Despite a fresh warning from the Internal Revenue Service, a key committee in the California Legislature on Friday unanimously advanced legislation designed to shield wealthy residents from the effects of the federal tax overhaul enacted by Congress in December.

The tax overhaul ended the previously unlimited itemized deduction for all local and state taxes and capped the deduction at $10,000. A Tax Policy Center study estimates the change will cost about 489,000 state tax filers an average of $3,290.

Three high-tax states – New York, New Jersey and Connecticut – have already passed elaborate legislation that allows tax filers to defray their bills by giving money to state-designated charities. Such donations remain deductible, in theory, on federal tax forms.

But last Wednesday, the IRS took dead aim at the three states’ tax-avoidance measures. In what the Bond Buyer website called “an unusually blunt notice,” the IRS warned taxpayers to be “mindful” that “federal law controls the characterization of the payments for federal income tax purposes regardless of the characterization of the payments under state law.”

The IRS warning makes it close to inevitable that the interpretation of what is an eligible charitable deduction under the federal tax code will come before the federal courts. New York Gov. Andrew Cuomo is likely to lead the charge, describing the warning as an unlawful “attack” by the Trump administration on the Empire State.

California lawmakers may end up part of that legal fight. On Friday, a measure setting up a charity-donation system like New York’s – Assembly Bill 2217, by Inglewood Democrat Autumn Burke – won the support of the Assembly Appropriations Committee on a bipartisan 14-0 vote; three Republicans abstained. On May 14, it passed the Assembly Revenue and Taxation Committee on a 7-0 vote in which there were also three GOP abstentions.

On Jan. 30, Senate Bill 227 – a similar measure proposed Senate President Pro Tem Kevin de León, D-Los Angeles – passed the Senate on a 27-6 vote, with seven GOP abstentions. It has yet to receive an Assembly hearing.

Like Burke’s measure, de León’s bill would give tax filers who made a donation to a specified institution a state income tax credit that was nearly equal to their contribution.

Brown’s view of tax-avoidance proposals unclear

How Gov. Jerry Brown views the bills is unclear. In December, while Congress was finalizing the tax overhaul, he blasted the plan as “evil in the extreme” and joined Cuomo in calling the cap on state and local tax deductions a partisan assault by Republicans on Democratic states.

In January, he repeated his criticism of the tax changes as partisan when he unveiled his proposed 2018-19 budget, saying at a news conference that he worried that because of the lost deductions, wealthy Californians “may be tempted to leave.”

But so far, Brown has not commented specifically on the measures before the Legislature. He’s also kept clear of proposals to address the federal tax changes with a huge overhaul of California’s tax system that would reduce income and sales taxes while adding new taxes on services. This would both limit the pain caused by the cap on the federal deduction and lessen the heavy volatility of the state’s revenue stream.

Such tax changes were endorsed in 2009 by Gov. Arnold Schwarzenegger and a bipartisan commission he established. But their 425-page tax reform plan was dead on arrival in the Legislature. Democrats blasted it for being a giveaway to the wealthy. Republicans ripped the proposal for sharply expanding categories of taxation.

With California’s cap-and-trade legislation on the ropes, zero-emissions vehicle quotas have emerged as the next piece of environmental policy up for debate in Sacramento.

A new bill, soon to be introduced by Assemblywoman Autumn Burke, D-Los Angeles, would “require that 15 percent of new vehicles be emission-free in less than a decade, a significant escalation in the state’s efforts to speed the evolution of new car technology,” according to the Associated Press. “Automakers that fail to sell enough electric vehicles would be required to make payments to rivals that do or pay a fine to the state,” the wire noted.

“Under current law, automakers accumulate credits for selling vehicles with cleaner technology and must hit annual targets. Environmental advocates say automakers have stockpiled credits for future use and won’t have sufficient incentive to sell electric vehicles at affordable prices, preventing the state from meeting its goals for greenhouse-gas reduction.”

Industry anxieties

In Silicon Valley and the Bay Area, the mood has shifted somewhat from optimism to concern, with regional opinion leaders mounting a defense of electric vehicles that allows that the rules around them may well need reform. “Despite Californians embrace of EVs, the state is in danger of not meeting its laudable goal of sales of 15 percent of all new cars by 2025, which would equate to roughly 1.5 million cars,” the San Jose Mercury News editorialized. “It’s especially worrisome that sales of electric vehicles increased by only 1.6 percent in California in 2015, and dropped by more than 10 percent throughout the United States.”

