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Last updateTue, 18 Sep 2018 1pm

Millions of California renters are about to receive some of the nation’s strongest protections against rent hikes and evictions—and the primary advocacy group for California landlords is OK with that.

State legislators this week passed AB 1482, a bill from Assemblyman David Chiu, a Democrat from San Francisco, which limits annual rent increases to 5 percent plus the rate of inflation (typically 2-3 percent). Modeled after a first-in-the-nation Oregon measure adopted earlier this year, the bill also requires landlords to provide a “just cause” for evicting tenants and, in some circumstances, pay for tenants to relocate.

“We do not have time for those suffering in our streets,” Chiu said after the bill’s final passage. “We do not have time for those (who are) one rent increase away from eviction and homelessness.”

Gov. Gavin Newsom has lobbied fiercely for the bill in recent weeks, arguing that the measure is necessary to combat the state’s twin gentrification and homelessness epidemics. Half of all California renters—more than 3 million households—spend more than 30 percent of their income on rent, meeting the federal government’s definition of “rent-burdened.”

“These anti-gouging and eviction protections will help families afford to keep a roof over their heads, and they will provide California with important new tools to combat our state’s broader housing and affordability crisis,” Newsom said in a statement. The bill now awaits his signature.

Here are five takeaways from the most ambitious renter-protection bill the state has passed in recent memory.

The new measure would curb extreme rent hikes, and it’s stronger than what Oregon passed. But it’s not conventional rent control.

Oregon made national headlines when it became the first state in the country to pass a statewide measure capping how much landlords could increase rents. Often characterized as rent control by the national press, the Oregon law limited yearly rent increases to 7 percent plus inflation.

Although Chiu’s bill imposes a tighter cap—5 percent plus inflation—the assemblyman has been very careful to frame the measure as “anti-rent-gouging,” as opposed to typical rent control. Fifteen California cities currently impose some form of traditional rent control on apartments, with the legally allowable rent increase hovering between 1 and 4 percent. Chiu’s bill also does nothing to prevent landlords from raising rents when a tenant leaves, a provision called “vacancy control” that is often associated with how rent control worked decades ago in places like Santa Monica and Berkeley.

“Words matter. This is not rent control. This is an anti-rent-gouging bill,” said Assemblyman Rob Bonta, Democrat from Alameda, a co-author of the bill.

So how many renters will the new California law actually help?

While landlords have access to proprietary data that can better answer that question, publicly available data can’t. A UC Berkeley study of 10 gentrifying California communities found that over a five-year period, the average yearly rent increase exceeded 10 percent about once every three years. An analysis by the real estate data company Zillow, working with admittedly incomplete data, found that about 7 percent of California renters would have benefited from Chiu’s cap in 2018. While a minority of California renters will enjoy real savings from the new law, those who do benefit are very likely to be low-income and thus most vulnerable to rent hikes.

Mike Wilkerson, an economist with ECONorthwest, which analyzed the Oregon plan with proprietary landlord data, said the majority of major rent increases in Oregon are occurring in lower-cost units. He suspects the same is true of California.

“Really, what this is doing is protecting lower-rent units, where we’re consistently seeing rents going up,” Wilkerson said shortly after the California bill was introduced. “And the benefit is preserving more units to be naturally affordable.”

Some opponents of the California legislation argue that the measure could backfire: Landlords, they say, may treat the rent cap not so much as a limit on what they can charge but as a benchmark for what they should charge—especially if they fear future unanticipated costs or having to take a tenant to eviction court.

“The large property owners can build this cost into their business because they have a lawyer on payroll,” said Sid Lakireddy, president of the California Rental Housing Association, an advocacy group for smaller landlords. “That’s not the case for mom and pop (landlords) throughout the state.”

Although the rent cap has received most of the attention, the eviction protections are arguably more controversial. And a “third rail” of California housing policy gets very lightly touched.

In most parts of California, landlords can evict a tenant without stating an explicit reason why they don’t want that renter in the property anymore.

When Gov. Gavin Newsom said in August he wanted to strengthen the rent-cap bill, he mostly meant he wanted to see “just-cause” eviction protections included. Assuming Newsom signs the bill, California landlords will have to list one of several specific reasons why they want a tenant out, such as dealing drugs from an apartment or failure to pay rent on time. Landlords who want to convert a unit into a condo or move a family member in will have to fork over one month’s rent to the displaced tenant for relocation assistance.

Marcos Segura, an eviction defense lawyer with the nonprofit Central California Legal Services, said a relatively small minority of his clients in the Central Valley are evicted without cause. Most of the time, landlords accuse them of not paying rent or otherwise breaking the lease.

But he says “just cause” protections could prove beneficial in preventing landlord retaliation. When landlords do evict tenants without cause, he says, it’s often because tenants have been complaining about shabby living conditions.

“If you take that option away from landlords, where they can serve no-cause eviction notices, in those cases, it would make all the difference in the world,” Segura said.

To compromise with landlords and developers, Chiu exempted an increasingly popular swath of California rental housing from his rent cap: single-family homes. While single-family homes owned by investment firms would be subject to the new measure, those owned by “mom and pop” landlords—the vast majority of the single-family-home rental market—would be exempted.

Even with that carve-out, Chiu’s bill represents the largest expansion of renter protections in recent California history, applying to 8 million renters, according to estimates from the lawmaker’s office.

Many of the renters live in cities that already have local controls but aren’t eligible for it. A state law passed in 1995, colloquially known as “Costa-Hawkins,” bans cities from expanding rent control to units built after 1995 and in some cities limits control to units built well before then. In Los Angeles, for example, rent control can apply only to units built before 1978.

Chiu’s bill would apply to all eligible California rental units built at least 15 years ago, meaning units built as recently as 2005 would be subject to rent caps.

That would be a major shift in California housing policy. Costa-Hawkins has been considered a “third rail” for the California Legislature for decades. While AB 1482 doesn’t actually touch the language of the 1995 law—cities would still be banned from expanding tighter rent limits on newer properties—millions of new housing units would be subject to a legal limit on rent increases.

Developers say the measure shouldn’t impede new construction, and they don’t oppose it. But no signature housing-production legislation will accompany the rent cap.

For those concerned with California’s million-unit housing shortage, the most compelling argument against a rent cap was that developers kept saying it could impede the construction of new housing.

While California apartment builders generally forecast annual rent increases of 2 to 3 percent when lining up financing for their projects, the flexibility to raise rents to what the market can bear helps persuade investors to plow money into the often uncertain and time-consuming process of building new housing.

But even before Gov. Newsom’s public comments, the California Building Industry Association—the premier lobbying group for California developers—announced it would not oppose the bill after it exempted new construction from the rent cap for 15 years.

“The new construction exemption is key, because it’s hard to get investors to invest in multifamily units on a 10-year window; it just doesn’t pencil out,” said Dan Dunmoyer, head of the group. “Fifteen years is a balance of what is doable for attracting capital. Anything less than that just makes it harder to bring investors to California.”

The organization’s withdrawal of opposition was also notable, because it has had mixed success in pushing through legislation it says would ease regulatory burdens and allow for more housing. Many Capitol insiders thought packaging a pro-development bill with a pro-tenant bill was a logical way to ensure that both could become law.

In Oregon, a bill that allowed developers to build fourplexes in areas zoned exclusively for single-family homes was passed shortly after the rent-cap bill. A similar developer-backed effort in California, SB 50, fizzled this year.

When making public comments about strengthening the rent cap bill, Newsom also publicly embraced SB 330, a bill from Sen. Nancy Skinner, a Democrat from Berkeley, that would limit many of the tools developers say cities use to stymie new housing.

Dunmoyer says Skinner’s proposal is a step in the right direction. But he admits it wasn’t the big boost to housing production that developers had hoped for, considering Newsom’s audacious goal of 3.5 million new housing units by 2025.

“I’m not surprised (the rent cap bill passed) because I’m a political analyst who looks at the dynamics—it’s easier to regulate than reform,” Dunmoyer said.

This is a big win for Newsom, who angered a key interest group to make it happen.

Gov. Gavin Newsom kind of needed this.

Shortly after a state ballot initiative that would have allowed cities to expand rent control failed overwhelmingly last November, Newsom (who very quietly opposed it) said he wanted to broker a deal between tenant groups and landlords. He reiterated his desire in February in his inaugural State of the State speech, calling on lawmakers to send him a package of renter protections he could sign into law this year.

