California cities to state: Pay up on homeless crisis

From CalMatters’ homelessness policy reporter Marisa Kendall:

California cities want more money to tackle homelessness. 

That was the main takeaway from a rally Wednesday where about 100 city officials made a big ask of Gov. Gavin Newsom’s administration and the Legislature: They want $3 billion a year in guaranteed homelessness funding from the state. 

That could be a tough sell this year, as the state is facing a $22.5 billion to $25 billion deficit that will require some belt-tightening. But gathered under the sun in the state Capitol Park, holding signs that read “Real progress starts local #InvestInCities,” the city representatives demanded that lawmakers prioritize homelessness in this year’s budget. 

It’s the latest sign of the homelessness crisis causing tension between local leaders and the state — recently Newsom briefly withheld $1 billion in funding from cities and counties because he said they weren’t doing enough.

• Erica Stewart, mayor of San Luis Obispo: “We believe every single person deserves housing. The cities alone are not going to be able to do this forever. We can’t do it. But we are your partners in action…We want the state Legislature and the governor to act and provide permanent, long-term, stable, on-going funding.”

Newsom poured unprecedented sums of money into homelessness during the pandemic, including $15 billion over the past two years. But critics complained that because most of that was in one-time grants, it’s been difficult for cities, counties and nonprofits to build the kind of multi-year programs that could actually make a dent in the crisis. Guaranteeing $3 billion a year for homelessness would be a shift in strategy by Sacramento. 

Though 84% of California cities have launched programs to address homelessness, most are struggling to fund them, according to a survey of 189 cities released by the League of California Cities, which held a joint conference on homelessness Wednesday with the California State Association of Counties. Of the cities surveyed, 87% said they have concerns about financing their homelessness programs long-term, and 79% said they have used their general fund to address the crisis since fiscal year 2018-2019. 

• Carolyn Coleman, executive director and CEO of the League of California Cities: “The demand for housing and services are outpacing their efforts alone, straining capacity and draining resources for all the essential services that our cities provide.”

Speaking of homelessness: Marisa also reports on the increasingly tricky bind lawmakers find themselves in when it comes to clearing homeless encampments. Though Democrats recently quashed Republican-backed bills that would make it illegal for unhoused people to settle near certain areas statewide, more and more cities led by Democrats are passing local ordinances cracking down on illegal camping.

Frustrated voters concerned with health and safety want these encampments gone. But displacing unhoused communities is morally and logistically complicated. Advocates argue that the process is traumatizing to individuals, and liberal lawmakers don’t want to be perceived as criminalizing homelessness.

But with scarce affordable housing options available in California, there is no clear solution. As one UC Berkeley professor studying homelessness told Marisa: With nowhere to go, the people shuffled away from one area to the next often become “a problem for another neighborhood.”

CalMatters events: We’re hosting more public events this year, starting with a discussion next Tuesday in our downtown Sacramento offices that will focus on the debate over early dyslexia screening. Read more from our engagement team and check out our calendar and sign up today.

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1 Anti-tobacco groups quiet on tobacco ban

Where have all the anti-tobacco groups gone?

In February, Assemblymember Damon Connolly, a Democrat from San Rafael, introduced Assembly Bill 935 that would ban the sale of tobacco products including cigarettes, cigars and vaping liquid, to anyone born after Jan. 1, 2007. Though it would take five years for future 21-year-olds to be directly impacted by the law, the bill was ambitious in its efforts to completely prohibit an entire generation of Californians from buying tobacco products. 

But as CalMatters’ state Capitol reporter Alexei Koseff writes, Connolly’s proposal was shelved this week without receiving a hearing. And, surprisingly, some of the same anti-tobacco advocates that were vocal three years ago about banning flavored tobacco products have stayed particularly silent on this matter. 

Their reasons for not publicly supporting the bill vary. Of the small handful of organizations who responded to Alexei, one organization said it has shifted priorities, focusing instead on reducing harm on the internet for young people. Another cited “enforcement issues” on the current flavored tobacco ban. And an Assembly health committee analysis suggested that winding down tobacco sales statewide wasn’t urgent because youth smoking rates are only slightly higher than the national average.

While the ultimate goal for anti-tobacco groups may be a “tobacco-free future,” the feasibility of that happening soon is unlikely. Tobacco taxes fund several state programs, and a statewide ban might also set off big public backlash. 

For Connolly, however, this does not signify the end. He plans to bring up the proposal next year and continue gathering support from anti-tobacco organizations.

• Connolly, to CalMatters: “I don’t want to speak for them, but I think certainly there are shared goals around the ultimate objective.”

More tobacco news: On Wednesday, Attorney General Rob Bonta announced that JUUL will have to cough up $175.8 million to California for violating state laws, the biggest settlement the electronic cigarette maker has reached with a state.

The payment is part of a larger $462 million settlement that includes six other states. In November 2019, the Department of Justice, the Los Angeles County District Attorney’s Office and the County of Los Angeles sued JUUL for “allegedly violating multiple California laws and regulations, including those on privacy rights of minors, unfair competition, and false advertising,” according to Bonta’s office.

