The cost of Gov. Newsom’s policy tour

We’re getting down to crunch time at the state Capitol — with a Friday deadline for bills to pass their first house and a June 15 deadline for lawmakers to pass a budget and still get paid.

Gov. Gavin Newsom will be a looming presence over both. The prospect of a veto is one factor that legislators must consider, and he is deeply involved in budget negotiations. 

So it’s worth taking a look back at the unusual State of the State tour in March that Newsom used to highlight his policy priorities for his second term. That four-day extravaganza got a lot of attention, but came at a price — at least $38,000 to be more specific.

As CalMatters’ Capitol reporter Sameea Kamal found out through public records requests, the tour cost at least five times more than traditional speech to the Legislature he gave at the start of his first term.

The money went towards flights, hotel and transportation for the governor and his staff, but the total cost is likely higher since the receipts provided by Newsom’s office did not include security costs. Many items in the documents Sameea received were also redacted because of privacy concerns.

Though Newsom is only constitutionally required to submit a State of the State letter to legislators (which he did after the tour), the events gave Newsom the opportunity to rally support for his policies on homelessness, prison reform and healthcare within impacted communities. His office told Sameea it was worth the price if it helped connect people to their government.

• Anthony York, Newsom spokesperson: “Not a lot of people pay attention to what’s happening in Sacramento on a daily basis. A 30-minute speech in Sacramento, it’s over…. It’s important for any politician — whether that’s the Legislature, the governor or the president — to be out among their constituents to be talking about what their government is doing.”

The extensive press coverage of the tour also helped further raise Newsom’s national profile just in time for his tour of GOP-led Southern states he kicked off a few weeks later.

Speaking of the bill deadline: Here are some of the noteworthy measures that passed their first chamber Tuesday:

• AB 853: Would require grocery or drug-retail companies to give the attorney general 180 days notice before finalizing a proposed merger.
• AB 881: Would bump jury duty pay from $15 to $100 a day for low- and moderate-income jurors. 
• AB 1347: Would promote the adoption of electronic receipts to reduce waste from paper receipts. Its approval was mocked by Assembly Republicans as “California’s most pressing issue.”
• AB 1359: Would protect healthcare workers who use as much as seven days of their accrued sick leave from being disciplined or fired.
• SB 227: Would establish a program to pay undocumented workers $300 per week in unemployment benefits, for as long as 20 weeks.
• SB 497: Would protect workers who report labor violations from being fired, bullied or harassed.

Youth journalism: CalMatters is ramping up its youth journalism initiative for high school students and educators. That includes an educator fellowship, with a workshop July 10-13 at CalMatters’ offices in Sacramento. Here’s an FAQ, and the application, with a June 12 priority deadline. Read more from our engagement team.

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1 Is State Farm pullout cause for alarm?

Since assuming office in 2019, state Insurance Commissioner Ricardo Lara has been issuing one-year moratoriums that prohibit insurance companies from canceling the home insurance of wildfire survivors. But that didn’t stop then-Assemblymember Marc Levine from accusing Lara of not doing enough to protect Californians living in wildfire areas from losing their homeowners coverage when Levine was vying for the position during the 2022 election.

Lara went on to win reelection, but even amid these moratoriums, insurance companies did not renew about 13% of “voluntary market homeowners and dwelling fire policies” in 2021. 

On Friday, State Farm General Insurance Co., which had 20% of the market in 2021, announced it would no longer provide new policies for homeowner insurance in California, citing rising construction costs and “rapidly growing catastrophe exposure.” (Current customers will still be insured.) 

As CalMatters’ housing reporter Ben Christopher and economy reporter Grace Gedye explain, State Farm’s decision follows a multiyear trend of insurers, including American International Group and Chubb, discontinuing their home insurance policies to some California customers because years of covering catastrophic wildfires in the state have been deemed unprofitable and unsustainable.

• Seren Taylor, vice president of Personal Insurance Federation of California: “State Farm sort of publicly said what they were doing, but I think for the last few years, we’ve all seen insurers restricting and pulling back their business in California.”

Winding down coverage also jeopardizes the California FAIR Plan, a state-run insurance plan that offers customers limited fire coverage when no private company will cover them. Because the program is funded by levies on private insurers, a severe fire season could bankrupt the plan, leaving private firms such as State Farm to pay the tab.

Michal Wara, a lawyer and climate scholar at Stanford Law School, suggests this may be one of the reasons why the company wanted to stop issuing new policies statewide in California, instead of just in fire-prone areas.

