GSBE Business Update 03/08/2021
STATE OF THE STATE
Newsom’s administration announced this week that the governor will deliver the annual State of the State speech on March 9. That’s the latest date in California history — never before has a governor delivered the State of State address after February. It will also be unusual in that Newsom will deliver it remotely from Los Angeles County in the evening, rather than in front of the state Legislature in Sacramento during the day. The explanation for choosing a location outside the Capitol: Primetime television; avoid conflict with legislators over budget, school reopening, etc, and a way to turn down the flames of the recall.
ADDRESSING RACISM IN CONSTRUCTION
Recently, we sat down (albeit virtually), with Assembly Member (now Senator) Sydney Kamlager and Senator Steven Bradford who serve as Chair and Vice-Chair of the Legislative Black Caucus in the State Legislature to discuss legislative concerns of African Americans and other citizens of color. Specifically, we wanted to develop a dialog around strategies to address racism in construction. In 2020, nearly 20 reported incidents of flagrant racism took place on construction job sites throughout North America. According to the Bureau of Labor Statistics, 88% of construction workers are White, compared to 78% in the overall workforce. By contrast, just 6% of construction workers are Black or African American, while they represent 12% of the workforce across all industries. We are grateful for both members’ willingness to engage with us to discuss these issues and we remain committed to continuing a collaborative dialog to promote and pull together different drivers for racial equality in the industry.
CA TRANSPORTATION PLAN 2050
CalTrans released its report outlining policies for achieving state’s goal of reducing green house gas emissions from transportation to 80% below 1990 emission levels by 2050. The report highlights 14 recommendations, including exploring a statewide means-based road-user charge program as a replacement for the gas tax; develop and implement sustainable transit and active transportation funding models; using additional funding sources for VMT-reduction projects; a state-level fee on TNC travel by ride-hailing companies; and expand developer impact fees, joint development, and land value taxation to fund infrastructure projects. Read report here.
FDA PANEL AUTHORIZES JOHNSON & JOHNSON VACCINE
California is expected to receive about 380,000 doses of the new vaccine this week. While this vaccine is less effective at preventing mild illness, it is effective at preventing serious illness and death. Read more.
FRANCHISE TAX BOARD WEBINAR – LEARN MORE ABOUT WHAT’S NEW IN 2021
Join Selvi Stanislaus, the Franchise Tax Board’s Executive Officer, on March 9 for an update on what’s new in 2021, filing statistics, litigation, regulatory development, conformity, and much more. Register here for this webinar and other CalTax Foundation webinars.
LOW NUMBER OF QUALITY JOBS
According to a new report released by Gov Newsom’s Future of Work Commission, California should push for a federal jobs guarantee, raise wages, double the amount of workers who have access to benefits, and help workers form unions. The report outlined steps CA should take in order to achieve a “new social compact for work and workers” by 2030. But even as the report sets “moonshot goals,” it acknowledges the state’s vast economic divide, which has yawned wider amid the pandemic. Some of the findings: CA has the highest poverty rate in the country when the cost of living is taken into account, clocking in at a staggering 17.2%, the report found. And while home prices have shot up 68% since 2012, wages have only grown 14%. The report also found that fewer than half of California workers have quality jobs — defined as those with a living wage, stable and predictable pay and access to benefits, among other factors — and 31% of the state’s workforce makes less than $15 per hour. (California’s minimum wage has increased for four years in a row and is set to hit $15 per hour next year for most employers.)
NEWSOM’S BUDGET LACKS CHECKS AND BALANCES
According to a report from the state’s non-partisan analyst, if lawmakers approve Newsom’s proposed budget, there would be “no reasonable checks and balances on the governor’s COVID-19 spending authority.” Additionally, the report critiques the underlying laws that make it possible for Newsom to wield such broad authority, apparently hinting that the Legislature should consider changing them. LAO: “Our concerns … are reflective of the larger problems associated with the state’s emergency spending authorities that allow the governor to spend an essentially unlimited amount of funds on emergency-related activities with very little opportunity for legislative oversight.”
CALIFORNIA LIKELY TO ENTER DROUGHT
The Sierra Nevada snowpack that supplies around a third of California’s water is at 61% of its historical average, the latest indication that the Golden State could be heading into another severe drought. The state’s two largest reservoirs are also significantly drier than usual, with Lake Shasta holding 68% of the water it normally contains this time of year and Lake Oroville holding 55%. As winter draws to a close without significant storms on the horizon, Californians could soon face their first water restrictions in five years, officials say. Read more here.