Newsom’s late efforts to strengthen the bill by adding eviction restrictions and tightening the rent cap flipped opposition among key interest groups. While he was able to secure a compromise from the state’s biggest landlord lobby, he angered the powerful California Association of Realtors, who thought the governor was breaking a deal they had struck on a softer version of the rent cap.

The Realtors are a major source of fundraising for California Democrats, contributing nearly $1.38 million in campaign funds to sitting Democratic lawmakers and $2.5 million to the state Democratic Party since 2017. Since the stronger bill was introduced, Realtors have flooded Democratic lawmakers with phone calls and emails.

How Newsom’s intervention will affect future relations between the Realtors and state Democratic leaders remains to be seen.

The Realtors have a reputation for holding a grudge, no matter the party involved. After Rep. Mimi Walters, a Republican from Irvine, voted for a Trump tax-reform plan the Realtors opposed, the state and national realtor advocacy groups spent $3 million supporting her 2018 Democratic opponent, Katie Porter. Porter won.

The big landlord lobby is OK with this. Which could hurt the prospects for rent control at the ballot box in 2020.

The California Apartment Association and its allies spent more than $70 million against a statewide rent-control initiative in 2018, defeating it by nearly 20 points. That victory gave landlords a major rhetorical advantage in pushing back against Chiu’s bill: Californians had already been given an opportunity to expand rent control and voted it down.

So why cave now, less than a year removed from that decisive victory?

Progressive firebrand Michael Weinstein, president of the Los Angeles-based AIDS Healthcare Foundation, is currently collecting signatures for yet another statewide rent-control initiative for the November 2020 ballot. Weinstein maintains Chiu didn’t go far enough to protect tenants. However, landlords can now say lawmakers have already moved to curb excessive rent increases and egregious eviction practices without endangering new development.

“We will argue the state has already spoken on this topic; we will argue this is a balance; we will argue everyone came to the table and found some common ground finally for a temporary solution,” said Debra Carlton, lobbyist for the California Apartment Association.

Landlords may have also gained assurances from key Democratic leaders that they may oppose, or simply mute their support for, rent control in 2020. Asked by the Los Angeles Times whether the California Apartment Association had requested that Gov. Gavin Newsom oppose Weinstein’s potential initiative, Carlton gave no comment.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics. 

Published in Politics

Doctors, real estate agents and hairdressers can keep their independent contractor status—but not truckers, commercial janitors, nail-salon workers, physical therapists and, significantly, gig economy workers, who will gain the rights and benefits of employees in California under sweeping workplace legislation passed this week.

Gov. Gavin Newsom has committed to signing the bill, which cleared the Assembly 56-15 in a challenge both to the longstanding trend toward outsourcing labor and to the business model of companies such as Uber, Lyft and DoorDash, who have threatened a $90 million fight at the ballot box.

Once signed, AB 5 would upend longstanding employment practices that have seeped into the Democratic presidential debate about how workers should be treated, particularly in today’s gig economy.

“With one clear test across our state labor laws, we will raise the standards for millions of workers and ensure they gain access to critical rights and benefits,” said Sen. Maria Elena Durazo, who presented the bill in the Senate on Tuesday night. “We can make California the global leader in protections for gig workers, janitors, construction workers and so many working people who can’t even pay their rent.”

Lyft spokesman Adrian Durbin said lawmakers missed an opportunity to find a flexible solution for rideshare drivers, and Uber announced it was ready to pour millions more into the ballot fight. “We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need,” Durbin said.

From the beginning, the bill’s author, Assemblywoman Lorena Gonzalez, a labor organizer and a Democrat from San Diego, made it clear her goal was to improve wages and workplace standards, and expand the right to collective bargaining at a time of growing income inequality.

She acknowledged more work remains but insisted the legislation is needed to establish a state standard after the California Supreme Court, in a landmark 2018 decision, created a strict test for certifying independent contractors, with the highest hurdle being that the work performed must be outside of the core of the company’s business. It’s commonly referred to as the Dynamex decision.

In advance of the vote, she shared a picture of a sentence plastered to the top of a wall in her office: “The Most Amount of Good for the Most Amount of People.”

California’s pushback against the gig economy intensifies pressure on Silicon Valley flagships such as Lyft and Uber, which were already trading below their IPO share prices amid investor concerns about the difficulty they’ve had turning a profit, despite many millions of users. Uber cut 400 people from its marketing team in July, reported a quarterly loss of $5.2 billion in August and sent layoff notices to another 400-plus workers this week.

On Wednesday, Uber chief legal officer Tony West said in a press call that the company plans to fight the tougher employment test once AB 5 takes effect next year. “We still may pass the test,” he said. “We believe we can pass the harder test.”

But concerns around basic worker protections also have become pressing in California, where one worker in three earns less than $15 an hour; also, the 18.2 percent poverty rate, when the cost of living is taken into account, is rivaled only by that of Washington, D.C. As lawmakers were debating AB 5, in fact, a commission on the future of work, appointed by Newsom, was convening not far away in Sacramento to address such issues as the proliferation of low-wage jobs, automation, artificial intelligence and the gig economy.

Aside from the philosophical questions around AB 5, the state estimates it loses about $7 billion a year in payroll taxes due to worker misclassification that could be supporting schools, roads and other public services. Supporters of the bill argue that by avoiding unemployment insurance taxes and workers’ compensation premiums, businesses shift the burden to the state—and its taxpayers—when workers get laid off, get sick or get injured on the job.

Opponents warned the bill will invite trial lawyers to file frivolous lawsuits against thousands of California businesses and called the bill a blatant power grab by big labor.

“This bill is the union caucus’ main event of the year,” said Republican Sen. Jeff Stone, who held up an exemption request form, obtained by CalMatters, that labor groups had been presenting to industry advocates seeking a carve-out.

Industries as varied as trucking and health care also pushed back, arguing that the legislation would rewrite the rules for independent workers whose status has worked for them for decades.

“AB 5 does not take into account the more than 70,000 California truckers who have built their business around the independent owner-operator model, invested hundreds of thousands of dollars in their trucks and have made the decision to run their own businesses,” said Shawn Yadon, CEO of the California Trucking Association, before the bill passed.

Hospitals, too, are worried the bill will not only cause confusion, but may have the unintended consequence of delaying patient services. Gail Blanchard-Saiger, vice president of labor and employment at the California Hospital Association, said although doctors, psychologists and podiatrists are exempt from AB 5, and hospitals employ more than 90 percent of their workforce, many medical professionals such as physical therapists and certified registered nurse anesthetists are contracted at small and rural hospitals where volume is low.

“The impact on the hospital for these health professionals is probably a delay in services, and in particular rural communities, maybe a reduction in services,” said Blanchard-Saiger.

Among the other health professionals not exempt under AB 5: occupational therapist, speech therapist, optometrist, nurse practitioner, physician assistant, radiation therapist, licensed professional clinical counselor, marriage and family therapist, licensed clinical social workers, respiratory therapists and audiology.

In the final weeks of the legislative session, gig companies unsuccessfully campaigned heavily for a new, first-in-the-nation framework that would allow their workers to remain independent while offering a wage floor and some kind of bargaining tool. And on Tuesday, Newsom told The Wall Street Journal that he is still talking to Lyft and Uber, “and regardless of what happens with AB 5, I am committed, at least, to continuing those negotiations.”

The San Francisco Chronicle reported potential legislation calling for a new category of workers—to be known as “network drivers”—to cover rideshare and delivery service drivers, guaranteeing at least 1.27 times minimum wage, reimbursement of 30 cents a mile and contributing 4 percent to a Drivers Benefits Fund to purchase workers compensation insurance and other benefits.

Uber and Lyft say the codification of the Dynamex decision—that established a three-part test for certifying contractors—will force them to fundamentally change their hiring practices. It likely means the rideshare industry will take on fewer drivers and assign shifts, giving drivers less flexibility.

Labor representatives called it a scare tactic and said nothing prevents companies from maintaining flexibility for workers.

In shifting to employee status, companies would have to offer basic worker protections such as guaranteed minimum wage, overtime pay, contributions to Social Security and Medicare, unemployment insurance and disability insurance, as well as workers’ compensation, sick leave and family leave. Workers could also get reimbursed for mileage and maintenance of their vehicles, which doesn’t happen now.