Compounding the problem, Californians with electric cars face the prospect of having their high occupancy lane access taken away — a move that would surely depress zero-emissions sales still further. “One of the most successful incentives to date has been the green-sticker program for plug-in hybrids and the white-sticker program for battery electric and fuel-cell vehicles, both of which provide high-occupancy-vehicle-lane access to these cars,” the San Francisco Chronicle warned. “Consumers have cited high-occupancy-vehicle-lane access incentives as a key consideration in their purchase of an electric vehicle. Both programs are set to expire at the end of 2018, and there are no longer any green stickers available unless the cap is raised by the Legislature.”

World watching

As always, national — and international — eyes remained focused on California’s moves in the zero-emissions market. China, whose central planners have looked to cap-and-trade champions like Gov. Jerry Brown and former Gov. Arnold Schwarzenegger for inspiration, has even formulated regulations patterned after the Golden State’s electric vehicle quota system. “The proposed rules will mandate that certain automakers produce or import new-energy vehicles in proportion to the number of fuel-burning autos they sell,” Bloomberg Markets reported, citing a draft document prepared by Beijing’s National Development and Reform Commission. “Companies that fail to achieve carbon dioxide emission reduction targets would be required to buy credits or pay fines of as much as five-times the average price of the credits, the country’s top industry regulator and policy maker said.”

But in spite of the impressive technology and social vogue powering attention and prestige around zero-emissions cars, in the U.S., electric vehicles have only really taken off along the West Coast. “Of the 13,772 cars with plugs sold last month, 7,161 went to buyers in California,” GreenCarReports noted — “exactly 52 percent, or more than the entire rest of the U.S. combined. With cheap gas sustaining a robust market for the SUVs and crossovers buyers favor — models that rarely come with plugs — sales have fallen short of expectations. 

Nevertheless, regulators have ensured that electric vehicles won’t be disappearing from showroom floors anytime soon. Automakers “know they must both meet the California ZEV mandate — which until 2018 applies only to Fiat Chrysler, Ford, GM, Honda, Nissan and Toyota — and gain experience for future years in which radically lower emissions will be demanded by regulators worldwide,” the site added. “California provides the most fertile market for those vehicles, and the ‘travel provision’ quirk in its ZEV regulations allows a car sold in that state to fulfill ZEV-sales requirements in 10 other states as well.”

Women make up more than half of California’s population, but only about one-fourth of the Legislature. 

And in November, that’s unlikely to change too much, according to a CalWatchdog analysis.

While an October surprise, outside factor or just particularly good or bad campaigning could change the course of race that appears to be a sure thing, primary results, incumbency advantages, voting trends and partisan makeup of a district can be useful in making educated guesses.

Currently, out of 120 legislative seats, there are 30 held by women — an additional seat is vacant now, having been held by the late Republican Senator Sharon Runner, who died unexpectedly earlier this month.   

There could be as many as 49 women in the Legislature next year, but it is likely that they’ll hover around the same amount as this year.  

In the Senate, women could have as few as five seats and as many as 13 — realistically, the number will likely be around eight to 10 seats. In the Assembly, women will occupy at least six seats and as many as 36, but that number will likely be somewhere between 15 and 24 seats. 

What we know for sure

Republican Senators Jean Fuller, Janet Nguyen, Pat Bates and Democratic Senators Connie Leyva and Holly Mitchell are not up for re-election and will definitely be returning next year, as the Senate is on staggered four-year terms.

In the Assembly, every seat is up for re-election every two years, although five seats will definitely stay occupied by women — either because the incumbent is running unopposed (or facing a write-in challenge) or because the incumbents are facing another woman in the general election. Those five seats are held by: Democrats Cheryl Brown, Cristina Garcia and Autumn Burke and Republicans Catharine Baker and Young Kim. 

Because of either term limits or the seat being vacated by an incumbent running for another position, eight seats held by women will be replaced by men as no women advanced from the primary in these races. Those are the seats currently held by Republican Assemblywomen Beth Gaines, Kristin Olsen, Shannon Grove and Ling Ling Chang and one Democrat, Toni Atkins, as well as two Democratic senators, Carol Liu and Fran Pavley.

Runner’s Senate seat will also be filled by a man.

There is only one definite pickup: An Assembly seat held by termed-out Democrat Luis Alejo.  

