Members of the California Poor People’s Campaign have been rallying outside the Capitol building weekly for the last month. The most recent protest marked the 50^th anniversary of the Poor People’s Campaign and March, which was organized by Martin Luther King Jr.

“Nothing feels progressive about the way California is run from the top,” Kait Ziegler, co-chair of the California Poor People’s Campaign, told the Sacramento Bee. “So we’re coming from the bottom to mobilize and say we aren’t going to be silent anymore.”

Chief among the concerns of the campaign were the issues of housing, homelessness and workers’ rights. Citing that “8 million Californians pay half or more of their income for rent,” the group demanded the establishment of a “human right to housing.” Additionally, they argue the state should invest more in affordable and low-income housing, as well as rent control and more protections for renters and tenants.

When taking into account the cost of living, California has the highest poverty rate in the country. By the normal metric, the Golden State comes in 35^th.

The Campaign also called for a homeless bill of rights, which, among other things, would safeguard the right of people to sleep in legally parked cars and sleep in public areas. The group also endorsed several bills that would divert some of California’s budget surplus toward affordable housing.

Finally, the group reiterated demands for measures to protect workers’ rights. These measures include Assembly Bill 2946, which would extend the statute of limitations for prosecuting wage theft and AB2293 and SB1412, which would reduce barriers to employment for those with certain prior convictions.

The Poor People’s Campaign expects to be back in action Monday.

UPDATED AT 1:45 P.M.

Seven weeks since stories about Harvey Weinstein in the New York Times and the New Yorker triggered a wave of sexual harassment allegations around the nation, California state lawmakers are on edge both about their pasts and what the future may hold.

Allegations about four named current and ex-lawmakers and a fifth unnamed one have been publicly reported. But lawmakers who faced past accusations of wrongdoing and thought they were past the risk of fallout could be in for a rude surprise if Assembly and Senate practices are changed and the results of previous disciplinary hearings and investigations are disclosed.

Going forward, all harassment allegations are going to be investigated independently – breaking with a system that long seemed to value keeping dirt hidden as much or more than having a healthy Capitol working environment. The Assembly will hold a hearing Tuesday on new policies and the Senate is likely to in coming weeks.

Four accused lawmakers identified; the fifth still not revealed

Here are the accused and where they stand:

Assemblyman Raul Bocanegra, D-Pacoima. Bocanegra resigned Monday — a month to the day after the Los Angeles Times broke the story that Bocanegra had been secretly reprimanded in 2009 for an incident in which he allegedly groped and stalked Elise Flynn Gyore at a time when both were legislative staffers. Since then, six more women have come forward with allegations of improper behavior by Bocanegra. He initially said he would resign in September 2018 at the end of the next legislative session, but that didn’t placate critics who said he should quit now or be kicked out if he refused to leave. Assembly Speaker Anthony Rendon, D-Lakewood, had promised Bocanegra would be “immediately” expelled if an independent investigation confirmed the allegations against him.

Former Assemblyman Steve Fox, D-Palmdale. On Oct. 18, the Sacramento Bee reported that it had obtained a copy of a settlement reached in April in which the Assembly agreed to pay $100,000 to Nancy Kathleen Finnigan, who worked for Fox as legislative director in 2013, during his only term in office. Finnigan alleged Fox had exposed himself to her and then fired her when she complained about his behavior. Finnigan’s suit was filed in 2014, when she first publicly accused Fox of sexual harassment, discrimination and retaliation. Fox denied the allegations and dismissed her as a disgruntled ex-employee.

The political career of Fox, 64, who has worked as a teacher and lawyer, may not be over. His 2012 win of a long-GOP-held Assembly seat was considered flukish, and he lost by more than 20 percent to Republican Tom Lackey in his 2014 re-election bid. But in 2016, while Lackey defeated Fox again, his margin of victory was only 6 percent.

Assemblyman Devon Mathis, R-Visalia. On Oct. 20, anonymous allegations that had surfaced on a website run by conservative activist Joseph Turner claiming that Mathis had sexually violated a passed-out staff member were printed in the Fresno Bee. Mathis denied the allegations and on Nov. 15 was cleared by the Sacramento Police Department, which said detectives were “unable to substantiate” if a crime had occurred.

The Assembly Rules Committee, however, has hired a private attorney to investigate allegations of improper behavior, according to Mathis’ hometown paper, the Times-Delta.

State Sen. Tony Mendoza, D-Artesia. Starting with a Nov. 9 story in the Bee, three young women have come forward with allegations of improper behavior, including a 19-year-old intern hoping for a permanent job on his staff who was invited by Mendoza to come to the Sacramento-area home he lives in part-time to “review resumes.” The twist: Mendoza until recently shared the home with state Senate President Kevin de Leon, who denied knowing of any wrongdoing by his former roommate. Mendoza, like Fox, has denied wrongdoing. De Leon has not said what his intentions are if a pending independent inquiry finds the allegations against Mendoza credible.

