Web Version [link removed] | Update Preferences [link removed] CBRT in the News Eli Lilly and Company Unveils Shared Innovation Laboratory In South San Francisco

Eli Lilly and Company (NYSE: LLY) today unveiled its first shared innovation lab, located in South San Francisco, designed to speed the discovery of innovative medicines through collaboration with local biotech companies. Lilly Gateway Labs will offer companies direct access to Lilly scientists, team members and executives, as well as exposure to Lilly's scientific and functional expertise.

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"Healthcare is the fastest growing sector of California's economy and Lilly Gateway Labs brings exciting opportunities for partnerships and innovation in drug research and development in South San Francisco that will help lead to groundbreaking therapies and improved patient care," said Rob Lapsley, President and CEO, California Business Roundtable. "California's life sciences industry is one of the nation's – and the world's – leading life sciences hubs, and we look forward to their leadership in South San Francisco to grow new companies and jobs into the future."

Read More [[link removed]] Business Group Opposing Split-Roll Backs $15B School Bond

The California Business Roundtable announced its support today for a $15 billion school facilities bond slated for the March ballot.

The support contrasts with the group's staunch opposition to another measure that, if passed, would also boost funding for schools: the "split-roll" tax proposal planned for the November 2020 ballot.

The high profile measure, backed by several Democratic presidential candidates, would generate up to $12 billion more for schools and communities annually by increasing commercial property taxes. The move would roll back property tax protections granted by Proposition 13, a landmark property tax measure in 1978.

Read More [[link removed]] California School Boards Association Pulls Plan To Put $15 Billion Tax On 2020 Ballot

The California School Boards Association announced Wednesday that it and its partners will end their effort to put a $15 billion tax initiative benefiting K-12 and community colleges before voters next November. Stating it wanted to avoid the prospect of competing tax measures for education on the same ballot, the association indicated it would seek a tax in 2022 instead.

The decision eliminates one of the challenges facing another tax proposal that has yet to qualify for the 2020 ballot. That measure would raise an estimated $12 billion for counties, cities, schools and community colleges by raising property taxes on industrial and commercial properties. Called Schools and Communities First, it would be the first serious effort in three decades to amend the limits on property taxes imposed in 1978 by Proposition 13. About 40 percent of the revenue — nearly $5 billion —would go to education.

Supporters of Schools and Communities First, a combination of grassroots housing, social justice and community groups, public employee unions, the League of Women Voters and the California State PTA, are currently collecting the nearly 1 million signatures needed to place the measure on the ballot. The measure had already qualified, but proponents modified the wording, requiring a second round of signatures. Opponents, which include the Howard Jarvis Taxpayers Association and the California Business Roundtable, already are funding opposition ads.

Read More [[link removed]] California Authorities Using Deceptive Language To Impose New Taxes

California authorities are trying to impose a new property tax. Newspaper reports show that, Californians have rejected the proposal so officials are “camouflaging” the initiative to present it to the public with a positive twist.

California Attorney General Xavier Becerra is pushing the proposal that could raise billions of dollars from taxpayers each year, reported The San Diego Union-Tribune.

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“We’re really disappointed with the attorney general,” said Rob Lapsley, president of the California Business Roundtable, quoted by San Francisco Chronicle.

The state has a property tax law that “saved” home and business owners over the past 40 years, OANN says.

In its report, OANN adds that residents have been saying for years that they refuse to change this tax and, according to experts, any legislature that tries to do so “will pay the final price at the polls.”

Read More [[link removed]] Want To End Poverty In California? Embrace Entrepreneurship.

Sacramento politicians have heralded the state’s record-low 4.0 percent unemployment figures. While this is good news, anyone living in Southern California will tell you that things aren’t as rosy as they appear to be.

Take what’s going on in Imperial County, for example. Unemployment rates in the El Centro region, which borders both Mexico and Arizona, were 22.1 percent in August, which the California Center for Jobs and the Economy terms, “Great Depression-era levels of unemployment.”