The bill triggered several rounds of protest at the Capitol with Uber and Lyft drivers circling downtown Sacramento one day, followed by truckers honking their heavy-duty trucks the next day.

Under the final version of the bill, doctors, dentists, lawyers, architects, engineers, accountants, insurance agents, real estate agents, hair stylists and barbers received exemptions. Travel agents, graphics designers and grant writers will continue to offer their professional services without disruption. Licensed cosmetologists and barbers that set their own rates and schedules won’t change. Commercial fisherman are exempt until 2023. Tow-truck drivers affiliated with the American Automobile Association got a carveout. And freelance writers and photographers can continue, provided they don’t submit more than 35 submissions to an outlet a year.

On the other end, AB 5 captured the industries targeted by labor: gig workers; big-rig, Amazon and other truck drivers; and low-wage services ranging from janitors to home health aides. Unlicensed nail technicians, language interpreters, musicians, strippers and even rabbis could be impacted.

If approved, the bill will take effect in January and gives the state attorney general and large cities the right to sue companies that don’t comply. San Francisco City Attorney Dennis Herrera and Los Angeles City Attorney Mike Feuer both say they would ensure workers are treated fairly.

“The city attorney welcomes the new authority, and if enforcement action is needed under the new law, he will exercise it,” said Feuer’s spokesman, Rob Wilcox.

During debate before the Senate vote, Republicans sought to include hostile amendments aimed at expanding exemptions for newspapers, physical therapists, the timber industry and more. Each was tabled by Democrats who control both houses of the Legislature.

Gonzalez, however, did agree to exempt the newspaper industry from converting carriers for one year.

“While I personally disagree with this delay, I’m willing to allow the newspaper industry the additional year to comply if it means those delivery drivers and nearly a million other misclassified workers are provided the minimum wage, benefits and workplace rights of Assembly Bill 5,” she said.

A few industries did get the exemption they sought, such as builders and contractors. Peter Tateishi, CEO of the Associated General Contractors of California, said his organization ended up backing the bill after being allowed to contract with other contractors under a business-to-business carve-out.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

California will soon have a tougher new legal standard for the use of deadly force by police, under legislation Gov. Gavin Newsom signed yesterday, Aug, 19, that was inspired by last year’s fatal shooting of a young, unarmed man in Sacramento.

Newsom signed the legislation amid unusual fanfare, convening numerous legislators, family members of people who have died in police shootings and advocates including civil-rights leader Dolores Huerta in a courtyard at the Secretary of State’s building—used in the past for inaugurations and other formal events.

The governor contends that with Assembly Bill 392 in place, police will turn increasingly to de-escalation techniques, including verbal persuasion, weapons other than guns and other crisis-intervention methods.

“It is remarkable to get to this moment on a bill that is this controversial. But it means nothing unless we make this moment meaningful,” Newsom said after signing the legislation.

He made a point of praising law enforcement, saying the “overwhelming majority are extraordinary and honorable people.” He is planning to attend the funeral today of California Highway Patrol Officer Andre Moye Jr., who was killed by an ex-felon last week in Riverside.

Newsom also noted that the state’s current budget includes an additional $35 million for more police training, including training on ways to better handle severely mentally ill people. He said as many as a third of people shot to death by police are diagnosed with schizophrenia, bipolar disorder or some other serious illness.

“That is a tough assignment for law enforcement,” the governor said. “What’s happening on the streets of California is challenging, and law enforcement is increasingly being called to do social work.”

Kori McCoy, who attended the bill signing, was among various family members of people shot to death by police. His brother, Willie McCoy, was shot Feb. 9 while he slept at a Taco Bell in Vallejo. Six officers fired 55 rounds, hitting him more than 20 times.

“I don’t think this is going to totally change everything, but it definitely is a piece, and we’ll take it,” McCoy said about the legislation.

The law reflects a compromise between civil-rights advocates who want to limit when police can shoot, and law-enforcement groups who said earlier versions of the bill would have put officers in danger.

Under the new law, which takes effect Jan. 1, police may use deadly force only when “necessary in defense of human life.”

That’s a steeper standard than prosecutors apply now, which says officers can shoot when doing so is “reasonable.” One of the most significant changes will allow prosecutors to consider officers’ actions leading up to a shooting when deciding whether deadly force is justified.

“This will make a difference not only in California, but we know it will make a difference around the world,” said Assemblywoman Shirley Weber, the San Diego Democrat who carried the legislation.

The law doesn’t go as far as civil libertarians originally proposed, and courts will need to define what a “necessary” use of force is in future cases. The negotiations led a few early supporters, including the group Black Lives Matter, to drop their support, and major statewide law-enforcement organizations to drop their opposition. After a year of contentious testimony over how to reduce police shootings, the final version of the bill sailed through the Legislature with bipartisan support. 

Newsom’s staff helped broker the compromise, and his signature was not a surprise. In March—after Sacramento’s district attorney cleared the officers who killed Stephon Clark on March 18, 2018, in his grandparents’ backyard after mistaking the cell phone he was holding for a gun—Newsom signaled support for police reforms that “reinforce the sanctity of human life.” And in June, he said he would sign the bill as he praised advocates for “working across their differences” to forge a compromise.

“The bill is watered down; everybody knows that,” Stevante Clark, brother of Stephon Clark, told the Los Angeles Times. “But at least we are getting something done. At least we are having the conversation now.”

California police kill more than 100 people a year—at a rate higher than the national average and highest among states with populations of 8 million or more. Most of the people police kill are armed with a gun or a knife.

But when California police kill people who are not armed, the impact falls disproportionately on Latinos and African Americans. Together, those groups make up 66 percent of the unarmed people California police killed between 2016 and 2018, but about 46 percent of the state’s population.

For more on California’s attempt to reduce police shootings, please listen to CalMatters’ Force of Law podcast. It’s available here on Apple Podcasts or here on other podcasting platforms. To read the Independent’s ongoing coverage of police shootings, go hereCalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

California recently approved longer paid family leave, allowing workers whose blessed events fall on the right side of the new law to take up to eight weeks off with partial pay to bond with a new baby.

How’s that going to work? We asked the experts and read the fine print to help you figure it out.

I’m about to have or adopt a baby. Do I get the longer paid leave?

Probably not. The new eight-week plan kicks in on July 1, 2020. If you file a claim to take paid family leave before that date, you will likely be put on the current plan that allows for six weeks of paid leave, according to Loree Levy, deputy director of the Employment Development Department. She said the rules are still being finalized, but that’s how she expects it will work.

Remember: Paid family leave is on top of the six weeks of disability pay that women can get after childbirth.

Can I take six weeks of paid family leave now and get two more weeks after July 1, 2020?

Probably not, Levy said. Again, the rules aren’t final, but that’s her expectation based on how changes have been made in the past.

Does my baby have to be born after July 1, 2020, for me to take eight weeks of paid leave?

Probably not. Whether you get six or eight weeks of paid leave will likely depend on the “effective date” you put on the paperwork you file with the state—not when your baby is born or adopted. Same caveat as above: The rules are still in the works.

A glimmer of good news for families expecting a baby in the spring: If your baby is born before July 1, and you can wait to start taking paid leave, you may be able to get eight weeks of paid leave by putting a July 1, 2020, effective date on your claim.

I’m not pregnant, but my partner is. Do I get eight weeks of paid leave too?

Yes. Both parents can take up to eight weeks of paid family leave.

How much will I get paid?

About 60 to 70 percent of your normal wages, depending on your income. Gov. Gavin Newsom has put together a task force to study how to increase that to 90 percent for low-income workers, but it hasn’t yet come up with a plan.

Some employers may allow you to take vacation time or provide other benefits to get your paycheck up to 100 percent, said Sebastian Chilco, an employment attorney with the Littler law firm in San Francisco. Though you can file for paid family leave through the state without telling your employer, he recommends letting your company know so you can find out what other benefits are available.

“It’s a lot easier to deal with things in advance,” Chilco said.

How do I know if I qualify for paid family leave?

You need to have paid into the State Disability Insurance fund in the last five to 18 months. In general, this is a program for private-sector workers, though some government employees also participate. Check your pay stub for payments to “CASDI,” and click here for more details.  

Does my employer have to let me take the longer leave if I want it?

Only in certain circumstances. If you have worked at your company for at least 26 hours a week over the last year and your worksite has at least 20 employees, your employer has to hold your job for you while you take baby-bonding leave.