The fifth accused lawmaker has so far not been identified. On Oct. 19, Sacramento lobbyist Pamela Lopez told CNN that a current member of the Legislature – a “big man” – had trapped her in the restroom of a Sacramento bar in 2016 and masturbated in front of her.

Lopez has been urged by activists to name the lawmaker but has so far declined to do so.

State Sen. Nancy Skinner, D-Berkeley, is among more than 140 women who signed the letter detailing sexual harassment in politics and demanding that it end. (Bert Johnson/KQED)

Senate President Pro Tem Kevin de León, D-Los Angeles, announced on Tuesday that the state Senate will hire outside firms to investigate allegations of sexual misconduct at the Capitol in Sacramento – allegations referenced in an open letter signed by women claiming widespread harassment while working in California politics.

“There’s always more employers can do to protect their employees,” de León said. “Everyone deserves a workplace free of fear, harassment and sexual misbehavior and I applaud the courage of women working in and around the Capitol who are coming forward and making their voices heard.”

The open letter was published on wesaidenough.com.

“The time has come for women to come together, to speak up and to share their stories,” part of the letter read. “The time has come for good men to listen, to believe us, and to act as strong allies by speaking out against harassment in all its forms.”

Below the text was a box to share and submit a story of your own to the group.

“If you see – or experience – inappropriate behavior, don’t sweep it under the rug. Speak up, speak loud, and know there is a community of people who will support you. Let’s work on the solution together,” the letter added.

In particular, the writing criticized the Legislature’s procedures for dealing with such complaints, with some women arguing they fear speaking out over concerns that it will put their professional life in jeopardy.

“If you hang someone out to dry as a Weinstein of the Sacramento community, that sort of gives folks the political cover to say look we got the bad guy, we fixed this,” lobbyist Samantha Corbin told the Sacramento Bee. “That’s not true. We want long-term culture change where men are held accountable and there is a system where woman can work and feel safe.”

Assembly leaders also said this week that they will launch public hearings, prompting some speculation that the claims are being given a heightened sense of attention in wake of the Harvey Weinstein sex scandal that has rocked Hollywood.

Assembly Speaker Anthony Rendon, D-Lakewood, issued a joint statement with with Assemblyman Ken Cooley, D-Rancho Cordova, and Assemblywoman Laura Friedman, D-Glendale.

“First, we must change the climate that has allowed sexual harassment to fester,” the statement read. “Second, we must ensure victims have a safe and dependable environment to come forward and discuss complaints no matter who the perpetrator is and without detriment to their career or environment. Third, we must ensure that sexual harassment is dealt with expeditiously and that the seriousness of consequences match the violations committed.”

The move by de León comes just days after he announced his primary challenge to longtime incumbent U.S. Sen. Dianne Feinstein, D-Calif., likely creating a sense of urgency to quell any criticism that he presided over a toxic and abusive culture while in leadership in Sacramento.

The Law Offices of Amy Oppenheimer will conduct the investigation and CPS HR Consulting will “review the Senate’s policies and practices against harassment, discrimination and retaliation,” according to de León.

One of the more explosive allegations comes from lobbyist Pamela Lopez, who described to several papers an incident where a current lawmaker, who has not been named, shoved her into a bathroom and masturbated in front of her.

The actions come in conjunction with the #MeToo campaign, which is spreading across social media, where victims are documenting their experiences with harassment.

The most significant measures passed long before the session’s deadline. In April, lawmakers passed a controversial 12-cents-a-gallon gas-tax increase by a razor-thin margin. The law also increased vehicle-license fees. In July, they passed a 10-year extension of the state’s cap-and-trade program, with the help of several Republican legislators. The Legislative Analyst’s Office estimates the measure could increase gas prices as much as 63 cents a gallon by 2021.

But the final hours of the session were still filled with tension. The housing package worked out between Gov. Jerry Brown and legislative leaders had stalled in the final days, but snuck past the finish line. The package includes three bills. One (Senate Bill 35) would streamline the approval process for high-density affordable housing projects, but requires contractors to pay union-based prevailing wage rates on those subsidized projects in return.

The other two parts of the deal have a bigger tax-and-spend element to them. SB2 imposes new fees of $75 to $225 on various real-estate transactions to help fund subsidized high-density housing projects. SB3 will place before voters on the November 2018 ballot a $3 billion state housing bond that likewise will fund the construction of low-income housing units.

The gas tax increase has sparked a GOP-led recall effort of Fullerton-area Democrat Josh Newman, mainly because of his vote to support the increase – and because he represents a GOP-heavy district. Democrats passed two bills this session to change the recall rules to help the embattled senator, but that issue is working its way through the courts. If Newman loses, Democrats would lose their supermajority in the Senate. Anti-tax activists also are gathering signatures for an initiative that would repeal the new gas tax and license fees.

