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Education Groups Renew Call For Newsom To Put Tax For Schools To Voters In 2020
 

A coalition of education organizations and school officials on Tuesday called on Gov. Gavin Newsom and legislative leaders to place one tax measure on the November 2020 ballot “solely focused on education: quality child care, pre-school, K-12 and higher education.”

Their letter to Newsom, Assembly Speaker Anthony Rendon and Senate President pro Tem Toni Atkins picks up where the California School Boards Association left off last week, when it announced it was deferring a $15 billion tax initiative for K-12 and community colleges until 2022. The school boards association had hoped that Newsom would intervene and reach a compromise with sponsors of another tax initiative — a challenge to Proposition 13’s limits on commercial property tax increases — to put only one tax before voters.

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Called Schools and Communities First, the initiative has significant support. It is backed by the California Teachers Association and other labor organizations, health organizations and other social service organizations that would benefit from the initiative and hundreds of elected officials. But it will also face major opposition from business interests, including the California Business Roundtable and anti-tax organizations, which have vowed an all-out campaign.

Schools and Communities First is currently gathering the nearly 1 million signatures needed to get it on the ballot.

 
 

 
Valley Legislators Hit With Thousands Of Petitions To Save Calif.'s Prop. 13
 

A push to maintain California’s landmark property tax law – Proposition 13 – got underway on Tuesday with a splash in the south Valley.

The Fight for Prop. 13, a campaign being waged by the California Business Roundtable and backed by a wide swath of local elected officials and organizations, hand-delivered thousands of petitions to southern San Joaquin Valley legislators.

Prop. 13, approved in 1978, capped property taxes at 1 percent of the cash purchase value of an individual property with increases to property valuations limited to 2 percent annually.

It has often been the subject of ire from California Democrats looking to repeal it in one fashion or another to boost tax revenues.

Currently, a proposal to partially repeal Proposition 13 and enact a split-roll property tax is targeted for the November 2020 ballot.

 
 
 
Business Climate and Job Creation

 
U.S., China Agree To Limited Deal To Halt Trade War
 

U.S. and Chinese officials announced a limited agreement to halt the trade war between the countries, with President Trump removing the threat of new tariffs on China and Beijing agreeing to purchases of American farm goods and other products.

As part of the “phase one” deal, the U.S. canceled plans to impose fresh tariffs on $156 billion in annual imports of Chinese-made goods—including smartphones, toys and consumer electronics—that were set to go into effect Sunday. The U.S. will also slash the tariff rate in half on roughly $120 billion of goods, to 7.5% from 15%.

Tariffs of 25% would remain on roughly $250 billion in Chinese goods, including machinery, electronics and furniture.

 
 

 
Holiday Retail Sales Had A Lackluster November Start
 

Shoppers are heading into the U.S. holiday season with restrained cheer.

Consumers held back on purchases of discretionary items ranging from clothes to electronics in November. Retail sales excluding cars and gasoline were unchanged from the previous month, the Commerce Department said Friday. When those volatile categories are included, sales rose 0.2%, seasonally adjusted.

Lackluster sales at the start of the holiday shopping season signaled consumer spending, which accounts for two thirds of the U.S. economy, could be softening as the fourth quarter progressed.

November is a key month for retailers, especially for department stores, clothing outlets and online sellers during the holiday shopping season. The month includes Thanksgiving Day and Black Friday, days in which Americans crowd malls and shop online for deals.

 
 

 
From Farms To Silicon Valley, U.S. Businesses Stand To Gain From USMCA
 

The new U.S.-Mexico-Canada Agreement is expected to usher in tangible benefits for agriculture, technology, manufacturing and other business sectors, industry analysts say.

Farmers are likely to see more exports. More auto parts are expected to be made in the U.S., and e-commerce and data companies say the trade pact will allow them to expand internationally.

U.S. business leaders hope it is a return to stability, spurring investment by establishing more predictable trade relations after a year marked by uncertainty over the pact’s fate in Congress and President Trump’s threats to pull the U.S. out of the existing North American Free Trade Agreement.