But smaller companies are not required to hold your job for you. That means about 25 percent of California workers are paying into the leave system but could be fired if they take it, said Jenna Gerry, an attorney at Legal Aid at Work.

Her group supported a bill this year that would have aligned the rules “so if you qualify for paid family leave, you also qualify for the right to take time off and return to your job after your leave,” Gerry said. It stalled, but advocates plan to try again next year.

I thought Gov. Newsom proposed six months of paid leave for new parents. Why are you talking about eight weeks?

It’s true that Newsom proposed six months of paid leave, saying in January that “there is no substitute for parents spending time with their children.”

But his idea is that each baby in California will be cared for by a parent or close family member for six months—not that each worker will get six months of paid leave. Newsom’s plan envisions two family members each taking two to four months off to care for a baby—so the new eight-week paid leave gets pretty close for two-parent families. If one of them is a birth mother who also takes six weeks of pregnancy disability pay, the family would get 22 weeks of paid time off, or about 5 1/2 months.

Newsom’s task force is studying how California could structure a paid leave plan that would allow six months of family care for every baby. It’s expected to make recommendations in November.

Who’s paying for all this?

You are, if you’re among the 95 percent of California workers who pay into the State Disability Insurance fund through a 1 percent tax on your paycheck. The state is lowering the amount of money held in the fund’s reserves to cover the cost of the additional two weeks of leave.

Paid leave isn’t just for parents, though—right?

Right. You can take six weeks of paid family leave to care for a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse or registered domestic partner. And that increases to eight weeks on July 1, 2020. But the job-protection rules are a little different than they are for people taking leave to bond with a baby.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Local Issues

President Donald Trump published controversial new rules earlier this week making it harder for legal immigrants to get green cards if they use—or are likely to use—Medicaid, food stamps and other social safety net programs.

California has reacted with anticipated outrage.

“This is a reckless policy that targets the health and well-being of immigrant families and communities of color,” Gov. Gavin Newsom said in a press release.

Added Attorney General Xavier Becerra: “We will not stand idly by while this administration targets programs that children and families across our state rely upon. We are ready to take legal action to protect the rights of all Californians.”

The expansion of the so-called “public charge” rule was long-anticipated—as was the response in California, home to a disproportionate number of the nation’s immigrants and headquarters of the anti-Trump resistance.

The Trump administration, meanwhile, has said the proposed new rules are intended to deny green cards to immigrants seeking U.S. benefits and to “promote the self-sufficiency of aliens within the United States.”

Here are six things to know about the latest immigration battle between the Trump administration and California.


What Would This Rule Actually Do?

Under the new regulation, legal immigrants into the United States could be denied permanent residency if immigration authorities deem them “likely at any time to” enroll in any number of public benefits for more than a year. The list of benefits includes food stamps, federal housing assistance and health insurance through Medicaid.

It’s an idea that the Trump administration has been kicking around since the very beginning of his presidency. Following multiple leaks to the press of versions of the rule, the Department of Homeland Security finally published a proposed draft last October. Earlier this week, the administration published the finalized rule, which will go into effect 60 days from Wednesday.

The new rule would also discourage immigration officers from granting visas to those making less than 250 percent of the federal poverty line, those receiving healthcare subsidies through the Affordable Care Act, and any applicant “likely to require extensive medical treatment or institutionalization.” The regulation also includes certain exceptions for immigrants serving the military, children, pregnant women and some students.

It’s one in a series of Trump administration initiatives that would curtail government benefits for low-income people and immigrants, including a proposal posted in late July that would cut food stamps to 3.1 million Americans.


Why the Concern?

Since 1882, the federal government has given immigration authorities broad authority to keep people out of the country if they’re deemed likely to become “public charges” of the state. Though the term “public charge” is never actually defined, since 1999, immigration officials have applied it only to people likely to be “primarily dependent on the government for subsistence” through cash welfare programs or publicly funded institutional care.

The new rule dramatically expands that definition to include “people who may have the occasion to one time use that type of benefit,” said Deep Gulasekaram, a professor of immigration and constitutional law at Santa Clara University.

“That is unprecedented,” he said. “And that is what truly makes this really a scary proposition for a lot of people.”

The new visa standards would—for now—only be used to approve or deny applications. But the Trump administration is also reportedly considering whether participation in these programs by otherwise legal immigrants could also be used as grounds for deportation.


Who in California Would Be Directly Affected?

Across the country, roughly 382,000 people applying for green cards would be reviewed to determine whether they are—or are likely to become—public charges under the new definition, according to the government. Given that nearly one in five people who received a green card between 2015 and 2017 lived in California, according to federal data, the rule will likely have an outsized impact on California green card applicants.

Advocates expect the impact to reach even further. Many mixed-status families are expected to unenroll from public benefits due to a fear that the public charge rule would impact their or family members’ chances of adjusting their status in the future.

According to the UCLA Center for Health Policy Research, as many as 765,000 people across the state may lose access to Medi-Cal and food stamps due to fear alone.

The UCLA researchers project that the rule could have a particularly strong collateral impact on low-income children in California, where one in two children are part of an immigrant family. Nearly seven in 10 Californians predicted to lose benefits would be children, according to the study.

The federal government offered up a much smaller estimate of the impact, predicting that fewer than 400,000 individuals across the country would forego applying or disenroll.


Has Talk of the New Rule Had a Chilling Effect Already?

Yes. As different versions of the rule have been leaked and then proposed over the past two years, California service providers and advocates have reported immigrant families opting out of public benefits in large numbers.

Elizabeth Ambriz, a CalFresh outreach worker for the Food Bank of Contra Costa and Solano, says this is the main reason that people have given for not applying for food stamps in the past eight months she’s been on the job.

“There are a lot of people who are working on becoming permanent residents, and their lawyers tell them, ‘Do not get CalFresh, because that will make you not be eligible to get your green card,’” Ambriz said in early August while tabling for CalFresh at a local health clinic.

Coupled with a decreasing unemployment rate, the looming new rule has been viewed by anti-poverty workers as a primary driver of a substantial decrease in enrollment in public benefits over the past two years.

One sign that immigrant families are already spooked in California is the drop in the number of households in which only children are eligible and enrolled in food stamps, usually because the parents are undocumented. These households declined by more than 40,000 in the state—including more than 85,000 children—between January 2018 and January 2019, according to an LAist analysis.

Meanwhile, a national poll by the Urban Institute of nearly 2,000 adults in immigrant families found that one in seven reported that someone in their family had declined a public benefit in 2018 because they didn’t want to risk a future green card. The effect was stronger among low-income families, Hispanic families and families with children.


Will California Be Suing?

Will the president will be tweeting? When the Trump administration announced a preliminary version of the rule late last year, Becerra fired off a 51-page letter, in which he called the rule “not supported by evidence, logic, or Congressional action,” “an arbitrary and capricious attack with no legal justification” and, in short, “unlawful.”

As a preview of the state’s legal argument, the letter suggests Becerra may once again argue that the Trump administration failed to follow the rules that govern how new regulations must be introduced. 

For anyone who has watched California take on the Trump administration again and again, it’s a familiar argument. The state has struck down or successfully delayed a number of new regulations by persuading a judge that the administration didn’t explain why a new rule was necessary, didn’t provide enough compelling evidence to support the justification, or simply didn’t give the public enough time to weigh in on the change—all in violation of the federal Administrative Procedure Act.

But that argument may be harder to make in this case, said Gulasekaram. 

“As a formal matter of changing the administrative rules, they complied with what is required,” he said, adding that courts give “a lot of deference” to agencies when deciding how to interpret a vaguely written law, particularly in immigration law.

Given the California Justice Department’s propensity for taking the Trump administration to court, state prosecutors could be typing up a complaint as you read this. Asked about a possible lawsuit, the press office for the Office of the Attorney General provided a short written response: “Stay tuned!”


Why Does This Remind Me of California in the 1990s?

According to reporting from Politico, Stephen Miller, one of President Trump’s most loyal and truculent policy advisers, has been the driving, hectoring force within the White House for this regulatory shift.

The Santa Monica-born 33-year-old was only 9 in 1994, when a majority of Californians passed Proposition 187, denying most public services to undocumented immigrants. The proposed constitutional amendment was later thrown out by the California Supreme Court. But Miller seems to be channeling the spirit of Prop 187 anyway, said Mike Madrid, a GOP consultant and frequent critic of his own party and President Trump.

