping 26% of residents are functionally unemployed and its poverty rate is the highest in the nation when the cost of living is taken into account. They include:
- Massive capital gains for the state’s wealthiest residents amid the pandemic.
- Record consumer spending as residents use state and federal stimulus checks. California businesses reported a record high of $217 billion in taxable sales during the second quarter of 2021, according to figures released Tuesday by the state Department of Tax and Fee Administration.
Asked about skyrocketing gas prices on Wednesday, Newsom said Californians have to “disenthrall” themselves from “being victims of petro politics,” adding, “We have to accelerate our transition — once and for all — away from fossil fuels.”
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The coronavirus bottom line: As of Tuesday, California had 4,748,429 confirmed cases (+0.1% from previous day) and 72,718 deaths (+0.2% from previous day), according to state data. CalMatters is also tracking coronavirus hospitalizations by county.
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Other stories you should know
1. UC lecturers secure win as Kaiser strike looms
A strike that would have cancelled classes for as many as one-third of University of California undergraduates was called off Wednesday morning around 4 a.m., when UC management and the union representing its 6,500 lecturers reached a tentative agreement on a new contract. The deal — which ends a labor impasse that stretched on for nearly three years — promises union members salary increases of about 30% over five years and increased job stability, CalMatters’ Mikhail Zinshteyn reports.
- Mia McIver, president of the lecturers’ union: “What changed is that we were really going to go on strike. They understood how angry our members were.”
It’s the latest win California workers have notched during “Strikesgiving,” with Hollywood crew members and Kaiser health care unions recently securing more favorable contracts hours before they were set to hit the picket line. But the strikes aren’t over: This morning, more than 40,000 Northern California Kaiser employees plan to walk off the job to support a hospital engineers union that’s been on strike since Sept. 18. According to SEIU-United Healthcare Workers West, it will be the largest sympathy strike in the country. Another 24,000 Kaiser health care workers are set to hit the picket line Friday.
2. Which incumbents are at risk in 2022?
Today, the independent commission charged with redrawing California’s legislative and congressional districts every 10 years is set to hear public comment on its draft Assembly maps — a process it will repeat Friday for its proposed state Senate maps. When drawing new districts, the commission isn’t supposed to consider how incumbents might be affected — in fact, it isn’t even supposed to know where elected officials live. But California politicians are well aware of what new district boundaries could mean for their careers. And, with a Tuesday study finding that 20 members of Congress, 29 state assemblymembers and 14 state senators have been drawn into districts already occupied by another incumbent, the stakes for the June 2022 primary election are high, CalMatters’ Sameea Kamal reports.
- Redistricting expert Paul Mitchell: “It does create kind of a frenetic, potentially very expensive, potentially very nasty … primary.”
To make matters even more confusing, only half of the 40-member state Senate is up for re-election in 2022. That means the new maps could result in some Californians having two senators — or none at all — living in their districts between 2022 and 2024. Sameea breaks down what it all means.
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CalMatters columnist Dan Walters: Why do California students take on immense debts for college educations that result in low-paying jobs?
The high stakes of California’s port backlog: If state leaders don’t take swift action to unclog the Los Angeles and Long Beach ports, companies may take years to transition their business back to the California market, argues Wendy Estrada of the National Latina Business Women Association.
Don’t restrict check-cashing outlets: Without these providers, consumers who can’t wait to access their check will resort to less regulated, costlier alternatives, writes Thomas Leonard of the California Financial Service Providers Association.
Other things worth your time
LAUSD to spend $5 million on prizes to persuade students to get COVID vaccine. // Los Angeles Times
Does LAUSD’s powerful school board contribute to leadership turnover? // EdSource
California Medical Board member calls out his colleagues. // Los Angeles Times
Sacramento children suffer from low rates of lead testing. // Sacramento Bee
California asks review of order tossing ban on private jails. // Associated Press
California Attorney General, DA Gascon colluding to overturn death sentences, prosecutor alleges. // Daily News
UC Davis quietly adds caste to its anti-discrimination policy. // San Francisco Chronicle
Oakland council selects developer to start exclusive negotiations on building out Coliseum site. // San Francisco Chronicle
San Diego wipes out parking requirements for many businesses. // San Diego Union-Tribune
Edison’s new rate plans create financial pinch for rooftop solar panel owners. // Orange County Register
North Coyote Valley to be preserved for open space, agriculture. // Mercury News
Hotter summer days mean more Sierra Nevada wildfires, study finds. // New York Times
Napa was on fire. A winery’s private crew was accused of wrongdoing. The case has exposed deep tensions in California. // San Francisco Chronicle
California towns fight for the right to water. // Capital & Main
California, Arizona and Nevada in talks on plan to save Colorado River water. // Los Angeles Times
After record low, monarch butterflies return to California. // San Diego Union-Tribune
See you tomorrow.
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