Seats where we likely know the outcome

Again, nothing is guaranteed until the final votes are tallied, but these nine seats are safe bets.

While the Assembly seat of Speaker Emeritus Toni Atkins will be filled with a man as mentioned above, the San Diego Democrat is expected to offset that loss by filling a seat being vacated by a man in the Senate. 

Because of the advantages of incumbency, district voting trends and favorable lopsided primary results, these eight female legislators will likely keep their seats: In the Senate, it’s Democrats Hannah-Beth Jackson (the current chair of the Women’s Caucus) and Cathleen Galgiani, and in the Assembly, it’s Democrats Jacqui Irwin, Susan Talamantes Eggman, Shirley Weber and Lorena Gonzalez with Republicans Melissa Melendez and Marie Waldron.

One female incumbent in trouble 

The only incumbent woman who is on very shaky ground is Democrat Patty Lopez. Lopez finished second in the primary, down 17.2 percentage points to the man she surprisingly knocked out of office in 2014, fellow Democrat Raul Bocanegra.

Best pickup chances

In the race to replace Sen. Mark Leno, who is termed out, Jane Kim led the primary against fellow Democrat Scott Wiener 45.3 percent to 45.1 percent. It’s obviously a close race, but it is a good chance for a woman to pick up a seat.

In a less competitive race, Democrat Cecilia Aguiar-Curry finished first in the primary against Republican Charlie Schaupp in a heavily Democratic district to replace Assemblyman Bill Dodd, D-Napa, who is running for Senate.

Democrat S. Monique Limón finished the primary with a formidable lead against Edward Fuller, who claims no party preference, 65.9 percent t0 34.1 percent. If elected, Limón would replace Democratic Assemblyman Das Williams. 

In the race to replace termed-out, Democratic Assemblyman Roger Hernandez — who is currently under a three-year restraining order for alleged domestic violence — Blanca Rubio appears likely to win. Rubio, a Democrat, will face Republican Cory Ellenson in a heavily-Democratic district.

Two wildcards 

Two seats where women have decent chances to pickup seats, although the odds are slightly tipped against them, are the Senate races to replace termed-out Republican Bob Huff and incumbent Democrat Jim Beall.

Republican Assemblywoman Ling Ling Chang saw an opening in the Huff race and decided to vacate her Assembly seat after only one term. However, she finished the primary with only 44 percent, with two Democrats splitting the 56 percent majority. 

Beall is being challenged by Assemblywoman Nora Campos, a fellow Democrat. Beall narrowly missed a majority in the primary, topping Campos by 22.5 percentage points. Campos is considered the business-friendly candidate, so she’ll have to use that to draw upon Republican support to top Beall.

Toss ups

There are approximately 11 races that look as though they could go either way, with four being vacated by termed-out women. Another four are against male incumbents: Republicans Marc Steinorth, Eric Linder and Travis Allen and Democrat Miguel Santiago.  

Looking for October surprises

And there are 11 other races where women are challenging male incumbents, although these races do not appear as though they’ll be too competitive. 

And as for retirement benefits, increase those by 79 percent total, or 53 percent per individual employee.

These are figures for the California Department of Technology, which again finds itself the butt of a fault-finding audit.

The report is one big bad report card. It notes that 73 of 77 state departments have not met standard safeguards for their information, for which the department is supposed to be the guardian.

Prone to Hackers

The newly discovered trouble involves the security of state-held information, including the news that the state’s data centers are subject to thousands of hacker attempts every month.

“The California Department of Technology does not provide adequate oversight or guidance to state entities under the direct authority of the governor (reporting entities) for which it has purview,” the audit finds.

Auditors were so troubled by lapses in information security at the state’s Department of Corrections that they issued a separate memo to that agency outlining the problems — the details of which were “too sensitive to release publicly.”

State agencies possess reams of information, from the bank account numbers on income tax forms to the birth dates of victims of crime and the Social Security numbers of people applying for food stamps.

The Department of Motor Vehicles alone holds more than 27 million records.

There are committees (“the Select Committee on Cybersecurity” in the statehouse) and task forces (the “California Cybersecurity Task Force”) in place to help protect data and info from intruders. But it’s the tech department that has responsibility for ensuring departments’ info is secured. To do so, it requires three annual reports. Last year it even offered a one-day seminar to teach info management people what’s up with data safeguarding.

