Web Version [link removed] | Update Preferences [link removed] CBRT in the News Posts Prop. 13: Why A Likely Winner May End Up Being California's Election Loser

Why didn’t Proposition 13 get more support from voters on Tuesday?

That’s a good question — even if the $15 billion state construction bond manages a remarkable turnaround and squeaks by to win after the remaining votes are counted. Backers of the bond measure are still hopeful it will win, and at least one data analyst says it’s possible.

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Along with Prop. 13, Tuesday was a bad day for the 120 local school bond measures and 28 parcel taxes. The former need a 55 percent majority to pass, and the latter require two-thirds. Their passage numbers could improve, too, after all of the votes are counted. But it’s evident already that a historically high percentage of bonds and parcel taxes will fail. EdSource will soon publish a detailed analysis.

Robert Lapsley, president of the California Business Roundtable, which does its own polling, said, “From everything we see, there is a huge concern about housing affordability and the cost of living and about paying more taxes. The older electorate and homeowners in particular don’t see accountability; there’s cynicism about where the money goes. That’s why local measures failed.”

Read More [[link removed]] Business Climate and Job Creation Bonds Extend Rally As U.S. Stocks Decline

Market upheaval intensified Friday as stocks and oil prices tumbled, while investors seeking shelter in haven assets pushed the yield on long-term U.S. government bonds to unprecedented levels.

The yield on the benchmark 10-year Treasury note fell below 0.7% for the first time. The Dow Jones Industrial Average fell 585 points, or 2.2%, in afternoon trading.

The blue-chip index was down more than 890 points shortly after the opening bell, before paring some of its losses. It is on track for a modest weekly gain, following a rally at the beginning of this week.

The S&P 500 dropped 3% Friday, while the Nasdaq Composite was down 3.3%. If the S&P’s drop continues through Friday’s close, it would mark the first time since December 2008 that the broad-based index has had five consecutive moves—higher or lower—of at least 2%.

Read More [[link removed]] Coronavirus Spread Could Halt Robust U.S. Job Gains

The spread of the novel coronavirus threatens to trigger a sharp pullback in U.S. hiring after the labor market showed signs of picking up earlier this year.

Services industries that help drive the U.S. economy—including air transportation, restaurants, entertainment and retail—would suffer the most from the spread of the virus, according to economic research firm Capital Economics.

Some of those sectors saw particularly strong job gains in February before cases of the infection began rising in the U.S., according to Friday’s jobs report from the Labor Department. Leisure-and-hospitality companies added 51,000 jobs in February, and restaurants added 53,000 to payrolls.

“This forward momentum could help these industries weather this shock, but also raises the possibility that job growth may slow significantly if the impact of the virus hits these industries hard,” said Nick Bunker, economist at job site Indeed.

Read More [[link removed]] Venture Firm Sequoia Is Sounding The Alarm About The Economy Again As Coronavirus Spreads

In 2008, in the middle of the most recent economic recession, prominent Silicon Valley venture capital firm Sequoia Capital advised its portfolio companies about how bad things were, in a presentation called “R.I.P. Good Times.” Now the firm is sounding the alarm again, telling founders and CEOs of its portfolio companies to prepare for worsening conditions.

The move comes as the coronavirus continues to roil U.S. and foreign financial markets, causing public companies to take steps to minimize impact to their employees and businesses. The memo shows private companies could be affected, too.

“With lives at risk, we hope that conditions improve as quickly as possible,” the firm said in the memo. “In the interim, we should brace ourselves for turbulence and have a prepared mindset for the scenarios that may play out.”

Read More [[link removed]] U.S. Trade Gap Narrowed In January As Flows Slowed

The U.S. trade deficit narrowed in January as trade flows with the rest of the world slowed during a month when the coronavirus’s impact became more pronounced in China.

The foreign-trade gap in goods and services contracted 6.7% from the prior month to a seasonally adjusted $45.34 billion in January, the Commerce Department said Friday.

Economists surveyed by The Wall Street Journal had expected a trade deficit of $46.0 billion.

