The Morning Report
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California Democrats and affordable-housing advocates are in panic mode over House Republicans’ tax reform bill.
The current version would end separate bond and tax credit programs that helped fund nearly 20,000 affordable units for homeless people, seniors and low-income families statewide last year.
In California, the state has both 9 percent and 4 percent tax credits to allocate through the Low-Income Housing Tax Credit Program. A Voice of San Diego analysis found that the 4 percent credits have helped finance more than 20,000 units in San Diego County over the last two decades.
The program allows low-income housing projects to apply for tax credits and look for investors to buy them. Investors, usually banks, then bid for those credits, thus investing in the affordable housing developments and helping to finance them.
State Treasurer John Chiang, Assemblywoman Lorena Gonzalez Fletcher and many advocates fear the proposal ending the 4 percent tax credit would be a devastating blow to recently passed state measures meant to address California’s housing crisis.
Measures including a $4 billion state housing bond, a law meant to help house thousands of Californians with serious mental illnesses and San Diego Sen. Toni Atkins’ hard-fought legislation to bankroll housing with a new real estate document fee all count on the tax credit’s existence.
House Republicans’ tax proposal would dash those plans.
The California Housing Finance Agency projects the number of units produced by the state bond alone could be more than halved if the tax bill passes – from a projected 50,000 new affordable units to as few as 15,000.
And Chiang estimated Thursday that California could produce 300,000 fewer affordable housing units over the next decade than initially projected if the bill passes.
Gonzalez Fletcher acknowledged state lawmakers have far more work to do to address the state’s housing crisis but said the tax proposal could cripple efforts already in play.
“It’s devastating to think that all of that political heavy lifting could be for nothing and that we’d be back to square one on how do we inject necessary resources into this issue,” Gonzalez Fletcher said.
Countless homeless-serving nonprofits have also factored the tax credit into their plans for projects meant to house the homeless.
Father Joe’s Villages, San Diego’s largest homeless serving nonprofit, has said its $531 million plan to produce 2,000 new units counts on the tax credit.
“This isn’t just some complicated tax idea that they don’t understand works,” Chiang said after a press conference in San Diego Thursday. “No, this is real. This has local community implications, real-life implications.”
– Lisa Halverstadt
San Diego County Spending Big on Lobbying in Sacramento
San Diego County’s been spending big in Sacramento lately. According to data compiled by the Sacramento Bee, the county had the eighth-most expensive lobbying operation in the Capitol. As the legislative session wound down and bills were on the edge of passing or failing, the county spent $625,000 on lobbying from July through the end of September.
Most of that – $540,000 – was paid to interest groups, like the $221,000 the county paid to be represented by the California State Association of Counties.
Alameda County, which is about half the size of San Diego, reported spending even more on lobbying, but San Diego slightly outspent the city and county of Los Angeles, which report separately, according to state filings.
County spokesman Michael Workman said he suspects San Diego appears as high as it does on the list because membership fees came due during the most recent lobbying disclosure period.
The rest of the county’s lobbying money went to its two outside lobbying firms, Nielsen Merksamer and JGC Government Relations. On Tuesday, the County Board of Supervisors is voting on whether to extend the two firms’ contracts for up to six years. The combined fees paid to the two firms, about $340,000 a year, will remain the same for two years and then increase modestly.
Over the summer and into the fall, the county’s all-Republican Board of Supervisors ended up in fights with Democratic lawmakers from San Diego. The board opposed AB 901, which could change how supervisors are elected; AB 801, which changes how supervisors’ districts are drawn; and AB 805, which changes how the San Diego Association of Governments works. All three bills were eventually signed into law.
The county, among many others, also successfully opposed union-backed AB 1250, which would have made it harder for counties to outsource government jobs (and thus make it easier for unions to keep or add members).
In terms of wins, the county supported several bills-turned-laws to try to improve how social services are delivered, and also backed a bill that gives the county more money to study and clean up the Tijuana River Valley.
– Ry Rivard
Chiang Calls for Short-Term Fixes for Burgeoning Pot Industry
Californians voted to legalize marijuana last year, but the pot industry, expected to grow into a $7 billion titan by 2020, still lacks access to banks.
Since the federal government still considers marijuana an illegal substance, banks and financial institutions won’t do business with the pot industry. Without access to banks, pot businesses struggle with basic functions like filing taxes, paying vendors, and granting benefits to employees. Dispensaries and distributors have been forced to deal only in cash, making them a target for violent crimes.