Meanwhile, California once again had the nation’s highest poverty levels in the latest release of the U.S. Census supplemental poverty measure. It found that 18.2 percent – or almost one in every five people – were living in poverty.

We’ve heard a lot of talk this year from state elected officials about reducing poverty. But Gov. Newsom and his allies promote the status-quo policies – such as increasing taxpayer spending and creating or expanding government programs – that haven’t proven successful in helping people in need.

Read More [[link removed]] Business Climate and Job Creation Despite Job Boom, More Men Are Giving Up On Work

David Pierce was never someone who sat around watching life go by. He worked as a chef and had a catering business on the side. He sang in his church choir and did community theater, where he met his wife.

Then, in his mid-50s, doctors removed part of Pierce's foot, a complication of diabetes.

"My health just went, kind of really downhill. It really took a turn for the worse," says Pierce, sitting at his dining room table in his tidy home in Apalachin, N.Y. "I couldn't maintain even a part-time schedule."

A year ago, he went on disability, joining the large army of men who have left the workforce for good.

Read More [[link removed]] U.S. Hiring Strengthened In November, Fueling Expansion

The U.S. job market strengthened in November, as hiring jumped and unemployment fell to a half-century low, adding fuel to the economic expansion.

Employers added 266,000 jobs in November—the fastest pace since 312,000 in January—and the jobless rate dipped to 3.5%, matching September as the lowest level since 1969, the Labor Department said Friday. Wages also advanced 3.1% from a year earlier.

“This is a ‘who would have thought moment?’” said Becky Frankiewicz, president of staffing company ManpowerGroup’s North America division. “No one would have ever guessed we could be sitting at 3.5% unemployment with 110 months of job gains.”

Read More [[link removed]] American Firms Import Fewer Chinese Goods

Imports of Chinese goods fell in October as the U.S. imposed new tariffs on consumer goods, and the overall trade deficit narrowed on a drop in imports and exports.

The foreign-trade gap in goods and services contracted 7.6% from the prior month to a seasonally adjusted $47.20 billion in October, the Commerce Department said Thursday, narrower than the trade deficit of $48.5 billion that economists had expected.

Imports decreased 1.7% overall in October, with imports of consumer goods dropping 4.4%.

Read More [[link removed]] Trump’s Tax Cuts Push U.S. Burden Lower In World

President Trump’s 2017 tax cuts reduced the U.S. tax burden to one of the lowest among major world economies, according to a Thursday report by an intergovernmental organization.

U.S. tax burdens dropped by the largest amount among those countries in 2018, and the U.S. now has lower taxes than all but three countries in the Organization for Economic Cooperation and Development, the report said.

Driven by the federal tax cut that Congress and Mr. Trump enacted at the end of 2017, U.S. taxes at all levels of government fell to 24.3% of gross domestic product in 2018, down from 26.8% a year earlier and 25.9% in 2016.

That 2.5 percentage-point drop was only the fourth time since 1995 that any country’s tax burden has declined by at least that much in one year outside of the financial crisis, according to OECD, an intergovernmental economic organization with 36 member countries including the U.S.

Read More [[link removed]] Could Tax Increases Speed Up the Economy? Democrats Say Yes

Elizabeth Warren is leading a liberal rebellion against a long-held economic view that large tax increases slow economic growth, trying to upend Democratic policymaking in the way supply-side conservatives changed Republican orthodoxy four decades ago.

Generations of economists, across much of the ideological spectrum, have long held that higher taxes reduce investment, slowing economic growth. That drag, the consensus held, would offset the benefits to growth from increased government spending in areas like education.

Ms. Warren and other leading Democrats say the opposite. The senator from Massachusetts, who is a leading candidate for the Democratic presidential nomination, contends that her plans to tax the rich and spend the revenue to lift the poor and the middle class would accelerate economic growth, not impede it. Other Democratic candidates are making similar claims about their tax-and-spend proposals. Some liberal economists go further and say that simply taxing the rich would help growth no matter what the government did with the money.