Imports decreased 1.6% in January. Exports, meanwhile, slid by 0.4% from December. The decrease in imports reflected fewer purchases of industrial supplies, capital equipment and autos. Meanwhile, U.S. firms shipped fewer aircraft and less oil.

Read More [[link removed]] Fed’s Williams Says Rate Cut Will Provide ‘Meaningful Support' To Economy

New York Fed leader John Williams kept the door open to additional rate cuts Thursday in a speech that explained why the central bank implemented an emergency rate cut this week.

The half percentage point rate cut done on Tuesday “provides meaningful support to the economy and will help sustain the economic expansion,” Mr. Williams said in the text of a speech to be given in New York.

“The coronavirus poses evolving risks to the U.S. economy,” and "the outlook is evolving and highly uncertain,” the official said. He added “in the weeks and months ahead, we will continue to closely monitor developments and their implications for the economic outlook.”

Mr. Williams also hinted at more action to come. “We will use our tools and act as appropriate to support the economy,” he said.

Read More [[link removed]] Bernie Sanders’s Tax Plan Would Be Biggest Expansion Of Taxation Since World War II

Presidential candidate Bernie Sanders is trying to expand federal taxation on a scale not seen since World War II, pursuing policies that would end the nation’s run as one of the industrialized world’s lowest-taxed countries.

Mr. Sanders’s combination of taxes on wealth, income, financial transactions, corporate profits, payrolls, estates and capital gains would hit rich Americans from every direction. If Congress were to pass all his plans, the total U.S. tax burden—including federal, state and local taxes—would resemble Canada’s or Germany’s rather than being near the bottom of the pack of rich nations.

Mr. Sanders views higher taxes as a means to pay for bigger health-care, housing, education and climate-change programs, and those plans would cost at least $40 trillion over a decade, according to the campaign, or a 66% increase in federal spending. And he seeks to stick companies and the top 1% of households with most of the bill.

Read More [[link removed]] California Law Pressures Small-Company Boards To Include Women

Smaller companies lag behind the country’s biggest corporations in bringing more women onto their boards. In California, though, that gap has been closing since the state began requiring public-company boards to include female directors, according to new data.

When the state passed the mandate into law in September 2018, 91 California-based companies in the Russell 3000—the index that includes most companies trading on major U.S. stock exchanges—had all-male boards. All but eight were in the bottom 2,000 in terms of market value, according to data from Equilar, a corporate-governance data firm.

But by the end of 2019, the deadline for California boards to include at least one female director, the number of those smaller-company boards with no women had plummeted to six. In percentage terms, the drop is nearly as sharp as the one among larger California companies with all-male boards, which fell over that period to just one: energy-technology company Enphase Energy Inc., which said it is in the process of recruiting a female director.

Read More [[link removed]] States, Insurers Move To Limit Coronavirus Testing Costs For Patients

States are moving to block insurers from charging members for coronavirus testing, putting pressure on the industry to ease costs that might discourage people from getting diagnosed and treated.

As California and Washington on Thursday became the latest state to require that insurers make the testing free for their customers, the industry began taking voluntary steps.

Cigna Corp. said that in its plans nationwide, it would waive consumers’ out-of-pocket costs for lab tests to diagnose infection from the novel virus, treating the tests like other types of preventive care that are free to members. Though these tests are already free when performed by the Centers for Disease Control and Prevention, they are expected to be offered more broadly by commercial labs that could charge. Consumer advocates have raised concerns that people might delay or decline testing for fear of high costs.

Read More [[link removed]] California School Construction Bond Is Losing

A $15 billion state proposal to fund school and higher education facilities — the largest school construction bond in state history — is losing badly, at least for now.