2 A potential tax on short-term rentals

To try to fund more affordable housing in California, Sen. Monique Limón, a Santa Barbara Democrat, has authored a bill that would impose a 15% tax on short-term rentals, including properties available on Airbnb and Vrbo. Short-term rentals are considered homes and rooms that are rented out for 30 days or fewer. 

Lawmakers are expected to vote on the bill as soon as today. If enacted, the tax would start in 2025 and bring in an estimated $150 million a year towards building or rehabilitating low-and middle-income housing, writes CalMatters’ political reporter Alexei Koseff.

Limón insists she is not villainizing short-term rentals, telling Alexei that she wants to invite them to help solve the state’s housing crisis. She is open to other solutions other than the tax.

• Limón: “One of the things that I get asked very often by my local cities and counties is: ‘Where is the money to build the housing?’ I see this bill really saying everyone has a role to play.”

For years, local governments have been pushing back against the proliferation of short-term rentals, arguing that they drive up rents and alter established neighborhoods. But industry groups dispute this claim, arguing that rentals don’t account for enough of the state’s housing to notably impact affordability.

Opponents of the bill also assert that it gives hotels an unfair advantage and that mom-and-pop vacation rental operators who depend on short-term rentals for additional income will be the ones to lose out.

• Airbnb, in an email to its hosts: “While the bill aims to boost housing affordability, it does so at the expense of regular Californians who are struggling to keep up with the rising costs of living.”

In other rental news: Imagine after months of searching for a place to live, you finally find a great apartment with a rent you can afford. But to move in, upfront costs include the first month’s rent, the security deposit — which can be two months’ rent for or even three months’ if the place is furnished — and any additional fees. 

For many in California, where the median rent for a two-bedroom apartment is $2,538, coming up with more than $7,000 makes finding affordable housing that much more difficult, reports Alejandra Reyes-Velarde of CalMatters’ California Divide team. 

Assemblymember Matt Haney, a San Francisco Democrat, hopes to change that with his bill to limit security deposits to only one month’s rent, regardless if it’s furnished or not.

• Haney: “People are being asked to pay the equivalent of the down payment of a home in many parts of the country just to move in. It’s really untenable.”

The California Apartment Association opposes the measure, arguing that deposits help landlords pay for repairs and can cover the cost of evictions, which cost $10,000 on average. Last week, the Assembly passed the bill. If signed into law, California would become the 12th state to limit security deposits. 

3 Upkeep cuts putting students at risk?

Though California’s community colleges will receive more than $9 billion in state funds this year, Gov. Newsom’s May version of the state budget proposes clawing back nearly $800 million that the colleges received last summer, to make up for the looming $31.5 billion budget shortfall.

The cuts would impact two major one-time grants, according to CalMatters’ community college reporter Adam Echelman. One was to help colleges recover from the pandemic and the other was to support maintenance and “green energy” projects. Colleges originally had years to spend the investments.

While some community colleges used the money so far to fix broken heaters, replace AC units and repair roofs, other initiatives take months to plan and years to finance — such as Riverside Community College District’s $5 million renewable energy project. If the college must return the money to the state, the project will stop.

Cuts to maintenance funds could also endanger students and staff. Students and professors at the City College of San Francisco resorted to hand-warmers because of broken heaters. 

And at Ohlone College last year, the Deaf Studies program told administrators that the fire alarm in their building provided no visual cues. Though the alarm was replaced, a vice president of the school, Christopher Dela Rosa, said that without the grants, the school wouldn’t have the funds to check if other buildings have the same problem. “I just need to prioritize which ones I can with the limited funds I have,” he said.

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How one Berkeley parking lot explains the housing crisis // The New York Times Magazine

State: Sacramento County must remove foster kids from cells // The Sacramento Bee

A California port city’s struggle with pollution and shootings // The Guardian

Dems vying to replace Barbara Lee promise tougher approach on crime // San Francisco Chronicle

Predawn picket lines help writers disrupt studio productions // The New York Times

How much do top Hollywood executives make? // Los Angeles Times

Bitwise Industries furloughs workers in financial emergency / The Fresno Bee

CA overtime law threatens use of grazing goats to prevent wildfires // AP News

Patients can face agonizing waits for hospital transfers // Los Angeles Times

Tech billionaire giving S.F. groups $2 million to fight retail issues // San Francisco Chronicle

Inside the movement for La Jolla to secede from San Diego // The San Diego Union-Tribune

Catholic church in CA grapples with over 3,000 lawsuits // The Washington Post

Charles Manson follower parole eligible, court says // San Francisco Chronicle