Read More [[link removed]] The U.S. Furniture Industry Is Back—but There Aren’t Enough Workers

Here’s the good news: There are now more reasons to make furniture in the U.S. than at any point since the financial crisis. Crate & Barrel and Williams-Sonoma Inc. are expanding manufacturing in the U.S., and the factories of longtime furniture makers are humming.

Here’s the bad news: There aren’t enough skilled workers available to support the renaissance.

Manufacturers across the country are struggling to fill open slots in a tight U.S. labor market. Furniture companies, which for decades have been hit by competition from China, face special challenges after years of shrinking. A generation of prospective sewers and upholsterers have steered clear of the industry, leaving it heavily reliant on an aging workforce.

At Century Furniture, based in Hickory, N.C., delivery times have stretched to nearly nine weeks because of the worker shortage, which has caused the company to lose orders.

Read More [[link removed]] U.S. Services Sector Grew Solidly In November

Service-sector activity across the U.S. expanded in November, a reassuring sign the U.S. economy remained on solid footing as 2019 comes to a close.

The Institute for Supply Management on Wednesday said its nonmanufacturing index—tracking industries including health care, finance, agriculture and construction—grew in November, albeit at a slower pace than in October. The index logged in at 53.9 in November, compared with 54.7 in October.

Separately, data firm IHS Markit said on Wednesday its U.S. services index was 51.6 in November, up from 50.6 in October.

Both indexes are derived from surveys of purchasing and supply executives. Readings above 50 indicate an expansion in activity, while those below 50 indicate contraction.

Read More [[link removed]] California's Economy Will Grow Faster Than The Nation's, UCLA Forecast Predicts

California’s financial progress will sluggish subsequent yr, however it’s more likely to outshine that of the nation general, as Golden State employers increase payrolls, in line with a brand new UCLA Anderson College forecast.

Whilst recession fears hang-out the continued enlargement, California’s financial output expanded by 2.6% this yr, albeit down from three.5% within the final quarter of 2018.

“This is still above the U.S. rate,” wrote forecast director Jerry Nickelsburg, noting that U.S. GDP grew by 2.1% within the final quarter. “While we expect further slowing of the California economy as part of the U.S. economic growth slowdown in 2020, this differential is expected to persist.”

The 134-page UCLA forecast, a broadly watched and often-cited quarterly outlook for California and the nation, provided analyses on the probability of recession, the well being of the housing market, the influence of the commerce warfare and the geographic distribution of educated employees.

Read More [[link removed]] CA Commercial Property Owners Facing Pervasive Tax Increases If Prop. 13 Split Roll Initiative Passes

Despite California’s record budget surplus of $7 billion in reserves, the Proposition 13 “split roll” property tax ballot initiative could end up being a tax windfall for state government coffers. With the state sitting on a sizable surplus, opponents ask why the attack on businesses?

The ballot initiative, referred to as “tax reform” by proponents, qualified for the November 2020 ballot, and is currently gathering signatures.

Proponents of splitting Proposition 13, which keeps escalating property taxes in check, are also selling the initiative as “higher funding for education.” Proponents have long claimed that because of Proposition 13, public schools have been robbed of necessary revenue, and that businesses have not been paying their fair share of property taxes.

While public education would receive more funding from higher property taxes, the real outcome is that commercial property owners would be forced to pass the increased costs to tenants, opponents say. And since most of the businesses in California are small businesses, whether they rent or own, they will be hit with this tax increase.

Read More [[link removed]] This New Law Was Meant To Target Uber. So Why Could It Hurt Hospitals?

When a former labor organizer, California Assemblymember Lorena Gonzalez (D-San Diego), wrote a bill to regulate "gig" labor, she was trying to take aim at companies like Uber and Lyft. These ridesharing companies had been inappropriately classifying their drivers as "independent contractors," she argued, when they were really just run-of-the-mill employees—and she hoped to force the companies to provide ordinary employment benefits (such as a minimum wage, providing paid sick days, and insurance benefits) to all of their workers.