“The approval of USMCA will send a signal of greater certainty to the market,” said John Murphy, senior vice president for international policy at the U.S. Chamber of Commerce. “Investment decisions that may have been clouded can now go forward without that uncertainty.”

 
 

 
California Power Producer PG&E Files Amended Reorganization Plan
 

California power producer PG&E Corp said late on Thursday that it has filed for an amended reorganization plan, adding that it remains on track to getting the plan confirmed before a June 2020 deadline to exit bankruptcy.

The development comes less than a week after the company said it reached a $13.5 billion settlement with victims of some of the most devastating wildfires in California's modern history.

PG&E has settled all major wildfire claims and resolved disputed release provisions between insurance companies and wildfire victims, it said on Thursday.

The company also said its plan can be fully funded through its capital structure, including the $12 billion equity backstop commitments that PG&E received last week.

 
 

 
Hit By Fires And Droughts, California Voters Call Climate Change Their Top Priority
 

Pummeled by fires, drought and floods, California’s Democratic primary voters put fighting climate change at the top of their list of issues for the next president to tackle.

Nearly half of likely Democratic primary voters call the issue the No. 1 priority for the next president, according to a new statewide poll conducted by UC Berkeley’s Institute of Governmental Studies for the Los Angeles Times.

By contrast, fewer California primary voters — about 1 in 3 — called healthcare the highest priority, even though differing healthcare proposals have dominated the debate among Democratic presidential candidates for months.

Presidents typically have a limited window in which to get major legislative proposals through Congress — the first two years generally see the most victories — and usually can manage to push only a couple of top priorities. The last two Democratic presidents devoted much of that crucial period to healthcare, successfully for President Obama, unsuccessfully for President Clinton.

 
 

 
Founded In 1983 To Serve LAX, SuperShuttle Is Going Out Of Business
 

The seemingly ever-present blue and yellow vans have been part of the blur of activity at LAX for nearly four decades.

SuperShuttle, the shared ride service founded in 1983 to serve the airport, is coming to a stop -- for good.

The service will cease operations by the end of the year, according to a letter from the company to a Los Angeles-area franchisee and obtained by NBCLA. SuperShuttle will honor all reservations and walk-up requests for service through Dec. 31.

The company expanded nationwide and to Latin America, Canada, Europe and Asia after taking off at LAX. In recent years, it has faced competition from Uber and Lyft and pulled out of airports serving many Burbank, Sacramento, Phoenix, Baltimore, Minneapolis and other cities.

 
 

 
Lyft Starts California Car-Rental Service in Blow to Hertz, Avis
 

Lyft Inc., whose ride-hailing service has been a frenemy of car-rental companies, just got a little less friendly with the likes of Hertz Global Holdings Inc. and Avis Budget Group Inc.

Lyft said Thursday it’s testing out a car-rental service in Los Angeles and San Francisco and offering unlimited miles as an inducement. The announcement did little for its stock but sent Hertz and Avis shares plunging. 

While the rise of Lyft and Uber Technologies Inc. raised existential questions for more than century-old rental companies like Hertz and Avis several years ago, both companies have benefited recently by making their cars available to drivers that the ride-hailing services must keep adding to help support their growth. Avis even forged formal partnership with Uber in early 2017 and Lyft last year.

Hertz and Avis can breathe easily for a while, said Hamzah Mazari, a Jefferies analyst who rates Avis a buy and Hertz a hold. Building up a big network of cars and rental lots is expensive, and Lyft doesn’t have the balance sheet to do it quickly.

 
 

 
California Travel Firm Tripling Dallas Office With Major Downtown Lease
 

One of downtown Dallas’ biggest buildings has landed a major new tenant.

California-based TripActions, a fast-growing corporate travel management firm, is taking more than 88,000 square feet of office space in the Renaissance Tower at 1201 Elm St.

The just-signed office deal is one of the largest lease transactions in downtown Dallas this year and will bring hundreds of new workers to the building.