Alongside more aggressive immigration crackdowns, the administration’s family separation policy and ceaselessly hostile immigration rhetoric, Madrid sees this latest regulation as yet another bid to “stoke the fire” and keep the party’s base energized for 2020.

“Will it work? It might for another two years,” said Madrid. “But if history is a guide, those two-year gains will lead to a generation of evisceration (for the Republican Party) at the national level.”

Despite winning the overwhelming support of California’s electorate, many experts say that Prop 187 turned an entire generation of Latino voters away from the California Republican Party. Many political commentators have drawn parallels to that moment in California history and the current political climate nationally. 

“The textbook has been written,” said Madrid. “The history is not old. It’s in the last decade or so.”

Today, proposals to extend legal protections and social services to immigrants who have entered the country illegally enjoy broad support in California, and any policy that could be characterized as an attack on legal immigrants isn’t likely to be well-received.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Local Issues

When Antoinette Martinez rolls her cart through the produce section of the FoodMaxx in Watsonville, her 5-year-old son, Caden, often asks for strawberries and blueberries.

Sometimes Martinez bends, but usually she sticks to the produce on sale: Roma tomatoes for 69 cents a pound, or cucumbers at three for 99 cents. Banana bunches are relatively cheap.

“If it’s not under a dollar, then I don’t buy it,” Martinez said, bypassing $2 lettuce as Caden clambered into her grocery cart. “It’s about stretching the dollar.”

The food budget isn’t as tight as it used to be since Martinez, a single mother, got a job at the Second Harvest Food Bank in Santa Cruz County. She helps people sign up for food stamps, known in California as CalFresh.

Between her $2,380 monthly paycheck and about $100 she receives in CalFresh, Martinez can make it through the month without her or Caden ever going hungry. But under a new proposal from the Trump Administration, Martinez and her son would lose their food stamps. So would many clients she helps at the food bank, along with an estimated 3.1 million other Americans.

Californians are likely to be hit particularly hard. The proposed rule, announced last week, would undo the ability of states to provide food stamps to households that have incomes above the federal food stamp limit—130 percent of the federal poverty line—but hefty expenses.

That would have the biggest impact in states like California that have raised the minimum wage to try to chase the skyrocketing costs of housing. As California’s minimum wage creeps towards $15 per hour by 2023, many more workers could be bumped off food stamps when their monthly incomes rise above the federal limit.

Under current law, a California family of two with a gross monthly income between 130 and 200 percent of the federal poverty level—or between $1,784 and $2,744—can qualify to receive CalFresh as long as their net income after housing, childcare or medical costs falls under 100 percent of the poverty level, or $1,372.

For now, Martinez falls right into that bracket.

The rule would also cut the benefit for families who have savings or assets above a federal limit that many states, including California, currently waive. That limit—$2,250 for most families—is only slightly more than the median monthly rent for a two-bedroom apartment in California ($2,110), and about half that of a two-bedroom in San Francisco ($4,730).

“It’s clear that states like California are a target on this,” said Jessica Bartholow, a policy advocate for the Western Center on Law and Poverty.

U.S. Secretary of Agriculture Sonny Perdue said that the proposal to eliminate what he called a “loophole” would reduce fraud and save the federal government money—more than $9 billion over the next five years, according to a federal estimate. The proposal could go into effect following a 60-day public comment period. 

“Our job is to make sure folks have the tools they need to move away from (food stamp) dependency … and preserve the benefits for those most in need,” Perdue said.

But advocates counter that the move would largely cut benefits for working families who spend large chunks of their paychecks on housing and care-taking costs for young children or ill or disabled family members.

“There’s actually no evidence that making someone hungrier makes them less dependent on public benefits. And there’s plenty of evidence showing the opposite,” said Bartholow.

The Western Center estimates that some 250,000 Californians could lose CalFresh, based on estimates made when California expanded eligibility in 2008 under Republican Gov. Arnold Schwarzenegger and again in 2013 under Democratic Gov. Jerry Brown.

Additionally, children in those families could lose automatic eligibility for free lunches at school.

The proposal to cut food stamps is the latest in a series of Trump administration initiatives to curtail government benefits for low-income people, including a rule that would tighten food-stamp work requirements, another to block some legal immigrants from getting a green card if they are deemed likely to use public services, and another to adjust the way the federal poverty measure is calculated.

Those other proposed rules have cleared their comment periods, but the Trump administration has yet to impose them.

Opposition from California’s Democratic leaders to the latest proposal was swift and predictable.

“There is not a state in the country that is probably more aggressive in pushing back from a litigation perspective, so that will be analyzed by the lawyers,” Gov. Gavin Newsom told CalMatters. A spokesman for Attorney General Xavier Becerra, who has sued the Trump administration over 50 times thus far, said his office was reviewing the proposal.

U.S. Rep. Jimmy Panetta, who represents Martinez’s district, sent Secretary Perdue a letter, signed by 45 California Democrats in Congress, asking that he take into consideration the harmful effects of this proposed rule and act quickly to rescind it.”

Martinez knows the feeling of hunger well. For many years, she said, she was homeless, battling addiction and mental illness. “When I was homeless … there was no place to eat,” Martinez said. “I wasn’t really too sure where to go.”

She recalled what happened next: She got pregnant, enrolled in CalFresh and was finally able to count on a steady source of food. Then she entered an intensive program to help homeless people get back on their feet.

Martinez and her son have now been housed for two years. She said she’s close to finishing her associate degree in human services at Cabrillo College and dreams of being a case manager for a nonprofit, helping others battle addiction and poverty.

She worries about what the food-stamp proposal would mean for her and her growing son. But she said she’s also concerned about the rest of the community she serves in Santa Cruz.

Within the county, 21.7 percent of residents live in poverty, the third-highest rate in the state after Los Angeles and Santa Barbara counties, according to new data from the Public Policy Institute of California.

“CalFresh is the first line of defense against hunger; the food bank is the second,” Martinez said. “We were barely surviving, but we’re not going to be able to survive if (President Trump) continues to push this.”

Jackie Botts is a journalist at CalMatters working for The California Divide, a collaboration among newsrooms examining income inequity and economic survival in California. CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in National/International

Do you freelance in California? Have a side hustle? Drive trucks? Work construction? Do nails? Work on political campaigns? Then you should be paying attention to a major employment fight coming to a head in Sacramento.

In the coming weeks, the state Senate will begin hearings on a bill that will make it harder to classify workers as independent contractors, officially codifying a sweeping 2018 California Supreme Court decision. The so-called “Dynamex” bill, supported by organized labor and named for the court case, has made headlines for threatening the on-demand business model made popular by the likes of Uber, Lyft, DoorDash and Postmates.

Less discussed, however, is the extent to which Assembly Bill 5 could sweep up some 2 million workers across industries far from the sharing economy and tech sectors, from truck drivers and general contractors to nail salons, strippers and perhaps even the freelance writers for this newspaper. The proposal has so unsettled mainstream businesses that they’ve banded together with sharing economy disruptors to run an “I’m Independent” campaign.

The legislation would rewrite the rules for when a worker is deemed an official employee, upending longstanding employment practices by winemakers, private investigators, music schools and other enterprises.

“Does AB 5 have very wide repercussions? Yes, that’s what makes the negotiations very complicated,” said labor-rights attorney Bill Sokol, who teaches employment law at San Francisco State University and is not a part of the negotiations.

California has long led the nation on employment practices, and AB 5 may be just the beginning as policymakers wrestle with updating labor codes in today’s app-for-hire world. Though the high court decision clearly raised the bar for treating workers as independent contractors rather than full employees, the devil is in the details that will be spelled out in the pending legislation.

AB 5 is being lobbied heavily both by business advocates and by organized labor, which seeks to ensure that gig-economy workers have workplace protections, including the right to collective bargaining. It has also put Gov. Gavin Newsom, who wants to be viewed as an ally to both labor and tech, in an awkward position.

“Everything is up for grabs,” Sokol said. “There’s no way to predict who’s going to end up with what. But labor recognizes that the American workplace they have traditionally organized—those worker relationships—have changed, and the laws have not kept up with them.”


Labor groups led by the 2 million-member California Labor Federation have united behind the proposal to limit the use of independent workers. Their contention: The gig economy has opened the door to mass exploitation of low-wage workers, a trend that is worsening income inequality.