Nevertheless, some commentators were relieved that the session wasn’t worse, from a tax-hiking perspective. Joel Fox, editor of Fox and Hounds Daily, referred to this as a “tax-happy session,” but noted the California Chamber of Commerce’s success in defeating nine so-called “job killer” bills that proposed some form of tax increase.

Some of these defeated tax proposals include: A tax on contractors who do business with the California Department of Corrections and Rehabilitation; excise taxes on manufacturers, distributors and wholesalers of distilled beverages; an excise tax on distributors of sweetened soft drinks to fund a new health program; an increase in the personal income tax of 14.3 percent; a tax on opioid distributors; a new retail tax to fund affordable housing; expansion of the capital gains tax; and a measure to lower the vote threshold for local property tax increases.

California Democratic leaders spent a lot of time this session positioning themselves to resist the Donald Trump presidency. Many efforts involved little more than posturing and press conferences, but the Legislature passed three substantive bills that are designed to either affect the next presidential election or confront the Trump administration over its controversial immigration policies.

For instance, the Legislature passed SB568, which moves up the state’s presidential primary. It now occurs late in the primary process in June, but would move to March. That would make California the fifth state to vote for president in the 2020 election, provided other states don’t play leapfrog with their dates. California’s voters currently have little say in the presidential races because the nominees are fairly obvious by June.

“Winning big in California could help a Democrat clinch the nomination in the spring instead of the summer,” according to The Washington Post’s analysis. That could help defeat Trump in the next election because “if you can wrap up the primary in the spring, you have more time to focus on taking out an incumbent president.” It could also help Los Angeles Mayor Eric Garcetti or Sen. Kamala Harris, D-Calif., both of whom are eyeing a presidential run.

The Post also pointed to two other anti-Trump measures now on the governor’s desk. SB149 requires presidential candidates to disclose their tax returns to be eligible to run in the state’s primary election. That’s obviously aimed at Trump, who refused to release his returns in the 2016 race. Most controversially, lawmakers passed a “sanctuary state” bill (SB54) that forbids state and local authorities from cooperating with federal officials to deport illegal immigrants. That sets up a serious showdown with the administration, which has threatened to withhold federal funds from localities that embrace sanctuary status.

Finally, California’s politically powerful unions got many of their priorities through this year’s legislative session. The most far-reaching measure, Assembly Bill 1513, would provide the names and personal information of home-care workers who work for private companies. That would enable unions to contact private-sector workers for organizing purposes.

The Legislature also passed Senate Bill 63, which expands the state’s family leave law, applying it to companies with at least 20 employees. It also passed AB1461, which would require employees at some companies that provide meal-delivery services to get a “food-handlers’ card.” Similar to the home-care bill, unions would then have access to these workers’ private information for organizing purposes.

The Legislature passed some other workers’ rights bills. AB168 bans employers from asking for an applicant’s salary history. That was posited as a women’s rights issue, as backers claim that providing pay information makes it harder for women to receive higher pay scales. Another bill (AB1008) would not allow employers to ask applicants about prior criminal convictions until a tentative job offer is made.

The Sacramento Bee noted that not all labor-backed bills succeeded: “Heavy opposition from the dialysis industry blocked SB349, which would have set staffing levels for those clinics” and opposition from county governments blocked a bill (AB1250) that would have largely banned counties from contracting out many services. AB568 did pass, however. It requires school districts, charters and community colleges to provide six weeks of paid leave for pregnancy-related reasons.

Lawmakers didn’t shy away from hot-button social issues. SB179 provides a gender-neutral option called “non-binary” for driver’s licenses. And AB1209 “will require large companies to report their mean and median salary data by classification and gender to the Secretary of State, who will post the data online,” as the San Francisco Chronicle reported.

Critics complain the state didn’t deal with several pressing financial issues, ranging from California’s exploding unfunded pension liabilities to reforming the California Environmental Quality Act, which is widely blamed for encouraging lawsuits that delay needed construction projects. The Legislature certainly didn’t control spending this year either, as it approved a budget that sets every manner of spending record.

The governor has until Oct. 15 to make his decision on the bills that made it to his desk.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

SACRAMENTO – California’s redevelopment agencies were a fixture on the local political landscape for six decades, as they guided development policies and grabbed “tax increment financing” that localities used to pay for infrastructure improvements, downtown renovations and affordable-housing projects. They had some notable successes but generated enormous controversy before Gov. Jerry Brown shuttered them in 2011.