But even though her bill wasn't specifically intended to impact the health care industry, the law could have significant consequences for hospitals—especially for a critical segment of the nursing workforce. Let's explore more.

Why hospital leaders are concerned about the bill

The law, as a result of significant lobbying efforts, has exemptions for several jobs and industries. Accountants, architects, travel agents, and—most importantly for hospitals—doctors are exempted from the rules.

Read More [[link removed]] How California Is Rewriting The Law On Online Privacy

Our actions online have created a vast trove of information worth billions of dollars. Every time we search, click, shop, watch, send, receive, delete or download, we create a trail of data that companies can use to figure out our tastes and interests. We also hand over information when we use social media or loyalty programs at our favorite stores.

This data has formed the foundation of the internet economy, allowing advertisers to better target the people they want to reach — whether that’s a company that wants to sell you something or a politician who wants your vote.

But many Americans have grown concerned about what else can happen with all this data. Hackers have stolen it from email providers and credit card companies. Facebook was fined $5 billion for mishandling information on millions of people that political consultants exploited to influence the 2016 presidential race. Health apps have been criticized for sharing their users’ most intimate details — including when they have sex or ovulate.

Read More [[link removed]] Energy and Climate Change Getting To A Carbon-Free Economy

The Green New Deal refers to two distinct ideas. The narrower idea, which I discuss here, is a strategy to decarbonize the U.S. energy system in line with the Paris Agreement. The broader, urgent idea is an integrated program including renewable energy, infrastructure, health care, education, and jobs.

Contrary to some commentaries, decarbonization will not require a grand mobilization of the U.S. economy on par with World War II. The incremental costs of decarbonization above our normal energy costs will amount to 1 to 2 percent of U.S. GDP per year during the period to 2050. By contrast, during World War II, federal outlays soared to 43 percent of GDP from the prewar level of 10 percent of GDP in 1940.

The key today is to redirect outlays now spent on fossil fuel–based technologies toward zero-carbon technologies instead. That redirection will require a serious increase in federal and state public infrastructure spending, but most importantly will depend on new federal and state regulations to redirect the energy-related spending. Carbon pricing (such as a carbon tax) will be one useful tool for redirecting the spending, but will be of less importance than regulations.

Read More [[link removed]] A Bumpy Road For Electric Vehicles in China

Beijing wants lots of electric vehicles, but no longer wants to pay for them. Car makers risk having to foot the bill instead.

Electric vehicle sales in China—the world’s largest auto market—fell off a cliff after June, when the government slashed purchase subsidies. From July through October, sales of new-energy cars, which include plug-in hybrids, were 28% lower than the year before.

Many buyers probably bought EVs in advance of the subsidy cut, amplifying the current hangover. Still, the big drop suggests demand for the new technology isn’t strong unless the government is picking up a big part of the tab. Without subsidies, EVs are still

Read More [[link removed]] UN Climate Talks Aim To Pave Way For Global Carbon Market

On a cold afternoon in late November, Jan Gerrit Otterpohl eyes the chimneys of Berlin’s Heizkraftwerk Mitte, a state-of-the-art power plant that supplies the city with heat and electricity. It’s not the billowing steam he’s interested in, but the largely invisible carbon dioxide that the power station exhales as it burns natural gas.

Under European Union rules, the plant’s operator, Vattenfall, needs a permit for each ton of carbon dioxide it emits. Otterpohl’s job is to keep costs low by making sure the company buys only as many permits as necessary, at the current market price.

Economists say that carbon markets like the one Otterpohl uses can become a powerful tool in the fight against climate change, by giving emitters a financial incentive to reduce greenhouse gases. But despite making progress in other areas, governments have for years been unable to agree on the rules that would allow truly global trade in carbon permits to flourish.

Read More [[link removed]] Gov. Newsom’s Climate Change Executive Order Looting Road Funds Short On Details, Long On ‘Social Investing’

Recently California Gov. Gavin Newsom signed an Executive Order authorizing the looting of voter-approved gas tax funding for road repairs and highway expansions, to be used to fight “climate change” via the high speed rail he promised to shut down. Voters felt duped. Again.