With 100 percent of precincts reporting, Proposition 13 is behind 44.6 to 55.4 percent. It is winning in only 10 of the state’s 58 counties. But with possibly as many as 5 million votes still to be counted, supporters aren’t conceding, and at least one data analyst says that a victory for the bond is possible. It will be at least several days, if not weeks, before the outcome is final. (Update: The California Secretary of State reported that as of March 5, 3.3 million votes remained to be counted, including 574,000 in Los Angeles County, 350,000 in San Diego County and 250,000 in Alameda County,)

“Whether it wins or not, the vote will move only toward the yes,” said Paul Mitchell, vice president of Political Data Inc, a bipartisan data analytics firm in Sacramento.

Read More [[link removed]] Are 'Taxifornia' Taxpayers Feeling Tapped Out?

California in recent years hasn’t much looked like the state that birthed the 1970s tax revolt with Proposition 13 as voters opened their wallets for a host of tax and bond measures and packed the Capitol with Democrats promising to spend freely.

But this week the single statewide bond measure on the ballot seeking $15 billion for schools — a cause that has been historically popular with voters — appears short of the majority support needed to pass despite a $12.9 million campaign toward its passage. Locally, a number of tax and bond measures also were failing.

Jon Coupal, president, Howard Jarvis Taxpayers Association, founded to preserve 1978’s Prop 13 taxpayer protections, was cautiously optimistic Wednesday that perhaps the worm has turned once again in the Golden State.

“It does appear as though there’s growing cynicism on the part of Californians with the representations that more money is needed,” Coupal said. “I think people are beginning to feel the stress of a high-tax, high-regulatory climate in California, and that may be reflected in some of the rejections.”

Read More [[link removed]] The Gig Economy Is Losing Ground In Its Fight With AB 5

The passage and implementation of Assembly Bill 5 (“AB5”) in California has become a reckoning for employers who engage with large numbers of independent contractors and has potentially put thousands of employers out of compliance with California employment law. The most publicized of these employers have been the leaders of the so-called Gig Economy.

Instacart became the most recent victim when a San Diego court enjoined Maplebear (Instacart’s official corporate name) from classifying its thousands of grocery packaging and delivery workers as independent contractors. While the injunction only covers San Diego, the writing appears to be on the wall for Gig Economy. Uber and Postmates were denied their request for an injunction against enforcement of AB5 in January 2020.

While the effect on the Gig Economy is clear, to truly understand the potential impact of AB5 to most employers they will need to look beyond the headlines and at the law itself. The law codifies the California Supreme Court decision in Dynamex Operations West, Inc v. Superior Court of Los Angeles that found that a worker was presumed to be an employee unless the employer can pass a three-part test, commonly known as the “ABC” test, proving the worker is an independent contractor. The three prongs of the test are:

Read More [[link removed]] The Golden State Of Inequality

At a glance, California’s economy seems like it should be the envy of the nation.

Since the end of the Great Recession, the state has outperformed the nation by half when it comes to economic growth; while the U.S. economy has grown 22 percent from 2009 to 2018, California’s grew 32 percent, according to the D.C.-based Economic Policy Institute. Its hot housing market has rebounded from 2009, when the value of the median house bottomed out, dropping nearly 60 percent in less than two years. Meanwhile, the state’s unemployment rate has reached a historic low.

But looking behind top-line numbers shows not only an economy disproportionately benefitting the affluent but one in which the worst off are falling further and further behind.

California’s rich are, of course, getting richer: From 2009 to 2018, the state’s top five percent of households saw their inflation-adjusted incomes grow 22.3 percent. At the same time, the bottom 20 percent of households saw their incomes fall by 1.8 percent when inflation is taken into account. As a result, by this metric inequality increased in California at nearly twice the national average. The increase in income inequality was larger than in all but three states, while the state is home to a vast unsheltered homeless population that accounts for 47 percent of the nation’s total.

Read More [[link removed]] Energy and Climate Change California Blackouts Boost Demand For Power Storage

Power cuts during California’s devastating wildfire season have boosted demand for combined solar panels and battery storage solutions as businesses look to mitigate economic damage from future blackouts.

Billions of dollars in economic activity were lost from mass power shutoffs during wildfires in California last year. The blackouts, which were aimed at preventing live wires from sparking more fires during high winds, caused widespread disruption for Californians at the end of last year and forced schools and business to shut.