They were designed in the 1940s to fight urban blight. But the agencies were criticized for their use of eminent domain on behalf of private companies; for running up debt without a vote; for the subsidies they ladled out to developers; and for financing big-box stores and auto malls rather than helping inner cities spruce up. The governor ultimately killed them because these agencies had become a drain on the state’s general-fund budget, consuming 12 percent of the budget.

It was a shock to see such a powerful sector dry up, as local agencies morphed into “successor agencies” that had nothing left to do other than pay off existing debt. But the redevelopment industry – the developers, lobbyists, city officials and low-income housing advocates – never really went away. Each year since 2011, lawmakers have proposed and sometimes passed measures that incrementally bring back the redevelopment process.

The way that complex process worked in the past involved city councils essentially creating agencies that target “project areas” for subsidy. The agencies would float debt to fund infrastructure and pay subsidies to developers who build things within those areas. Cities often would subsidize retail projects because of the sales taxes they provided. The gain in the property taxes from the new development was designed to pay off the debt.

But those taxes often come out of the hide of other public services, such as schools and public safety. The state budget had to backfill the losses and the result was the budgetary drain that the governor plugged. But with the state’s fiscal situation having improved markedly since 2011, legislators have been less concerned about any financial impact of revived agencies.

In 2015, the governor signed Assembly Bill 2, which created Enhanced Infrastructure Finance Districts (EIFD) that have many similarities to the old redevelopment project areas. Under the old law, redevelopment officials would simply declare an area blighted before gaining new powers of subsidy and debt funding within that area. Under what some called Redevelopment 2.0, those borrowing and spending powers were limited to infrastructure projects.

To prevent some of the old fiscal abuses, the new EIFD process bans the newly created agencies from unilaterally creating project areas that would steal tax revenue from counties, fire authorities or school districts. Instead, they would have to gain the approval of the other districts, thus providing incentive for a less controversial project. These projects also lacked the affordable-housing requirement that was found in the old redevelopment law.

This year, affordable housing is the Legislature’s pet issue in its final week of session. The governor and Democratic leaders have promised a legislative package to deal with the state’s housing crisis. Lawmakers also are considering Assembly Bill 1568 by Assemblyman Richard Bloom, D-Santa Monica, which would add a housing component to those infrastructure districts. Critics say it’s creeping redevelopment, combined with an expanded ability for local governments to raise taxes.

“Local governments have been without a reliable financing mechanism to invest in economically depressed, transit-rich areas since the demise of redevelopment agencies in 2011,” Bloom said in a Senate Rules Committee analysis. This proposal “provides local jurisdictions with the authority to finance infrastructure and affordable housing using new sales and use taxes in addition to property tax increment within qualifying districts.”

Lawmakers are expected to make technical amendments Friday and then send it to the Senate floor for a vote Monday. The bill requires that the Enhanced Infrastructure Financing Districts use the new taxes to fund affordable housing on infill sites. The measure has passed its committees on a largely party-line vote, with most Democrats favoring it and most Republicans opposing. It’s backed by several planning and local-government organizations, and has a high likelihood of making it to the governor’s desk by the Sept. 15 deadline.

If that’s so, then it will be interesting to see whether Gov. Brown, who fought so hard to eliminate redevelopment agencies, is willing to let them return incrementally, albeit with a different name and somewhat different rules.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Real-estate prices have gotten so high that they stretch family budgets and are a root cause of California’s highest-in-the-nation poverty rates, based on the Census Bureau’s new cost-of-living-adjusted poverty measure.

The situation is so acute it’s drawn the attention of the national media. “A full-fledged housing crisis has gripped California, marked by a severe lack of affordable homes and apartments for middle-class families,” according to a recent New York Times article. Median home prices have hit a “staggering $500,000, twice the national cost.”

The problem is particularly bad in the state’s major metropolitan areas. The median single-family home price in the nine-county San Francisco Bay Area, for instance, has topped $750,000. Public-opinion surveys suggest soaring home prices – rather than job opportunities or the state’s business climate – are the key reason many people are moving to other states.

But while there’s broad agreement that housing affordability is in crisis, there are two schools of thought on how to address it. Democrats are primarily trying to raise taxes and fees to pay for more government-subsidized affordable housing, whereas Republicans want the state to chip away at local governmental barriers to home construction.

Legislators and the governor have made little progress in crafting a detailed housing plan for this legislative session. But there are a handful of bills moving their way through the Capitol that encapsulate their approach. Their high-priority measure, when legislators return to the Capitol late next month, is Senate Bill 2, which would impose fees of $75 to $225 on every real-estate transaction to provide $225 million in annual funding to subsidize developers of low-income housing.

“With a sustainable source of funding in place, more affordable housing developers will take on the risk that comes with development and, in the process, create a reliable pipeline of well-paying construction jobs,” according to the Senate bill analysis.