The move will also more than triple TripActions’ office footprint in the Dallas area.

“TripActions’ business is booming,” Whitebox Real Estate’s president and managing director Grant Pruitt said in a statement. “This is their second office relocation with a need to expand within a year.”

 
 

 
This California Farm Town Is Launching Startups Faster Than Seattle, Boston, and the Bay Area
 

Once a recurring punch line in Johnny Carson's monologues, the agriculture-and-oil town of Bakersfield, California--home to the country's most prolific carrot farm--is not the most obvious example of a West Coast startup hub.

But the Central Valley city, population 400,000, has vaulted onto this year's Surge Cities list by outperforming 46 other metro areas--including the Bay Area, Boston, and Seattle--in net job and business creation in the past year.

"Incredible things are happening here," says Irma Olguin Jr., co-founder and CEO of Bitwise Industries, a Fresno-based tech academy and software startup that's helped create about 1,000 jobs in the area. It's opening a Bakersfield location in 2020. "We're seeing validation from VCs and investment banks, and there is a momentum around local revitalization."

According to Anna Smith, co-founder of local real estate firm Sage Equities, this Bakersfield boom has been helped by entrepreneurial Millennials who've returned home from more expensive cities. They're finding a growing tech community, bolstered by events like the 59-day hackathon led by nonprofit 59DaysofCode.

 
 

 
Five US Cities Are Dominating Tech Job Growth
 

The unprecedented pace of technology developing and integrated into everyday life has created a trillion-dollar market with worldwide spending of information technology (IT) close to US$4 trillion this year.

In the US, the tech industry has created more than 250,000 new jobs from 2005 to 2017, though the majority (90 percent) of the jobs are located in a handful of cities, while the remaining 10 percent are spread across 377 metro areas across the country.

New research revealed the five cities leading in tech jobs are Boston, San Diego, San Francisco, Seattle, and San Jose. In contrast, cities, including Madison, Albany, Provo, are some of the cities gaining the smallest percentage of tech jobs.

The research by scholars Mark Muro and Jacob Whiton, from the Brookings Institution and the Information Technology and Innovation Foundation, revealed the consequences of the uneven development of the tech industry across cities and emphasized the need for government initiatives to close the gap in this disparity.

 
 

 
Businesses Sue California Officials Over New Mandatory Arbitration Law
 

California business groups have sued state officials over a new law that will criminally penalize employers who ask workers to sign mandatory arbitration contracts to get hired, calling it a “job killer.” It was an unsurprising legal challenge to California’s new code that tiptoed around federal law allowing companies to enforce contracts where workers agree to mediate employment issues instead of suing.

The state law applies to new employees required to sign arbitration agreements or current workers who risk being fired if they don’t agree — not to those who already have contracts.

The suit, which the California Chamber of Commerce announced Tuesday after filing it last week, argued the new law would open the floodgates to litigation — clogging courts, delaying justice, and increasing costs for businesses and workers. Plaintiffs asked the court to stop AB51 before it goes into effect in January.

 
 

 
More People Signing Up For Health Insurance In California
 

California has seen a surge in people signing up for health insurance this year.

More than 130,000 people have purchased through the state-run marketplace for the first time.

That is a 16 percent increase from last year now that the state is offering more money to help people pay their monthly premiums.

California will also begin taxing people next year who refuse to buy insurance.

Covered California released the numbers on Thursday ahead of a Sunday deadline for people to purchase insurance and have their plans effective Jan. 1.

Plans purchased after Sunday would take effect Feb. 1. California's open enrollment period closes Jan. 31.

In addition to the new enrollments, more than 1.13 million people in California have renewed their plans for next year.

 
 

 
California’s Accounting System Cost Taxpayers $1.1 Billion And Still Can’t Produce A State Checkbook
 

California State Controller Betty Yee admits to paying 49 million bills last year. Yet, she won’t produce a single transaction subject to our public records request for line-by-line state spending.