“We’re seeing more tenders for solar-storage combinations in areas where there are reliability issues, in California for instance, where blackouts this autumn boosted demand,” Gwenaelle Avice-Huet, Engie SA’s head of renewables division, said in an interview Tuesday. “We’re also seeing demand on islands, with tenders in Hawaii for solar-storage combinations.”

The need for a more reliable supply of electricity coincides with a push by companies, governments and investors for cleaner power as part of efforts to mitigate climate change, which is partly to blame for recent giant blazes from Australia to Portugal.

Read More [[link removed]] California Is Taking Aim At Uber And Lyft's Outsized Climate Consequences

To understand California’s climate change challenge, look no further than its popular ride-hailing companies.

Uber, Lyft and other companies make up a tiny piece of the biggest greenhouse gas polluter in the state: transportation. Yet their contribution to climate-warming emissions is outsized, drawing attention from researchers and lawmakers and raising an ambitious question: how can the state rein in emissions from gig economy companies built on drivers who own their vehicles?

The latest strike against Uber and Lyft comes from the Union of Concerned Scientists, an advocacy group that published a report last week showing ride-hailing trips release 69% more climate-warming emissions than the walking, biking, transit and other car trips they displace. The findings support California’s own analysis, which concluded ride-hailing increases carbon dioxide pollution by 50% for every mile a passenger travels, compared to when they drive themselves.

Read More [[link removed]] Environmental Disaster Or Key To A Clean Energy Future? A New Twist On Hydropower

Steve Lowe gazed into a gaping pit in the heart of the California desert, careful not to let the blistering wind send him toppling over the edge.

The pit was a bustling iron mine once, churning out ore that was shipped by rail to a nearby Kaiser Steel plant. When steel manufacturing declined, Los Angeles County tried to turn the abandoned mine into a massive landfill. Conservationists hope the area will someday become part of Joshua Tree National Park, which surrounds it on three sides.

Lowe has a radically different vision.

With backing from NextEra Energy — the world’s largest operator of solar and wind farms — he’s working to fill two mining pits with billions of gallons of water, creating a gigantic “pumped storage” plant that he says would help California get more of its power from renewable sources, and less from fossil fuels.

Read More [[link removed]] California Had Its Driest February On Record. Here’s How Bad It Was.

Not a drop of rain fell in downtown San Francisco this February. Or in Big Sur State Park. Or in Paso Robles. February in California was so dry that it is raising concerns that the state, which, according to the National Drought Mitigation Center, only fully emerged from drought last March, may be headed for another one.

“It was the driest February on record,” said Daniel Swain, a climate scientist with the Institute of the Environment and Sustainability at the University of California, Los Angeles.

Ordinarily, 90 percent of California’s rain falls during the seven-month period between Oct. 1 and April 30, with half of the state’s total precipitation falling during December, January and February. The rains that come in February are part of a seasonal pattern that nourishes plants, replenishes reservoirs and, in the Sierra Nevada mountains, restores the snowpack that provides up to 30 percent of the state’s drinking water.

Read More [[link removed]] Workforce Development Why Bond And Tax Measures To Bolster California Schools Struggled To Pass At The Polls

California voters were uncharacteristically stingy this week when they rejected more than half the local school bonds and tax measures that would have funded campus facility upgrades and operations throughout the state.

Of 111 school bonds on the ballot, more than half appeared headed for failure. Nineteen were passing and the rest were too close to call as of Thursday afternoon. Half of the 28 parcel taxes placed on the ballot by school districts were also failing. Eight were too close to call and six appeared to pass.

By contrast, in 2016 nearly all the 150 or so school bonds and taxes passed in California.

Read More [[link removed]] Oakland School Board Votes $18.8 Million In Cuts, Up To 100 Layoffs; Hears Pleas To Cut Police Force

The Oakland School District is prepared to cut its workforce by up to 100 workers starting July 1 and may consider eliminating its police force in the future.