Too many employers misclassify employees in order to cut costs, the unions argue, and strong curbs on the use of independent contractors, who aren’t eligible for many of the benefits and workplace protections mandated for regular employees, would slow that. Those curbs would also make it easier to reach groups, such as general contractors, that have long been difficult to organize.

But business advocates warn the change would dramatically ramp up labor costs in California, and have dire consequences for the state’s economy. In some sectors, such as ridesharing, widespread contracting isn’t even the long-term business model—it’s just an intermediate phase on the way to automation. Uber or Lyft, both headquartered in San Francisco, might stop operating in California altogether, they say.

Their hope is to carve out a third way that would allow employers to grant some benefits without having to categorize workers as full employees.

“We have a completely different economy,” said Jennifer Barrera, executive vice president at California Chamber of Commerce. “We have a huge group of individuals who really value their flexibility and control over their own schedule, and I don’t think it has to be one or the other.”

The California Supreme Court decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles dealt with a same-day courier service that, to save money, had converted all its employees to independent contractors. A former employee claimed the shift was a Labor Code violation, and the litigation that ensued ended up reinterpreting a longstanding test for classifying workers. The ruling instead established a three-part test for certifying independent contractors, with the highest hurdle being that the work performed must be outside the core of the company’s business.

Even though the Dynamex decision is already law, labor representatives say many companies have been flouting it. AB 5 would ensure that workers would not have to file suit on a case by case basis to seek enforcement.

“There’s a whole bunch of things that they’re currently being cheated out of, frankly,” said Steve Smith, with the Labor Federation. “With respect to Uber and Lyft, it’s the exploitation they subject their workers to on a daily basis. Many of these workers are not receiving minimum wage; they are misclassified as contractors when they actually should be considered employees, meaning there’s a whole host of benefits they’re not getting that they should get like everyone else.”

In steering more people to employee status, the bill would force companies to offer basic worker protections such as guaranteed minimum wage, overtime pay, contributions to Social Security and Medicare, unemployment and disability insurance, workers’ compensation, sick leave and family leave. Workers could also get reimbursed for mileage and maintenance of their vehicles.

The state estimates it loses about $7 billion a year in payroll-tax revenue due to worker misclassification that could be supporting schools, roads and other public services. And by avoiding unemployment insurance taxes and workers’ compensation premiums, businesses shift the burden to the state when workers get laid off, get sick or get injured on the job.

“These billion-dollar companies can complain, but we have to ask ourselves as taxpayers: Should we subsidize their business by subsidizing their workers?” said Assemblywoman Lorena Gonzalez, a former labor organizer from San Diego who is author of AB 5. “That’s what happens when you don’t adequately compensate workers.”

She dismisses the idea that Uber and Lyft will flee the fifth-largest economy in the world. More likely, the lawmaker predicts, Uber and Lyft will make the changes required by law, because there’s a massive market for transporting individuals and goods in California. If they can’t manage it, she says, then someone else will.


Gonzalez’s bill is triggering pushback in part because the impact of the high court ruling is far broader than many Californians expected. Gonzalez says she’s heard, for instance, from newspaper publishers who want to keep using freelance journalists and beauty salons that rely on nail technicians. She’s even rattled folks in her own world of politics, because her bill would reclassify campaign workers as employees, not contractors.

Chris Shimoda, vice president of government affairs with the California Trucking Association, says trucking has been a pathway for people without advanced degrees to make more money. In fact, about 80 percent of drivers in the industry have a high school education or less, he said. But if firms are required to employ their own drivers, independent drivers who own their own $150,000 Class 8 heavy duty trucks may not be able to find work.

“We all agree there should be a pathway, especially for the blue-collar working class to rise up the economic ladder,” Shimoda said. “It’s just: What are the rules for the labor and employment law side of things? If there are specific things that have been abused, then what are those, and how do we reconcile that through this bill?”

As his association works to ease the potential impact of AB 5 on those drivers, the trucking industry has challenged the Dynamex decision in federal court, arguing that federal laws governing motor carriers pre-empt the state test.

Peter Tateishi, chief executive officer of the Associated General Contractors of California, which represents construction firms, said the bill would disadvantage small businesses, many of which are women-owned and minority-owned firms, that subcontract with builders, because contractors won’t be able to get outside help.

As for Uber and Lyft, the rideshare companies have sought compromise and held back-channel negotiations with the Teamsters and Service Employees International Union. The Labor Federation, however, remains committed to full employment status for rideshare workers. As a result, the gig economy companies have sought support in the court of public opinion.

In an open letter, Uber Chief Executive Dara Khosrowshahi and Lyft co-founders Logan Green and John Zimmer proposed maintaining their drivers’ freelance status but granting access to some employee benefits such as paid time off and retirement accounts. The executives, whose combined worth is over $1 billion, offered to form a new driver association to advocate for the drivers’ interests.

“We are public companies that tens of millions of people rely on for mobility and work,” they wrote. “If there ever was a time for new policies, it’s now.”


This week, the “I’m Independent” coalition led Uber and Lyft drivers around the Capitol to meet with lawmakers and staff to voice their desire to remain freelancers.

“I’m very offended that they would think they’re doing us a favor by calling us employees,” said Vivian Mallory, a 60-year-old Uber driver in Sacramento. “We want better rates, and we want more opportunities for benefits. I think we’re not against the bill being passed, but I think we want changes in the language.”

Mallory says she’s strategic about picking up longer rides that pay more and was able to average $4,800 a month last year driving. Another Uber driver, James Kyle, 58, of Roseville, said he needs to remain an independent contractor, because he works seasonally at charity golf tournaments.

“They’re taking the fun away from it,” Mallory said.

AB 5 supporters counter that drivers will continue to maintain a flexible schedule, because rideshare companies, like any employer, can pay wages based on the number of hours worked.

On the other side are drivers like 62-year-old Ann Glatt, who joined the Gig Workers Rising movement after noticing her share of fares declining over time with Lyft. She says she’s lucky to make $700 a week and would like to see changes to the way the rideshare companies categorize their drivers.

“Teachers are in unions. We’re not able to unionize because we’re independent contractors,” Glatt said.

She added that the labels put on drivers can be misleading.

“Uber and Lyft are not transportation companies—they are platforms. So that makes us customers, and the passengers are the end user. But really it kinda just means Uber and Lyft are not responsible for basic labor standards for people,” she said.

After speaking to CALmatters, Glatt said she stopped driving Lyft because she wasn’t able to make ends meet.

Requests for exemptions have so far succeeded in some sectors. Gonzalez has agreed to leave doctors, insurance agents, real estate agents, hair stylists/barbers who hold a booth rental permit, dentists, architects, engineers and accountants out of the law.

But business interests are pressing for more. Barrera said CalChamber would like to carve out licensed occupations, from court reporters to family therapists. While the author is committed to sorting through more positions, Gonzalez said the exemptions will need to stop at some point.

“I have a driver’s license,” she said. “That doesn’t make me a business owner.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

California government’s technology drastically pales in comparison to that from Silicon Valley, but Gov. Gavin Newsom is betting $40.8 million and a new office will change that.

Even though California is home to innovative tech giants like Google and Apple, its government historically has used technology that can’t handle simple tasks—like accepting a credit card at the DMV, or in some cases, offering fully functioning websites. To combat this stark digital divide, Gov. Gavin Newsom proposed the Office of Digital Innovation. Funding is tucked into the budget starting July 1.

Can a new office and $40.8 million fix a decades-long problem? That depends on who you ask. Newsom won enough legislative support to get the funding approved. But observers remain skeptical as to what the office can actually accomplish given entrenched bureaucracy. Assembly Majority Leader Ian Calderon, a Whittier Democrat, counts himself as one of Newsom’s supporters and said he wished the office was created a long time ago.

“We live in the tech capital of the world, yet we don’t have anybody driving the modernization of how we as government operate and provide services to the people we represent,” Calderon said.

Calderon is co-chair of the Legislature’s tech caucus. He said he remembers taking calls as a field representative for the Legislature in 2010 and helping a single mother who was having trouble navigating the Employment Development Department. She was unemployed and needed her unemployment benefits to pay bills and buy food for her children, he said. She finally called him to ask for help. The woman had spent hours on the phone trying to access her benefits.