Senate Bill 3 also takes a similar approach toward building affordable housing. The measure authorizes $3 billion in general-obligation bonds to pay for low-income and transit-oriented housing. It would need to be approved by voters in the November 2018 election. There’s also talk about using proceeds from the cap-and-trade auctions to fund such programs.

One major bill embraces some of the concerns expressed by those who want to encourage market-oriented solutions to the problem. Senate Bill 35, by Sen. Scott Wiener, D-San Francisco, “creates a streamlined, ministerial approval process for development proponents of multi-family housing if the development meets specified requirements and the local government in which the development is located has not produced enough housing units to meet its regional housing needs assessment,” according to the bill summary. The streamlined process would apply where a project meets “objective zoning, affordability, and environmental criteria, and if the projects meet rigorous labor standards,” according to Wiener.

The bill circumvents local planning decisions, but New Urbanists and others say such pre-emption is needed because “not in my back yard” (NIMBY) sentiments among residents and city officials have impeded developers’ ability to add high-density housing in urban areas. The latter point – the requirement that workers receive union wage rates – has been a major sticking point for some conservatives, who believe the mandate could drive up the cost of home construction.

The building industry has neutralized another measure, Assembly Bill 199, which could have required such above-market wage rates for a wide range of privately funded housing projects. AB199 originally would have required “prevailing wage” for any project that involved an agreement with a “state or a political subdivision.”

The building industry argued that “the language was purposely ambiguous and could mean simple tasks, like a new porch, would require union labor,” according to a San Diego Union-Tribune report. The amended version removes that language and now applies only to projects that receive public subsidies.

There’s wide disagreement about whether additional mandates for affordable housing will substantially boost the supply of lower-priced homes. Even if the new subsidies pass, those dollars are a drop in the bucket, given the overall size of the state’s housing market, critics say. And government mandates that builders provide a set number of affordable units as part of their new subdivisions may ramp up the overall costs for market-based units.

The Union-Tribune’s Dan McSwain compared the process to something out of a Kafka novel: “Raise the overall price of market units, thus ensuring that fewer get built, in order to subsidize a handful of poor families … who win a lottery administered by local government agencies, with staffs funded by housing fees that inflate prices.” McSwain blamed high costs partially on city-imposed fees that inflate housing prices by 20 percent or more.

The Legislature isn’t about to tackle that broader problem. Legislators have yet to reform the California Environmental Quality Act and other environmental rules that drag out the approval process for major new developments. For instance, Southern California Public Radio recently reported that the Newhall Ranch development in Los Angeles County finally “is moving forward after recently winning key approvals.”

That Santa Clarita Valley project, which will house 60,000 people, has been in the works since the 1980s and still is a long way from a ground-breaking. It’s been delayed by environmental lawsuits and legal challenges related to its possible impact on climate change.

Southern California Public Radio quoted real-estate experts who say the project will only make a small dent in the region’s housing shortage. But is that the fault of the developer or of policymakers who have ignored the problem so long that adding tens of thousands of new housing units only amounts to adding a few drops in the housing bucket?

The good news is the Legislature and governor are paying attention to a serious problem that has been percolating for years. The question, as always, is whether state officials can craft legislation that will make a real dent in the problem.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

The Sacramento Bee reported last week that “leaders of the Legislative Asian Pacific Islander, Black, Jewish, Latino, LGBT and Women’s caucuses” are seeking information about the “race, ethnicity, gender and openly gay or lesbian orientation” of the employees of lobbying firms.

Supporters of the request say it’s “intended to expand conversation about cultural diversity in the Capitol workforce,” according to the Bee report. Critics believe it may instead be the first step toward something like a quota system and note that legislators aren’t required to report this kind of personal information about their employees.

The data request has taken on partisan overtones, as well. The conservative Breitbart news site found it ironic that the Democratic-dominated caucuses want detailed personal data on lobbying firms “while the state refuses to give voter data to President Donald Trump’s voter fraud commission.”

The request for data, however intrusive it came across to the lobbying firms, was made in a letter and is not currently the subject of any legislation. Meanwhile, members of both parties have voted overwhelmingly in favor of expanding an already far-reaching mandate for similar data from insurance companies that do business in California.

That legislation was amended significantly late last week. Instead of giving the imprimatur to the Department of Insurance to seek out more data from insurers without doing an official rulemaking, it limits the department’s power. But the legislation is a reminder that other industries already deal with these kinds of demographic data requirements.

Currently, insurers that write California premiums in excess of $100 million biennially are required under the California Department of Insurance’s 2012 “Insurance Diversity Initiative” to provide the department with detailed demographic data about insurance-company suppliers. Insurers must “periodically submit to the insurance commissioner a report on its minority, women and disabled veteran business enterprise procurement efforts,” according to state law.