The Executive Order by the Governor requires state government to “redouble its efforts to reduce greenhouse gas emissions and mitigate the impacts of climate change while building a sustainable inclusive economy.”

Through the Executive Order, California Governor Gavin Newsom has redirected gas tax money to fund railway systems and other projects. The gas tax revenue would have repaired and upgraded the state’s broken highways and roads, California Globe reported in October.

“Newsom’s order directs the state’s Transportation Agency, pension funds and the department that manages government contracts to reconsider how they spend the public’s money with an eye toward investing in projects that could help Californians prepare for climate change,” the Sacramento Bee wrote.

Read More [[link removed]] Judge Tosses Lawsuit Over California Nuclear Plant Fuel

A federal judge has thrown out a lawsuit that tried to halt the transfer of used nuclear fuel at the San Onofre nuclear power plant in Southern California.

The San Diego Union-Tribune reports that the judge dismissed the suit with prejudice on Tuesday, meaning the same complaint can't be refiled.

San Onofre closed in 2013 but it remains home to 3.5 million pounds of spent fuel and nuclear waste. The waste is being transferred from storage pools to concrete storage holes.

The group Public Watchdogs sought an injunction to halt the transfers.

Southern California Edison, which operates the plant, says it's pleased with the judge's decision.

Read More [[link removed]] Offshore Wind Still Looks To Get A Foothold In California

There may be a literal energy windfall off the coast of California but it is still unclear whether the federal government will give approval to specific sites and how long it will take before tall turbines are bobbing on the Pacific, sending electricity to customers across the Golden State.

Wind energy’s boosters are eager to see proposed projects get the go-ahead.

“Let’s get a couple of these rolling, get some floating offshore turbines out there and build this over time, which is exactly what you’re seeing on the East Coast,” said Tom Kiernan, CEO of the American Wind Energy Association.

For now, the state, local and federal governments are working with military brass to negotiate a possible agreement that could see a way clear for a pair of sites off the coast of Central California but a compromise thus far has proved elusive.

By contrast, one offshore wind farm off the coast of Rhode Island is already up and running and 15 other potential sites off the East Coast are in the pipeline.

Read More [[link removed]] California Pension Fund Goes Green With Muni-Bond Debut

The California State Teachers’ Retirement System may have just missed its investment goal but its debut municipal-bond sale Thursday is right on target.

The public pension, the second-biggest in the nation, is selling $281 million in tax-exempt municipal green bonds at a time when wealthy Californians are snapping up such debt to drive down their tax bills and when buyers are increasingly seeking investments intended to lessen the impact of climate change. The pension, which posted a 6.8% return shy of its 7% expectation for the year that ended in June, is using the bond proceeds for an expansion of its West Sacramento headquarters designed to meet high environmental standards, including the ability to achieve zero net energy consumption.

While investors generally haven’t paid higher prices for assets complying with environmental, social and governance principles, that may change in the future, said Eric Friedland, director of municipal research at Lord Abbett & Co. That makes the Calstrs bonds, which are already linked to a strong state credit because of the financing California provides for the pension system, even more appealing, he said.

Read More [[link removed]] Workforce Development U.S. Math Scores Remain Flat On International Test Of 15-Year-Olds

Despite recent instructional reforms, American students continue to struggle with math, according to the latest results of one of the most watched international assessments.

U.S. math scores have not budged significantly since 2003 on the Program for International Student Assessment and the country ranks 31st among 77 education systems worldwide, according to a report on the fall 2018 results released Tuesday by the National Center for Education Statistics, which is part of the U.S. Department of Education.

In the last decade, California, 40 other states and the District of Columbia have adopted the Common Core, new academic standards in mathematics and English language arts. Many states, including California, have also adopted new science standards — all of which have required major shifts in instruction. But compared to other countries, test results show there’s a long way to go before these reforms can be dubbed a success.