Who’s at Fault?

In one regard, it’s not all on the department; the report found that 90 percent of select departments queried said that they had met the mandates for security when they really hadn’t.

Still, when four in 10 departments reported they had not achieved full compliance, “we expected that the technology department would have followed up. … However, when we reviewed the 2014 correspondence between the technology department and a selection of eight noncompliant reporting entities, we found that the technology department did not conduct any follow‑up.”

In addition, there are no policies on how to enforce the security requirements.

One more interesting element of the audit: Twenty agencies declined to be monitored or assessed and were therefore not measured for cybersecurity compliance. Among them were the Office of the Inspector General, California Department of Resources Recycling and Recovery and the Public Employees’ Retirement System.

The auditing team recommends that state lawmakers require the tech department to do an independent, comprehensive security assessment of each reporting entity at least every other year.

Auditors also ask legislators to allow the department to ask for money upon any finding of security flaws. The technology department should follow up on any troubled agency and how that agency intends to make its information more secure, the report says.

Then a final scold from the auditors: “As a result of the outstanding weaknesses in reporting entities’ information system controls and the technology department’s failure to provide effective oversight and assist noncompliant entities in meeting the security standards, we determined that some of the state’s information, and its critical information systems, are potentially vulnerable and continue to pose an area of significant risk to the state.”

The Department of Technology didn’t answer questions, but gave the Associated Press a written statement, saying that it is committed to improving oversight and to “improving the state’s overall information security posture.”

A Continuing Pattern

The report is the second in the last six months to beat down the department. The last one upbraided tech department officials for wasting tens of millions of dollars due to computer troubles and aborted projects that cost taxpayers up to $1 billion.

Some lawmakers are trying to throw more money at the agency.

One measure would allow the technology department to size up contractors with an evaluation scorecard that would cost  $350,000.

“There is no guarantee that they will implement the evaluation system in a long term capacity,” Assemblywoman Autumn Burke, D-Los Angeles, told a Senate committee earlier this month. “In fact, a simple change of leadership with CalTech could put the evaluation system in jeopardy.”

Also noted in the conversation was something as scary as a data breach: “Currently the state has 44 IT projects under development that are reported to cost more than $4 billion,” Burke told her colleagues.

However, the Legislative Analyst’s Office surveyed 50 school districts around the state, including the 11 largest, and warned in a January report that not one had proper safeguards to prevent diversion of funds. In Los Angeles Unified, among other districts, the local teachers’ union last summer pointed specifically to new, incoming LCFF dollars as a kitty to tap for pay raises.

In coming months, this issue is likely to emerge as a point of contention in Sacramento because of concerns raised by the California Legislative Black Caucus about State Board of Education rules governing how LCFF funds are used. Here are three of the caucus’ main points:

— Any authority for the use of supplemental or concentration grants to schoolwide and districtwide expenditures must clearly link the services to demonstrated effectiveness in increasing student achievement and closing achievement gaps, and demonstrate that the expenditures are proven effective for “concentrations” of unduplicated children in schools in the district where concentrations exist.

— The terms “most effective” or “effective” should be defined, and at a minimum be tied to demonstrated effectiveness in meeting the “student achievement” goal and closing any persistent achievement gaps or deficiencies as it relates to the unduplicated students, and not just a generic reference to the state priority areas.

— The proposed regulations also do not provide the Board or county superintendents clear standards by which districts must explicitly demonstrate or explain, at a minimum, how expenditures of supplement and concentration grant funds will support services that will actually improve the academic achievement of unduplicated students or close persistent academic achievement gaps.

These concerns are from Assemblywoman Shirley Weber’s remarks to the State Board of Education at its Jan. 16 meeting on behalf of the Black Caucus.

Dan Walters wrote a Feb. 26 column in the Sacramento Bee noting that a “broad coalition of civil rights and education reform groups” had expressed worry about the LCFF not being implemented according to the goals cited in 2013 upon its passage. But this effort seems likely to be much stronger with the aid of state lawmakers.

The Black Caucus has 12 members — Weber, Reginald Byron Jones-Sawyer Sr., Sebastian Ridley-Thomas, Cheryl R. Brown, Autumn Burke, Jim Cooper, Mike Gipson, Christopher Holden, Kevin McCarty and Tony Thurmond in the Assembly, and Isadore Hall III and Holly J. Mitchell in the Senate.