Senate Bill 488, by Sen. Steven Bradford, D-Gardena, expanded that reporting requirement to include businesses controlled by veterans (not just disabled veterans) as well as those owned or managed by lesbian, gay, bisexual or transgendered people. It passed the Senate in late May on a bipartisan 38-0 vote. The clear goal of these surveys is to use the highly regulated nature of the insurance industry to pursue social goals that go beyond the stated goals of insurance regulation.

For instance, the Senate analysis notes that including the new categories of business owners “will open the door or economic opportunity more broadly.” Yet the analysis makes clear that the purpose of insurance regulation is not to promote economic opportunities for various demographic groups but to ensure insurance companies “are financially able to fulfill their obligations to policyholders and that they are treating consumers fairly.”

Lobbying firms likewise are regulated by the state, so there’s fear that the letter seeking data will turn into something more pernicious. “If a firm isn’t diverse and voluntarily provides data, some legislators may feel less inclined to work with them,” explained the Bee report. In addition, lobbying firms might view the request as something less than voluntary.

Likewise, insurance companies are routinely asked by the Department of Insurance to provide data voluntarily that conforms to controversial political objectives. There’s fear in the industry that if a company doesn’t comply, it could suffer repercussions from a department that holds ultimate authority over the prices they are allowed to charge consumers.

There’s no question that regulators continually expand their requests. Assembly Bill 53 in 2012 mandated the provision of supplier demographic data, but the Department of Insurance (DOI) then issued a 2014 data call for information about the diversity of insurance-industry board members, which was not specifically authorized by the legislation. As part of that diversity initiative, the DOI participated with four other states and the District of Columbia in collecting the board member information, which was used to highlight the large percentage of white males at the helm.

“Since the initial AB53 data call in 2013, DOI has expanded their diversity data call efforts to include an entire new effort (board member diversity), insurer activity in other states (collecting data for multiple states), increased data call frequency from every other year to annual, and added demographic categories not included in AB53 (LGBT and veteran-owned business enterprises),” explained the Senate analysis. The Senate legislation in its original form would mainly have granted the department authority it already had been exerting on its own.

There are parallels here with the letter from the legislative caucuses. Will the caucuses follow up the request to registered lobbyists with a legislative mandate? If they do so, will they continue to up the ante? Lobbying firms are concerned, but they aren’t the only industry that faces such “requests.” Some lobbyists downplay the recent letter and argue that there’s not much the legislators could do even with detailed data. Others nonetheless worry that the request is just a precursor of things to come.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Among the bills that were vetoed at that time were two that would have repealed sales taxes on diapers and tampons. Both measures passed unanimously, but the governor wanted to assure that new spending-related measures didn’t lead to deficits. So the authors of those two measures are back again this year – but this time they are addressing the revenue issue.

The Common Cents Tax Reform Act, Assembly Bill 479, would “exempt diapers, tampons, pads and other basic necessities from California’s sales tax,” according to a statement last week from its authors. The February version of the bill would have exempted sales taxes from the sale, storage and use of various physician-prescribed medicines, but was amended to target diapers and feminine products.

To deal with the governor’s concerns, its co-authors (Assembly members Cristina Garcia, D-Bell Gardens, and Lorena Gonzalez Fletcher, D-San Diego) want to raise taxes to offset the tax cut. The bill would increase the excise tax by $1.20 per gallon on hard liquor that is 100 proof and and by $2.40 a gallon for liquors that are more than 100 proof.

They estimate the tax increase will add about 1.5 cents per gallon to the typical hard-liquor serving and say that it’s a modest increase, but the tax rate would be boosted by more than 36 percent – raising it from $3.30 a gallon to $4.50 a gallon. The state’s excise taxes, however, would remain the same on the sales of beer and wine.

“Common sense is that liquor is a choice and a luxury and human biology is not,” said Garcia, who authored the tampon-tax bill last year. “There is no happy hour for menstruation. Our tax code needs to reflect the fact that it’s not OK to tax women for being born women.” Gonzalez Fletcher, who had authored the diaper-tax measure, depicted the matter as one of “babies over booze.” Because the bill requires a tax increase, it will need two-thirds supermajority support in the Legislature.

But opponents of the legislation caution against using the tax code to favor some goods over others. “Taxing drinks to reduce the taxes on other consumer goods is folly – not least because retailers will mark up diapers and feminine care products to their current price,” said Kevin Kosar, a senior fellow of the R Street Institute in Washington, D.C., and author of the 2016 book, “Moonshine: A Global History.”

“Drink taxes should only cover the social costs they produce – not expenses attributable to normal bodily functions like defecation and menstruation,” he added. “What’s next – taxing drinks to pay for toilet paper and fingernail clippers?”