“I just want us to be more effective and more efficient,” Calderon said. “When people are calling a state agency because they’re having an issue, they don’t have time to spend three hours on the phone.”

Newsom was outspoken about technology problems in California’s bureaucracy even before he was elected. He called for pushing democracy into the digital age with a book he co-authored in 2013: Citizenville: How to Take the Town Square Digital and Reinvent Government. In an interview with Google, Newsom said, “California is on the leading and cutting edge of 1973.”

As an example, Newsom early this year pointed to the Department of Motor Vehicles’ inability to accept credit card payments in field offices.

Despite Newsom’s attention, the DMV will not be the first agency helped by the upcoming office, said Government Operations Agency Secretary Marybel Batjer. The Office of Digital Innovation will be housed under her agency since its mission will be to help Californians navigate a bureaucratic tangle of poorly performing websites.

“Our first and most important thing to do is begin to hire,” she said. The budget calls for 50 positions, and once filled, “we’ll begin investigating and learning from department agencies where the greatest need is, and we’ll set a path forward.”

Batjer said the DMV is “ripe” for innovation, and she mentioned California’s Health and Human Services Agency as another entity that could use a technological boost. The Department of Health Care Services, which is housed under the agency, has faced its own technological snafus, like making questionable Medi-Cal payments and denying Medi-Cal coverage to eligible Californians.

Batjer said the new office will be modeled after other government digital agencies, including the federal office 18F, which was created in 2013 after the disastrous rollout of the Affordable Care Act. (That agency reportedly faces its own problems under the Trump Administration.) California’s office also will look at the United Kingdom’s Government Digital Service. Both offices focus on user needs and take a start-up approach to tech.

Batjer said California’s office will complement the Department of Technology, which also is under Government Operations.

Amy Tong, the California Department of Technology director and state chief information officer, said the new office will be expected to bring innovative approaches to technology, honed in Silicon Valley, to state offices that are stuck in “legacy” mode and unable to figure out how to update.

For instance, the office might help state workers become more efficient by streamlining processes that take many steps into ones that only require a few.

Yet to truly succeed, some say state employees need to do more than become more efficient. They need to adopt a new attitude about technology.

“Nobody wants to take risks. Nobody wants to stick their neck out,” said former state Sen. Dean Florez about state technology decisions.

He said the job description for the new director is admirable, but he questions whether a large, bureaucratic system will actually be as willing to “break things”  as start-ups and tech gurus of Silicon Valley.

Florez said Newsom’s biggest challenge will be getting bureaucrats on board with a major tech overhaul.

“I think Newsom wants to get California to the cloud,” he said, a costly move. “It would be a big change for the state of California to forgo those legacy systems and move to things like the cloud.”

Still, the Newsom administration remains confident that this is the best next step.

“Gov. Newsom is committed to transforming the way citizens interact with their government for the better,” said spokesman Brian Ferguson in a written statement. “The goal of this new office is to tap into and grow the creativity, innovation and transparency that already exists elsewhere in our state to improve the way the executive branch approaches the delivery of technology and services to the public.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Local Issues

Despite speculation about bold moves—in a far-left direction, even for this blue state—Gov. Gavin Newsom and legislative Democrats actually landed a budget Thursday that’s surgical about new taxing and spending while still keeping promises to help poor Californians and working families.

Under the $214.8 billion spending plan, the state inched closer to universal health coverage, expanding Medi-Cal to all low-income young adults regardless of immigration status. State lawmakers also charted a course to increase tax credits to the working poor and boost subsidies to middle-income Californians to buy health coverage. There were significant investments in early education and housing, while a portion of the surplus was diverted to pay down pension liabilities.

While Democrats began the year with a surplus of ideas for taxing Californians, only a few strategic levies survived the negotiation process, specifically a fine on individuals who don’t have health insurance under a state mandate. There’s even a little tax relief: Parents, for instance, will get a temporary tax exemption on diapers.

One hitch? The devil is in the details, some which have yet to be worked out. Though Democrats met their deadline for a balanced spending plan, most of the underlying policy to enact the budget wasn’t hashed out—and may not be for weeks. Call it a learning curve: This was the new governor’s first time negotiating with seasoned legislative leaders who know how to count votes. Look for more action in coming trailer bills.

Here’s what you need to know about California’s new budget—including maybe, just maybe, the first steps toward the establishment of a four-year college in the Coachella Valley.

Yes to Health Care for Undocumented Young Adults

The Legislature agreed to the governor’s plan to expand Medi-Cal, the state’s Medicaid program for low-income people, to young adults ages 19-25. It’s a step toward offering free health care to all undocumented adults since the state already makes Medi-Cal available to children regardless of immigration status.

The Senate had proposed going further by offering Medi-Cal to undocumented seniors 65 and older. However, none of the leaders backed offering health care to all low-income immigrants.

The state expects an estimated 90,000 young adults could gain coverage when the benefit begins next year. Already, 76,000 have registered for a limited version of Medi-Cal that covers emergency services and prenatal care available to low-income people regardless of immigration status. The price tag for this expansion? About $98 million a year.

It’s worth noting the state also affirmed its commitment to restoring optional Medi-Cal benefits. During the recession, coverage for audiology, optical, podiatry, speech therapy and incontinence creams had been taken away.

Obamacare Lives: A $695 State Mandate to Carry Health Coverage

Starting next year, California will join New Jersey, Vermont and the District of Columbia in requiring residents carry health coverage or face a $695 state penalty—a fine that will go up each year with inflation.

The state individual mandate aims to replace the federal one that Republicans repealed in their effort to dismantle the Affordable Care Act. The administration says California needs to act, because without a mandate, the number of Californians without coverage—10.4 percent in 2016—will go back up. Separately, a study conducted by the University of California estimated the uninsurance rate will rise to 12.9% by 2023, or 4.4 million people, without state action.

Money raised from the penalties, about $450 million over three years, will be used to give bigger subsidies to those who purchase private insurance through the state’s health coverage exchange, Covered California.

Newsom and lawmakers hope to expand assistance to 190,000 middle-income Californians making between $48,000 to $72,000 a year, according to Health Access California, a health advocacy group.

Fear of Recall = Not Many New Taxes

The budget includes a plan to impose a fee—that still needs to be voted on—of no more than 80 cents a month on each telephone line to help digitize the state’s 911 system, which is still analog. The next-generation system would improve call delivery, better location data and incoming text capability.

Other than that and the health-care mandate, lawmakers opted against most of the new taxes proposed early in the session. In fact, California parents and women will get a sales tax exemption on diapers and menstrual products (though only for two years).

Notably rejected, given the state’s current $21.5 billion surplus, was Newsom’s push for a 95-cent tax on most residential water bills to fund-clean-drinking water initiatives in the Central Valley. Instead, the Legislature worked out a deal to clean up toxic water by diverting money generated from big polluters under the state’s cap-and-trade program.

Some environmental groups questioned using clean air money to pay for drinking water, but supporters reasoned that water is being contaminated with arsenic and other toxic chemicals from the heavy use of fertilizers, so it makes sense to draw the $100 million for cleanup from the agriculture industry’s portion of the greenhouse gas fund.

One issue that won’t be resolved this week is whether California will conform its tax code to match federal changes made by Republicans in 2017. Newsom is relying on the projected $1.7 billion increase in net revenue from that to expand the state’s earned income tax credit, the centerpiece of his anti-poverty agenda.

Assembly Democrats in swing districts are skittish about limiting deductions and losses that can be claimed by some businesses. They know the fate of former Sen. Josh Newman, who was recalled from his Orange County seat after voting to raise California’s gas tax. Tax conformity requires a two-thirds vote in the Legislature to pass, so the pressure is on.

Paying Debt and Rainy-Day Saving

Lawmakers embraced the governor’s proposal to use some of the surplus to make extra pension payments, a step Newsom says is necessary to tame the state’s $256 billion retirement liability for state workers and teachers.

The Legislature approved supplemental payments of $3 billion to the California Public Employees’ Retirement System and $1.1 billion to the California State Teachers’ Retirement System for the state’s portion of unfunded liability.

To relieve school districts across the state, the Legislature will contribute a total of $3.15 billion toward paying down their liabilities and reducing their payroll contribution rates. One difference is where it will go.

Previously, Newsom had all the extra payments going to the teachers' pension fund—a reaction, in part, to teachers strikes that erupted as he took office. Now a portion of that money will be doled out to CalPERS. The change was made in recognition that while teachers are members of CalSTRS, many other school employees from janitors to bus drivers belong in the state’s other public-employee pension fund.