Out of the 50 states, California is the only one that refuses to produce its state checkbook to our auditors at OpenTheBooks.com. Even though it’s home to Silicon Valley, the state government isn’t letting tech drive transparency when it comes to its own records.

It shouldn’t take subpoenas and litigation to force open the books.

Last year, Yee paid 49 million bills for about $320 billion in payments. If you can make the payment, then you can track the payment. The state controller’s office – whose job it is to stop waste, fraud, corruption, and taxpayer abuse – may be in violation of transparency laws.

 
 
 
Energy and Climate Change

 
In Climate Fraud Suit, Exxon Mobil Earns Win Over New York State
 

On Tuesday, a New York state judge dismissed a lawsuit against Exxon Mobil alleging that the company had misled investors about the potential effects of climate change regulation on its business. The decision ends a lengthy investigation by the New York attorney general’s office that attracted attention from climate change activists hoping to hold the oil-industry giant accountable for its role in driving the global consumption of fossil fuels.

But it is unlikely to end scrutiny of whether Exxon bears legal responsibility for climate change impacts, or to settle looming questions about whether the company misled the public about climate change.

At issue is an apparent disjunct between the company’s business operations and the knowledge generated by its sophisticated scientific and analytical teams. (The company today employs more than 2,200 Ph.D. scientists). In 2015, InsideClimate News and The Los Angeles Times released in-depth investigations documenting that Exxon leaders had been aware of the possibility of a climate crisis since at least the late 1970s — years before most members of the public — and had conducted extensive research into the effects of carbon dioxide well into the 1980s. Then, starting in the late ’80s, the reporters found, the company scaled back that research and instead began financing efforts to cast doubt on the reliability of climate science writ large — even as it used those same climate change projections to inform its own business decisions.

 
 

 
California Celebrates 1 Million Solar Roofs
 

Former Governors Arnold Schwarzenegger and Jerry Brown and other local elected officials joined local high school students, business leaders and workers, renewable energy advocates, and community leaders marked achieving one million solar roofs across California during a celebration event at Buchanan High School in Clovis.

In 2006, then-Governor Schwarzenegger signed the Million Solar Roofs Initiative into law, which set a goal of building one million solar energy systems on homes, schools, farms, and businesses throughout the state. In 2019, the idea that once made international headlines for its “wow factor” is now a reality.

“California is leading the way to a clean energy future,” said Former Governor Arnold Schwarzenegger. “13 years ago, we set a huge goal: to build a million solar roofs in our state by 2019. Republicans and Democrats came together behind a policy that would be successful years after we all left office — it wouldn’t be ready for our re-election campaigns — because we understood that big, worthwhile goals were more important than politics. Today, we celebrate the vision and the hardworking Californians that made a million solar roofs a reality.”

 
 

 
California Regulators Clear Way For Natural Gas Ban To Take Effect
 

The California Energy Commission cleared the way Wednesday for six local governments to limit the use of natural gas in many new buildings. The policies, which encourage the installation of all-electric appliances, are scheduled to take effect in January.

Environmental advocates pushing to scale back fossil fuels hailed the commission’s move as a victory, but opponents argue that the gas bans will increase costs, harm businesses and limit consumer choice. Some noted that the all-electric push comes despite Pacific Gas & Electric Co.’s warning that wildfire-prevention power outages could persist for a decade.

Berkeley passed a trend-setting ban on gas appliances in new homes over the summer. Its example showed the way for more than 20 municipalities to pass similar ordinances, according to the Building Decarbonization Coalition.

 
 

 
These Cities Want to Ban Natural Gas. But Would It Be Legal?
 

With concerns about natural gas's impact on climate change rising, several Massachusetts cities and towns have started exploring outright bans on new natural gas hookups in commercial and residential buildings.

Berkeley, California, passed the first such ban in the country this past summer, and other West Coast cities have since followed with similar restrictions.

But in Massachusetts, as Cambridge discovered on Wednesday, it might be harder—if not impossible—to do.