This is likely to become a partisan issue. Some California Republicans supported previous efforts to reduce taxes on diapers and tampons, figuring any tax reduction is a good thing. Likewise, many Republicans generally took issue with the governor’s statement equating tax cuts as spending. If a cut is the same thing as a spending hike, then it implies the government – rather than individuals – is the steward of all income. But they appreciate Brown’s insistence the budget remain balanced, which means any diversion of revenue has to be made up somewhere else.

California Democrats are jumping on a national “gender equity” campaign designed to reduce the prices of feminine products and other necessities. For instance, the Washington Post reported that New York’s Democratic Gov. Andrew Cuomo last year signed a law exempting sales tax from tampons and Washington, D.C.’s Democratic mayor signed a law that also removes the tax from diapers. Cuomo blasted the tax as regressive – meaning it hurts the poor the most – and called it a “matter of social and economic justice.”

Assembly Bill 479 isn’t the only recent effort to rearrange the tax code to favor in a targeted manner. “The Teacher Recruitment and Retention Act of 2017,” introduced by Democratic state Sens. Henry Stern, D-Agoura Hills, and Cathleen Galgiani, D-Stockton, would exempt public-school teachers from paying state income tax on their teacher salaries if they stay in the field for at least five years. The goal is to address a shortage of classroom teachers.

The diaper/tampon exemption would be revenue-neutral because of the corresponding booze-tax increase, but the teacher exemption is estimated to cost more than $617 million a year. Although the state’s highly progressive tax code already is filled with special privileges for some and higher tax rates for others, critics worry that this new spate of tax exemptions could spark a frenzy of similar bills, and the slow expansion of state tax exemptions from one favored group to another.

When Gov. Brown vetoed seven tax bills last year, he noted that their cumulative effect would be to reduce revenues by around $300 million. He cautioned about cutting such revenues “when the state’s budget remains precariously balanced.”

Although there’s disagreement on the likelihood of new deficits, there’s little question that California’s budget remains as precarious as ever. That gives the teacher exemption a huge obstacle – but it’s unclear what the governor might do if AB479 passes now that supporters of the tampon and diaper exemptions identified a tax hike to make up for lost revenue.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

The prime means the state uses to pay for such capital investments is through the bond process. State bonds don’t directly raise taxes, but the bond payments come out of the general fund. So increases in bond spending nudge out other types of spending, and lead to pressure to increase taxes to make the payments. By contrast, local bonds directly impose new tax commitments on property owners.

While supporters of individual bond measures argue over the specific merits of each proposed measure, both sides often ignore this crucial question: How efficiently do current bonds achieve the goals promised in the measures? California voters approve an overwhelming majority of the bond initiatives placed before them on the ballot, but too often there’s little attention paid to how the authorized funds actually are spent.

The state’s independent watchdog agency, the Little Hoover Commission, last week released a report that reinforces that point. In the past decade, voters have approved $70 billion in state bonds and more than $138 billion in local school-facilities bonds – numbers that have increased after the state lowered the voter threshold for approval, it explained.

“Spreading the costs of major infrastructure projects across generations makes sense,” the commission’s chairman Pedro Nava added. “But as Californians have put more and more on the tab, a day of reckoning will arrive.” The commission cautions that these payments on the debt service will remain after the next recession hits and called for a re-evaluation of “whether current oversight mechanisms are enough to ensure both state and local bond proceeds are spent as efficiently as possible and as voters intended.”

The commission had produced a similar report in 2009, where it called for greater oversight and transparency specifically for natural-resources bonds. It noted that 23 departments in the state Natural Resources Agency administer 16,000 projects, so it’s a Herculean task to try to oversee and track the billions of dollars in spending.

Regarding statewide bond measures, it called for the creation of bond-oversight committees in both houses of the Legislature, independent audits funded from the bond proceeds, and a greatly improved web-based system for tracking expenditures and outcomes based on uniform reporting standards. It also called for the establishment by state officials of some fundamental bond criteria that could then be used to create a “report card” that grades each bond proposal.

After the last report, some efforts were taken to improve accountability, but the commission was not satisfied with the level of changes. The Schwarzenegger administration had proposed a detailed accountability plan, but it has not led to a consistent approach. There is no report card, as proposed. Furthermore, the new report takes aim at the state’s website, although it is encouraged by new legislation that would advance that goal. It points to overall progress, but of an inconsistent nature.

The commission offered two recommendations this year. The first should get heads nodding, although it is lacking in detail: “The governor and the Legislature should adopt a consistent system to improve transparency and oversight of all statewide bonds, particularly the 2008 high-speed rail and the 2016 school facility construction bonds, which currently lack such requirements, as well as all future statewide bond measures.”

The second is more specific and calls for adequate financial support for Senate Bill 1029, a new law which requires the Treasurer’s Office to track and report on all local and state debt spending until the debts are paid off or redeemed.