Both issues came before the school board on Wednesday night, ensuring that the district is likely to face months of turmoil as it cuts $18.8 million to balance its budget for the 2020-21 school year. At the same time, state and county officials have notified the district that its deficits could be higher than originally anticipated in December — $25 million this year and $33.5 million next year. The board expects to review updated budget projections later this month.

The board cut fewer jobs than originally recommended by Superintendent Kyla Johnson-Trammell and her staff, who recommended $20.2 million in cuts including about 76 central office administrators or other workers who support school services. Other cuts in school-based jobs are also expected, but which positions will be affected is unclear.

Read More [[link removed]] Infrastructure and Housing Rep. Costa Proposes Legislation To Complete California High-Speed Rail Project

Rep. Jim Costa (D-CA) has proposed legislation that would fund high-speed rail throughout the country, but most especially in California’s San Joaquin Valley.

H. R. 5805, called the High-Speed Rail Corridor Development Act, would give $32 billion to federally designated high-speed rail corridors to complete projects like California’s High-Speed Rail project connecting San Francisco to Los Angeles. The bill, if passed, would provide $8 billion per year from 2021 through 2024.

Since 1992, Congress has designated 10 areas of the country as high-speed rail corridors, including the Chicago Hub corridor linking Chicago, Detroit, St. Louis, and Milwaukee to Minneapolis/St. Paul, Cleveland, Columbus and Cincinnati; the Empire State Corridor linking New York City to Albany and Buffalo; the California corridor linking San Diego with Los Angeles, San Francisco, and Sacramento; the Southeast corridor linking Charlotte, N.C., and Washington, D.C. to Jacksonville, Fla., and Macon, Ga.; and the Pacific Northwest corridor linking Eugene and Portland, Ore. with Seattle, Wash., and Vancouver, BC, Canada, among others.

Read More [[link removed]] Bullet Train Plan For Tehachapi Passage Would Cost $18.1 Billion Over 82 Miles

The future California bullet train would barrel out of Bakersfield and shoot up 4,000 feet over the Tehachapi Mountains en route to Palmdale, an engineering feat that would cost $18.1 billion and impose significant impacts — including the loss of low-cost housing, a homeless shelter and a high school, according to new details.

The impacts are outlined in a draft environmental statement released Thursday by the California High-Speed Rail Authority. It selects a preferred route that would include 9.3 miles of tunnels and 15.8 miles of elevated structures, representing about 30% of the entire passage between the two cities.

The rail segment is a crucial link in California’s ultimate plan of running bullet trains from the Bay Area to Los Angeles and beyond. But this stretch of the route, as planned, would take out the R. Rex Parris High School in Palmdale, the Lancaster Community Homeless Shelter, the Solid Rock Bible Church, eight motels, 253 residential housing units, 311 businesses and 175 farm fields, according to the environmental documents.

Read More [[link removed]] Wall Street’s Single-Family Rental Strategy Is Squeezing Tenants

A new report in The New York Times Magazine chronicles the growth of the corporate single-family rental market in the wake of the 2008 foreclosure crisis — what journalist Francesca Mari calls “the financial industry’s newest scheme to harvest money from housing.” After the mortgage crisis, investors like Invitation Homes, associated with the private-equity firm Blackstone, were able to purchase foreclosed homes at a deep discount, and rather than selling them to new owner-occupants, have instead in many cases rented them to tenants. They have also created new financial securities products backed by expected rental income from these homes. As property values have rebounded and new acquisitions become more expensive, the report notes, these landlords have sought to squeeze even more money out of tenants to provide returns to investors.

“Rather than protecting communities and making it easy for homeowners to restructure bad mortgages or repair their credit after succumbing to predatory loans, the government facilitated the transfer of wealth from people to private-equity firms,” the report says. “By 2016, 95 percent of the distressed mortgages on Fannie Mae and Freddie Mac’s books were auctioned off to Wall Street investors without any meaningful stipulations, and private-equity firms had acquired more than 200,000 homes in desirable cities and middle-class suburban neighborhoods.”