The reason: the city ordinances and town bylaws in Massachusetts may conflict with existing regulations that are governed by the state. During a Cambridge City Council committee meeting Wednesday, the city's attorney advised that a proposed gas ban there might not stand up to legal scrutiny. The state attorney general's office is also reviewing the legality of a ban approved last month by the Boston suburb of Brookline on natural gas heating in new buildings.

"It is our analysis that [the rule change proposed for Cambridge] would likely be found to be preempted by state law if this were challenged in court," Nancy Glowa, solicitor for the city of Cambridge, told the City Council's ordinance committee.

 
 

 
California Faces A Crossroads On The Path To 100% Clean Energy
 

Bill Brand spent two decades fighting to get the waterfront power plant in Redondo Beach torn down and replaced with a public park. Until recently, he was sure he had won.

Regulators had set a deadline of Dec. 31, 2020, for owner AES Corp. to shutter the hulking power plant, whose smokestacks are bordered by a marina, six acres of wetlands and some of the most densely populated neighborhoods on the California coast. Plans were coming together for the city to purchase half the site — a triumph for Brand, whose campaign for open space and cleaner air had fueled his rise from activist to Redondo Beach mayor.

Then state officials had a last-minute change of heart.

In a unanimous vote last month, the California Public Utilities Commission said the gas-burning facility should be allowed to keep operating through 2022. The commission said the Redondo Beach facility — and three other coastal gas plants also slated for closure or rebuilding — is needed to keep reliable electricity flowing to Southern California residents for a few more years, until utilities can fully replace them with non-polluting resources.

 
 

 
California Considers Requiring Zero Emission Truck Sales
 

The country’s most populous state could become the first to require a portion of new truck sales be electric or “zero emission” vehicles as California grapples with how to clean up its worst-in-the nation air quality.

Home to the two largest ports in the country in Los Angeles and Long Beach, California has roughly 1.5 million medium and heavy duty trucks on the road that spew harmful pollutants as they haul freight to warehouses. The state’s transportation sector accounts for 41% of all greenhouse gas emissions, a cause of climate change, and is a major source of ozone and particulate matter pollution that can cause respiratory problems.

Regulators estimate the new rules would result in roughly 74,000 zero emission trucks on the road in California by 2030, or about 4% of all trucks. California already has a rule requiring car makers to offer for sale specific numbers of clean cars. But Mary Nichols, chairwoman of the California Air Resources Board, said the truck rule would be the first of its kind in the world.

 
 
 
Workforce Development

 
Some Rating Rise In 3rd Year Of California School Dashboard
 

Significantly fewer school districts will require county help this year for poor performance on the state’s school accountability tool, the California School Dashboard, reflecting what State Board of Education President Linda Darling-Hammond called “steady — albeit slow — progress in important areas” such as high school graduation rates and, by one measure, test scores.

On Thursday, the California Department of Education released the third year of dashboard results, covering 2018-19, in three new languages: Vietnamese, Tagalog and Mandarin. For the first time, it also released all of the underlying data for the dashboard in DataQuest, the state’s school data site.

High school graduation rates statewide increased 2.2 percentage points to a record 85.9 percent in 2018-19, with African-American students narrowing the gap with a one-year gain of 6.2 percentage points. The proportion of high school seniors deemed ready for college, based on state test scores, completion of courses needed for admission to the University of California and California State University and other factors, rose to 44.1 percent.

 
 

 
Lawsuits Seek To End University Of California's SAT And ACT Test Requirement For Freshman Admission
 

Saying they seek to protect low-income and minority students’ rightful chances for college admissions, civil rights organizations and the Compton School District followed through with their threat and filed lawsuits Tuesday demanding that the University of California stop requiring that applicants take the SAT or ACT entrance exams for freshman college admission.

“The requirement that all applicants submit SAT or ACT scores systematically and unlawfully denies talented and qualified students with less accumulated advantage a fair opportunity to pursue higher education at the UC,” declared the lawsuits filed in Superior Court in Alameda County. UC’s central administrative office is located in Oakland, in that county.