Although the report doesn’t discuss this, the high-speed rail example offers a reminder of how difficult it will be for the public to get a handle on how its bond proceeds are being spent. Voters approved Proposition 1A in 2008 by a nearly 57 percent to 43 percent margin. The initiative authorized the California High-Speed Rail Authority to issue $9.95 billion in general-obligation bonds to fund the start of a bullet-train project linking Los Angeles with the Bay Area. The project now is estimated to cost $68 billion.

The rail line’s backers included a number of specific promises to voters to help secure their support for such a large bond measure. For instance, supporters touted a 2-hour and 40-minute travel time from L.A. to San Francisco, but the latest plan – using shared lines with commuter trains in both major metropolitan areas – puts the time well over 3 hours. Other promises regarding cost, completion times and subsidies seem unlikely to come to fruition.

“Substantial legal questions loom in the trial court as to whether the high-speed rail project the … authority seeks to build is the project approved by voters in 2008,” explained a state appellate court in 2014, yet the court gave the project the go ahead. Other legal challenges remain, but even one of the rail system’s original proponents has come out against the current iteration of the plan by arguing that it doesn’t resemble the project approved by voters.

In other words, the problem with this major bond issuance isn’t necessarily oversight given that the details of the authority’s spending are fairly well known by now. The problem, critics say, is the courts allow the spending to continue even after it’s known that the tightly written promises within the bond measure aren’t always being followed.

Regarding local bonds, the commission in 2009 recommended the creation of local oversight committees. It modeled its suggestion on the largely unheeded testimony from the California League of Bond Oversight Committees. “Unfortunately, but understandably, many locally-elected government officials who must make multimillion- and multibillion-dollar decisions on bond issuances lack experience in municipal finance,” according to the report. This situation, it wrote, is like “playing with financial matches.”

The commission’s new report points to a 2012 scandal at the Sweetwater Union High School District in San Diego County. The new leadership has since created an oversight committee that the commission sees as a statewide model.

“Bond oversight committees in many communities act simply as cheerleaders for the district, often because members simply do not understand their roles or know what actions they can take,” the report explains. The key to their success, it added, “is adequately training members so that they understand their role and the tools they have at their disposal to ensure they are effective.” The key is independent oversight and “performance audits tailored to results.”

The report also calls for a variety of measures ranging from better online tracking of spending to the ability to impose sanctions on districts that fail to live up to constitutional and statutory spending restrictions, as detailed in Proposition 39. That’s the 2000 statewide ballot measure that reduced the supermajority vote requirement to 55 percent for the passage of local school bonds. It included a variety of spending safeguards in exchange for making it easier for districts to pass these spending measures.

It’s unclear whether the state will embrace the commission’s suggestions and how successful any of the specific recommendations might be. But there’s little question that state officials need to pay more attention not only to how much money the state has to repair and improve its infrastructure – but how those dollars are being spent.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Poll: State higher education is too darn expensive

Good morning! TGIF. Californians are concerned over the cost of the state’s public colleges and universities, just as two of the state’s three higher-education systems are considering tuition increases.

In fact, only 13 percent of Californians say it’s not a problem, while 57 percent say it’s a big problem, according to a poll released Thursday night by the Public Policy Institute of California. 

Just below half of Californians think affordability is the biggest issue facing California’s higher-education systems, while only 15 percent think quality is the top problem. 

CalWatchdog has more. 

In other news:

• “President Obama has decided to side with Sen. Barbara Boxer and California environmentalists in their battle with Sen. Dianne Feinstein and House Republicans over Golden State water policy,” writes CalWatchdog. 

• “Following the election, Baird, a leader of a longstanding and improbable effort by several Northern California counties to secede from California, warned fellow property owners about water-related environmental policies he feared ‘are going to heat up’ in the spring. Meanwhile, Baird was preparing to sue the state over its dearth of lawmakers representing rural, sparsely populated counties. The effort is a longshot, but the sentiment underpinning it reflects lingering discord between California’s heavily Democratic population centers and more conservative, rural areas of the state. As California marches on Trump, Republicans in the state’s interior are hunkering down.” Politico has more. 

• “Monday’s legislative swearing-in ceremonies made it official: Democrats had restored their two-thirds supermajorities in both houses of the Legislature. The achievement rested heavily on millions of special-interest dollars moving to and from political party campaign committees, state filings show, effectively avoiding candidate contribution limits and obscuring the true source of the money.” The Sacramento Bee has more. 

• “For decades, some Malibu property owners have made it hard for the public to reach public beaches. On Thursday, the California Coastal Commission fined two of those property owners more than $5.1 million for denying surfers, sand castle builders, kite flyers, sun bathers, yoga enthusiasts and other beachgoers access to the sand that is theirs by state law.” The Los Angeles Times has more. 

Legislature:

• Gone till December. 

Gov. Brown: 

• No public events scheduled. 

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