Read More [[link removed]] 'San Francisco Is Full': Tech Backlash Reaches New Heights With Skyscraper Battle

John Elberling has a drastic plan to address the city’s housing crisis: no more new skyscrapers.

Or at least a trade off. The city of San Francisco allows for a yearly allotment of new office space based on how much affordable housing gets built. No new housing? That allotment goes down.

“There clearly has to be a balance, where you don’t grow faster than you can handle it,” he said.

It’s the newest effort by San Franciscans to draw a line in the concrete over the growth that has made it a global hub of technological innovation but also the archetype of what a sudden influx of well-paid tech workers can do to a city.

And Elberling, a local advocate who is the head of a nonprofit housing organization, has support for his plan. He put the measure, Proposition E, on the local ballot in Tuesday’s election, and although the final result won’t be known for days as mail-in ballots are counted, preliminary results showed it getting support from 55 percent of the voters.

Read More [[link removed]] Takeaways From A Bernie Sanders Campaign Housing Panel

Last week I was a panelist at a Bernie Sanders campaign event entitled “A Path to Housing Justice,” uploaded to YouTube. As you can see from the above picture, a packed house closely followed the discussion of the housing crisis.

As a campaign event, the tactics were spot on, but the jury is still out regarding the Senator’s long-term strategy. This event’s success was based on inviting supporters to a renters-rights panel, silent art auction, open bar and taco stand, standup comedians, DJ, and band. It was a magnet for the woke, and I am sure those who attended left as dedicated Sanders voters and helped him win the California primary. If Sanders manages to overcome the Democratic Party’s old guard and become its 2020 presidential candidate, these Berniecrats, whether new or old, will actively support him, many as volunteers.

I have little doubt that events like this played a key role in Sanders’ success in Tuesday’s California primary victory. Yes, the Senator has taken strong positions on economic inequality, health care, education, climate, and housing, but based on this event, the campaign’s approach to California turned on meticulous logistics, not public policy.

Read More [[link removed]] Editorial and Opinion Why Californians Should Support Delta Tunnel Proposal

If our state wants to remain economically competitive, it must re-engineer the troubled estuary that serves as the hub of California’s elaborate water-delivery system — the Sacramento-San Joaquin River Delta. The best and most viable way to do this is via the single Delta tunnel project proposed by Gov. Gavin Newsom, which the Silicon Valley Leadership Group and our 350 members support.

The water that flows through the Delta serves nearly 27 million people in our state and ensures 3 million acres of farmland stays productive. Yet, the current Delta water delivery system – comprised often of simple earthen levees – is fragile and extremely vulnerable to catastrophic disruption from earthquakes, floods, and rising seas. If this outdated system were to fail, salt water from the nearby San Francisco Bay would knock out the freshwater supply for most of the state, causing untold economic and environmental damage. This cannot be allowed to happen.

The governor’s proposal envisions a single, 30-mile underground tunnel capable of transporting up to 6,000 cubic feet of water per second that would draw water from the north end of the Delta. The goal of modernizing Delta water delivery this way is to guarantee a baseline supply of water by more reliably capturing water during and after storm events, to protect existing supplies from the threats posed by climate change, sea level rise and earthquakes and to better protect the delicate Delta ecosystem.

Read More [[link removed]] Climate Change And Water Supply

California, as everyone knows, receives virtually all of its precipitation during a few fall and winter months and in 2019, some early rain and snow storms promised a bountiful water year.

This year, Mother Nature kept that promise in Southern California, where precipitation is running at or above the normal, but Northern California — far more important from a water supply standpoint — has been a different story.

The north has seen almost no precipitation since Christmas, the all-important Sierra snowpack is less than half of its average depth, and the region’s balmy, springlike weather shows no signs of ending.

A stubborn high-pressure area off the coast has been blocking Arctic Ocean storms from dipping into California, leaving water managers hoping for a “March miracle” like the one that rescued the state from an even worse winter dry spell in 1991.

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