“Every UC admissions cycle that evaluates applicants based on their SAT and ACT scores irreparably damages the futures of tens of thousands of students who are capable of excelling at the UC campuses of their choice and benefiting from the opportunities and supports a UC education provides, causing unjustifiable squandering of time and resources and intense stress for them, their families, and their schools.”

 
 
 
Infrastructure and Housing

 
Sacramento Region Earns Low Grades For Response To The Housing Crisis
 

It's well known that California needs to build more homes to keep up with its population growth. But just how many homes? And how many homes should be built in your town to meet its share of the burden?

A 2017 report by then-Gov. Jerry Brown's administration found that the state needed to build 1.8 million new homes by 2025 to keep up with its expected population growth. And current Gov. Gavin Newsom has called for 3.5 million new homes in the same period. To achieve either goal, the state would need to see construction at two to four times the pace it's achieved in the past decade.

So how are we doing at picking up the pace? We're not, according to an analysis published earlier this week by the Southern California News Group. It compares the number of building permits approved in every city in California with the goals set for each city under the state's Regional Housing Needs Assessment. The analysis also helpfully assigns a letter grade to each city's performance.

Statewide, 97% of cities haven't issued enough permits to meet their goals under the assessment, and two-thirds of cities are more than 50% behind, according to the analysis.

 
 

 
Michael Bloomberg Brings California A Housing Plan
 

Former New York mayor Michael Bloomberg on Wednesday used his first presidential campaign visit to the make-or-break state of California to offer his plan to address the problems of poverty and housing affordability plaguing the Golden State.

Mr Bloomberg is skipping the four initial nominating contests in February and focusing on California, Texas, North Carolina and the other delegate-rich states voting on March 3 on Super Tuesday and beyond.

California alone offers 495 delegates to the nominating convention next summer, a little over 10 per cent of the total.

California is struggling with a housing affordability crisis that is fuelling homelessness.

 
 
 
Editorial and Opinion

 
Seattle’s Wage Mandate Kills Restaurants
 

This city’s minimum wage is rising to $16.39 an hour on Jan. 1. Instead of receiving a bigger paycheck, I’m left without any pay at all due to the policy change. That’s because the restaurant where I’ve worked for six years is closing as a consequence of the city’s harmful minimum-wage experiment.

I work for Tom Douglas, one of the best-known restaurateurs in Seattle. Mr. Douglas is in many ways responsible for the city’s reputation as a foodie paradise, and he recently celebrated his 30th anniversary in business. He’s a great boss, and his employees tend to stay at the company for a long time.

But being an established chef and a good employer doesn’t save you from the burden of a sharp minimum-wage increase, up 73% from $9.47 in 2015. For large-scale employers like Mr. Douglas, there’s no separate rate for workers who earn tips. In Washington and a handful of other states, tips aren’t counted as income earned on the job. That means restaurateurs are expected to pay servers like me the full minimum wage in addition to our considerable tip income.

 
 

 
5 Unsettling California Tax Rules
 

If you live in California—or even if you don’t—you probably know something about California taxes. They are high, the highest in the nation. And the state’s tax man is aggressive too, way more aggressive than you might think. Think the IRS is tough? California’s Franchise Tax Board is generally regarded as more uncompromising when it comes to tax disputes. What else should you know about California taxes? Consider these five things.

California Capital Gain Taxes Are Among the Highest in the World. With a top income tax rate of 13.3%, California taxes hurt. But one of the biggest complaints I hear is not about the top rate, it is about capital gain. With the IRS, the top capital gain rate is 20%. Add the 3.8% net investment tax under Obamacare, and you have 23.8% to the IRS. But do you get any kind of capital gain break in California?

Nope, Californian's pay up to 13.3% on their capital gain too. By paying 23.8% plus 13.3%, Californians are paying more on capital gain than virtually anyone else in the world. Those disproportionately high California taxes are an increasingly large share of the tax burden. It is one reason that California's 13.3% tax on capital gains inspires move then sell tactics. Moving to no-tax Texas, Florida, Nevada or Washington can look pretty good.

 
 
 
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