The money will go towards vaping prevention programs, enforcing California’s ban on flavored nicotine products and researching the health impacts of e-cigarettes.

2 Higher health care wage advances

From Jeanne Kuang of CalMatters’ California Divide team:

Wednesday, legislators advanced a union-backed proposal to require a $25 minimum wage for a wide range of health care workers, including hospital janitorial and food service staff — many of whom donned union capes at the Capitol to testify in support.

The bill, authored by Los Angeles Democratic Sen. Maria Elena Durazo, comes after the state’s largest health care worker union put similar measures on two southern California city ballots last fall. Voters approved the wage hike in Inglewood and rejected it in Duarte. California’s minimum wage is $15.50 this year, though it’s higher in several cities and counties including Los Angeles County, and voters in 2024 will get to decide whether to raise the statewide minimum to $18.

The proposal is sure to be one of the session’s more controversial labor bills, with both sides pointing to the health care workforce shortage. SEIU California and the California Labor Federation say health care workers remain underpaid despite being deemed essential during the pandemic. Provider organizations are opposed, arguing hospitals and clinics cannot afford the increase. The California Chamber of Commerce lists the bill as a “job killer.”

The UC Berkeley Labor Center estimates 469,000 workers would get a raise under the bill, including those who make slightly more than $25 who would likely get their own corresponding pay bump. The average increase would be nearly $5.75 an hour, the center found, and operating costs would go up by about 3% — though researchers said there is “large variation across types of facilities.”

Sen. John Laird, a Salinas Democrat, said he was concerned struggling rural hospitals could not afford the hike, pointing to the closure of the Madera hospital and the precarious financial status of several others. He noted hospitals in wealthy coastal communities in his district already pay at least $25 an hour. 

• Laird: “I just think certain parts of the system might have a real problem.”

Meanwhile, a committee hearing on a bill to aid struggling rural hospitals was put off Wednesday. But as CalMatters’ health reporter Ana B. Ibarra explains, the state of hospital finances is still front and center.

One in five of California’s hospitals are in an “unsustainable financial position” and deemed at risk of closing, according to a new report commissioned by the California Hospital Association

Hospitals considered at-risk are losing more money than they are making, have decreasing cash balances and increasing debt, said the report, which sampled 114 hospitals. Among the findings: Hospitals spent about $23.4 billion more providing care in 2022 than in 2019, in part due to the increased cost of labor, drug and supplies. 

Hospitals have been citing the closure of Madera Community Hospital, a 106-bed facility that shut its doors at the beginning of this year, as a worst-case-scenario example in their requests for aid to Newsom and legislators. Despite the state’s projected budget shortfall, hospitals want $1.5 billion in immediate relief from the state.  They also want increased pay for the care they provide to Medi-Cal and Medicare patients. 

Some struggling hospitals are looking for buyers or seeking new leadership teams that could help dig them out of their financial holes. For example, Imperial County’s El Centro Regional Medical Center, which recently closed its maternity ward, announced that it has hired a new CEO, who will start Monday.

3 Online-only CA college bounces back

Online-only colleges may raise eyebrows from skeptics who believe that the traditional, in-person model of higher education is the only way to go. But for many adult learners, such colleges are viable alternatives that fit the lifestyle of their students.

As CalMatters’ higher education reporter Mikhail Zinshteyn explains, Calbright College, a once- troubled online-only college that was on the brink of closure after a scathing 2021 state audit, is now on the upswing:

• Enrollment is increasing by about 8% monthly, and now stands at 2,300 students, up from 1,000 a year ago.
• Students are sticking around longer: Between late 2020 and late 2021, 7% to about 40% of new students remained enrolled or completed their studies nine months to a year later.
• 70% of students who started in the first two calendar quarters of 2022 finished their program.

That’s not to say the college doesn’t have room for improvement. Fewer than 10% of students complete their studies within a year; some students wish that the college held them more accountable for finishing coursework; and the college still has a ways to go from fully adopting all the auditor recommendations.

Nonetheless, because online schools such as Calbright offer students lower financial risk, flexible hours and stackable credentials, they are especially valuable to students who work full-time, are unable to afford a four-year tuition or have family care obligations.

In more higher ed news: CalMatters’ new community college reporter Adam Echelman details a little-known federal program that thousands of eligible Californians do not utilize every year. Known as Ability to Benefit, the financial aid program allows students who don’t have a high school degree to access aid money if they are enrolled in both GED and college classes at the same time.

About 340,000 Californians who don’t have a high school diploma took some form of adult education in 2021, according to the California Community College Chancellor’s office. But as many as 90% of the same adults did not take advantage of this federal aid in the same year.

The reasons for the low participation rate are complicated, Adam explains: Poor federal oversight has led to the historical exploitation of the aid program by for-profit colleges. To rein in abuse, Congress restricted eligibility, leaving community officials confused about who exactly can access the benefit. But with student expenses averaging to about $12,000 a year (not to mention the cost of college tuition itself), California students can’t afford to be shut out of another source for financial aid.

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