Read More [[link removed]] University Of California Under Pressure From Within To Abandon SAT And ACT For Admission

Pressures are mounting on the University of California to end its 50 year old practice of requiring freshman applicants to take the SAT or ACT — this time from some of its most senior leaders.

While the university awaits the recommendations of a special faculty task force on the controversial issue, UC Berkeley chancellor Carol Christ has come out strongly in favor of ending the testing requirement.

“I’m very much in favor of doing away with the SAT or ACT as a requirement for application,” she said at a symposium last week hosted by Policy Analysis for California Education (PACE) and the UC Berkeley Graduate School of Education.

Such a move could provide relief for the nearly 200,000 high school students who apply to UC each year and also potentially contribute to a more diverse student body, especially at its flagship campuses. Over 1000 colleges have already adopted “test-optional” policies. Last year, the University of Chicago became the most prominent selective research university to do so, although it still “encourages” students to take the tests. Were the University of California to follow suit, it would be the largest and most prominent public university system to move away from the practice, which has been in place at UC for a half century.

Read More [[link removed]] Infrastructure and Housing Senate President Sounds Off On San Mateo Housing Ruling

As an advocacy group prepares to challenge a judge’s ruling that the San Mateo City Council did not violate the Housing Accountability Act when it denied a proposal to build a 10-unit condominium building last year, the issue on Wednesday garnered the attention of the state Senate president pro tempore, who criticized the exemptions for charter cities from a critical component of the state’s housing laws.

In a statement, state Sen. Toni Atkins, D-San Diego, described Judge George Miram’s Nov. 7 ruling as disappointing and underscored the state’s role in providing more than $1 billion to local governments in the past two years to streamline procedures, update planning documents and provide infrastructure financing to accompany new housing.

“We want local governments to act in partnership with the state to address our housing and homelessness crisis,” she said in the statement. “When municipalities seek to avoid these responsibilities, we all lose.”

Read More [[link removed]] California Could Lose Housing Leverage Over Cities Under Court Ruling

A judge’s ruling in San Mateo County is raising fears among developers and advocates for more housing construction that the state will lose its leverage for forcing cities to build their way out of California’s affordability crisis.

The judge said the city of San Mateo was not obligated to follow a state law on housing approvals because it is a charter city — a system that gives local governments greater control over their own affairs. There are more than 120 charter cities in California and housing is tight in many of them, including San Francisco, Oakland and San Jose.

The ruling did not create a binding precedent for California. But it has prompted a legal challenge from groups concerned that it will make it easier for cities to reject new housing. It even caught the attention of Gov. Gavin Newsom, who called the ruling “misguided.”

Read More [[link removed]] Home SF Was Meant To Boost Housing Along Transit. But Can It Fulfill Its Promise?

Two and a half years ago, San Francisco adopted an aggressive plan to add more housing, including affordable homes, along transit corridors. Under the Home SF program, officials hoped to see 16,000 units completed by 2037.

The program lets developers exceed height and density limits in exchange for including more affordable housing in their projects, and the idea was to push more projects in historically development-wary neighborhoods.

But the program has been slow to gear up. Not one Home SF project is under construction and just three have been approved.

Now, Home SF may finally be gaining momentum. In the last few months the number of developers seeking to use it has jumped from six to 12, and three applications have been filed since October.

Read More [[link removed]] ‘It’s Not Town Planning, It’s Town Cramming’: A Look at the Development Backlash In Growing Western Cities

Colorado’s job growth has a downside. Along the urban corridor where the Rocky Mountains meet the plains, home prices are climbing, luxury apartments are multiplying, and commuters are getting stuck in traffic. Parking spaces on some main streets and popular trailheads are jampacked.

Now some locals, frustrated with the pace of development, are trying to slow it down.

"Every place that you go, it’s overwhelmed by people, just like California,” said Daniel Hayes, a rental home manager based in Golden, Colorado, who has proposed a statewide ballot initiative to restrict new housing construction in most urban areas, which the Colorado Supreme Court has yet to approve for circulation. “Is that what we want?”