A report released Tuesday by state Treasurer John Chiang and his Cannabis Banking Working Group recommends ways to fill marijuana’s banking void.
The report is a product of the group’s yearlong tour that made a stop in San Diego in July.
It says the state should privately contract with armored cars to transport tax money from marijuana businesses to counting facilities, and then into the state account, to deal with risks from cash-only transactions. The pot industry is expected to generate $1 billion in tax revenue each year.
It also says the state should consider creating a public bank to serve the marijuana industry. Chiang said a study of that issue will begin shortly.
The federal government is not likely to change its stance on marijuana anytime soon, but the report calls for the formation of a multistate organization to lobby Congress on behalf of the pot industry. Alaska, Maine, Oregon, Pennsylvania and Washington already intend to join the group.
Dallin Young, executive director of the Association of Cannabis Professionals, which is exploring several 2018 ballot measures to facilitate access to marijuana throughout San Diego County, said Chiang’s report is encouraging, but industry veterans are used to managing expectations for the federal government.
“When it comes to expectations, I think that during this administration, I don’t say we’re hoping for much,” Young said. “I know that we hear (Attorney General) Jeff Sessions ramping up the rhetoric, but I don’t think we can base our decisions off of fear. I think we need to wait and see what goes on. And we are just going to keep pushing for what we can do.”
Indeed, Chiang said at a press conference unveiling the recommendations that the solutions offered in the report are only temporary.
“A definitive, bullet-proof solution will remain elusive until the federal government removes cannabis from its official list of banned drugs,” he said. “But that is not an excuse for inaction.”
– Jonah Valdez
Gonzalez Fletcher Prepping Work Scheduling Bill
Assemblywoman Lorena Gonzalez Fletcher announced this week that she plans to write a bill requiring employers to give more notice to part-time employees about their schedules.
“I’ve been a single breadwinner mom who has had to juggle the unpredictability of family responsibilities with my duties at work, but I have also been fortunate enough to have a predictable work schedule and child care to assist my family,” Gonzalez Fletcher said in a statement. “I know many working moms who are not so lucky, which is why it’s time to provide workers with a fair head’s up on when they’re needed at work.”
In 2014, the New York Times featured a young San Diego mom in a story describing how erratic scheduling can wreak havoc on low-wage workers’ lives. A sampling:
But Ms. Navarro’s fluctuating hours, combined with her limited resources, had also turned their lives into a chronic crisis over the clock. She rarely learned her schedule more than three days before the start of a workweek, plunging her into urgent logistical puzzles over who would watch the boy. Months after starting the job she moved out of her aunt’s home, in part because of mounting friction over the erratic schedule, which the aunt felt was also holding her family captive. Ms. Navarro’s degree was on indefinite pause because her shifting hours left her unable to commit to classes. She needed to work all she could, sometimes counting on dimes from the tip jar to make the bus fare home. If she dared ask for more stable hours, she feared, she would get fewer work hours over all.
Starbucks changed its scheduling policies after the story was published, but plenty of other employers provide schedules to part-time workers only on short notice.
Gonzalez Fletcher “will propose requiring employers to provide additional advance notice so workers can better plan their responsibilities of family, other jobs and school,” according to a release from her office.
– Sara Libby
More Details on Sexual Harassment in the Capitol Come to Light
News about sexual harassment in the Capitol keeps pouring out. The latest this week:
The Sacramento Bee examined sexual harassment cases involving state agencies and public universities, and found “that untold millions have been paid out in recent years to settle claims – without any centralized oversight of these settlements, or public accountability for the outcomes.”
The Bee also broke a story revealing that Sen. Tony Mendoza invited a legislative fellow seeking a job to his home repeatedly, and fired three top staffers who knew.
Meanwhile, the Los Angeles Times reports that the Legislature has investigated more than 31 complaints of sexual harassment since 2006.
– Sara Libby
Golden State News
- “California is the undeniable star” of the subnational governments at the U.N. climate meetings in Germany this week. (Scientific American)
- California’s new school accountability system is kind of a disaster. (L.A. Times)
- Sens. Dianne Feinstein and Kamala Harris introduced a new bill this week to ban assault weapons. (KRON)
- Has California really built far more prisons than colleges over the last four decades? (Politifact)
- A rising class of Latino elites is achieving the California Dream. (U.S. News & World Report)