Besides paying down California’s “wall of debt,” as former Gov. Jerry Brown called it, the state is shoring up for a downturn—or in Newsom-speak, “building budget resiliency.” The new budget carries a roughly $20 billion reserve from several rainy-day funds. This amount, while hefty, would be easily wiped away in a downturn. According to the Legislative Analyst’s Office, the state would need as much as $40 billion to cover the budget in a moderate recession.

Big Spending on Housing

With new commitments topping $2 billion, the budget represents the most important action the governor has taken so far on housing and homelessness. The lion’s share will target the state’s homeless population, including $650 million in grants for cities and counties to build and maintain emergency shelters, and $100 million for wrap-around care for the state’s most vulnerable residents. Another $500 million will go toward quintupling the size of the state’s affordable housing financing fund, plus hundreds of millions earmarked for cities to update their often outdated housing plans.

While lawmakers and Newsom have agreed to cut big checks, it’s not clear who’ll get the money, and with what strings attached. Big-city mayors and lawmakers want homelessness grants directed towards the state’s largest 13 cities, while Newsom wants to spread out the money to include counties.

Newsom also wants to deny transportation funds to cities not building enough housing. As of Thursday, lawmakers were still negotiating a scaled-back version of the proposal. Another Newsom proposal that speeds construction of homeless shelters by sidestepping environmental laws also remains unresolved.

Lending a Hand to Working Families

Expanding California’s earned income tax credit has quickly become one of Newsom’s signature anti-poverty programs, because it gives a cost-of-living refund to low-income working families. Lawmakers are poised to triple the program from $400 million to $1.2 billion to provide a $1,000 refund for families with children under 6 and expand income eligibility from $24,950 to $30,000.

Anti-poverty advocates had wanted Newsom to include undocumented workers who file with individual taxpayer identification numbers instead of Social Security numbers. That proposal did not make the final version of the budget. Still, the administration estimates the current expansion will increase the number of beneficiaries from 2 million to 3 million households.

The budget also will make it easier for low-income families with children to qualify for assistance, increasing the CalWORKs asset limit to $10,000 and the motor vehicle exemption to $25,000—changes that will allow people to save and hang on to cars that can get them to work.

And parents of all incomes will get a longer paid family leave to care for new babies—eight weeks, up from the current six weeks, starting in July of next year. The goal will be to boost the benefit to 90 percent of most wages, up from the current maximum of 70 percent.

The K-14 Kids Did All Right

As required by law, the lion’s share of the budget goes to public schools, with nearly $102 billion in state money to be pumped into California classrooms and community colleges, plus another $389 million in a special reserve fund for schools. Though the figure is an all-time high, California is still viewed as lagging in per-pupil spending, in part because of the high cost of living.

Democrats are also demanding more stringent oversight of charter schools, which can operate like private schools, tend to be non-union and have proliferated in big cities such as Oakland and Los Angeles. Newsom proposed prohibiting charter schools from blocking or disenrolling special-education students who require more support for disabilities. Lawmakers readily embraced that change.

The budget includes $300 million to build more kindergarten classrooms in an effort to boost full-day kindergarten programs. Newsom had initially proposed $750 million but that was reduced after a study found most part-day kindergarten programs are in wealthier communities.

After-school programs will get a $50 million boost over the $600 million or so the state is currently spending. The money will help cover the cost of minimum wage increases enacted during Brown’s tenure.

So Did the Little Ones

In emphasizing early education, Newsom and lawmakers agreed to expand day care and preschool slots by the thousands while investing in training for child care providers.

Newsom gets $50 million in seed money to start child savings accounts for college and post-secondary education. He initially asked that all of it go toward pilot projects with First 5 California and local governments, but the Legislature is designating $25 million to that. The other $25 million will create a state program with the Scholarshare program in the Treasurer’s Office.

More Free College and Help for Student Parents

Newsom and legislators delivered on a $45 million promise to fund a second year of tuition-free community college for first-time, full-time students at campuses participating in the state’s College Promise program.

Other big winners include students with children, who will be eligible to receive grants of up to $6,000 to help cover their families’ living expenses. The budget boosts by about 15,000 the number of competitive Cal Grants—a significant jump, but far less than the 400,000 qualified students who applied for the state scholarships last year and didn’t receive them.

The University of California and California State University systems will receive money to increase enrollment, and waive tuition during the summer to help low-income students graduate faster. Lawmakers also set aside funds for campuses to combat hunger and homelessness, strengthen veterans resource centers, and provide more mental health counseling. A center at the University of California San Francisco is getting a $3.5 million earmark for dyslexia screening and early intervention.

Backers of the state’s controversial new online community college fended off an effort to slash the college’s funding, clearing the way to enroll its first class this fall. And CSU will get $4 million to study five possible locations for a new campus: Stockton, Chula Vista, San Mateo, Concord and Palm Desert.

Lots for Police Training; a Little for Police Records

Reflecting the Legislature’s focus this year on reducing police shootings, the budget includes $20 million to train police officers on de-escalation tactics, and how and when to use force. Outside the budget, bills to set a tougher standard for police to use deadly force and require more officer training are advancing through the Legislature, reflecting a compromise between civil rights advocates and law enforcement groups.

Attorney General Xavier Becerra’s office will get $155,000 to implement the new state law he’d been resisting: making law-enforcement misconduct records public. Becerra will also have to report to the Legislature on how many requests his office processes, and how much time is spent on that. A judge ruled in May that Becerra must produce the records; previously he had said he would not release them until the courts clarified whether he had to.

Powering Down to Cope With Wildfires

Besides beefing up the state’s firefighting capability and disaster preparedness, California will add powering down to its to-do list for coping with climate change-driven wildfires.

The budget doles out $75 million to state and local agencies whenever investor-owned utilities decide to shut off electricity during red flag weather warnings. One note: The Assembly added language to track how the money is used.

CALmatters reporters Matt Levin, Felicia Mello and Laurel Rosenhall contributed to this report. CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

House of Lucidity Opens in Cathedral City

The House of Lucidity, Cathedral City’s newest dispensary, officially opened with a ribbon-cutting—complements of the Greater Coachella Valley Chamber of Commerce—on May 1.

The 10,000 square foot facility is located at 36399 Cathedral Canyon Drive. In addition to the gorgeous dispensary—which features black-and-white photos of celebrities including Frank Sinatra—House of Lucidity also has a cultivation facility and an extraction lab.

House of Lucidity is open from 4 to 9 p.m. daily. For more information, call www.houseoflucidity.com.


City of Coachella to Host Cannabis Summit

The city of Coachella is bringing in a lot of big names for its SoCal Cannabis Summit, taking place at the Fantasy Springs Resort Casino on Monday and Tuesday, June 24 and 25.

The summit will begin with a cultivation and dispensary bus tour, followed by a reception on Monday. On Tuesday, the summit will feature speakers including Riverside County District Attorney Michael Hestrin, California Bureau of Cannabis Control Chief Lori Ajax, California Treasurer Fiona Ma, and many other political leaders and marijuana experts. An exhibit hall will also be open to the public with free admission on Tuesday.

Tickets for the bus tour are $50, while summit tickets are $75. For tickets or more information, visit coachellacannabissummit.com.


Marijuana Revenues Disappoint Gov. Newsom

Revenues from marijuana growth and sales are bringing millions of dollars into state coffers—but not nearly as much as the state anticipated.

According to a May 23 news release, the cannabis industry—via the state’s cannabis excise tax, cultivation tax and sales tax—paid $116.6 million to the state in the first three months of 2019, according to first-quarter tax returns, due April 30, which had been submitted so far. That’s up slightly from the $111.9 million paid during last quarter of 2018.

Earlier in May, Gov. Gavin Newsom had to scale back cannabis-tax revenue projections significantly—cutting $223 million from the amount expected to be collected by June 2020.

According to the Associated Press, the reasons for the disappointing sales included the thriving illegal market, as well as the state’s struggles with licensing and regulation.

Newsom also blamed some states and counties for not welcoming legal cannabis into their communities.

“We knew (some counties and cities) would be stubborn in providing access and providing retail locations and that would take even longer than some other states, and that’s exactly what’s happening,” he said, according to the Associated Press.

Published in Cannabis in the CV

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