Anti-growth feeling is bubbling up in some Western communities — particularly in cities adding people and housing faster than the national average — even as city leaders and affordable housing advocates call for more homebuilding and downtown density to combat traffic and rising home prices.

Read More [[link removed]] Editorial and Opinion California's Proposition 13 Education Bond Is A Much Needed Solution For Aging Campuses

More California high school graduates are academically ready for college than ever before and expanding access to higher education would benefit them and the state’s economy.

To meet student demand and the need for an educated workforce, expansion of facilities and fire and other life safety improvements in buildings at California’s public colleges and universities are urgently needed.

The state must protect its 151-year investment in its public higher education system to fulfill its commitment to educate these students.

Approving Proposition 13, a $15 billion bond measure on the March 3 ballot, would help address the most critically needed seismic repairs and improvements of buildings and other infrastructure at California’s pre-K-12 schools and public universities.

Read More [[link removed]] California Is Hardly 'Over.' But It Does Need To Make Two Big Changes

Maybe it’s the fires, but the news seems filled with California apocalypse stories. One San Francisco based columnist recently wrote, “I’m starting to suspect we’re over.”

I beg to differ. Since 2000, California has consistently grown at a rate almost twice that of the U.S. GDP. Yes, we have had bad years, particularly in 2008, when the U.S. economy experienced the Great Recession, but we rebounded much faster than the rest of the country.

Last month the U.S. reported GDP growth of 2%, while California is growing at 4%. Is this a state that is over?

The problems that seem to have set the California declinists off are the fires and the homelessness and housing problems that are plaguing our large cities. But a reasoned analysis of these issues suggests that they are solvable problems.

Californians have risen to big challenges in the past, largely by testing new approaches to governance and public policy that were eventually embraced by the rest of the nation.

Read More [[link removed]] Will Schools Get More State Aid?

To the denizens of the state Capitol, the onset of the holiday season also marks the beginning of the state budget cycle.

Gov. Gavin Newsom and his budget staff will soon decide the hundreds of individual appropriations that will make up the 2020-21 budget he will propose in early January, touching off five months of public hearings, backroom negotiations and horsetrading before the final version is enacted in June.

California’s economy continues to perk along, albeit with some signs of slowing, and barring an unanticipated recession, Newsom and the Legislature will have more than enough tax money to meet all of the state’s current obligations.

In his annual look ahead, issued in late November, the Legislature’s budget analyst, Gabriel Petek, projects that carryover funds from the current year and anticipated revenues are enough to cover all current activities with as much as a $7 billion surplus.

Read More [[link removed]] What To Do About The Gig Economy

Next year, a California law cracking down on “gig economy” companies such as Uber will go into effect. These companies have typically classified their workers as independent contractors rather than full employees, which has profound implications under modern labor law: no collective-bargaining rights, fewer antidiscrimination protections, less regulation of working conditions and benefits. But under the new statute, passed to codify and clarify a recent decision by the state’s supreme court, it will become a lot harder to treat workers as contractors for the purpose of the state’s wage-and-hour policies, which pertain to matters such as minimum wage, breaks, overtime, and the like.

The “ABC test” that the new law prescribes seems simple enough. To qualify as a contractor, a worker must (a) be “free from the control and direction of the hiring entity in connection with the performance of the work,” (b) do work that’s “outside the usual course of the hiring entity’s business,” and (c) be “customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.” But there’s a big problem here, even for those thirsting for Uber blood: Lots of people, in a wide range of industries, fail the ABC test — people who have been happily working as independent contractors for decades and don’t want to stop.

These include freelance journalists, who let loose a torrent of complaints online as it became clear how the law would affect them, and many others, from translators to “owner-operator” truckers. Applying the ABC test to these workers could cost them their independence, their flexibility, and, if employers don’t find it worthwhile to hire them on more onerous terms, possibly their livelihoods. And the drafters of the law knew full well that the ABC test was not a good way to draw the line between full employment and contracting, as evidenced by the numerous exceptions they wrote in.

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